Panda Power Funds has financed the 1,124 MW Panda Hummel Station power plant-one of the largest US coal-to-natural gas power conversion projects. The conversion will involve the retired Sunbury coal-fired power plant near Shamokin Dam in Snyder County, Penn.
The 400 MW, 65-year-old plant was closed in 2014 in response to low gas prices and the onset of strict environmental regulations.
The Panda Hummel generating station will be fueled with Marcellus shale gas, which is expected to provide the project with a significant operating cost advantage. The plant is scheduled for commercial operations in the first quarter of 2018.
Goldman Sachs, ICBC, and Investec acted as joint lead arrangers for the senior debt financing of the plant, raising debt capital totaling $710 million.
The Panda Hummel transaction marked the seventh financing of a new, large-scale power facility by Panda Power Funds in 3.5 years, representing $6 billion in total combined capital.
The Fund is supplying equity for the project along with large institutional investors including Siemens Financial Services which is investing $125 million in the Hummel Station plant.
"The natural gas revolution has arrived in the heart of coal country," said Todd W. Carter, president and senior partner of Panda Power Funds. "We're ready to take what we've learned in Pennsylvania and apply it to other coal-fired projects across the nation."
Panda's Hummel generating station is expected to create 900 construction jobs during a 2.5-year period.
The generating station will create 35 direct, long-term jobs to run the power plant, and it will also help support a long-term market for Pennsylvania Marcellus gas producers and royalty owners.
Environmental benefits
The Hummel Station generating facility will utilize the latest emissions-control technology-making it one of the cleanest natural gas-fueled power plants in the nation, Panda said.
While the new power station will supply 180% more power than the coal plant it replaces, SO2 and NOX emissions will be reduced by more than 90 percent.
The Panda Hummel generating station will also help preserve Pennsylvania's fresh water resources by using 97% less water for cooling purposes than the retired coal-fired Sunbury plant.
Siemens Energy Inc. and Bechtel Power Corp. will build the Hummel plant on a turnkey basis. Siemens will provide the power island package, including the gas turbines, steam turbine, generators, heat recovery steam generators, and instrumentation and controls systems. The turbines for the Hummel generating station will be manufactured at Siemens' manufacturing facility in Charlotte, NC.
Bechtel will be responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility.
The generating station will be on the west bank of the Susquehanna River in Shamokin Dam Borough on the site of, and immediately adjacent to, the retired Sunbury coal plant. The Panda Hummel power plant will utilize existing infrastructure for the electrical interconnection, water intake and storm water runoff systems. Construction is expected to take 30 months.
