Power Plants Making Fast Switch from Coal to Gas

by Kristen Wright, contributing editor

As the U.S. Environmental Protection Agency (EPA) forces U.S. coal plants into early retirements, renewable energy and natural gas plants are stepping up. Nevertheless, the U.S. can’t get all of its abundant supply of natural gas to the plants or its renewable energy to the people who want to use it (see sidebar). The pace at which coal plants are retiring, means that preparing the infrastructure to deliver natural gas to new gas-fired plants, as well as coal plants being converted to natural gas-fired plants must become a priority for regulators, power generators and pipeline companies.

Unprecedented Retirements

PennWell’s Hub Services Director Kent Knutson discussed coal plant retirements during GenerationHub’s May 27 Quarterly Market Update webcast. He said that in 2015, 6,725 MW already had retired, and an additional 15,542 MW from 83 generating units are expected to retire in the next nine months. Forty-four units were expected to retire in May and June-8,252 MW.

As expected this year, American Electric Power (AEP) has stopped generation at 10 coal plants in five states, according to the company. The plants in Indiana, Kentucky, Ohio, Virginia and West Virginia generated a combined 5,588 MW. AEP has announced two more coal plant retirements for 2016: Northeastern Station Unit 4 in Oklahoma and Welsh Unit 2 in Texas. By then, AEP will have retired more than 6,500 MW of coal-fired generation.

AEP has announced two more coal plant retirements for 2016. One of those plants, Northeastern Station Unit 4 in Oklahoma, is pictured here.

New Gas Generation

AEP’s Big Sandy Unit 1 in Kentucky is being converted to natural gas, as are its Clinch River Units 1 and 2 in Virginia. Changing two of the generating units at Clinch River from coal-fired to natural gas-fired is the least-cost alternative to meeting customers’ power needs while continuing to support the local economy and reduce emissions, according to AEP.

AEP expects the Clinch River conversions to cost some $65 million-much less than building a new combined-cycle natural gas plant or combustion turbine peaking unit. The natural gas units are expected to be operational in 2016 with the capacity to generate 484 MW of electricity. The three coal-fired units at Clinch River generated 705 MW, according to AEP.

GenerationHub is tracking $134 billion-that’s 133 GW-in planned natural gas projects and those under construction. The generation investment from 2015 to 2018 totals 180.8 GW, which breaks down like this: 169.5 GW (94 percent) is gas, wind and solar. Of that:

“- Gas represents 118.9 GW (66 percent);

“- Wind represents 33.2 GW (18 percent); and

“- Solar represents 17.4 GW (10 percent).

Knutson said that in February, GenerationHub was tracking nearly 18,000 MW of planned natural gas development in 2015. Nearly half of that capacity, he said, is being postponed until later years or indefinitely. He also said that of projects being built in 2015, a lot are already operating, and a “big chunk” is under construction.

Newly Operating Gas-fired Plants

Newly operating natural gas-fired projects include Mississippi Power’s 877-MW Jack Watson plant and Georgia Power’s 807-MW Yates plant, which are both refuel projects,

El Paso Electric’s 264-MW Montana power station in Texas, Panda Temple Power’s 758-MW Panda Temple power station in Texas, and Louisville Gas & Electric’s 691-MW combined-cycle Cane Run Generating Station in Kentucky.

Other projects expected to come online this year include:

“- Hess Newark Energy Center’s 735-MW Newark energy center in New Jersey (July);

“- Public Service Co. of Colorado’s 626-MW Cherokee plant in Colorado (December); and

“- Los Angeles Department of Water & Power’s 509-MW Scattergood plant in California (December).

Repowered and Refueled Projects

Barry Cassell, chief analyst for GenerationHub, said in early 2015 that GenerationHub is tracking 28 plants that are repowering or refueling 53 units. Fourteen of those units are scheduled to go online in 2015.

Repowering projects, he said, tend to be short-term. Switching from coal to gas, for example, probably will extend a plant’s life anywhere from five to eight years-enough time for utilities to comply with the Clean Power Plan.

Cassell said that after that, utilities likely will retire those repowered plants and choose other generation sources.

Gas Pipeline Development

GenerationHub, he said, also is tracking 42 pipelines worth $21.6 billion, most of which are planned to come online between 2016 and 2018.

The current trend toward projects that will export liquefied natural gas, Cassell said, is driving those pipeline developments.

There have already been instances when various state programs and efforts have made a dent in the way those markets “think,” including the state renewable portfolio standards.

Author

Kristen Wright is managing editor of PEI Journal, a publication of the Petroleum Equipment Institute. She previously was senior editor of Electic Light & Power magazine for seven years.

Note

TransmissionHub Chief Analyst Corina Rivera Linares and Analyst Jennifer Delony contributed to this report.


FERC Chairman LaFleur: Gas, Electric Infrastructure Additions Will be Needed for Clean Power Plan Compliance

by Corina Rivera Linares, TransmissionHub

Both gas and electric infrastructure additions will be needed to facilitate states’ compliance with the Environmental Protection Agency’s Clean Power Plan, Federal Energy Regulatory Commission (FERC) Chairman Cheryl LaFleur said earlier this year during the National Association of State Energy Officials (NASEO) Energy Policy Outlook Conference in Washington, D.C.

“I think we can achieve real environmental improvement, including on climate, but only if as a nation we’re willing to build the infrastructure and shape the markets to make that happen,” she said. “I don’t think it’ll just happen by itself, and we have to do that hard work if we’re going to sustain the values of reliability and cost.”

One of the building blocks of the plan involves using more natural gas generation, and adding more natural gas generation means more natural gas pipelines, LaFleur said.

“On the surface, that doesn’t seem like a hard problem because we are blessed right now with abundant and affordable natural gas … but in order to get that gas where it needs to be for electric generation, you need pipelines and compressor stations to get it there,” she said.

Although natural gas can “help a lot in our climate aspirations and our environmental objectives, it has its own environmental consequences, and it has fierce environmental opposition just about everywhere that we see a pipeline proposed in the country,” she said.

Building things has never been easy, LaFleur said.

“We’re seeing a level of societal controversy on whether we should build gas pipelines at a level that I haven’t seen before now,” she said.

On the electric side, she said, more electric transmission is necessary to make the Clean Power Plan implementation work.

“Any change in generation means a change in transmission at some level unless it’s sited (in) exactly the same place,” LaFleur said.

One building block of the Clean Power Plan involves greatly increasing the use of renewables, she said. Central station renewable resources generally are located in places that require transmission to get them.

“Those lines are long, can be expensive (and) controversial,” she said.

FERC has worked on matters like cost allocation under FERC Order 1000 and is requiring that when regions look to build transmission lines, they consider state public policy, or “things that states have said that they want in their portfolio.”

LaFleur said there has been some progress.

“But we have to keep our eye on that ball also if we’re going to get the infrastructure ready that we’ll need for all the Clean Power Plan implementation that’s coming,” she said.

Beyond infrastructure, there is also work to be done on the wholesale electric markets in relation to the Clean Power Plan, LaFleur said.

There have already been instances when various state programs and efforts have made a dent in the way those markets “think,” including the state renewable portfolio standards, she said.

“The different markets have made various adaptations to how they buy power to reflect the renewable portfolio standards states have-not always perfectly or smoothly-but there has been an effort to make some adjustment,” she said.

Each state’s coming up with its own plan to comply with the Clean Power Plan, LaFleur said, is not “a problem beyond human imagining.”

“But it is a thing we’re going to have to work on before they go into effect to make sure that we keep the benefits of markets while we get the environmental improvement that we’re trying to get through the plans,” she said.

Fortunately, she said, that is the kind of “dirt-under-the-fingernails work” that FERC does.

“But I think we’re going to have a lot of that work between now and 2020, 2030 to make that happen.”

Author:

Corina Rivera Linares is Chief Analyst with PennWell’s TransmissionHub. Reach her at CorinaR@pennwell.com.

This article was originally published in TransmissionHub on February 2, 2015.

 

 

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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