Midland Cogeneration Venture's facility in Michigan offers electricity for customers throughout the Midwestern United States and steam for large local facilities.
There is no question that natural gas from U.S. shale plays a critical role for energy independence and a heyday as one of the resources of choice in the energy industry throughout the United States. Part of the clean energy economy, Midland Cogeneration Venture (MCV) in Midland, Mich., is the perfect example of a major producer of energy deploying the tremendous energy efficiency benefits of combined heat and power technology.
“With the abundance shale gas, it is the more favorable industry to be in,” says Pete Milojevic, president and CEO of MCV. “The challenges for us are not technical, but how we can allow additional marketing of our cost competitive energy to additional customers with more open access to the market.”
MCV is the largest gas-fired cogeneration facility in the United States, capable of producing up to 1,633 megawatts of electricity and up to 1.5 million pounds per hour of process steam for industrial use. MCV is owned by Borealis Infrastructure with interest from the Global
Strategic Investment Alliance. According to Milojevic, the plant’s electrical capacity represents approximately 15 percent of the supply for the state of Michigan. Also, it is connected to the Midcontinent Independent System Operator (MISO).
The MCV facility originally was designed to be a nuclear power plant, according to Milojevic. Plans were to construct a two-unit pressurized water reactor station when construction began in the 1970s. However, due to issues with construction and design, and the changing regulations for the nuclear industry at the time, those plans were abandoned when the plant was about 90 percent complete.
In the late ’80s, Consumers Energy installed cogeneration equipment to utilize the steam turbines still in the facility, making the plant a combined-cycle cogeneration facility. MCV began commercial operations in 1990, serving Dow Chemical with 100 percent of its industrial process steam.
The core power generation equipment was manufactured by ABB, which is now known as Alstom, and General Electric.
According to MCV, the steam turbine cycle produces roughly one-third of the power and the gas turbine cycle produces twothirds of the power output of the combined cycle power station. By combining both gas and steam cycles, high input temperatures and low output temperatures can be achieved. This adds efficiency to the cycles, because they are powered by the same fuel source. the company states.
Gaining Market Share
MCV is located in the state of Michigan, which is one of 16 states that regulate its electric industry. That means that a vast majority of power generation must be sold to customers through monopoly utility companies. This creates an uneven playing field for companies who want to provide cost competitive energy directly to customers.
In order to better serve the state, Milojevic believes Michigan legislators need to consider electricity market relaxation to give companies like MCV an opportunity to be on a level playing field to provide healthy competitive electricity rates for large customers including manufacturing facilities.
“What can be done is to modernize the rules for the state, so companies like us have an opportunity to provide cost competitive electricity to customers like manufacturers. Customers need to have freedom to make choices to select suppliers of electricity. They want
to select from potential pro viders based on an equal footing, apples-to-apples comparison in a fair and open market,” Milojevic says. “This can’t be done in the current setup because we have to go through the big utility monopolies.”
MCV does have a long-standing agreement with Dow Chemical, but Milojevic says that is only due to physical locality and a historical agreement.
Despite the issues with the regulatory market, Milojevic says MCV is confident it will see an expansion of capacity in the near future, and
there are plans for the plant to ramp up. With the likely reductions coming in coalfired generation with government regulations like the Clean Air Act forcing plants to either shut down or reduce production, MCV is poised to pick up the slack in the marketplace.
MCV wants to undergo an expansion that will add approximately 660 megawatts of capacity through another highly efficient combin ed cycle natural gas plant.
“We have maximum flexibility with our plant, and obviously we’re very efficient in converting energy from natural gas to electricity and steam,” Milojevic says. “Additional capacity from MCV is good for the state and for those connected to MISO. We have an economy of scale and infrastructure for expansion that nobody else has, with our large cooling pond, the electricity switchyard connections, , as well as ample natural gas line supply capability to accommodate this expansion.”
Milojevic says there is a tentative timeframe for the expansion’s completion to correlate with the anticipated coal-fired generator shutdowns, as well as deregulation of Michigan’s electricity market. In parallel, the company is actively in dialogue with several potential customers currently in Michigan, or looking to locate their facilities to Michigan. Such an expansion will cost more than $500 million.
The Future of Clean
MCV is one example of clean energy generation on a massive scale, and the rest of the nation is starting to take notice. In October, Phyllis Cuttino, director of Pew Environmental Group’s Clean Energy Program, toured the facility as part of the Pew organization’s goal to highlight clean energy economic boosters in the United States.
Despite the national attention, Milojevic wants MCV to be ready to better serve the Michigan economy when the time comes.
“Our vision is to be Michigan’s choice for energy,” he says. “In general, we’re proud to serve the Michigan economy with cost competitive energy.”