Coal’s Utilization Increase a Little, Natural Gas Use Climbs More in 2014
by Teresa Hansen, Editor in Chief
Editor’s note: To compare the 2014 report with previous years visit www.elp.com, select “Current Issues” and then select “Past Issues.” The articles are in the November/December issues going back to 2002.
Natural gas prices climbed in 2014, resulting in a slight increase in the utilization of the nation’s coal-fired power plants. Higher fuel prices, however, didn’t keep natural gas-fired combined-cycle plants from generating more electricity in 2014 than they did in 2013: 914,772 GWh vs. 872,514 GWh, according to a new report.
In spite of coal-fired power’s uncertain future, it remains the largest contributor to the U.S. generation mix, providing 1,573,163 GWh of electricity in 2014. Coal-fired power’s share of the generation mix likely will decline considerably when the Mercury and Air Toxic Standards (MATS) and Clean Power Plan take effect in the coming years, but for now coal still provides more electricity than any other fuel, said Tom Hewson, principal at Energy Ventures Analysis.
Since 2002, Electric Light & Power magazine has published this power plant operating performance report based on data and analysis provided by Energy Ventures Analysis, an Arlington,Virginia-based market analysis firm that specializes in energy and the environment. The firm obtains the data for this report from Form EIA 923 “Power Plant Report” and EPA’s Continuous Emissions Monitoring System (CEMS). The tables tell the story, but a few observations follow.
Additional tables for coal-fired power plant SO2 and NOX and gas-fired combined-cycle NOX emissions are provided in the online version of this article. You can find it under the “Current Issues” feature found on the magazine’s home page at www.elp.com.
Coal Power Plant Performance
Coal Generation: Table 1
As always, large plants dominated this top 20 list in 2014.
“Big plants and plants that operate as baseload units make this list,” said Philip Graeter, an analyst at Energy Ventures Analysis.
Fifteen units that were in the top 20 list in 2013 remained in 2014, while only five new names were added to the list.
“The five that dropped out during 2014 barely missed the cut,” said Graeter. “They didn’t drop far.”
The total reporting U.S. coal generation fleet experienced more than 5 GW of capacity retirements, said Hewson. The amount of electricity generated by the entire fleet, however, increased more than 24,000 GWh from 2013.
“Higher natural gas prices (in 2014) compared to 2013 resulted in slightly higher coal generation and utilization rates,” said Graeter.
Coal Capacity Factor: Table 2
The plants in this top 20 list have the controls necessary to meet the Mercury and Air Toxic Standards (MATS), which required compliance beginning in April 2015. Some of these plants, however, likely won’t remain in this top 20 list in years to come. Hewson and Graeter expect owners to retire several plants in this list rather than spend the money to retrofit them to meet coming environmental regulation requirements, such as the Clean Power Plan.
“The Clean Power Plan’s dominating compliance strategy is displacing coal generation with natural gas and renewable generation,” said Graeter.
Coal Heat Rate: Table 3
The 2014 list of all EIA reporting coal plants includes smaller units and co-generators, which were not included in 2013 because the data wasn’t yet available.
The average capacity factor for the top 20 in 2014 was a little lower than that of 2013, 89.1 percent vs. 90.4 percent, respectively. There was little difference in the threshold to make the list-86.7 percent in 2014 vs. 86.9 percent in 2013.
The No. 1 capacity factor rating was slightly higher in 2014 than the previous year: 97.0 percent vs. 95.9 percent.
“The return of the small generators to the group of reporting plants is responsible for this slight capacity factor increase,” said Graeter.
Like last year, AEP’s John W. Turk Jr. plant landed in the No. 1 spot on the heat rate list, but with a slightly higher (less efficient) heat rate: 9.038 mmBtu/MWh in 2014 vs. 8.858 mmBtu/MWh in 2013. First Reserve Corp.’s Longview plant kept its spot at No. 2 with only a slightly higher heat rate than the Turk plant.
“The Turk plant is the only ultra-supercritical unit in the U.S.,” said Hewson. “It and Longview, which is a highly efficient supercritical plant, will stay in their top spots for a long time because we aren’t building anymore coal plants. It is likely that neither of these plants will be displaced (from this list) in my lifetime.”
In addition to Turk and Longview, 14 other plants in this top 20 list are supercritical units, with the top 12 spots being occupied by only supercritical units. Beginning with the No. 13 spot, the highly efficient subcritical Intermountain plant makes the list. Subcritical plants J.K. Spruce and Valmont also made the top 20 list. Virginia City, which came in at No. 20, is the only fluidized-bed combustion plant in the top 20.
Like the Coal Generation list, 15 plants in this list also were in it in 2013.
“The main change coming to this list will be plant retirements. AEP’s Big Sandy Units 1 and 2 retired this year (2015), so we won’t see them in this list when we compile the 2015 data,” said Hewson.
It is important to note that unlike the generator and capacity factor lists, this list excludes small plants and co-generation units.
Because co-generation plants use some of their steam to run manufacturing processes and the rest for electricity generation, they tend to skew the heat rate numbers, therefore, they weren’t included in this list, said Graeter.
The qualifying coal heat rate was a little lower in 2014 than 2013: 9.765 mmBtu/MWh vs. 9.814 mmBtu/MWh, respectively. The reason, Graeter said, is because overall coal unit heat rates are less efficient as unit utilization drops.
Nuclear Power Plant Performance
Nuclear Generation: Table 4
For many years, this top 20 list has seen little change and this year is no different. Nineteen of the plants in the 2014 nuclear generation top 20 list also appeared in the 2013 top 20 list. Dominion’s North Anna plant was the only newcomer in 2014, replacing Exelon Corp.’s Nine Mile Point plant.
“The units in this list are highly utilized because of their low fuel and variable costs,” said Graeter. “They are at the top of the dispatch list.”
With several nuclear power plant retirements on the horizon, changes in the nuclear lists are coming.
“Nuclear isn’t as set as we thought it was,” said Hewson. “Low gas (price) is undercutting some plants. Single reactor merchant plants are at risk.”
The retirement of Entergy’s Vermont Yankee in 2014 and the announced retirements of its Pilgrim plant in Massachusetts scheduled by mid-2019 and its Fitzpatrick plant in New York likely to occur in 2017, are proof of some nuclear plants’ vulnerability, he said.
As some of the merchant plants leave the fleet, new nuclear plants are being added and those plants have some advantage, Hewson said.
“The EPA (U.S. Environmental Protection Agency) is allowing the new nuclear plants currently under construction to be eligible for emission reduction credits under the Clean Power Plan if the states in which they are located adopt a rate plan rather than a market-based plan (mechanism),” he said. “This is an advantage for new nuclear operating in regulated states.”
Nuclear Capacity Factor: Table 5
“Nuclear capacity factors showed continued high utilization rates,” Graeter said. “As always, there was a lot of turnover in this list due to refueling schedules.”
The threshold capacity factor for 2014 was about the same as that for 2013: 93.3 percent vs. 93.4 percent, respectively. The average capacity factor of the top 20 plants, however, was almost 1 percent lower in 2014 than 2013.
In addition, the top 20 plants generated almost 14,000 GWh less electricity in 2014 than they did in 2013.
On the other hand, the entire nuclear fleet (all reporting plants) obtained an average capacity factor in 2014 that was 2 percent higher than that of 2013-90 percent vs. 88 percent-resulting in nearly 8,000 GWh more electricity generated in 2014.
“Capacity factor was down, but generation was up,” Hewson said.
This is due in part to some unit uprates, he said. Uprates are cheaper than new build.
Gas-fired Combined-cycle Power Plant Performance
Combined-cycle Generation: Table 6
Gas-fired combined-cycle generation for all reporting plants increased in 2014 after decreasing in 2013, as did the capacity rating for all reporting plants. In 2014, all reporting U.S. gas-fired combined-cycle plants had a total capacity of 238,116 MW and generated 914,722 GWh of electricity. In 2013, those figures were 230,819 MW and 872,514 GWh. Although gas prices were higher in 2014 and coal-fired utilization was up, the U.S. gas-fired combined-cycle fleet increased its generation.
Only three plants fell out of this top 20 list. Like the coal and nuclear top 20 generation lists, the same large units dominate this list each year. The top five plants in this list in 2014 also were the top five in 2013.
“A lot of the big combined-cycle plants are operating in regulated markets,” said Graeter. “Many were built by regulated utilities to run as baseload units, so many of the plants on this top 20 list are heavily utilized and impacted little by gas price. Therefore, you see the same plants year after year.
“On the other hand, gas prices impact merchant plant operations more than anything else, so you’ll find few merchant plants on this top 20 list,” he said.
As the table shows, a few plants on the list do operate in deregulated markets. They are: NextEra Energy’s Forney plant, Dominion’s Fairless plant, North American Energy Services’ La Paloma plant and PSEG’s Bergen plant.
Combined-cycle Capacity Factor: Table 7
Many smaller generators that did not report in 2013 did so in 2014, resulting in fewer gigawatt-hours generated by the top 20 plants in the capacity factor list. The addition of these smaller plants also caused a lot of turnover in the list from 2013 to 2014, said Graeter. Only four plants in the 2013 list returned to the list in 2014.
The average capacity factor of the top 20 plants in 2014 increased more than three and a half percentage points from the 2013 average: 85.5 percent vs. 82.4 percent. In addition, the threshold to make the top 20 increased from 77.2 percent in 2013 to 80.8 percent in 2014.
As in years past, many of the units in this top 20 list are cogeneration units that sell steam and are heavily utilized because they are needed to meet industrial needs.
Combined-cycle Heat Rate: Table 8
Prior to 2013, the top 20 heat rate list saw a lot of turnover from year to year. That trend changed in 2013, when 15 plants returned from the previous year. More turnover was seen in the 2014 top 20 list, but nevertheless, more than half the plants on the list (11) were repeats from 2013.
NV Energy’s Harry Allen plant, which was No. 1 on the list in 2013, fell out of the top 20 and NiSource’s Sugar Creek plant came in at No. 1 in 2014. This is the first time the plant has made the list since it began operation in 2008. NextEra Energy’s Cape Canaveral plant, which was new in 2013, climbed from No. 3 to No. 2 in 2014, its first year of full operation. Dominion’s Warren County plant, which began operation late in 2014, also made the list, coming in at No. 5.
The average heat rate of the top 20, as well as the threshold heat rate to break into the top 20, was about the same in 2014 as it was in 2013. The No. 1 heat rate, however, was better in 2014 than 2013: 6.631 mmBtu/MWh vs. 6.798 mmBtu/MWh.
These top 20 plants operate extremely efficiently and each year, they seem to get a little better.
“My hat’s off to these guys,” said Hewson. “New technology allows the gas-fired combined-cycle fleet to achieve better and better heat rates.”