Developer Abandons Virginia Gas-Fired Power Project

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A Michigan-based energy company that planned to build a 1.1-GW gas-fired power plant in Virginia has pulled the plug on the project.

NOVI Energy on July 9 said it would abandon development of the C4GT plant in Charles City County, which is southeast of Richmond. The project, one of two gas-fired plants planned for the area, faced local opposition, and already had been plagued by delays. The developers also were involved in a dispute with Virginia Natural Gas (VNG), which serves customers in southeastern Virginia, about supplying the plant's feedstock. VNG earlier this year sued C4GT's developers for allegedly breaking the terms of a supply agreement.

A statement issued last week by a group representing the developer said, NOVI Energy cares deeply about the communities it serves and the affordable, reliable power facilities it helps build. After taking feedback from the community and assessing the changing market, NOVI Energy has decided not to pursue the C4GT power plant."

This is a rendering of the proposed C4GT 1,100-MW natural gas-fired power plant in Charles City County, Virginia. NOVI Energy, the project developer, on July 9 said it was canceling the plant's construction. Courtesy: NOVI Energy

NOVI Energy did not immediately respond to a July 12 request for comment about the situation.

Local officials in Charles City County earlier this year had voted to begin the process of reclaiming land on the proposed site of the plant. Environmental advocates and local residents in May held a virtual meeting and called on state officials to stop the project.

U.S. Rep. Don McEachin, a Democrat from Richmond who represents the area in Congress, in a statement Friday said, Construction of a new natural gas power plant in Charles City County would bring significant environmental, health, and economic implications to the region. This project would have risked endangering the health of residents, particularly members from frontline communities, low-income communities and communities of color, who disproportionately suffer the health effects of harmful, toxic pollution."

Project Began in 2016

NOVI Energy formed C4GT, LLC, in 2016 with the purpose of developing a gas-fired power plant in Charles City County, at a site near Roxbury Industrial Park. The plant's construction was approved by Virginia regulators in 2017, but financing problems-along with opposition from local groups and environmentalists-quickly created challenges for the project.

NOVI in 2019 said the project would use two General Electric (GE) 7HA.02 turbines, along with GE heat recovery steam generators and other balance of plant equipment. The project's developers and VNG created a supply agreement in October 2019, and the gas company planned infrastructure to accommodate the plant through what it called the Header Improvement Project. VNG filed its expansion plan with state regulators in December of that year.

The supply contract called for C4GT to finalize debt financing agreements to pay for the project's development and construction by June 30, 2020. VNG in its lawsuit earlier this year said the agreement included safeguards for the utility in case the project was not found to be creditworthy," with C4GT asked to supply financing details and allow for $3 million in credit support."

The developers prior to the June 2020 date asked VNG to move the deadline to December 2020, as the project was still struggling to obtain financing. VNG President Robert Duvall in September of that year wrote a letter to the developers, saying his group had serious doubts as to the financial viability of C4GT's project." State regulators ultimately rejected VNG's plan for the infrastructure expansion because the plant's developers had not secured financing.

VNG in its lawsuit said it canceled the supply agreement because the project's developers did not meet their obligations and did not prove the plant's financial viability; the suit asked for $2.1 million in reimbursement to the utility for its costs.

Second Gas-Fired Plant Proposed For County

The second gas-fired plant planned for the area is the Chickahominy Power Station, a 1.65-GW facility in Charles City County. Chickahominy Power is a subsidiary of Balico, a Herndon, Virginia-based energy project development group. The Chickahominy Power Station is named to honor the Chickahominy Nation, an indigenous people that has populated areas of east-central Virginia near Richmond for centuries.

Gemma Power Systems is the engineering, procurement, and construction contractor for the project. The developers last year said the project would feature three Mitsubishi Power M501 JAC power trains in single-shaft configuration.

Chickahominy Pipeline, a company registered with Virginia's State Corporation Commission with the same address and registered agent as Chickahominy Power, recently sent a letter to residents requesting permission for site surveys associated with a gas pipeline project through five central and eastern Virginia counties. Balico has not confirmed that the pipeline would be used to supply the Chickahominy plant.

Rick DelaHaya, a spokesperson for VNG, in an email to the Virginia Mercury news group said the utility has not discussed a pipeline with Chickahominy or Encompass Energy, an energy services company also named in the letter to property owners.

-Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

The post Developer Abandons Virginia Gas-Fired Power Project appeared first on POWER Magazine.