In their respective second-quarter earnings reports, NRG Energy and Vistra discussed potential opportunities for data center co-location.

NRG’s 21 generating sites are “ideally suited for new large loads and power plant development, offering co-location opportunities both behind and in front of the meter,” said NRG President and CEO Larry Coben on the company’s earnings call Thursday.

Coben said NRG’s facilities would be attractive to data center developers for their access to water for cooling, premium fiber channel access for low latency and existing grid access for rapid market entry. NRG’s fleet includes a mix of natural gas, renewables and coal.

“We were getting lots of people sort of throwing us bids for our sites,” Coben told investors.

He continued: “We know they think we’re just a bunch of power guys who don’t know anything about data centers. So, if that’s what they’re bidding us, we really need to look at this, because it means there’s a lot more value in there than the bids that we’re receiving.”

Regarding discussions with data center providers and any potential co-location deals, Coben said NRG was working on a strategy and would release more details later in 2024.

The concept of large loads co-locating with generation continues to draw interest. The most-watched proposal would result in the co-location of an Amazon Web Services (AWS) data center at Talen Energy’s Susquehanna nuclear plant in Pennsylvania.

Multiple utilities protested the proposed Talen Interconnection Service Agreement (ISA), prompting FERC to call for a technical conference in the fall to discuss the larger issue of co-location.

For Vistra, the pending Talen case or upcoming FERC technical conference “has not slowed the conversation down” on potential data center co-location deals, said company President and CEO Jim Burke.

“We’re in due diligence for a number of sites,” Burke told investors on the company’s Q2 call. “This is a really big opportunity for our industry to meet customer needs.”

Vistra reiterated the company can provide data centers the speed to market advantage since there wouldn’t be the same level of buildout needed on the transmission side.

“I think there’s going to be plenty of data center load behind-the-meter or co-located, and also front of the meter,” Burke said.

On planning for load growth and building new gas plants

The industry’s rapid load growth is being driven by data centers, electrification and new manufacturing. This is compounded by the retirement of fossil-fired plants. As a result, both NRG and Vistra see emerging supply gaps and tightening markets.

Among the regions expected to experience a surge in demand, ERCOT’s current long-term load forecast shows peak demand increasing from 86 GW in 2024 to 137 GW in 2028. This load growth will require significant planning and construction of new generation and transmission.

While NRG and Vistra operate plants outside of Texas, most of their growth is taking place in the ERCOT market. Both companies are taking advantage of the Texas Energy Fund (TEF), a government low-interest loan program used to incentivize the development of more dispatchable generation and smaller backup power in the state.

NRG has filed TEF loan applications for three separate projects, totaling more than 1,500 MW of capacity. Thee company would begin construction on two of the three facilities as early as October of this year.

One of these projects is a new 689 MW natural gas combined-cycle unit with Mitsubishi Power M501JAC equipment, located at NRG’s Cedar Bayou plant in Baytown, Texas. The target completion date would be late-2027.

The 415 MW simple-cycle unit at TH Wharton would include Siemens Energy’s SGT6-5000F equipment and could come online by mid-2026.

Finally, the 443 MW simple-cycle unit at Greens Bayou would be powered by a GE 7HA.03 turbine and could be finished by mid-2028.

“We believe our projects are well-situated for a timely approval, given their shovel-ready nature and the completeness of the applications that we submitted,” said Coben.

Texas Lt. Gov. Dan Patrick recently said 81 applicants representing over 41 GW of dispatchable power had applied through the fund, as of May 31. Patrick said the state planned on expanding the program during the next legislative session.

Coben told investors NRG could apply for more loan funding in a potential second TEF round, but also noted the challenge of multi-year lead times for turbines and other equipment.

“If you don’t have a place in the turbine queue today, there’s no way you’re getting a new project online before 2030, at the earliest,” he said.

In May, Vistra announced plans to add up to 2,000 MW of natural gas-fired capacity in West, Central and North Texas.

860 MW of simple-cycle peaker plants would support West Texas, including the state’s growing oil and gas industry. The company is seeing multiple demand drivers, including data centers and the electrification of oil field operations, specifically the Permian Basin of West Texas

Vistra would also convert its coal-fired Coleto Creek plant near Goliad to natural gas after the plant retires in 2027. Repowering would enable up to 600 MW of gas-fired capacity.

Also included are 500 MW of augmentations at existing facilities, nearly half of which are already finished, Burke said on the Q2 earnings call.

In its quarterly report, Vistra leadership noted the industry continues to experience supply chain constraints and labor shortages that have reduced the availability of certain equipment needed for the construction of renewables projects. As a result, Vistra has deferred some of planned capital spend for these projects, the company said in its 10-Q filing.

The company did announce two long-term power purchase agreements (PPAs) with Amazon and Microsoft for two new large-scale solar facilities.

Supply chain disruptions have also increased the lead times to procure certain materials necessary to maintain Vistra’s natural gas, nuclear and coal fleet, according to the filing.

“We have proactively engaged our suppliers to secure key materials needed to maintain our existing generation facilities prior to future planned outages,” the company reported.

In its Q2 report, NRG said procuring mid to long-term generation through PPAs continues to be part of its strategy. The company has entered into renewable PPAs totaling nearly 1.9 GW with third-party developers, all of which were operational as of July 31.

The two-unit nuclear plant, located in Somerville County, Texas, has a capacity of 2,400 MW. Construction of the two Westinghouse pressurized water reactors began in 1974. The plant began operating in 1990. The company submitted its application for license renewal with the NRC in October 2022.

Vistra said the license renewal is important as the country faces demand growth while transitioning to cleaner sources.

“With demand for electricity growing at a rapid pace, reliable sources of power, like Comanche Peak, are going to be absolutely essential to meeting that need,” said Jim Burke, president and chief executive officer of Vistra.

Comanche Peak is the third of Vistra’s four nuclear plants to receive its license extension from the NRC.

Comanche Peak units 1 and 2 can now operate through 2050 and 2053, respectively. The company’s Beaver Valley Nuclear Power Plant units 1 and 2 in Pennsylvania are licensed through 2036 and 2047, and Davis-Besse in Ohio is licensed through 2037. Perry Nuclear Power Plant in Ohio filed its application for renewal in 2023 and is currently in the NRC review process.

The Beaver Valley, Davis-Besse and Perry Nuclear power plants came from Vistra’s acquisition of Energy Harbor, which was approved by FERC in February. Vistra originally announced the $3.4 billion purchase in March 2023. It includes a 4,000 MW nuclear generation fleet and retail business of nearly 1 million customers.

The company would build up to 860 MW of simple-cycle peaker plants in West Texas to support the increasing power needs of that region, including the state’s growing oil and gas industry. These quick-start units would help back up the grid when renewable resources are not available and battery storage limits have been reached. Texas continues to develop a vast amount of wind and solar generation. Vistra is planning to file an application on May 31 for the Texas Energy Fund for these new peakers. 

Vistra would also convert its coal-fired Coleto Creek plant near Goliad to natural gas. The coal plant is set to retire in 2027. Repowering would enable up to 600 MW of gas-fired capacity. By using the existing grid interconnection, Vistra said it could bring this project online in a shorter timeframe compared to a new greenfield location.

Finally, the company plans complete several projects at its existing gas plants that will add more than 500 MW of summer capacity and 100 MW of winter capacity. The company said nearly half of this summer capacity will come online in the next few months, with the remainder coming by summer 2025.

“Texas is in the enviable position of experiencing sustained economic growth, which includes rapidly increasing power demand as a result of population growth and electrification activities in a number of areas, including transportation, data centers, manufacturing, and industrial activities,” said Jim Burke, president and chief executive officer of Vistra.

Vistra currently operates approximately 11,300 MW of natural gas-fired plants across Texas.

Vistra originally announced the $3.4 billion purchase last March. It includes a 4,000 MW nuclear generation fleet and retail business of nearly 1 million customers.

Vistra will now operate the second-largest non-regulated nuclear fleet in the country, with four plants totaling more than 6,400 MW across ERCOT and PJM. Three of those plants – Beaver Valley, Davis-Besse and Perry – would come from the Energy Harbor transaction.

FERC’s approval, which was received Feb. 16, was the last regulatory approval needed for the companies to close the transaction.

Vistra anticipates closing in the coming weeks.

The 350 MW/1,400 MWh Phase III expansion brings Moss Landing’s total capacity to 750 MW/3,000 MWh, the world’s biggest battery storage facility to date.

The Phase III expansion reached commercial operation on June 2 and will operate under a 15-year resource adequacy agreement with Pacific Gas and Electric Company (PG&E) beginning August 1.

Phase III is made up of 122 individual containers that combined house more than 110,000 battery modules.

Vistra’s Moss Landing energy storage facility is in Monterey County and is co-located on the site of Moss Landing Energy Storage Facility is co-located on the site of an existing natural gas-fired plant. As a result, Vistra has been able to reuse the site’s existing industrial zoning and infrastructure.

The site also has the potential for further growth. A potential fourth phase of the battery facility could expand the site’s capacity to 1,500 MW.

Vistra now owns the second-most energy storage capacity in the country. The company owns and operates renewable assets in California and Texas and has a pipeline of projects under development in Illinois and Texas.

Earlier this year Vistra announced plans to acquire Energy Harbor’s 4,000 MW nuclear fleet. The transaction, which is expected to close later in 2023, would bring Vistra’s total nuclear capacity to 6,400 MW.  

Vistra has reached an agreement to acquire Energy Harbor in a $3.43 billion deal, including debt.

When the transaction closes, Energy Harbor’s nuclear and retail businesses would merge under a new Vistra subsidiary the company is calling “Vistra Vision.”

Both companies’ boards of directors gave approval.

Vistra said it has been looking to expand its nuclear power generation capacity, and the deal would help the Texas-based energy company add about 4,000 MW of nuclear capacity.

Vistra would operate the second-largest non-regulated nuclear fleet in the country, with four plants totaling more than 6,400 MW across ERCOT and PJM. Three of those plants – Beaver Valley, Davis-Besse and Perry – would come from the Energy Harbor transaction.

“There are few opportunities to grow a reliable and dispatchable zero-carbon generation portfolio at scale this quickly,” said Vistra President and CEO Jim Burke.

He added that with the enactment of the zero-emission nuclear production tax credit in the Inflation Reduction Act, nuclear would more competitive against lower power prices, resulting in “tremendous upside opportunity compared to other generation with similar attributes.”

Total compensation would consist of $3 billion cash and Energy Harbor shareholders getting a 15% equity interest in Vistra Vision. Most Energy Harbor shareholders would receive cash at closing and the two largest shareholders, Avenue Capital Group and Nuveen, would receive a combination of cash and the 15% ownership interest.

Additionally, Vistra Vision would assume approximately $430 million of net debt from Energy Harbor in the transaction. Vistra would continue to own 85% of Vistra Vision and 100% of Vistra Tradition, the company’s gas and coal generation fleet.

Vistra said it intends to finance the majority of the $3 billion of cash consideration through debt financing at Vistra Operations, with all or a portion of the debt expected to be invested in Vistra Vision with an inter-company loan.

Vistra is not acquiring Energy Harbor’s conventional generation assets, which are expected to be sold to third parties.

A year ago, Energy Harbor said it planned exit its fossil generation business through a sale or deactivation of its W.H. Sammis Power Station in Stratton, Ohio, and its Pleasants Power Station in Willow Island, West Virginia.

At the time, Energy Harbor filed deactivation notices with PJM Interconnection for the following generating units:

• W.H. Sammis Diesel Units SAA, B1-B4, Stratton, Ohio (12.5 MW, diesel oil)
• W.H. Sammis Units 5-7, Stratton, Ohio (1,694 MW, coal)
• Pleasants Power Station Units 1 and 2, Willow Island, West Virginia (1,368 MW, coal)

These plants represented 3,074 MW of generating capacity.

In late February, Vistra said it cleared more than 6,900 MW generating capacity in the PJM capacity auction for 2024/2025 planning year. It received a weighted average clearing price of $43.25 per megawatt-day, equating to around $109 million in capacity revenue. 

Vistra announced it will seek to extend the life of Luminant’s Comanche Peak nuclear plant through 2053, an additional 20 years beyond its original licenses.

Specifically, the company is applying to renew the licenses of Units 1 and 2 through 2050 and 2053, respectively. The current licenses for Units 1 and 2 extend through 2030 and 2033, respectively.

Vistra officially submitted its application for license renewal with the Nuclear Regulatory Commission (NRC).

The two-unit nuclear plant, located in Somerville County, Texas, has a capacity of 2,400 MW. Construction of the two Westinghouse pressurized water reactors began in 1974. The plant began operating in 1990.

In June 2008 the NRC approved a request to increase the generating capacity of Units 1 and 2 by approximately 4.5% each. Luminant implemented the changes during refueling outages. 

Vistra expects to have at least 7,300 MW of zero-carbon generation online by 2026 across Texas, California, and Illinois. The company’s goal is a 60% reduction in GHG emissions by 2030, compared to a 2010 baseline. Vistra said the company has already achieved more than 72% of that target.

The company said it began bringing the facility online during May and June after implementing corrective actions, including modifications related to connectors in the facility’s water-based heat suppression system.

The remaining 7 MW is expected be restored later this summer after replacement batteries and electrical components are received.

The energy storage facility was knocked out of service in September after a water-based fire suppression system activated and doused battery racks.

Vistra’s Moss Landing Energy Storage Facility consists of two separate buildings – one housing the 300 MW Phase I system and the other housing the 100 MW Phase II system. Construction is underway on the 350 MW Phase III expansion, which is set to be commercially operational next summer. A potential fourth phase could expand the site’s capacity to 1,500 MW.

A second, nearly identical incident involving the early detection safety system occurred in mid-February in the 100 MW Phase II building. Vistra said that in that incident, the water-based suppression system released water that contacted some batteries. It said early evidence pointed to water hose leaks that caused some batteries to short and that led to smoke filling the building. Vistra said the February incident was “similar” to what occurred in the September incident at the next-door 300 MW Phase I facility.

The 300 MW facility that was knocked offline last fall includes three 100 MW arrays. Each array consists of 32-33 cores, each made up of 47-48 racks containing 22 battery modules. Altogether, the facility has a total of 99,858 modules in 4,539 racks making up 98 cores.

As designed, the building housing the Phase I battery system has a fire suppression system, including sprinkler pipes. A separate water-based heat suppression system protects against thermal runaway in individual battery modules. This system includes 25 “preaction zones,” each of which services 3-4 cores. The preaction zones consist of carbon steel header pipes that are connected by flexible hoses to piping on each rack. The rack piping includes sprinkler nozzles that are inserted into each battery module.

The design calls for release of water to the header pipes in a particular zone if a certain level of smoke is detected by the Very Early Smoke Detection Apparatus (VESDA). After release to the header pipes, water is injected into a battery module if the temperature in that module rises high enough to activate the nozzle in that module.

An investigation into the September incident found that in response to low levels of smoke in one area of the facility, the water-based heat suppression system armed. Then, because of failures of what were said to be a small number of couplings on flexible hoses and pipes, the system improperly sprayed water on battery racks. 

The smoke was believed to have originated from a failed bearing in a separate air handling unit. The water damaged the batteries and caused some to overheat, creating more smoke which, in turn, resulted in the release of more water, damaging additional batteries. In total, around 7% of the facility’s battery modules were damaged, the report said.

It said that at the time water was first released by the heat suppression system, all battery module temperatures were recorded as “within established temperature limits.” The investigation found that the batteries “were not the initial source of smoke or a cause of the incident.”

Vistra made several modifications prior to restarting Phase I, including pressure testing the entire heat suppression system and repairing any leaks that were found. In addition, the company installed an air supervision system to monitor for leaks in the heat suppression system. Smoke detectors also were installed in all air handling units and gaps in the facility’s upper floor were sealed.

Five Illinois coal plants that are currently closed or in the process of ending their coal operations are expected to begin operating energy storage facilities in 2025.

To boost this effort, the state’s Department of Commerce and Economic Opportunity (DCEO) announced $280.5 million in funding over ten years for the five plant sites. The dollars come from Illinois’ “Coal-to-Solar Energy Storage Grant Program,” which in part incentivizes companies to install energy storage at the sites of former coal plants.

NRG Energy will receive a combined $158.4 million to build energy storage projects, each 72 MW in size, at the Waukegan and Will County coal-fired plant sites.

NRG is expected to retire both Waukegan Units 7 and 8, totaling more than 600 MWs­, and the 599 MW Will County Unit 4 in 2022. The units are the last of the coal-fired capacity at those respective plants, as other units were retired years ago.

The other three coal plants are owned by Vistra subsidiaries. They’ll receive a combined $122.1 million to build energy storage projects, each 37 MW in size, at the Joppa, Havana and Edwards coal plant sites.

Vistra decided to retire Joppa coal-fired plant in the latter part of 2022, as part of a revised agreement to settle a complaint brought by the Sierra Club in 2018. The complaint to the Illinois Pollution Control Board alleged environmental violations prior to Vistra’s ownership. Joppa’s first unit entered into operation in 1953 and a second unit two years later, according to reports. It is a 1,000-MW subcritical coal-fired facility.

The nearly 650 MW E.D. Edwards plant is also expected to be retired by the end of the year. Edwards has been in operation since 1960, according to reports. Unit 1 was retired in December 2015. Unit 2 and 3 were brought online in 1968 and 1972, respectively.

The 434-MW Havana plant was retired in late-2019.

“When it comes to Illinois’ clean energy future, this initiative will help deliver on the progress our residents deserve,” said Illinois Governor JB Pritzker.

The grant program is part of Illinois’ Climate & Equitable Jobs Act (CEJA) passed in 2021 and aimed at moving the state toward 100% clean energy by 2050. The first payments would be issued in 2025 when the energy storage sites are expected to be commercially operational.  

In order to qualify for grant money, the plants must have burned coal, have a generating capacity of at least 150 MW and commit to hiring a diverse workforce.

DCEO is overseeing the energy storage component of the grant program, while the Illinois Power Agency (IPA) will oversee a program to incentivize the production of solar energy and co-located energy storage.

DCEO is also in the process of implementing several workforce training programs, grants for communities impacted by the energy transition and programs to support historically underrepresented contractors in the green energy space.

Vistra announced that its DeCordova Energy Storage Facility in Granbury, Texas, is online and storing and releasing electricity to the ERCOT grid in time for another hot Texas summer. The 260-megawatt/260 megawatt-hour battery energy storage project is the largest of its kind in the Lone Star State.

First announced in September 2020, DeCordova is the second of seven new zero-carbon projects Vistra is bringing online in Texas over the next few years as part of its growing Vistra Zero portfolio. These new power generation facilities represent a nearly $1 billion capital investment by the company within the Texas ERCOT market.

“As our fleet and electric grids across the country transition to cleaner generation, we haven’t lost sight of our essential role in providing reliable, affordable electricity. The battery storage technology at DeCordova accomplishes those objectives – providing instantaneous-start, dispatchable generation to help balance the intermittency of renewable energy as the electric grid transitions to low-to-zero-carbon resources,” said Curt Morgan, CEO of Vistra. “No doubt, a project of this size and an overall investment this ambitious solidifies Vistra’s position as a market leader in investing in, owning, and operating emission-free power generation in Texas and beyond while balancing affordability and reliability.

Comprised of more than 3,000 individual battery modules, DeCordova Energy Storage Facility can store enough electricity to power approximately 130,000 average Texas residences during normal grid conditions. The batteries capture excess electricity from the grid, primarily overnight during high wind-output hours, and can release the power when customer demand is highest.

DeCordova Energy Storage Facility utilizes lithium-ion technology housed in containers that, in addition to project inverters, were supplied by Sungrow, the project integrator. Mortenson provided engineering and construction expertise. Project construction began in June 2021 and was finished in less than a year.

Along with DeCordova and Brightside Solar Facility, Vistra is also completing the 108-MW Emerald Grove Solar Facility in Crane County ahead of summer. Together with its existing emission-free generation assets, including the most efficient nuclear plant in the country – Comanche Peak Nuclear Power Plant, these projects bring the company’s zero-carbon Vistra Zero portfolio to nearly 3,300 MW online, with plans to grow to more than 7,300 MW by 2026.

For more information on Vistra Zero, click here.