Albany landfill offers cheaper power than proposed Geddes facility.
SYRACUSE, N.Y. -- The New York Power Authority this week chose a landfill gas-to-energy plant in Albany to provide supplemental power to the village of Solvay, a setback for a proposed wood-burning power plant in Geddes that had hoped to win the contract.
Solvay will pay about 5 cents per kilowatt-hour for electricity from Albany Energy LLC, which burns methane recovered from the Albany city landfill, said John Montone, superintendent of the village electric department.
The Albany plant submitted the lowest of 13 bids made in response to a request for proposals issued by NYPA, which supplies all of Solvay’s power. The village gets most of its electricity from NYPA’s hydropower facilities — for just 1 cent per KWH — but the hydropower allocation does not cover all of the village’s needs.
NYPA’s seven-year contract with Albany Energy, which can be extended up to 10 years more, will replace some of the energy NYPA now buys for Solvay on the spot market. Montone said he does not expect it to change the rates paid by Solvay consumers, who pay an average of 5 cents per KWH, but the contract will protect consumers if market prices rise in the future.
In September 2009, NYPA sought bidders to provide up to 35 megawatts of renewable energy to supplement Solvay’s hydropower. Albany Energy will supply 7.2 megawatts.
The developers of Onondaga Renewables — a planned 35 megawatt biomass plant in Geddes — thought they were a lock to win. Texas-based Catalyst Renewables Corp., which opened a Syracuse office and announced plans to build the $150 million facility in 2008, prompted NYPA’s request for proposals by initiating talks with Solvay, said Eric Spomer, president of Catalyst.
“We along with Solvay caused this RFP to happen,” Spomer said. “We were willing to compete.”
But Catalyst officials expected NYPA to place greater emphasis on the local economic impact of the project. Onondaga Renewables anticipated hiring 26 full-time workers and spending $21 million a year on salaries and fuel costs, which would boost the local economy, Spomer said.
NYPA chose the low bidder. Onondaga Renewables’ price of 10 cents per KWH was roughly double what Albany Energy bid. That leaves the future of Onondaga Renewables in doubt.
Catalyst, which is developing the project in a joint venture with Atlantic Power Corp., of Canada, will continue trying to find a long-term buyer for its output, Spomer said.
Onondaga Renewables recently won a 10-year, $68 million contract to sell its renewable energy credits to the New York State Energy Research and Development Authority. And the plant would qualify for nearly $40 million in stimulus funds if it started construction this year, Spomer said.
But the developers need a long-term contract to sell the power in order to finance the plant, he said. “We will continue to evaluate how we cause that to happen,” Spomer said. “We’re not giving up.”