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When two worlds collide: hybrid fossil fuel/renewable
power plants
POSTED: Wednesday, October 17, 2012 at 09:12 AM PT
BY: Jeanette Schuster
The age-old saying “two heads are better than one” seems to fit an
emerging trend in the energy sector: hybrid fossil fuel/renewable
power plants.
Driven by the often conflicting demands of an energy-hungry
economy that requires a reliable, yet clean energy supply,
developers are looking to hybrid energy systems as a potential
solution. It is seemingly an unlikely marriage – green technology
coupled with brown fossil fuels – but one that might actually be
sustainable.
Jeanette Schuster
Hybrid fossil fuel/renewable power plants often are created by
adding a renewable energy component to an existing fossil fuelpowered plant or vice versa. Also, some are built from the get-go as a
hybrid energy facility.
For example, in 2011, Florida Power & Light unveiled the Martin Next
Generation Solar Energy Center, a hybrid gas/solar energy plant that was created by adding a
solar power facility to an existing combined-cycle natural gas power plant. The addition of the
solar power is expected to reduce fossil fuel consumption by approximately 41 billion cubic feet
of natural gas and more than 600,000 barrels of oil over the facility’s estimated 30-year lifetime.
Here in Oregon, First Wind Holdings LLC, the parent company of Baseline Wind LLC, recently
notified the Oregon Department of Energy of its intent to submit an amended application for a
site certificate; it plans to add a natural gas-fired generation component to its originally
proposed 500-megawatt wind energy facility in Gilliam County. On Sept. 27, the state DOE issued
an amended project order to First Wind, triggering the next step in the process for authorization
to construct and operate the project.
On a global scale, the first solar-wind-natural gas plant is under way in Turkey and will have a
capacity of approximately 530 megawatts.
Hybrid power plants are attractive to developers for several reasons. The most obvious is based
on the inherent nature of renewable energy – it relies on natural resources that are intermittent
and often not available when they are needed most at peak hours. By combining a renewable
source with a fossil-fuel powered source, energy producers can back up their intermittent energy
supply with a reliable source (so-called “firming” of renewable energy).
Other incentives include lower construction costs (because developers can optimize ancillary
equipment such as controls and valves and avoid duplicate costs for required equipment such as
transmission lines), a higher ratio of income to fixed costs (by spreading capital costs over more
electricity output per year), and the ability of utilities to meet renewable portfolio standards
without having to build an entire new facility.
There are also multiple challenges potentially faced by hybrid energy systems. One is permitting
– depending on the type of facility and its location, renewable energy projects may be regulated
by different jurisdictions and different environmental laws than fossil-fuel powered projects.
Consequently, obtaining regulatory approval may be more expensive because a developer may
have to pay additional fees and hire or train additional staffers to manage both aspects.
Another is spatial – fossil fuel infrastructure, such as pipelines, may not always be located near
places that would be ideal for wind or solar power.
In addition, public perception may affect the ability of developers to obtain approval or financing
for a hybrid energy system. Depending on values and opinions, a renewable energy project that
has a fossil fuel component may not be attractive to investors or the local community because of
perceived environmental and human health risks.
Conversely, a fossil fuel plant that adds a renewable energy component may face opposition
because of aesthetic and noise concerns. These hurdles seem minor, however, compared to the
additional benefits such energy systems provide.
As for the future of hybrid energy systems, they are likely to make renewable power facilities
competitive enough with fossil fuel power plants to incentivize and accelerate the construction
of more energy projects incorporating renewable energy components.
Moreover, these systems will likely increase innovation and advances in technology by opening
the dialogue between two types of industries often perceived as being on opposite sides. Knowing
that strong relationships thrive on the ability of each member of a group to compensate for the
other’s weaknesses and to complement the skills each brings to the table, this may be a marriage
that’s built to last.
Jeanette Schuster is an attorney in the environmental and natural resources practice group at
Tonkon Torp LLP. Contact her at 503-802-2114 or [email protected].