$400 million Marshall Energy Center on track and already promoting development
Development Partners announced last year it would build the Marshall Energy Center.
$400 million Marshall Energy Center on track and already promoting development Development Partners announced last year it would build the Marshall Energy Center. Check out this story on battlecreekenquirer.com: https://www.battlecreekenquirer.com/story/news/2018/08/22/marshall-energy-center-natural-gas-fired-power-plant-track-promoting-development/981318002/
Kalea Hall, Battle Creek Enquirer Published 7:00 a.m. ET Aug. 22, 2018 | Updated 6:32 p.m. ET Aug. 22, 2018
Construction on the Marshall Energy Center will start in late 2019. The natural gas-fired power plants will produce 1,000 megawatts of electricity.(Photo: Provided)
Scott Fleming understood from the start a $400 million natural gas-fired power plant would be a big deal.
"We definitely knew this was a winning project," said Fleming, the CEO of the Marshall Area Economic Development Alliance.
Development Partners, a White Plains, New York development company, announced last year it would build the Marshall Energy Center, which initially will have one 500-megawatt plant and could eventually have two.
The project is now in the permitting phase. Development Partners expects to have a connection to the Midcontinent Independent System Operator grid in place next year, which will allow electricity from the plant to get out to residential and commercial customers in Michigan and other states.
Construction on the first plant is set to start in late 2019, and the plant should be operational by mid-2022, able to serve up to 500,000 customers. The second plant will be built based on market needs.
The development of one plant will bring between 300 and 500 construction jobs and create 20 and 25 direct jobs and 60 indirect jobs once the plant is up and running.
Marshall economic development officials have already used the project to help spur more development in the city. Marshall Hospitality LLC submitted a proposal to the city to build two four-story hotels and two restaurants earlier this year. One of those hotels is set to break ground this fall.
"If you have infrastructure going in then you are getting businesses' attention, especially new ones wanting to build," Fleming said.
Marshall hotel construction to begin this fall
The city also has some other "hot prospects" interested in developing in the historically charming Marshall that Fleming can't currently discuss.
Development Partners opened a natural gas power plant this past spring in New Carlisle, Indiana. The impact is already taking shape.
The plant helped to put the area on the map as soon as ground was broken at the site and more so after the center was built, said Bill Schalliol, executive director of economic development for St. Joseph County in Indiana where the St. Joseph Energy Center is located.
"That really raised the profile and showed that projects could happen here with not a lot of complication," Schalliol said. "We have a good project that shows that things can get done and get done when they need to get done."
Now, the county's economic development team has five new projects slated to be announced by the end of this year, he said, and potentially five others next year.
"We think it will help us be a leader in moving the other projects forward," Schalliol said. "We certainly knew that there would be energy generated off this. I have been doing this 20 years and never seen this much. "
The Development Partners built another natural gas-fired power plant in New Carlisle, Indiana. The plant there opened this spring. (Photo: Provided)
Marshall's project
In both Marshall and New Carlisle, the natural gas power plant projects were initially met with skepticism.
Natural gas power plant development projects have been discussed on the site where the New Carlisle plant is located since 1989 but never came to fruition.
After more than two years of construction, a 700-megawatt plant opened in April.
"From our standpoint, the project is a huge success from 2014 to the day it opened. It allowed us to generate momentum for the industrial park area," Schalliol said. "It has been nothing but a success. It has helped catalyze the development in the corridor."
The Marshall Energy Center will sit on 70.5 acres inside the industrial park.
"These are state-of-the-art electric generating stations powered by natural gas," said Willard Ladd of Development Partners. "This is a highly efficient way to produce electricity. It is 60 percent efficient versus conventional plants which are around 30 percent efficient."
Brooks Industrial Park will house the new Marshall Energy Center, which will be operational by mid-2021. (Photo: Kalea Hall/The Enquirer)
To bring the plant to Marshall, the city will have to install new wells to supply enough water to the plant. The city is currently working with the state's Department of Environmental Quality and won't know the costs associated with adding the wells until the state says where it will allow the city to draw the water, City Manager Tom Tarkiewicz said.
"Our current well field doesn't have the capacity to get them what they need," Tarkiewicz said. "The cost to do the water improvements will pay back in the [energy center's] water usage so it won't affect our ratepayers."
While the construction work on the energy center will provide a short-term economic stimulus to the area, Huntington Bank Senior Economist George Mokrzan believes the project of building a new energy center also will have lasting value to Marshall because its a "fundamental key" to the infrastructure there.
"A good secure energy supply is something that every community needs," Mokrzan said. "That should keep on providing benefits for the long-term future."
The Marshall Energy Center will sit on 70 acres inside the city's Brooks Industrial Park. (Photo: Provided)
Natural gas in Michigan
The electricity produced at the Marshall Energy Center will hook into the electrical market and be sent out to energy consumers.
Marshall was selected for the project, in part, because Ladd believed the area needed more energy production.
Last July, the Michigan Public Service Commission noted concerns it had about the ability of electric providers to meet established reserve capacity requirements in the Lower Peninsula.The commission said it is "highly likely" that Michigan "will need additional capacity resources within the state, due to additional expected [power plant] retirements, to meet local capacity requirements in the coming years."
"This area is underserved with [electricity] generation, and, while other parts of Michigan electric loads are flat or declining a little bit, this area of the state is actually experiencing stable if not increasing electric demand with new business coming to the area," Ladd said. "By putting this generation where the load is needed, where there aren't many plants, you help stabilize the electric system."
Marshall's industrial park also stood out because it has gas pipelines that will bring the natural gas supply to the site.
Natural gas comes to Michigan from Indiana, Ohio, Wisconsin and Canada, according to the U.S. Energy Information Administration.
"There have been large discoveries of natural gas throughout North America so the fuel is abundant," Ladd said. "Combined with the high efficiency of the plants we use, it has become an attractive source of electricity generation."
Coal is the largest source of fuel for Michigan's electricity generation, but, in 2017, coal fueled less than two-fifths of the state's net generation, down from about half just three years earlier. Meanwhile, natural gas plants' share of electricity generation nearly doubled in 2017, according to the Energy Information Administration.
The state's energy providers, Consumers Energy Co. and DTE Energy, decided to decommission coal plants and use other fuels for electric generation.
Consumers Energy Co. provides electric service to 1.8 million customers in Michigan's Lower Peninsula including Calhoun County.
The company has two natural gas power plants and five coal-fired power plants, but it plans to close all of its coal plants by 2040. Consumers also uses wind and solar power.
"We are confident as we close the coal [plants] we can meet our needs with more renewable sources," said Brian Wheeler, spokesman for Consumers.
The company at this time has no plans to build its own natural gas power plant but can purchase energy produced by natural gas plants like the one in Marshall if it needs the supply.
DTE Energy, however, plans to build its own $1 billion natural gas plant in East China Township. A groundbreaking for the Blue Water Energy Center took place Tuesday.
DTE celebrates new gas-fired power plant in East China
DTE, which services 2.2 million electric customers in southeast Michigan, plans to retire three coal plants after the natural gas plant is operational. Two other coal plants will be retired by 2040.
DTE's primary sources for electric generation will be natural gas, wind and solar power.
While natural gas is a fossil fuel like coal, it creates less emissions, it's easier to transport, is domestically abundant and highly efficient, DTE spokesman Brian Corbett said.
Ladd sees natural gas a "logical replacement" for coal.
"A lot of these coal-fired facilities have reached the end of their useful life." Ladd said. "So this is a highly efficient way of using natural gas to replace coal facilities which probably made sense at the time 40 or 50 years ago."
Contact Kalea Hall at (269) 966-0697 or khall@battlecreekenquirer.com. Follow her on Twitter at @bykaleahall.
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