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Researched by Industrial Info Resources (Sugar Land, Texas)--Power generator and retailer NRG Energy Incorporated (NYSE:NRG) (Princeton, New Jersey) is back in the black. The company reported full-year 2018 net income of $268 million, compared with a loss of $2.15 billion in 2017. NRG pointed to higher electricity prices and an increased number of customers, as well as a rigorous capital program for the changes. In the company's fourth-quarter 2018 conference call, Chief Executive Officer Mauricio Gutierrez spoke of the company's capital success and the concerns about less reserve margins on the Electric Reliability Council of Texas (ERCOT) grid, the main power grid in Texas. NRG is progressing with a series of power generation capital and maintenance projects across the U.S.
In the conference call, Gutierrez expressed concern about the lack of investment incentive on the ERCOT grid. Gutierrez said, "As you all know, ERCOT's supply/demand balance is the tightest it has been in many years" and is becoming very dependent on new-build projects, particularly wind and solar. "For example, in 2020, ERCOT projects a 10% reserve margin, 3.5% coming from existing resources and the rest coming from new wind and solar. Just to be clear, this is equivalent to nearly 14 gigawatts of new renewable capacity that needs to come online in the next 16 months. Any deviation from that will take us back to single digit reserve margins. These dynamics have led us to much higher wholesale prices in the near term, but in the medium- to long-term, prices are still lagging and remain below new-build economics, making it difficult for developers to justify 20- or 30-year investments."
Elsewhere, NRG is underway with projects at its natural gas-fired and coal-fired facilities. In Massachusetts, for example, NRG is adding a 330-MW natural gas-fired combustion turbine unit at its Canal Generating Plant. Construction began early last year and is expected to be completed by this summer. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing EPC on the project, which has an estimated total investment value of $320 million. For more information, see Industrial Info's project report.
In Dunkirk, New York, NRG plans to convert three coal-fired units to natural gas by adding Babcock & Wilcox (NYSE:BW) gas-fired units. Construction is expected to begin later this year and be completed by yearend. For more information, see Industrial Info's project report.
In Pennsylvania, NRG is planning an environmental water system upgrade at its 328-MW coal-fired New Castle Power Station in West Pittsburg. The project aims to comply with environmental requirements by adding a closed-cycle cooling system, intake velocity modifications and other features to three steam turbines. The project could kick off next year, for completion in late 2021. For more information, see Industrial Info's project report.
A wastewater treatment system at its coal-fired facility in Shelocta, Pennsylvania, also is in the works. For more information, see Industrial Info's project report.
This year, NRG is planning a refueling outage for the 1,280-MW Unit 2 at its South Texas Project nuclear plant, near Bay City, Texas. The project is expected to take approximately 34 days to refuel and provide inspections and repairs to the Westinghouse pressurized water reactor. The project is expected to wrap up in early November. For more information, see Industrial Info's project report. Industrial Info is tracking more than $190 million in active NRG maintenance projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
In the conference call, Gutierrez expressed concern about the lack of investment incentive on the ERCOT grid. Gutierrez said, "As you all know, ERCOT's supply/demand balance is the tightest it has been in many years" and is becoming very dependent on new-build projects, particularly wind and solar. "For example, in 2020, ERCOT projects a 10% reserve margin, 3.5% coming from existing resources and the rest coming from new wind and solar. Just to be clear, this is equivalent to nearly 14 gigawatts of new renewable capacity that needs to come online in the next 16 months. Any deviation from that will take us back to single digit reserve margins. These dynamics have led us to much higher wholesale prices in the near term, but in the medium- to long-term, prices are still lagging and remain below new-build economics, making it difficult for developers to justify 20- or 30-year investments."
Elsewhere, NRG is underway with projects at its natural gas-fired and coal-fired facilities. In Massachusetts, for example, NRG is adding a 330-MW natural gas-fired combustion turbine unit at its Canal Generating Plant. Construction began early last year and is expected to be completed by this summer. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing EPC on the project, which has an estimated total investment value of $320 million. For more information, see Industrial Info's project report.
In Dunkirk, New York, NRG plans to convert three coal-fired units to natural gas by adding Babcock & Wilcox (NYSE:BW) gas-fired units. Construction is expected to begin later this year and be completed by yearend. For more information, see Industrial Info's project report.
In Pennsylvania, NRG is planning an environmental water system upgrade at its 328-MW coal-fired New Castle Power Station in West Pittsburg. The project aims to comply with environmental requirements by adding a closed-cycle cooling system, intake velocity modifications and other features to three steam turbines. The project could kick off next year, for completion in late 2021. For more information, see Industrial Info's project report.
A wastewater treatment system at its coal-fired facility in Shelocta, Pennsylvania, also is in the works. For more information, see Industrial Info's project report.
This year, NRG is planning a refueling outage for the 1,280-MW Unit 2 at its South Texas Project nuclear plant, near Bay City, Texas. The project is expected to take approximately 34 days to refuel and provide inspections and repairs to the Westinghouse pressurized water reactor. The project is expected to wrap up in early November. For more information, see Industrial Info's project report. Industrial Info is tracking more than $190 million in active NRG maintenance projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
