ERCOT gas-fired capacity sells for half the cost of new build
Luminant on Monday closed on the $1.3 billion acquisition of 2,988 MW of natural gas-fired capacity in the Electric Reliability Council of Texas footprint, a move that diversifies the company’s generation portfolio.
In the deal, Luminant, a subsidiary of Energy Future Holdings, took ownership of NextEra Energy Resources’ 1,912-MW Forney independent power plant in Forney, Texas, and NextEra’s 1,076-MW Lamar plant in Paris, Texas. Both plants are combined-cycle facilities.
The purchase price of the two plants was $435/kW of installed capacity, less than half the per-kW cost of building combined-cycle capacity.
In the lawsuit that Panda Power filed against ERCOT in March — alleging that the grid operator deliberately provided misleading information to “induce” independent power companies to build new generating capacity — Panda said it had recently invested about $2.2 billion to build three gas-fired combined-cycle projects totaling 2,274 MW of capacity, putting the cost of new-build projects at about $967/kW.
n a statement, Luminant CEO Mac McFarland said: “We’re delighted to add these two combined-cycle natural gas plants that will enhance our already diverse generation assets.”
Luminant now owns almost 17,000 MW of generating capacity in ERCOT, including about 6,450 MW fired by natural gas, 8,000 MW fired by coal, and 2,300 MW of nuclear capacity.
Luminant indicated when it announced plans for the deal that it did not own any gas-fired combined-cycle units, and that the two plants would fit in well with its wholesale and retail trading activities and its geographical focus within ERCOT.
The company also said then that the US bankruptcy court handling Energy Future Holdings’ ongoing bankruptcy proceeding and creditor groups gave Luminant permission to bid on and purchase the plants, and that Luminant has the liquidity and debtor-in-possession financing to acquire them.