– Michael Messer, Standard & Poor’s
Tenaska is known nationwide for its successful and innovative development of highly efficient electric generating plants. Since Tenaska’s founding in 1987, the Business Development Group, with the support of its widely-recognized finance and engineering teams, has developed 9,000 megawatts of generating capacity, including eight plants it currently operates in the United States.
Technology: Experience and Innovation
Tenaska is a leader in the application of energy generation technology. The company’s employees are experienced in the design, construction and operation of combined-cycle, peaking and cogeneration projects fueled by natural gas and fuel oil, coal-fueled projects, waste coal-fueled projects and hydro-powered projects. Working with major equipment manufacturers, Tenaska selects the technology best suited for the location and market conditions. Tenaska is committed to cost-effective construction management, resulting in projects that are completed on schedule and within budget.One example of Tenaska’s innovation is its pioneering development of unique plants that are positioned to serve either of adjacent reliability organizations, such as the Electric Reliability Council of Texas (ERCOT) and the Southeastern Electric Reliability Council (SERC). Such capability provides Tenaska and its customers the flexibility to take advantage of new and changing business opportunities. The company's Frontier generating station was named Project of the Year in 2001 by Power Engineering Magazine for its innovative dual-grid design.
New Generation Opportunities
Interest in new generation has been increasing since 2005 as the over-supply of capacity that developed in the late 1990s and early 2000s has begun to be absorbed by demand growth and retirement of existing generating units. Tenaska is exploring opportunities to provide new capacity, including new technology to cleanly utilize our nation's abundant coal supplies.Because of recently high and continually volatile prices of natural gas, many utilities, cooperatives and municipalities began considering coal for new capacity in the early 2000s. While coal provides a diverse fuel choice and economic pricing even where no power shortage exists, growing concerns about the environmental impact of conventional coal generation and rapid, significant increases in construction costs have caused many of these entities to reconsider the desirability of such generation.
Tenaska has responded to potential customers’ desire to use coal in an environmentally responsible manner by investing in the development of the Taylorville Energy Center, (TEC) an integrated gasification combined-cycle (IGCC) project in south central Illinois, and the Tenaska Trailblazer Energy Center near Sweetwater, Texas.
In an IGCC plant such as TEC, coal is converted to a synthetic gas and then to substitute natural gas, which can either be used to produce electricity or sold into the natural gas pipeline. Pollutants can be segregated and captured prior to combustion, making IGCC plants significantly cleaner than conventional coal projects. TEC also pioneers a technology essential to the global effort to reduce greenhouse gases – the ability to remove and capture most carbon dioxide prior to combustion.
At the proposed Tenaska Trailblazer Energy Center, pulverized coal and supercritical steam technology are wed with state-of-the-art emissions control equipment to create a cleaner conventional electricity generating station. In addition, the plant would be among the first new conventional coal-fueled plants to capture 85 to 90 percent of the carbon dioxide (CO2) emissions on a commercial scale. The captured CO2 would be used to recover 10 million barrels or more of oil from Texas’ Permian Basin each year.
In 2007, the Illinois Environmental Protection Agency issued an Air Construction Permit, the first issued in the U.S. for a commercially-sized IGCC power generating plant, authorizing the construction of the $3.5 billion TEC. The proposed 602-megawatt facility would be among the world’s most environmentally responsible coal plants. The plant’s coal gasification technology will dramatically reduce air emissions, allowing high-sulfur Illinois coal to become a more environmentally sound fuel source. In 2009, TEC was selected by the U.S. Department of Energy to proceed into the term sheet negation phase for a $2.579 loan guarantee. To read more about the Taylorville Energy Center, please visit www.cleancoalillinois.com.
As the Taylorville project moves toward construction, Tenaska continues to gain significant knowledge about the IGCC technology. Involvement with this early IGCC project will give Tenaska a significant competitive edge as other potential customers look to utilize this new, environmentally responsible technology.
In 2009, the Texas Commission on Environmental Quality published a draft air quality permit to operate the 600-megawatt Tenaska Trailblazer Energy Center, and Tenaska selected Fluor Corporation (NYSE: FLR) to be the engineering, procurement and construction (EPC) contractor for the project. In 2010, Tenaska announced that it has sold a 35 percent equity interest in the Trailblazer project to St. Louis, Missouri-based Arch Coal, Inc. (Arch). To read more about the Tenaska Trailblazer Energy Center, please visit www.tenaskatrailblazer.com.
In April 2009, Tenaska announced that it is analyzing sites in Lebanon County, Pa. and Westmoreland County, Pa., to locate maximum 950 MW natural gas-fueled power generating facilities. The plants, in early development, would sell electricity into the PJM Interconnection market if built.
Tenaska believes that opportunities will develop for innovative conventional coal-fueled, natural gas-fueled and IGCC projects as capacity markets continue to recover. Its experts are constantly analyzing market needs and transmission constraints to select sites for future power plant development.
Financing Expertise
Since 1987, Tenaska has successfully financed approximately US$10 billion in power projects and credit facilities for Tenaska Marketing Ventures/Tenaska Marketing Canada, the company’s gas marketing affiliate.Tenaska is well known and respected by global lenders. The company’s worldwide capital sourcing includes export credit agencies, World Bank and other multilateral and bilateral agency financings. Tenaska financings have won numerous awards from prestigious international project finance magazines.
Customer-Focused Operations
Tenaska’s Operations Group prides itself on its ability to work with customers to maximize the value of Tenaska projects. Combined Cycle Journal has awarded Tenaska projects its “Best of the Best Practices” award for operational excellence.