An economic stimulus package proposed in January by the Obama administration includes $150 billion to be spent over 10 years to spur next-generation biofuels, plug-in hybrid vehicles, a new digital electrical grid and new “low-emission” coal plants. The Obama plan also calls for a national renewable portfolio standard requiring 25 percent of electricity produced in the United States in 2025 to come from renewable sources.
The plan depends on high-tech ingenuity to solve coal emissions issues, as well as most other energy problems, while creating new jobs in the process. The proposal would invest in low emission coal plants, the definition of which has been somewhat ambiguous based on Obama’s public statements.
The president has sometimes suggested his administration would adhere to demands by hard-line environmentalists that carbon capture and sequestration be fully used for a coal plant to be built. But most of his public pronouncements have hinted that dramatic improvements toward capturing emissions, including CO2 , would be an acceptable path. Some power industry insiders believe the latter course, if followed, would help the coal-fired sector recover from an Environmental Protection Agency Environmental Appeals Board decision last fall that essentially required a CO2 emissions review prior to permitting a plant under the Clean Air Act. Many new coal-fired power plant proposals were shelved in 2008, in part due to the fear that no coal plant could be built without full carbon capture and sequestration from the time the plant goes into service.
The plan would also invest in a highly-skilled domestic manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools to pioneer the first wave of green technologies, the demand for which is increasing both in the U.S. and worldwide. The administration’s plan calls for increased funding to federal workforce training programs and directs those programs to incorporate green technologies training, including advanced manufacturing and weatherization training.
The proposal would also create an energy-focused youth jobs program to invest in disconnected and disadvantaged young people. Providing more skilled workers for heavy manufacturing and construction projects would likely help meet the need for skilled labor in the coal and nuclear sectors.
The proposal would also create a federal renewable portfolio standard (RPS) requiring that 25 percent of electricity produced in the U.S. be derived from renewable sources by 2025 and extend the production tax credit for all forms of energy determined to be “renewable.” While about a dozen states currently have RPS programs, adopting a national standard is viewed by many as preferable to the current patchwork-quilt approach, which serves to complicate planning for and locating new power projects.
The proposal to derive 25 percent of all electricity from renewables by 2025 could be difficult to achieve, given that renewable energy today supplies just over 8 percent of electricity in the U.S., with the largest share (71 percent) coming from hydro. Data from the U.S. Department of Energy’s Energy Information Administration project that renewable-generated electricity will account for 12.5 percent of total U.S. electricity generation by 2030, fueled by an expansion of non-hydro renewable generation technologies that qualify to meet state and/or federal mandates for renewable energy production.—Steve Blankinship
EPA Asks for MACT Review
The U.S. Environmental Protection Agency’s Office of Air and Radiation said in a January 7 memo that power plants under construction may now need to meet new-source maximum available control technology (MACT) standards.
The EPA memo from Robert J. Meyers, principal deputy assistant administrator, states that although electric steam generators may have relied on rules first issued by EPA and vacated in February 2008 by a federal court decision, EPA now believes those generators are “legally obligated to come into compliance” with requirements of Section 112(g) of the Clean Air Act Amendments.
The United States Court of Appeals for the District of Columbia Circuit vacated EPA’s Section 112(n) Revision Rule and its Clean Air Mercury Rule (CAMR) last February. The affected rule removed coal- and oil-fired electric steam generating units from mandatory compliance with MACT.
Units affected by the January 7 EPA memo include coal- and oil-fired facilities that began “actual construction or reconstruction” between March 29, 2005, and March 14, 2008.
EPA said it reviewed permit information for facilities potentially affected by the decision and concluded that controls in place “may be sufficient” to comply with MACT standards. The agency said, however, it is asking state and local air-permitting bodies to make new-source MACT determinations for each affected project.
EPA advised permitting authorities not to consider any MACT options closed simply because permits have been issued, administrative processes have begun or contracts have been let. Instead, EPA said permitting authorities should “limit such consideration to actual construction only.”—David Wagman
Call for Renewable Energy Tax Reform
The most important thing the new administration and Congress can do to achieve President Barack Obama’s vision for renewable energy is to make renewable tax incentives refundable, according to leaders of America’s solar and wind energy trade associations.
At a joint news conference held in January the day after then President-elect Obama announced his goal of doubling renewable energy in three years, Denise Bode, American Wind Energy Association CEO, and Rhone Resch, Solar Energy Industries Association president, called on Congress to use the existing tax code structure to refine the investment tax credit (ITC) and production tax credit (PTC) to make them refundable.
“The structures of the ITC and PTC don’t work anymore,” said Resch, “and it’s unreasonable to assume they will” because the tax equity market has shrunk.
The economic downturn has slowed momentum for the solar and wind industries that had experienced record-breaking growth in the last few years. Bode said layoffs and cutbacks have been announced in the wind industry and a 50 percent reduction in growth could be seen in 2009.
“The problem is the PTC,” she said. “We are jointly calling on Congress to include refundability in the stimulus package so we can move to the new, clean economy.”—Nancy Spring
A Game Changer for Wind Turbine Output?
Superconducting technology has been a long time coming to the power industry, in large part because the electric utility industry has historically been slow to adopt dramatically new and different technology.
But after many years of development, superconductivity’s day in the sun may be close at hand, both for what it can do to raise the efficiency and lower the net cost of transmitting and distributing power and as a means to boost wind turbine output.
When it comes to superconducting technology, most attention has focused on the potential to eliminate transmission and distribution line resistance. That is accomplished by replacing copper power lines with cables carrying wire made of ceramic materials and cooled to minus 320 F by liquid nitrogen pumped through the cable. Though not yet commercial, such applications are now close to being available.
Until recently, superconductivity demonstrations have been confined to the test stand. But in a recent interview with Power Engineering magazine, American Superconductor spokesman Jason Fredette said the technology is now being deployed at three U.S. utilities.
In August 2006, the first two superconducting distribution cables were energized in the grid, said Fredette. One is in Columbus, Ohio, by AEP and one is in Albany, N.Y., for National Grid. And last April, Long Island Power Authority energized the first transmission superconductor line, a 138 kV line that is a permanent part of its grid.
Fredette said ConEd in New York also plans to deploy a superconductor cable under the streets of Manhattan. “That will be the project that really gets the superconductor business into the commercial market,” he said.
To fund the commercialization, American Superconductor has entered the wind energy business as a logical extension and application of the superconductivity expertise it already has.
American Superconductor was founded in 1987 following the discovery of high temperature superconducting (HTS) materials by a group of IBM scientists. In superconductivity terms, “high temperature” still means temperatures hundreds of degrees below freezing but significantly higher than absolute zero, which was the point that previously had to be approached to achieve superconductivity. HTS materials can be made into wires that can carry up to 150 times more electricity than a copper wire of similar dimensions.
Commercializing the technology has taken more than two decades. In the interim, American Superconductor formed a division called AMSC Power Systems to focus on products based on power electronics. The division is helping to pay for superconductor commercialization, Fredette said.
The company is not initially offering any superconductivity products in the wind sector. But AMSC Power Systems sells its D-VAR system that connects wind farms to the power grid. D-VAR is essentially a voltage regulation device between the wind farm and the power grid that monitors and stabilizes voltage levels on both sides when needed. To date, AMSC has sold the equipment to about 40 wind farms worldwide.
To further integrate itself with the wind industry, AMSC acquired Austria-based Windtec, which designs wind turbines from the ground up.
Generators for 5 MW wind turbines are massive, making them difficult to transport over roads and hoist to the top of towers. Replacing copper rotor coils with superconductive coils inside a wind turbine generator could dramatically shrink those systems.
“You can be less than half the size and weight for the same amount of output,” said Fredette. “It would enable 10 MW-sized wind generators to be no bigger than the turbine generators today,” potentially introducing an entirely new era of generator.
AMSC is working with TECO Westinghouse to develop HTS and related technologies for a 10 MW-class offshore wind turbine. The design is similar in size to 5 MW and 6 MW machines currently in production or in development. Among the obstacles to overcome are larger blade sizes and a need for additional ground and structural support. If these challenges can be overcome, then Fredette said the technology can “really break through a major barrier in the wind industry.”—Steve Blankinship
SEPA Study Aims to Improve Solar Power Market
The Solar Electric Power Association (SEPA) last month released a new report, “Utility Procurement Study: Solar Electricity in the Utility Market,” that is aimed at improving large-scale solar acquisition by electric utilities and that provides innovative ideas for future project procurement.
In 2008, more than 5,000 MW of new solar photovoltaic (PV) and concentrating solar power projects were announced. With the eight-year extension of the federal investment tax credit (ITC), the market is expected to grow significantly, SEPA said.
Along with the tax credit extension, the revised ITC also allows electric utilities to use the credit for the first time by both owning or investing in solar projects, potentially creating a critical source of new projects and capital financing during the current economic downturn.
“The past year was marked by an unprecedented number of announcements for new large-scale solar power projects,” said Julia Hamm, SEPA’s executive director. “A significant investment of time and resources by both utilities and solar companies goes into a solar project’s initial development. Current practices and procedures such as requests for proposals, negotiations and contracting occur behind the scenes, but are critical to the overall success of new solar generation.”
The new research report is based on the results of two studies, one conducted to explore traditional methods for the procurement of large-scale solar electricity by the utility market and a parallel study to explore innovative methods of solar acquisition. The first part of the report dissects the traditional procurement process, which involves the release of a standard request for proposals (RFP) by utilities, to which solar project developers respond. Responses are then internally scored and selected by utility staff. After negotiations are completed, a contract with a specific company emerges.
The second part of the report looks at innovative procurement ideas, ranging from aggregating utility purchasing power to interactive auctions where pricing response could be more dynamic than a single bid process.—RenewableEnergyAccess.com
Wind Integration Study Underway
State renewable portfolio standards differ widely. In the East and Midwest, for example, New York’s target is 24 percent by 2013. Illinois and Minnesota aim for 25 percent by 2025 and Connecticut’s goal is 27 percent by 2020.
To hit such diverse renewable energy targets, wind power will be key. That raises major questions about transmission and regional generation planning. For example, what system operational impacts and costs are imposed by wind generation variability and uncertainty? What are the benefits of long distance transmission that moves large quantities of remote wind energy to urban markets? What is the role and value of wind forecasting?
The Eastern Wind Integration and Transmission Study (EWITS) was designed to address those questions and others. With the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) as project manager, the study will evaluate operational impacts on the power system associated with increasing wind capacity to 20 percent and 30 percent of retail electric energy sales by 2024 in the Joint Coordinated System Plan (JCSP) region, an area comprising multiple interconnected regions from the Dakotas to Oklahoma and eastward to Maine.
Regional transmission organizations covered by the study include the Midwest Independent Transmission System Operator (Midwest ISO), PJM, Southwest Power Pool, Tennessee Valley Authority, New York ISO and ISO New England.
For the study team, NREL chose the Midwest ISO, Ventyx and EnerNex Corp. to analyze the complexities and scope related to such a significant amount of wind generation in a large competitive market. AWS Truewind will perform wind modeling. EWITS will build upon prior wind integration studies and related technical work and coordinate with JCSP and other regional power system studies.
EWITS has been divided into three “tasks.” Mesoscale wind resource modeling will develop high quality wind resource data sets for the wind integration study area with three years of time-series data and identify wind sites and develop wind power plant outputs. The transmission analysis will compare different transmission alternatives for different wind scenarios, building on JCSP work. The wind integration study will evaluate operating impacts on regulation, load following and unit commitment.
According to a presentation by EWITS project manager David Corbus for the first meeting of the technical review committee (TRC), four scenarios will be developed. Some will emphasize high capacity factor wind development in the Midwest with a larger transmission component while others will explore development of regional wind resources. All four scenarios require “a lot of wind and transmission” and some offshore wind, writes Corbus. NREL, with AWS, has identified more than 700 GW of wind plants. Sites for the four scenarios will be selected from this “superset” of sites.
A number of TRC meetings are planned to review findings as the study progresses, dates and locations for which will be posted at the study’s Web site, wind.nrel.gov/public/EWITS/. Study completion is scheduled for August 2009. –Nancy Spring
Business Briefs
The Indiana Utility Regulatory Commission approved Duke Energy’s revised cost estimate of $2.35 billion for its 630 MW clean coal gasification power plant under construction in southwest Indiana. Duke Energy filed its $365 million cost increase request for the Edwardsport station with state regulators last May. The revised cost equals $3,730 a kW. The Commission also approved the company’s $17 million request to study capturing a portion of the plant’s carbon dioxide emissions. Duke Energy said it plans to explore capturing and storing carbon dioxide permanently in underground geologic formations.
PPL’s Susquehanna nuclear power plant set a plant record in 2008 for the amount of electricity generated. The two-unit plant generated 19,046,000 MWh in 2008, beating the plant’s previous record of 18,272,000 MWh set in 2005. The plant, near Berwick, Penn., is owned jointly by PPL Susquehanna LLC and Allegheny Electric Cooperative Inc. and is operated by PPL. Susquehanna. Susquehanna nuclear power plant uses two Mark 2 boiling water reactors.
TransAlta Corp. said its 96 MW, $C170 million Kent Hills Wind Farm began commercial operation on time and on budget. Located in New Brunswick, Canada, the Kent Hills Wind Farm includes 32 Vestas V90, 3 MW wind turbines.
FPL Energy, a unit of the FPL Group, is being renamed NextEra Energy Resources.
Dynegy Inc. and LS Power Associates L.P. agreed to dissolve the two companies’ development joint venture. Under terms of the agreement, Dynegy will acquire exclusive rights, ownership and developmental control of all repowering or expansion opportunities related to its existing portfolio of operating assets. LS Power will acquire full ownership and developmental rights associated with various “greenfield” projects under consideration in Arkansas, Georgia, Iowa, Michigan and Nevada, as well as other power generation and transmission development projects not related to Dynegy’s existing operating portfolio. LS Power will receive around $19 million in cash during the first quarter of 2009 to reflect the relative value of assets exchanged. Additionally, Dynegy said it will record a loss in 2009 related to the transaction.
Projects & Contracts
Entergy Nuclear said it will temporarily suspend reviews of two new nuclear license applications and will explore alternative nuclear technologies. The company asked the Nuclear Regulatory Commission to suspend reviews specific to GE Hitachi’s Simplified Boiling Water Reactor after what it said were unsuccessful attempts to agree on business terms. Entergy Nuclear will also temporarily defer environmental reviews for the construction and operating license applications for potential projects at its nuclear sites in Grand Gulf, near Port Gibson, Miss., and River Bend, near St. Francisville, La.
American Municipal Power-Ohio, Inc. and Bechtel Power Corp. said they would construct a 1,000 MW coal-fired electric generation facility in southern Ohio. AMP-Ohio signed the contract January 8, naming Bechtel the engineer-procure-construct contractor for the $3.25 billion American Municipal Power Generating Station and granting the engineering firm a limited-notice-to-proceed on the project. The project is contingent upon receipt of final permits and successful negotiations of state and local incentives.
Basin Electric Power Cooperative is moving ahead with plans for a 300 MW combined-cycle natural gas plant. The utility filed its notice to proceed with the South Dakota Public Utilities Commission. The company will need permits from the PUC and other state agencies. Construction is expected to start next fall and the plant could be operating by 2012. The co-op said the Deer Creek Station would cost $405 million to build and is designed as a combined-cycle power plant. Plans call for the plant to have one turbine fired by natural gas and the other by steam produced by the heat from the first turbine.
Neundorfer Inc. won a contract from Detroit Edison to improve the operation and reliability of four flue gas conditioning systems at the company’s coal-fired, 725 MW Trenton Channel Generating Station in Trenton, Mich. Neundorfer will provide consulting and engineering services to Detroit Edison to convert and upgrade the existing sulfuric trioxide flue gas conditioning systems. Neundorfer’s flue gas conditioning technology uses the direct burn of granular, pelletized sulfur as feedstock and will be used to convert the existing systems that currently use molten sulfur feedstock.
Siemens Energy won orders to install instrumentation and control systems at a coal-fired power plant in Carneys Point, N.J.; a combined cycle power plant in Redding, Calif.; and combined cycle power plants in Syracuse and Beaver Falls, N.Y.
Progress Energy Florida signed a contract with Westinghouse Electric Co. LLC and The Shaw Group Inc.’s Power Group for the engineering, procurement and construction of two 1,105 MW AP1000 nuclear power plants in Levy County, Fla. Cost of the two new nuclear units is based on a contract price of $7.65 billion, plus forecasted inflation, owner costs and contingencies. The company estimates the total cost for the two generating units to be approximately $14 billion. An additional $3 billion is estimated for transmission equipment and about 200 miles of transmission lines associated with the project. Plans are for the units to be operational in the 2016 to 2018 time frame.
Mergers & Acquisitions
Exelon Generation completed integrating the nuclear generation assets held by its AmerGen Energy Co. LLC subsidiary into Exelon Nuclear and dissolved the AmerGen legal entity. The Nuclear Regulatory Commission approved the formal transfer of the operating licenses for these facilities to Exelon Generation on Dec. 23. The former AmerGen facilities include the Clinton Power Station, in Clinton, Ill.; Oyster Creek Generating Station, in Forked River, N.J.; and Three Mile Island Unit 1, in Londonderry Township, Pa.