NRG Energy’s Somerset Station Selected for Department of Energy Loan Guarantee for Due Diligence Review
PRINCETON, N.J.-(Business Wire)-September 25, 2009 - The U.S. Department of Energy (DOE) has confirmed that NRG Energy, Inc.’s (NYSE: NRG) Somerset Station plasma gasification project has been selected to proceed into the detailed due diligence phase of the DOE Loan Guarantee Program. NRG is requesting a $158 million loan guarantee for this renewable technology project, which will use up to 35% eligible, or Massachusetts Department of Environmental Protection-approved, biomass and if permitted, up to 100% eligible biomass. The proposed 112-megawatt (MW) repowering project would provide enough electricity to support approximately 100,000 homes in southeast Massachusetts.
“NRG supports advanced, environmentally beneficial technologies and plasma gasification offers a practical way for smaller coal plants, like our Somerset facility, to meet—and in the case of Somerset, beat—the state’s strict environmental standards,” said Drew Murphy, President of NRG’s Northeast Region. “Repowering Somerset Station with plasma gasification is a green and responsible project, and obtaining a DOE loan is an important step to help make it a reality.”
Upon successful completion of detailed due diligence by the DOE and loan structure negotiations, the Somerset plasma project would receive a loan guarantee under the DOE Loan Guarantee Program. NRG also is seeking to bring in additional equity investors for the project.
“Not only would repowering Somerset Station bring considerable capital investment to the region,” added Murphy, “but it would maintain the current plant workforce and produce about 250 new construction jobs during the 24-month construction period.”
Environmental Benefits
To retrofit Somerset Station, the existing 108 MW power plant would be redesigned with new Westinghouse plasma gasification technology that will use solid biomass (such as green wood) and coal feedstock. This feedstock would be heated to a very high temperature, producing a clean synthesis gas which is then combusted in the plant’s boiler. The process reduces sulfur dioxide emissions by over 95%, mercury emissions by over 95% and nitrogen oxide emissions by over 60%. Once built, this project would be the first large-scale use of plasma gasification for the production of electricity in the United States—a process developed by Westinghouse Plasma Corporation of Madison, PA (a wholly owned subsidiary of Alter NRG Corp. of Alberta, Canada) and demonstrated at commercial scale by Hitachi Metals in Utashinai, Japan.
Meeting Renewable Energy Standards
“Proposed federal renewable energy standards require that 20% of electricity be derived from renewable energy sources by 2020,” added Murphy. “By using up to 35% biomass as a fuel source—as presently permitted—Somerset will be 15 percentage points above the hurdle and a decade or more ahead of the curve.”
The U.S. Department of Energy’s Loan Guarantee Program paves the way for federal support of clean energy projects that use innovative technologies, and spurs further investment in these advanced technologies.
Established under Title XVII of the Energy Policy Act of 2005, the Secretary of Energy is authorized to make loan guarantees to qualified projects in the belief that accelerated commercial use of these new or improved technologies will help to sustain economic growth, yield environmental benefits, and produce a more stable and secure energy supply.
About NRG
NRG Energy, Inc., a Fortune 500 company, owns and operates one of the country’s largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the Company’s power plants provide more than 24,000 megawatts of generation capacity—enough to supply more than 20 million homes. NRG’s retail business, Reliant Energy, serves more than 1.6 million residential, business, commercial and industrial customers in Texas. A past recipient of the energy industry’s highest honors—Platts Industry Leadership and Energy Company of the Year awards, NRG is a member of the U.S. Climate Action Partnership (USCAP), a group of business and environmental organizations calling for mandatory legislation to reduce greenhouse gas emissions. More information is available at www.nrgenergy.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions and include our expectations and the timing and completion of the repowering of Somerset Station, and typically can be identified by the use of words such as “will,” “expect,” “estimate,” “anticipate,” “forecast,” “plan,” “believe” and similar terms. Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, hazards customary in the power industry, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, construction delays, changes in the wholesale power markets, changes in government regulation of markets and of environmental emissions, the condition of capital markets generally, and our ability to access capital markets.
NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect NRG’s future results included in NRG’s filings with the Securities and Exchange Commission at www.sec.gov.
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