December 20, 2006

NRG Selected by NYPA to Build $1.5 Billion IGCC Plant

NRG Energy received a conditional contract from the New York Power Authority to build a 680 net megawatt Integrated Gasification Combined Cycle plant at its Huntley facility in Tonawanda, New York. The project, which represents a total project cost of approximately $1.5 billion, is scheduled to go into commercial operation in 2013.

While NRG’s proposal was selected, the award is conditional in that the cost of the IGCC technology is above current market pricing for new coal plants using more traditional technology that doesn’t have the option to capture and sequester carbon. NRG and NYPA are establishing a strategic alliance to pursue tax credits or other federal and/or state funding sources to bridge this economic gap.

IGCC is a process that converts coal to a synthetic gas, removing the pollutantsA?AA¢AA¢aAA¬AA¢a?A¬?sulfur dioxide, nitrogen oxide and mercuryA?AA¢AA¢aAA¬AA¢a?A¬?as well as potentially carbon dioxide, from the synthetic gas before combustion. The cleaned synthetic gas is then used in a combined cycle gas plant in order to generate electricity. The NRG IGCC plant will have the ability to capture up to 65 percent of the carbon dioxide produced. According to NRG, the emissions profile of an IGCC plant is similar to that of a natural-gas fueled plant.

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