HOLLAND — Making batteries requires energy. Many.
The Holland Board of Public Works electric utility plans to invest up to $10 million to build new infrastructure to supply this power to the planned expansion of LG Energy Solution’s battery plant in Holland. .
The company told HBPW it will need 71 megawatts of electricity to power the expansion on land north of its existing facility at 1 LG Way. HBPW’s largest electricity customer to date required approximately 10 MW.
HBPW chief executive Dave Koster said the utility is “well positioned as a utility” with the ability in its “miscellaneous” energy portfolio to supply that energy, but the project could bring the electric utility to accelerate plans to add to its portfolio, particularly with the possibility of early retirement from the coal-fired plants from which HBPW derives part of its energy.
The utility uses its natural gas-fired power plant to produce more electricity than local demand requires and sells the electricity wholesale in the market, Koster noted.
With LG’s proposed new plant, if their current projections hold, local retail electricity sales will increase by 40%. The utility will mostly stop selling that extra power in the market and deliver it to LG instead.
Although this additional wholesale revenue for HBPW and the City of Holland will be eliminated – profits are split 50-50 between the entities – utility officials told the City Council of Holland that retail sales would represent little Near that dollar amount, with LG expansion alone is expected to increase the utility’s total retail electricity revenue by 28% and add $1.7 million to HBPW’s annual retail dividend payout to the town.
The city receives a dividend payment on HBPW’s revenue from retail sales that is equal to 6.25% of the average retail sales over the past three years.
Additionally, HBPW plans to invest approximately $10 million to build a new substation near the plant to supply electricity.
The board agreed to spend about $5 million to order transformers for the substation on Wednesday and also agreed to a buy-sell deal to buy part of the property where the substation will be built. The city is still in the process of acquiring adjacent land.
An agreement with LG, also approved by the board on Wednesday, stipulates that if HBPW’s incremental revenue from power sales to the plant is not enough to cover the utility’s initial investment in the substation, LG will have to cover the shortfall, up to $7. million.
Koster said LG’s power needs won’t cause a major change in power generation operations at Holland Energy Park, which he says is already “often” running at full capacity to generate additional electricity. which is sold to other utilities and in the market.
But the plant could operate more regularly at full capacity due to LG’s future demands, particularly on weekends and holidays, when they would have previously seen reduced demand.
Koster said he sees two benefits: first, the plant operates more efficiently when operating at its highest load, he said, and second, it will provide more consistent production of the waste heat that is routed under Dutch sidewalks to melt the snow.
HBPW draws its electricity from the 125 MW natural gas-fired Holland Energy Park; 47 MW from two coal-fired plants, Consumers Energy’s JH Campbell plant and DTE’s Belle River plant; approximately 30 MW from solar farms, 35 MW from wind power and some landfill gas sources; as well as peaking facilities that burn gas and oil and have the capacity to generate an additional 157 MW in an emergency.
LG’s large power demand will “accelerate coal replacement decisions,” Koster said, as the utility develops its plans for replacing the Campbell and Belle River plants. The owners of both factories recently announced plans to bring forward their pensions to this decade, although those plans have yet to be approved by state regulators.
Koster also said the utility will also continue its energy waste reduction programs for residential and commercial customers to increase energy efficiency in the service area.
No longer mandated by the state, the utility voluntarily decided to continue with its EWR program and increased the target to 1.5%.