CPS Energy to Enter Power Purchase Agreement with Texas Clean Energy Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--CPS Energy (San Antonio, Texas), the municipal gas and electricity utility for Greater San Antonio, earlier this week announced that it will enter a 25-year power purchase agreement (PPA) with Summit Power Group Incorporated's (Seattle, Washington) Texas Clean Energy Project (TCEP).

TCEP, which will be located in Penwell, Texas, near Odessa, is a clean-coal power plant that will use integrated gasification combined-cycle (IGCC) technology, which will greatly reduce emissions, including sulfur dioxide and mercury. The plant will also feature carbon capture and storage (CCS) technology, which will allow it to capture approximately 90% of carbon dioxide produced. The CO2 will be used in enhanced oil recovery (EOR) projects in West Texas.

CPS will purchase 200 megawatts (MW) of the 400 MW generated by TCEP, which is planned to begin commercial operation by early 2015. The project has an estimated total investment value in excess of $3 billion.

Along with the announcement of the PPA came the news that CPS plans to mothball the 871-MW J.T. Deely coal-fired plant in San Antonio by 2018--about 15 years earlier than originally planned. The move comes in anticipation of increasingly strict environmental regulations and allows CPS to invest in clean-energy technologies, rather than install emissions-reduction equipment at the Deely plant.

Other projects announced to help offset the closure of Deely include plans by SunEdison (Beltsville, Maryland) to set up two solar facilities with a combined generating capacity of 30 MW in the Greater San Antonio area.

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