Case ISO New England, USA:


MAKE MONEY WITH

FLEXIBLE GENERATION



























HOW ENGINE-BASED POWER PLANTS
MAXIMISE PROFITS IN ISO-NE?

The electricity markets now reward flexibility throughout North America, including ISO-NE. This should be taken into account in investment analysis. By choosing the most flexible technology for new-build power plants, the owner maximises returns.

According to an in-depth value analysis by Wärtsilä, a 200 MW reciprocating engine power plant offers 20.8% equity IRR in ISO-NE. For the gas turbine options the IRR is 14.3-17.6%. Fast-reacting engine power plants simply generate more revenue in the day-ahead, real-time and ancillary services markets. In a nutshell: the faster the machines, the more money they make in the volatile market.


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CASE STUDY



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“Since the real time marketplace came into play,
we have seen our running hours of our 170 MW
Smart Power Generation plant growing 10-fold.
That’s due to the flexibility of the engines.”

GEORGE HESS, VICE PRESIDENT OF PRODUCTION, GOLDEN SPREAD ELECTRIC COOPERATIVE.








HIGHEST IRR WITH ENGINE POWER PLANTS

Power plants based on large reciprocating engines are de facto the most flexible generation technology out there. Unlike the gas turbine alternatives, they are capable of, for example

• Feeding megawatts to grid in 30 seconds
• Starting to full load in 5 minutes
• Starting several times daily without extra costs
• Operating efficiently on low and partial load

The value analysis was made a with a back-cast analysis of 2011-2014, and a combined 20-year future outlook. Wärtsilä 50DF dual-fuel engines were used in the analysis, enabling the use of natural gas as the main fuel and light fuel oil as back-up. Using the gas-only alternative, Wärtsilä 50SG, the IRR difference is even larger. This is due to higher unit output, lower heat rate and lower capex.



 


Because of their inherent flexibility, power plants based on reciprocating engines are more capable of capturing revenue streams in the volatile market place than gas turbines. This translates into a higher equity IRR. The volatility will increase with more intermittent wind and solar energy, growing the value of flexibility even further.





LET’S TALK

Reciprocating engine power plants make more profit in ISO-NE than the gas turbine options. This is because the market now rewards flexibility. The trend is very similar in other markets such as Southwest Power Pool.

Please contact us to learn more.

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MATTI RAUTKIVI
Origination, Americas




HOW DO YOU OPERATE AND MAINTAIN AN ENGINE-BASED POWER PLANT?

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O&M

Engine power plant operation and maintenance








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GENERATION
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ENERGY SOLUTIONS
The right amount of power at the right time