Regulations Spur Plant Optimization

CO2 restrictions encourage new technologies that will help coal-fired generation evolve

Environmental issues have been in the spotlight recently thanks to a confluence of new regulations and election year publicity efforts. For the power industry, the focus is on tightening existing rules for NOx, SOx and particulate matter, the establishment of new standards for mercury, and the prospect of regional regulation of carbon dioxide.

Carbon dioxide regulations have garnered the most attention. California’s Global Warming Solutions Act would establish a CO2 cap-and-trade regime for the state, while seven northeastern states have agreed to establish a similar program, the Regional Greenhouse Gas Initiative.

The idea of regulating carbon has already been accepted by the industry players who actually have money—and perhaps their corporate futures—riding on the final outcome.

Greenhouse gas (GHG) emissions are a known business risk. In Europe, insurers are already refusing to cover companies against investor lawsuits over GHG-related losses if the firm does not have a plan in place to address that risk.

In the U.S., there is no GHG regulation, at least for now, but major utilities are positioning themselves for what is probably inevitable. AEP, for example, is an active participant in the Chicago Climate Exchange. AES recently announced a $1 billion spending program to curb GHG emissions. PG&E is seeking approval of a special tariff for a carbon-neutral offering expected to be available to customers in 2007. This is especially interesting as it uses carbon offsets rather than non-emitting generation, but the main target of CO2 regulation is generation, primarily the coal-fired plants that currently produce more than half the electricity consumed in the U.S. every year.

Optimization at a Coal Plant

While the principle behind thermal generation is fairly simple, the specifics of running a coal plant profitably are very detailed indeed. The object is essentially to solve a gigantic optimization problem where all of the factors that contribute or detract from the plant’s performance (physical and monetary) are balanced to achieve the best possible result. Those factors also interact with one another and the ever-changing operating environment.

Complicating matters further is the fact that optimization is a multi-faceted problem. There are operational issues like monitoring plant performance and improving efficiency; maintenance issues like predicting turbine erosion and evaluating different maintenance options; and environmental issues, which center on reducing the emissions of various pollutants. All of this requires an enormous amount of data and analytic muscle. Even with the best tools there is a great deal of uncertainty left in the process, especially when plants are running in multiple regions, each with its own combination of market and emissions rules.

Plant optimization can be applied at three phases: fuel input, combustion and waste treatment. Mercury is primarily handled at the ends, either by using pre-processed fuel that eliminates mercury from the feedstock or by scrubbing the material from the flue gas. NOx and SOx can be managed in the combustion process where a variety of functions (e.g., boiler control during startup) can be manipulated to improve efficiency while simultaneously lowering emissions.

For CO2, however, there is presently no viable solution for treating the gas as it leaves the boiler, so the question of how to reduce emissions comes down to either sequestering the CO2 produced or improving plant efficiency so that less fuel is burned to generate the same amount of power. As with mercury, pre-processed fuel offers a significant improvement. The difference in energy content between high-quality pre-processed fuel and low-grade “dirt” coal can reach 50 percent, which is compelling considering that a 1 percent increase in plant efficiency produces a 1 percent decrease in CO2 emissions. Pre-processed fuel comes at a premium, of course, but consistency in fuel quality is also a major headache for plant operators. Real-time testing of fuel on the front end of the process is still very expensive, so using a high-quality pre-processed coal affords a level of certainty that can make subsequent operational decisions easier.

There is, however, only so much that can be done at the plant level. Competitive wholesale markets have honed generators’ skill in balancing the many elements that affect their profitability from a portfolio perspective. In the long run, adding CO2 to the mix shouldn’t present much of a challenge. It’s just another variable in the algorithm. This is also true of the other GHGs that, while representing a small fraction of total GHG emissions, are far more damaging than CO2 on a pound-for-pound basis.

In the long run, optimization will encompass all of these considerations. Like a new automobile that delivers more power, greater fuel efficiency and lower emissions than its predecessors, so too will coal-fired generation evolve. Today’s “conventional” coal plants already outperform their ancestors by a wide margin in both economic and environmental terms. New restrictions on CO2 will encourage the development of new technologies and techniques to take those advances even further.

Bob Fesmire is a communications manager in ABB’s power technologies division. He writes regularly on transmission and distribution, IT systems and other industry topics. Contact him at (The opinions expressed here are his own and do not necessarily represent those of ABB.)

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