Power plant use signals energy market changes
NEW ULM — The electrical distribution plant provides a unique benefit to New Ulm. The plant is capable of providing all the power for the city if needed, but recently its capacity has benefited the state power grid.
In the last year, the Midcontinent Independent System Operator (MISO) has called on the New Ulm plant twice to use its steam generators, a development that could hint at changes in the energy market.
The plant produces energy by creating steam and electricity. It does it through a multi-step process.
First, the plant brings in raw water and runs it through a reverse osmosis filter to soften the water. This removes any minerals from the water that could slow down the system. After the water is treated, it is moved to a boiler and heated using natural gas, converting it to steam that travels to a turbine. The steam turns the turbine, powering a generator and creating electricity.
The steam created by the process is also used as a heat source for downtown Minnesota Street customers. Steam tunnels extend several blocks out from the plant.
Plant engineer Glen Hillesheim said the steam system has two components, the downtown and industrial side. A 10-pound-per-square-inch gauge system provides energy to the downtown commercial and residential heating customers. A 140 psi system provides heat to industrial customers who use steam with their process. This is a unique system, as not too many communities use steam heat.
Hillesheim said the downtown steam heat is primarily used in the winter months, but the industrial steam is used year-round. Industrial steam customers include Firmenich, AMPI and recently Black Frost Distilling.
Even though the plant could produce enough energy locally to power the city, most of the electricity comes from outside New Ulm. The Public Utilities Commission contracts with larger power companies to provide energy to the city. This is because it is cheaper to buy energy off the grid than produce it locally.
PUC Director Kris Manderfeld said the energy transmitted to the city is generated from a variety of sources, including natural gas, coal and renewable energy. By combining energy sources, the net cost is lower than the cost of using only natural gas.
This arrangement benefits utilities by giving New Ulm additional capacity. Manderfeld said in the event New Ulm would ever need additional energy capacity beyond what is being supplied from the grid, it can be produced locally. PUC would not have to go out and buy more capacity.
Another benefit is if a power emergency occurred, and New Ulm was cut off from the larger energy grid, it could self-power until a connection to the grid was restored.
A third benefit is New Ulm Public Utilities can sell capacity to MISO if the power grid requires additional load. In a sense, New Ulm’s plant is on standby in case the larger suppliers need help. This year, MISO requested New Ulm’s plant turn on its steam generators twice to help supply energy to the grid.
Hillesheim and Manderfeld said this was unusal. In the past, MISO has asked to use the plant’s fuel oil generators during peak energy needs during the winter months. This year, the steam generators were needed during the summer. MISO pays New Ulm Public Utilities for the use of its capacity.
Hillesheim said summer energy requirements are higher than winter, because air conditioning requires more energy than heating.
Manderfeld said the MISO request to use New Ulm’s energy capacity coincided with hot days with limited wind. People are more likely to use air conditioning on warm days, but limited wind also means limited wind energy production.
Manderfeld said the request to use New Ulm’s capacity shows things are changing in the energy market. A greater reliance on renewable energy reduces overall costs but will require plants like New Ulm to provide a base load during peak energy usage.
The plant was waiting for a call from MISO to turn on the generators last Friday and Monday, due to the extreme heat, but capacity was not required. Manderfeld said it was possible New Ulm could be called to provide capacity again before the end of summer.
To ensure the plant provides backup capacity, Public Utilities is required to maintain equipment.
For insurance purposes, a full overhaul must be done on the generators every 10 years or 50,000 hours of operation. In the last 10 years, the No. 4 generator operated for about 14,000 hours but was last overhauled in 2012 and is due for the next overhaul.
The Public Utilities Commission recently authorized the overhaul, which is estimated to cost $500,000.
The project is scheduled to begin in spring 2023 but might be delayed to fall 2023, depending on the progress of the Center Street bypass project. The overhaul should take between six to eight weeks if no problems are detected.