In a landmark decision today, NRG Energy, Inc. (NYSE:NRG) received a
conditional award of a contract from the New York Power Authority to
build an innovative, 680 net megawatt (MW), Integrated Gasification
Combined Cycle (IGCC) plant at its Huntley facility in Tonawanda, New
York. The project, which represents a total project cost of
approximately $1.5 billion, is scheduled to go into commercial operation
in 2013. Unlike other technologies some refer to as ?clean
coal,? this plant can be designed to capture
and sequester carbon from the first day of operation.
?New York should be commended for exercising
great courage and leadership in tackling head on the country's
single biggest issue, global warming, while embracing coal?our
most affordable, abundant domestic fuel source,?
said David Crane, NRG President and Chief Executive Officer. ?While
we realize this is only the beginning of a long road to implementation,
we are gratified to be part of such an important milestone and we look
forward to working with New York to begin construction of this important
technology by 2008.?
While NRG's proposal was selected, the award
in that the cost of the IGCC technology is above current market pricing
for new coal plants using more traditional technology that doesn't
have the option to capture and sequester carbon. NRG and NYPA are
establishing a strategic alliance to pursue tax credits or other federal
and/or state funding sources to bridge this economic gap.
?Our public-private partnership with NYPA is
essential to making this groundbreaking project a reality,?
said Crane. ?Additional funding is necessary
to offset the higher cost for this new plant and transform our current
facility to supply power for the next generation, bringing significant
environmental and economic benefits to the region.?
Acknowledging the more than 50 organizations that have demonstrated
support for NRG's bid to build the plant,
Crane said, ?We are humbled by the massive
encouragement and support shown by local and state officials, labor
unions, educational institutions, workforce development organizations,
local area businesses, environmental groups and the armed forces, and
ask for everyone's continued support as we
move forward with this project.?
Background on RFP Process
As part of the Advanced Clean Coal Power Plant Initiative launched
earlier this year by the Governor's Office of
Regulatory Reform, NYPA issued a request for proposal on September 1 for
up to 600 MW electric generating capacity from a coal plant that would
significantly reduce emissions and be built with the ability to capture
and sequester carbon dioxide emissions. NRG submitted the Huntley IGCC
project in response to this RFP, which includes a 20-year contract, on
IGCC is a process that involves converting coal to a synthetic gas,
removing the pollutants?sulfur dioxide,
nitrogen oxide and mercury?as well as
potentially carbon dioxide (CO2), from the synthetic gas before
combustion. The cleaned synthetic gas is then used in a combined cycle
gas plant in order to generate electricity. The NRG IGCC plant will have
the ability to capture up to 65 percent of the carbon dioxide produced.
The emissions profile of an IGCC plant, which uses abundant, affordable
and domestically available coal, is similar to that of a natural-gas
Location and Economic Benefits
The proposed IGCC facility would be located adjacent to the existing
Huntley Generating Station and would utilize existing plant
infrastructure such as rail, coal handling, and water and transmission
facilities. The project would utilize NRG's
experienced skilled workforce and would add an additional 100 full time
jobs and over 1,000 new jobs during construction.
NRG Energy, Inc. owns and operates a diverse portfolio of
power-generating facilities, primarily in Texas and the Northeast, South
Central and Western regions of the United States. Its operations include
baseload, intermediate, peaking, cogeneration and thermal energy
production facilities. NRG also has ownership interests in generating
facilities in Australia, Germany and Brazil.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions and include NRG's
expectations regarding the timing, completion, costs, financing,
environmental impact, job creation, financial success and overall
benefits of the IGCC project described herein, and typically can be
identified by the use of words such as ?will?
similar terms. Although NRG believes that its expectations are
reasonable, it can give no assurance that these expectations will prove
to have been correct, and actual results may vary materially. Factors
that could cause actual results to differ materially from those
contemplated above include, among others, our ability to use existing
plant infrastructure, general economic conditions, permitting and
regulatory obstacles, construction delays, the volatility of energy and
fuel prices, changes in the wholesale power markets and related
government regulation, the availability of financing and the condition
of capital markets generally and our ability to access capital markets.
NRG undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. The foregoing review of factors that could cause NRG's
actual results to differ materially from those contemplated in the
forward-looking statements included in this news release should be
considered in connection with information regarding risks and
uncertainties that may affect NRG's future
results included in NRG's filings with the
Securities and Exchange Commission at www.sec.gov.