Overall this is a win for Delaware, NRG, and hopefully a portent of future added electric generation in the state. Delaware imports 60% of its electricity and pays a premium price for electricity because we add to grid congestion.
The State of Delaware will provide a half million dollar grant to NRG to defray the cost. A good question is why the state kicked in 2% of the project cost. Would NRG really have passed on the project if it cost 2% more? Calpine converted their Edge Moor generating power facility from coal to natural gas with no state help and it is forty times larger.
The Dover conversion could reduce carbon dioxide emission by twenty-four thousand tons a year. The state grant will cost $.80/ton of reduced carbon dioxide over twenty-five years. Regional carbon emission credits currently cost $1.89/ton, the minimum allowed price. The Edge Moor conversion saved forty times the carbon dioxide emission with no subsidies.
In contrast, Delaware’s sixteen megawatts of solar capacity also reduces carbon dioxide emission by twenty-four thousand tons a year, the same as the Dover conversion.
However, state and federal subsidies, including the value of Solar Renewable Energy Credits issued for each megawatt of solar power produced, will total about $150 million. The carbon dioxide reduction for solar energy will cost $250/ton in subsidies over the expected twenty-five year life! Remind me again why we are subsidizing solar power.
Director, Center for Energy Competitiveness
Caesar Rodney Institute