PSE's Encogen Plant and Cross-Border Energy Trade

By: Elliott Smith
If you’ve ever driven through downtown Bellingham on a cold winter day, you’ve probably seen steam rising from Puget Sound Energy’s (PSE) Encogen plant on Cornwall Avenue. Oftentimes people mistakenly think they’re seeing pollution rising from the facility, but really, the visible emissions are mostly harmless steam. When the plant runs, and how it runs, is a fascinating tale of cross-border energy trade.
Trade Tips Blog was recently offered a tour of the facility, located at 915 Cornwall Ave in downtown Bellingham. Originally built as a cogeneration plant when the Georgia Pacific Pulp Mill was operational, the Encogen plant at one time supplied steam to the mill and produced electricity on the side from the heat generated in that process. Now that mill is gone, but the Encogen plant is still producing power as-needed to augment other sources of electricity from around the region.
Puget Sound Energy's Encogen Plant in Bellingham
Most of the electricity in Washington and BC comes from hydropower, but the system is augmented by smaller plants like the Encogen facility and, increasingly, new renewable sources like wind and solar. PSE in is a leader in wind power in the Pacific Northwest, having made large investment in the technology in Washington. The future of wind power is promising, but wind is fickle. Power supplied from wind can drop off when conditions change, so wind power must be backed up by alternative sources of energy. That is a role that the Encogen plant is increasingly playing.
When large amounts of wind power are being utilized by the PSE grid, and a drop in wind is expected, the Encogen plant can be put online in about four hours to augment the power supply and keep the lights on. Backing up wind supplies is just one role the versatile plant plays. A number of other factors including cold weather, low supply, or favorable market conditions can influence when the plant is activated. The price of electricity fluctuates on a wholesale market, which, especially in the Pacific Northwest region, has significant cross-border trade elements.
The US-Canada cross-border electricity trade relationship is massive. In 2008, the most recent year for which statistics are readily available, Canada sold $3.8 Billion worth of electricity to the US.  In the Pacific Northwest region, the Canada-US Columbia River Treaty also influences the cross-border energy trade. Natural flows are greatest on the Columbia River during spring, when winter snow accumulated in the Cascade and Rocky mountains melts. More water than could be possibly used to make electricity would naturally flow down the river system in spring, and, under natural conditions, summer flows would then slow to a comparative trickle. Under the 1964 Treaty between the US and Canada, BC stores 15.5 million acre feet of water to be released later in the year for power generation purposes, smoothing the river’s seasonal flow pattern and maximizing energy production. A calculation is made to determine how much additional electricity is produced at federally-owned dams downstream in the US by virtue of Canadian storage, and Canada is entitled to one half of that power. BC Hydro, as the Canadian entity in the Treaty, may choose to have that power delivered to BC, or instead it may sell it on the US market through its energy trading arm, Powerex. What BC decides to do with its share of Columbia River power, along with myriad other factors and market conditions help to determine when the Encogen plant is put online.
The plant, operational since 1993, produces electricity with four generators: three gas turbines and one steam turbine. According to PSE “The plant employs modern, ‘combined-cycle,’ combustion turbine’ technology that allows it to generate electricity using both a natural gas cycle and, from the exhaust heat of its power-generating turbines, a steam cycle.” Much of the natural gas fuel used to power the plant comes from Canada. The highly-efficient plant can also run on liquid fuel, with enough supply kept on site for two days’ operation. Encogen can produce up to 165 megawatts when running at full capacity, enough to power about 120,000 homes.
So, the next time you see steam rising from Bellingham’s waterfront, rest assured it’s not pollution, it’s PSE’s Encogen plant responding to cold weather, low wind or cross-border market conditions and putting power into the grid.
TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.
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