A Houston-based company is seeking state and federal permits to construct a power generation plant in Anderson County that could generate more than $2 million in tax revenue.
The plant would use new technology to utilize compressed air in an underground salt dome in the process of producing electricity for the wholesale grid.
Only two plants in the world currently use the innovative process in Alabama and Germany, officials said.
Apex Compressed Air Energy Storage LLC is applying for permits for the proposed plant to the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency.
Jack Farley, the company’s president/CEO, anticipates receiving the permits in time for construction of the $350 million to $400 million power generation plant to start next spring. The plant’s output will be 317 megawatts.
It would be a “good sized facility” but not large in comparison to area power plants, Farley said.
“We will produce electricity for the wholesale market to put onto Texas’ transmission grid; we will be selling this electricity to utilities or power utilities or large retail providers,” Farley said.
The new plant would be called the Apex Bethel Energy Center because it would be at the site of the Bethel Salt Dome.
The plant would sit between existing facilities of Anadarko, an oil and gas company, and Atmos, a natural gas utility.
Farley expects construction will take about three years to complete, with a target date of 2016 for the plant to come on line.
An average of 200 construction workers would be at the site during construction. Once the plant begins operating, it will be manned 24 hours a day by about 20-25 full-time employees, Farley said.
Anderson County Judge Robert E. Johnston said, “We’re very excited they have chosen Anderson County to come. It’s going to be a very clean (facility). As a matter fact, they say (it will be) the cleanest natural gas-fired electric plant in the state, maybe in the country.”
The jobs that the plant will create will be high-paying jobs, Johnston said. “That is going to help. It also (will) help anytime you can get infrastructure in here to add to the tax roll.”
Farley said the plant would be a “significant” and a “major” taxpayer.
The tax revenue would increase to $2,084,000 if the plant is assessed at $400 million, Johnston said.
Deciding how to use the extra income for the county would be a really nice problem to have, Johnston said. The county could fix structures, fix more roads and reduce its tax rate, Johnston added.
In deciding where to locate the new plant, Apex searched and screened salt dome formations in Texas. The Anderson County site looked the “most attractive,” Farley said.
“Then we commenced to do due diligence on about a dozen sites and the Anderson County site really was a good fit for us,” he said.
There are already large caverns that have been built into the dome that date back to the 1970s and there’s large pipeline infrastructure available for natural gas supply for the plant.
The salt dome is attractive to Apex because the caverns have the size and pressure characteristics that are necessary for the power generating plant, Farley said. The availability of pipelines for natural gas supply and also an Oncor power transmission line through the site contribute to the attractiveness of the location, Farley said.
The storage cavern will let Apex have high pressure air available to fire combustion turbines in the process of generating electricity, Farley said. Apex will use electric motor-driven large compressors to inject air into the cavern.
High voltage wires connecting to the Oncor system will be used to deliver the energy to the grid system.
The cavern lies 3,700 feet below the earth’s surface. It is about 1,000 feet tall and about 250 feet wide with a capacity for 8 to 10 million barrels.
Use of an air cavern for power generation is uncommon, Farley said, but it will allow the plant to provide stability regulation services when the Texas grid needs more power or less power very quickly.
“That’s what’s unique about this technology; it’s a very fast responding power generation source,” Farley said.
“The storage cavern lets us have high pressure air available at a moment’s notice to fire the turbines and that’s one of the reasons it’s such a faster responding source,” he said.
The impact that Apex’s proposed plant might have on availability of electricity on the power grid managed across most of Texas by the Electric Reliability Council of Texas, often called ERCOT, is unclear at present.
It would “definitely” add to the capacity, Farley said, adding, “This is a very reliable technology.”
“We are always glad to see any movement on developing of new generation and new innovative technologies. We look forward to seeing this project progress to the point where it would qualify to be included in our resource adequacy outlook,” Ms. Searcy said.
The new plant will not be a burden to the county’s infrastructure system since it will not run a lot of trucks over county roads to the facility, Farley said.
“We’re past the hard part of determining the salt dome will meet our needs, but we still have a lot of permitting to do and a lot of additional work that has to be done before this is a project that can be constructed,” Farley said.
“We fully expect to get all those permits and to satisfy all the safety and permitting requirements,” he said. “This plant should be the cleanest natural gas fired power generating plant in the state. We are a very efficient user of fuel. Therefore, we don’t make as much emissions because we don’t burn as much fuel.”
Apex is a young company funded about a year and a half ago by an investment firm called Haddington Ventures. Haddington has been around since the late 1990s, Farley said, and has a focus on natural gas storage in underground caverns but also has an interest in this new power generation technology.