$1.8B in new NW Ohio energy plants

Oregon won venture capital commitment that has resulted in critical development infrastructure and new jobs

Two venture capitalists/industrialists and their companies that are focused on investments in the energy markets and both located in the Boston area are placing a large bet on northwest Ohio, in excess of $1.8 billion. One of the venture capitalists and industrialists, William Siderewicz, P.E., traveled to Oregon in mid-February to announce the decision to build a second gas-fired power plant in the community. The newly announced project is being developed by Clean Energy Future, LLC (CEF), a Massachusetts company formed in January 2011 and whose principals have been involved in constructing other gas-fired energy plants with over 14,000 Megawatts (MW) of capacity.

CEF energy plant

The project announced in mid-February is a $900 million electricity generation plant that will have the capacity to produce 955 MW of power. It will be located in Oregon east of North Lallendorf Road, at the end of Parkway Road, and immediately south of the existing railroad line. The new project is located directly across the tracks from the Oregon Clean Energy Center (OCEC), a sister development that is completing construction and expected to open by June 1. OCEC is a gas-fired plant with a capacity of 800 MW, according to CEF.

“To put this in perspective, the combined capacity of the two plants is about twice the output of FirstEnergy’s Davis-Besse nuclear facility,” explained Siderewicz in an interview with Toledo Business Journal (TBJ).

“When we applied to the Ohio Power Siting Board, they asked us to describe what the economic ripple effect is of building a plant like this,” said Siderewicz. “We went ahead and added up all the elements that make the economic impact: jobs, parts, supplies, taxes, buying natural gas, transporting natural gas, and over a 40-year life cycle, which is probably two-thirds of the life cycle of a plant like this, a single plant like this is about $14 billion, and so both of these plants represent a huge stone being thrown into a pond that creates a $28 billion ripple going out.”

“We are extremely proud and excited for this announcement,” said Lindsay Myers, executive director of Oregon Economic Development. “Clean Energy Future and its developers have been a pleasure to work with. Their commitment to Oregon and the northwest Ohio region is unwavering. The partnership that exists between Clean Energy Future, the City of Oregon, and the City of Toledo showcases our commitment to collaboration and growth. We are excited for our community and our bright future.”

Venture capital

In an interview with Toledo Business Journal, Oregon Mayor Michael Seferian and City Administrator Michael Beazley shared efforts that led to the community’s winning initial venture capital funding that has since resulted in new investment, new economic development infrastructure, and new facilities that will approach and pass $2 billion.

In response to seeing a request for proposals for a site for a new gas-fired energy plant about seven years ago, the two Oregon leaders met and discussed the assets and capabilities that their community possessed that could support such a venture. Not being familiar with such a facility, they drove to Fremont to see an actual gas-fired energy plant in operation.

Realizing that Oregon was well-positioned as a site for the proposed gas-fired energy plant, Seferian and Beazley began an effort to win this project. They were able to persuade the two principals behind the venture (Siderewicz and William Martin) to travel to Oregon to examine potential sites in consideration of possible selection. This began what has become many trips from Boston to Oregon for the two business professionals. “We have traveled to the area and spent so much time in Oregon that we might need to have an apartment here,” stated Siderewicz.

On one of their trips to the area in February 2013 following the efforts by Seferian and Beazley, the two venture capitalists/industrialists met with TBJ to discuss their plans for the development of the Oregon Clean Energy Center. Information about the venture capital funding being put into the project was shared in an article published that March.

“The two partners explained that to date they have already invested close to $2 million of their own money into this project. They expect their personal investment will be close to $7 million by August and this money will be lost if the project does not move forward.

“Martin and Siderewicz discussed the financing for this large project. $300 million of equity will be placed into the project and $500 million of borrowed funds, provided by a consortium of banks, will be utilized.”

During the 2013 interview, the two venture capitalists/industrialists shared information about the companies in which each was involved.

“Martin also heads a company called CME Energy LLC in Boston and Siderewicz is also a principal in Pure Energy Resources LLC, located in Burlington, Massachusetts.

“CME Energy is involved in the development and financing of privately-owned electrical power, cogeneration, and other forms of energy projects. CME is interested in all forms of technology which have a low negative environmental impact, including solar, geothermal, wind, and gas-fired projects.”

Siderewicz is currently the president of Clean Energy Future, LLC which late last year announced another large gas-fired energy plant in northeast Ohio, the Trumbull Clean Energy Center, a 940 MW facility similar to the recently announced plant in Oregon.

Project team

Siderewicz shared information about the team formed to formally advance development of the CEF project which includes Siemens Energy, Fluor Corp., BNP Paribas, and Siemens Financial Services.

William Siderewicz, P.E., Principal, Clean Energy Future, LLC “We’ve been studying the Oregon energy picture for about 7-8 years,” he said. “It actually goes back to when we first developed the Fremont project back in the early 2000s, and we noticed there was a tremendous need in both the northwest part of Ohio as well as the northeast side of Ohio. This project will be our fifth project in northern Ohio that indeed represents about $5 billion of investment that we’re bringing to the state.”

According to Siderewicz, Siemens Energy will supply the primary equipment going into the plant, estimated to be valued at over $200 million.

The Siemens technology is called combined-cycle gas turbine (CCGT). It is known as two-on-one combined cycle cogeneration. There are two gas turbines that will each spin generator sets. Exhaust gases will go through a heat recovery steam generator (HRSG) which takes heat from the exhaust gases and then turns it to steam in order to spin a steam turbine that will also generate electricity. The use of natural gas and the ability to recapture and use the exhaust gases increases the efficiency, lowers the environmental emissions, and reduces the production costs to generate electricity.

Another team member is Fluor Corp., an engineering, procurement, and construction contractor that will be involved in building the power plant once it has been designed.

Financing for the project will be managed by BNP Paribas, a French-based bank and seventh largest in the world, according to information from CEF. It is providing $400 million of equity and $500 million of debt for the project. Another team member, Siemens Financial Services, has already committed to put in $100 million of equity to help finance the project.

Timetable

The 800 MW Oregon Clean Energy Center plant is still under construction on a 30-acre parcel in Oregon and is expected to be completed this spring. The second, 960 MW CEF facility is expected to begin construction in early 2018, and to be fully operational in 2020.

“We’re really happy about this, because not only is it a great project for all the jobs and revenue that it brings to the region, but far more important is the fact that we can make electricity at a cost of probably 2.5 cents per kilowatt hour,” said Siderewicz “A plant like this can serve the needs of about 900,000 homes, so both plants side by side have the ability to provide low-cost power to 1.8 million homes here in northwest Ohio, which is pretty phenomenal for a piece of land that measures about 30 acres,” he added.

Siderewicz said his company had been working on the project since October 2015, and is about to file formal applications in Columbus for the air permit and the Ohio Power Siting Board permit.

Siderewicz estimated that the plant would buy $220 million in natural gas each year, most of which will come from eastern Ohio. While the pipeline could be expanded, Siderewicz explained that the plant’s energy generation capability was limited only by the power lines in the area.

CEF will utilize the same technology used in OCEC and of a similar scale. One of the things that attracted Clean Energy Future to Oregon, according to Siderewicz was the presence of local skilled labor technicians to build and run these machines.

“When Bill and Bill first came to town, among the things that drove them to locate here was that we had water, we had opportunity for partnerships, we had a gas line, and a source of gas starting to be developed in Ohio, and we had access to the utility grid,” explained Beazley. “One of the other things they talked about was quality local contractors. We have our refineries here, and we have good skilled trades, workforce, the folks are here from the trades and the Associated General Contractors, and they put people to work here and know how to build complicated projects.”

Water development

Development of the power plants has also encouraged the City of Toledo and the City of Oregon to integrate their water systems.

“We’re very, very fortunate to have not only the City of Oregon as our home, but we now have the City of Toledo working in partnership with us, said Siderewicz. “This is just one more example of how I have discovered, working in Ohio, how communities, even though they have differences, they also have common threads to each other. Today we celebrate that commonality between the City of Toledo and the City of Oregon. We will, in essence, integrate the water systems between both cities that never existed before, so if there were some kind of catastrophic event in Oregon where they needed the help of Toledo, they open up a particular valve and water flows, and one serves the other, and conversely the opposite is true, if something were to happen where Toledo needs a little help, the valve opens and water flows the other way, from the City of Oregon into Toledo. So in addition to us being a revenue source to the City of Toledo, they also are integrated physically, as well as from a systems standpoint.”

“This is really a great opportunity for northwest Ohio, and for the City of Toledo and the City of Oregon,” said Toledo Mayor Paula Hicks-Hudson. “In fact, you are actually proving what I’ve been saying since I’ve become Mayor and had the opportunity to travel throughout the country, and that is that we have this great asset called fresh drinking water that is probably better than any other throughout the United States, and I will say that very proudly. We have been able, with the help and leadership of the Mayor of Oregon, and now with this wonderful company, to prove that with this asset we can drive development, we can drive a better place for all of our communities to work in partnership. I truly believe that this is how we will move northwest Ohio and be really competitive throughout this country, not just in this region, in providing opportunities for companies to grow, for our citizens to benefit, and for our industries to be top drawer throughout this country. I believe this proposed partnership is a clear example of how we can focus the future of our communities together and to make us moving forward holistically, and to use water as an economic development tool.”