Project Overview
When Montclair State University decided to replace its existing cogeneration plant with a larger system, the university still had to determine what to do with the 4.25 MW plant it no longer needed. The equipment retained value as a complete cogeneration system, but removing it presented a challenge. The plant was installed inside a building in the heart of an operating college campus, and the university planned to convert the space into a student art gallery.
In July 2014, Phoenix Equipment and its dismantlement partner purchased the complete cogeneration plant outright and assumed the resale and removal risk. Phoenix found a buyer in approximately two months and sold the system for reuse at an ethanol plant in Iowa. The project ultimately left Montclair State with a gutted, broom-clean building that could be converted to its next use.
The Challenge
The 4.25 MW cogeneration plant included a Solar Turbines Centaur 50 gas turbine, heat recovery steam generator (HRSG), steam boiler, deaerator, boiler feedwater pumps, water filtration system, fire protection system, controls, and associated equipment. Montclair State was replacing the existing plant with a larger system, but the complete equipment package still had potential value in the secondary market.
The university needed a contractor that could address both the value of the equipment and the complexity of its removal. Phoenix was the only bidder prepared to pay for the plant while also taking responsibility for the complex removal scope. Other contractors approached the project primarily from a scrap-recovery standpoint and were not equipped to manage the safety requirements associated with removing the plant from an operating university campus.
Finding the Right Buyer
Phoenix acquired the cogeneration plant before a buyer had been identified, taking on the risk of finding another application for the complete system. Within approximately two months, Phoenix found a turbine rebuilder interested in acquiring the plant for an ethanol facility in Iowa.
Before completing the purchase, the buyer conducted technical due diligence that included borescope and nondestructive testing inspections. The complete system offered significant capital and lead-time savings compared with purchasing new equipment and was acquired for use at the Iowa ethanol plant.
Removing a Cogeneration Plant From an Operating Campus
Finding a buyer was only part of the project. The cogeneration plant was located inside a building in the heart of Montclair State's operating campus. Dismantlement therefore had to be coordinated closely with campus operations and security while normal university operations continued around the project.
The location also complicated the physical removal of the equipment. Major components were jacked and slid out of the building before being lifted by crane for loadout. The physical dismantlement took approximately six weeks, and the complete removal was finished by December 2014, meeting the university's end-of-year deadline. Phoenix returned the former cogeneration building gutted and broom clean for its planned conversion to a student art gallery.
Project Outcome
The approximately $1.2 million project allowed Montclair State to receive payment for equipment it no longer needed while avoiding the cost and responsibility of separately contracting for its removal. The university also received the cleared building needed for its next use, and the former cogeneration space was converted into a student art gallery.
For the buyer, the transaction provided a complete 4.25 MW cogeneration system with significant capital and lead-time savings compared with purchasing new equipment. The system was acquired for reuse at an Iowa ethanol plant, where the project called for 4.25 MW of electrical generation and 24,000 pounds per hour of 150 psi process steam.
Project Highlights
- Client: Montclair State University
- Location: Montclair, New Jersey
- Plant: 4.25 MW Cogeneration Plant
- Major Equipment: Solar Turbines Centaur 50 Gas Turbine, HRSG, Steam Boiler and Balance-of-Plant Systems
- Phoenix Acquisition: July 2014
- Marketing Period: Approximately 2 Months
- Buyer: Turbine Rebuilder
- End Use: Ethanol Plant
- Destination: Iowa
- Dismantlement: Approximately 6 Weeks
- Removal Completed: December 2014
- Project Value: Approximately $1.2 Million
- Final Building Condition: Gutted and Broom Clean
Recovering Value From a Difficult-to-Remove Asset
The value of an installed process system depends partly on whether it can actually be recovered. At Montclair State, the cogeneration equipment had secondary-market value, but realizing that value required removing a complete plant from inside a building in the middle of an operating university campus.
Phoenix could address both sides of the project. By purchasing the plant before a buyer was identified, Phoenix gave Montclair State a defined disposition path while assuming the remarketing risk. Working with its dismantlement partner, Phoenix then managed the constrained removal and returned the building gutted and broom clean. Within approximately two months of acquisition, the complete cogeneration system had also found a new industrial application in Iowa.