New natural gas-fired cogeneration plant at Monthey

A number of key decisions have just been taken to pave the way to the construction of the natural gas cogeneration plant at Monthey. Construction work is due to begin end of 2007 with the new plant expected to go into operation by the end of 2009.

Three crucial decisions

Having announced its plans to build a new power station at the Monthey chemical site in the canton of Valais in April 2006, Atel has now passed three key hurdles on the road to turning these plans into reality. On 2 April 2007, the local authorities decided to issue planning permission for the project, for which Aare-Tessin Ltd. for Electricity (Atel) has earmarked around CHF 100 million. Monthel SA, the company founded by Atel for the construction, operation and management of the new facility, and Compagnie industrielle de Monthey (Cimo) have signed a contract governing the construction of the power plant on the chemical site and the supply of industrial steam and electricity to businesses based at the Monthey site. Kraftanlagen München GmbH has been selected as turnkey supplier and solution provider for the new plant. The project is set to get underway this summer.

The planned project

The main task of the new power station will be to generate industrial steam to supply the companies operating on the Monthey chemical site. The cogeneration plant will be capable of supplying the chemical companies with approximately 466 000 tonnes of steam per year. The power station is also expected to generate 456 GWh of electricity, some of which will cover the needs of these companies while the rest is supplied to the local electricity grid.

Atel, which supplies energy services throughout Europe, is well experienced in the construction, operation and management of natural gas-fired cogeneration power plants. The group already operates two facilities of this type in the north of Italy.

Monthel SA, the company founded by Atel in April 2007 to build, operate and manage the new facility, will bear the entirety of the investment costs (around CHF 100 million). Cimo, an industrial partner and customer of Monthel SA, will be responsible for the operation and maintenance of the new production unit and also the distribution of heat and electricity to customers, the chemical companies at the site.

The new power station will make it possible to replace the ageing thermal power plants managed by Cimo with modern, efficient technology (natural gas and cogeneration) without increasing NOx emissions. It is also a key asset that will help to sustain the chemical industry in the region and a modest but welcome contribution to electricity generation in Switzerland.

Uncertainty over CO2 offsetting conditions

The new power plant will be primarily involved in generating heat for industrial use on the site. Because it uses combined heat and power technology, 80% of the energy in the fuel can be put to useful work, generating electricity as secondary energy. The project developers hope that characteristics like these will exempt the station from the standard CO2 offsetting conditions. For this reason, the precise manner in which new CO2 regulations will be applied to this high energy yield cogeneration facility is still being discussed with the federal authorities. Nevertheless, a number of projects in Switzerland are already being evaluated with a view to fulfilling the possible carbon offsetting conditions to which the new cogeneration plant – primarily intended to respond to local industrial heat requirements – could be subject.

Although the new political framework is sceptical about the competitiveness of natural gas-fired power plants in Switzerland, the developers of the new plant at Monthey are determined to forge ahead with the project. Indeed, given the importance of a secure and competitive energy supply (steam and electricity) to the chemical companies at the Monthey site, and in view of the current and future situation regarding electricity supplies in Switzerland, any new production facility on national territory must be a welcome addition.

Atel and Cimo, as the energy supplier for the companies based at the Monthey chemical site and the future operator of the facility, anticipate that the project will get underway immediately, with construction due to begin in 2007 and the whole plant going into service at the end of 2009.

Aare-Tessin Ltd. for Electricity Corporate Communications