Project: Desert Rock Energy Project
Location: New Mexico

 

Overview:

Sithe Global Power, LLC (SGE) has proposed the construction of the 1,500 MW Desert Rock Energy Project (DREP), a hybrid dry cooled coal-fired electric power-generating plant south of Farmington in northwestern New Mexico.  The project is being developed with Diné Power Authority (DPA) which is an enterprise of the Navajo Nation and chartered to promote and facilitate the development of energy projects on the Navajo Nation.  The Navajo Nation, through the DPA, has the option to become an equity owner in DREP. 

The Navajo Transmission Project (NTP) Segment 1 is being proposed to allow DREP to transmit energy to the Arizona, California and Nevada markets.  NTP Segment 1 will be a 190 mile 500 kV transmission line from the Shiprock substation near DREP in northwestern New Mexico to the Red Mesa substation in northern Arizona.  The Navajo Nation, through the DPA, has the option to become an equity owner in NTP.  Construction on DREP and NTP is anticipated to begin in the second quarter of 2007.  

 

E3 Services Provided:

  • Since 2004, E3 Consulting has been providing financial and market advice to DPA management, Board of Directors and legal counsel on investment matters related to the Navajo Transmission Project (NTP) and Desert Rock Energy Project (DREP). 
  • As part of its scope of work, E3 developed a financial model to analyze investment returns for NTP and DREP, and confirm SGE’s projections of future tax and royalty revenues to the Navajo Nation. 
  • E3 has provided an overview of risks associated with power plant and transmission line investment and ownership. 
  • E3 has also provided an overview of the various sources of equity financing for power plant projects and transmission line projects, including initiation of discussions with leading lending institutions regarding such financing.

Project Spotlights:

  • DREP consists of up to two 750 MW supercritical coal boilers and steam turbines with an efficiency of over 41%. 
  • The project will be fueled by low sulfur coal mined from the adjacent BNCC Navajo Mine, and will provide electrical power to utilities in the Southwest. 
  • The project is equipped with a natural draft dry cooling tower. Water consumption is reduced by 80 per cent for this type of cooling versus a typical wet cooled plant.
  • DREP is expected to have the lowest emissions permitted to date in the United States by combining a supercritical coal boiler, advanced flue gas treatment and low sulfur Navajo coal.
  • The project will control over 90 percent of NOx emissions and 98 percent of SO2 emissions.
  • The project will also have the best technology to control over 80 percent of the mercury emissions.
  • The project will be designed to have a heat rate of less than 8,700 Btu/kWh, 15 percent more efficient than similar sub-critical plants.