Air Pollution Control Equipment Services, Nuclear

EPA Mercury Rule Tossed Out by Court

Issue 3 and Volume 112.

A U.S. court ruled last month that the Environmental Protection Agency must reconsider a decision to allow coal-fired power plants to swap rights to emit toxic mercury. The U.S. Court of Appeals for the District of Columbia ruled the EPA violated the Clean Air Act in 2005 when it exempted coal plants from the strictest emission controls.

The EPA’s “Clean Air Mercury Rule” would have created a cap-and-trade program that would allow utilities to swap rights to emit mercury to comply with overall limits that would reduce nationwide emissions by 70 percent by 2018.

Clean Air Mercury Rule: Court sends it back to the EPA for a rethink.
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The court ruling means that power generators will likely have to install mercury-reduction equipment at more of their coal-fired power plants rather than rely on a fleet-wide trading program.

The nation’s 1,100 coal-burning units emit about 48 tons of mercury each year, reportedly the largest unregulated U.S. source. The EPA rule tossed out by the court would have set the cap at 38 tons a year by 2010 and 15 tons a year in 2018.

Fourteen states, including New York and California, had sued the EPA over the rules, along with environmental and public health groups.

Petitioners said actual emissions under the EPA plan would have been higher than promised for many more years because of emissions credits the EPA would have allowed utilities to bank from previous years, creating “hot spots” with utilities deciding to buy credits for emitting mercury rather than making actual reductions.

Utilities said the cap-and-trade system gave them flexibility to reduce emissions without spurring a switch to natural gas, which is relatively cleaner but more expensive than coal.—David Wagman

Record Performance by U.S. Nuclear Power Industry

Nuclear power plants in the United States generated a record amount of electricity in 2007 while operating at record capacity factors, according to preliminary data from the Nuclear Energy Institute (NEI).

The country’s 104 operating nuclear power reactors generated some 807 billion kWh of electricity in 2007, exceeding the previous record-high of 788.5 billion kWh set in 2004. Output from nuclear plants in 2007 was boosted by the restart in May of Tennessee Valley Authority’s (TVA’s) 1,155 MWe Browns Ferry 1 reactor in Tennessee. In addition, the industry implemented power uprates at two reactors: a 55 MWe increase at TVA’s Browns Ferry 1 and a 13.7 MWe increase at Progress Energy’s Crystal River 3 unit in Florida.

The NEI said preliminary figures showed the average capacity factor of U.S. nuclear power reactors in 2007 was 91.8 percent, up from the previous record of 90.1 percent set in 2004. The capacity factor is the ratio of electricity actually produced compared with the theoretical maximum electricity a reactor can produce operating at full power throughout the year.

The average production cost (covering expenses for nuclear fuel supply, operations and maintenance) was 1.68 cents/kWh in 2007. The previous low of 1.72 cents/kWh was set in 2005. The NEI said that 2007 marked the seventh straight year that nuclear plants have had the lowest production costs of any major source of electricity, including coal- and natural gas-fired power plants.

Skip Bowman, president and CEO of the NEI, said “At a time when consumers are confronted with rising oil and gas prices and an increased reliance on foreign energy sources, nuclear energy provides reliable, affordable and clean electricity. Nuclear energy emits no greenhouse gases during the production of electricity, and it is available today to meet rising electricity demand and fight global warming.”—David Wagman

For more news, analysis and information on the global nuclear power industry, read Nuclear Power International, a new Power Engineering magazine digital quarterly supplement delivered to your desktop. Visit to subscribe.

Wyoming and California in Coal Talks

Wyoming political leaders and California’s top electric utilities regulator said they hope the two states can work together to use Wyoming coal to help meet California’s growing power demands.

Wyoming Gov. Dave Freudenthal and leaders of the state House and Senate flew to Los Angeles early last month to meet with members of the California Public Utilities Commission and the CEOs of Southern California Edison and San Diego Gas and Electric.

Gov. Dave Freudenthal (right) visits Wyoming coal mining country.
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“We had a very positive conversation discussing the various interests and needs of the two states,” said Michael Peevey, president of the California Public Utilities Commission.

Wyoming is the nation’s top coal-producing state. The delegation sought assurances that California would use electricity from power plants fueled by Wyoming coal, provided those plants meet California’s carbon dioxide emissions standards.

“The bottom line is, if Wyoming electricity met California environmental standards, they would probably accept our electricity,” said Wyoming state Rep. Tom Lubnau. He went on the trip along with Freudenthal, House Speaker Roy Cohee and Senate President John Schiffer.—David Wagman

Exelon CEO Calls for Partnership in Fostering Low-Carbon Economy

Exelon Chairman and CEO John Rowe called on industry and government to accelerate the process of building a low-carbon economy that he said is essential to solving the climate change issue and meeting rising demand for energy.

“Time is not our friend with respect to global climate change,” Rowe said in a speech last month at the Brookings Institution in Washington, D.C. “We must begin a long journey to address climate change and the usual D.C. approach—doing too much, too late—will not work.”

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Rowe outlined three elements that he said are necessary to make a meaningful impact on carbon emissions: proper governmental policies and regulations, market-driven innovation and investment and energy industry leadership.

Rowe said the transition to a low-carbon economy requires a continuing commitment to competition that allows markets to choose the most cost effective demand- or supply-side solutions.

“The competitive market system is the single most important weapon in the fight against climate change,” Rowe said. “Ultimately, if policymakers abandon market principles it will cost consumers three times as much to reduce or displace carbon.”

In the speech, Rowe called for a comprehensive government policy that includes a cap-and-trade system to incorporate the costs of greenhouse gases into the marketplace. “This is where the rubber meets the road, and without carbon regulation, climate action is just climate talk,” said Rowe.

Rowe said any cap-and-trade system should have an allowance allocation system to protect against economic windfalls. In the electricity sector, Rowe said that means allowances either should be auctioned or allocated to local distribution companies based on the number of customers they serve.

Rowe also called on the federal government to increase investment in research and development for renewables and carbon sequestration and called for federal loan guarantees and tax incentives for renewables and new nuclear plants.

Rowe said that nuclear energy must be part of the solution. He said he believed the U.S. will need at least 25 to 30 new reactors by 2030.

Rowe said that addressing climate change will not be inexpensive. He cited Energy Information Administration estimates that the utility industry will need to invest $400 billion in new electric generation by 2030 to address climate change. That amount is almost as much as today’s market cap for the entire investor owned utility industry, he said.—Steve Blankinship

Dominion Poses Coal-to-Gas Plant Conversion Plan

Dominion is proposing to convert its 240 MW Bremo Power Station from coal to natural gas. Dominion said its proposal is possible only by having new coal-fired generation from its proposed 585 MW Virginia City plant available. Virginia City would burn a variety of coals, including waste coal, or “gob.” It is also designed to use up to 20 percent biomass as a fuel. Dominion said, however, that converting Bremo without Virginia City is not a realistic option.

Dominion said there would be “large net reductions” in emissions of sulfur dioxide and mercury if the Virginia City station were built and if the two Bremo units are converted. Emissions of nitrogen oxides, carbon dioxide and particulates from Bremo also would be reduced.

These reductions would be in addition to Dominion’s efforts already under way in Virginia to reduce emissions of sulfur dioxide, nitrogen oxides and mercury from existing stations by 75 to 85 percent by 2015.

Bremo is Dominion’s oldest coal-fired power station in Virginia. The station entered service in 1931. The two units now in use were put into service in 1950 and 1958.—David Wagman

Research Lab to Focus on Material and Component Integrity

The Electric Power Research Institute (EPRI) has teamed with EDF and Tokyo Electric Power Co. to create the international Materials Aging Institute, a collaborative research facility that will examine the critical link between materials science and power plant component performance and degradation.

The Institute’s mission is to explain and anticipate the aging of materials in existing power production facilities, to improve knowledge of high-temperature materials behavior in future power plants and to maintain expertise and skills on materials science. Its research will provide the technical foundation that supports the continued safe, efficient and cost-effective operation of power plants worldwide and supports the construction of new plants built to the highest industry and technical standards. Research will encompass materials issues at nuclear, fossil and hydroelectric generating facilities.

“The founding of the Materials Aging Institute reflects both the global nature of the electric power industry and the common challenges facing power plants around the world,” said Chris Larsen, vice president of EPRI’s nuclear sector. “By teaming with research organizations such as EDF and TEPCO, we will be working with recognized experts in materials science and technology, ensuring that research and development efforts focus on critical issues with widespread industry impact.”

With an initial budget of $13.1 million, the Institute has selected nine projects to establish the research and development program for 2008. Among the areas that will be analyzed are equipment corrosion, component and material degradation due to irradiation, non-metallic material performance (for example, polymers) and concrete aging.

The Materials Aging Institute will be based at EDF’s facilities in Les Renardières, France. EDF is investing $22.3 million to erect a new building to house the Institute and is purchasing modern laboratory equipment, including three electron microscopes and powerful numerical simulation tools.

The Institute will initially be staffed by members of EDF, EPRI, TEPCO, utility organizations, national laboratories and universities. To address global concerns regarding the medium- to long-term availability of a capable workforce for the electric power industry, the Institute will include a formal training program for young engineers.—Steve Blankinship

Duke Says CCS Will Limit Future Carolina Coal Plants

James Rogers, CEO of Duke Energy, told a global warming conference in February that his company’s 800 MW Cliffside coal plant expansion will be the last coal-fired unit his company will build in the Carolinas. That’s because the region’s geology will not support sequestration of carbon dioxide (CO2), unlike the geology of Indiana where Duke is building a 630 MW integrated gasification combined cycle (ICGG ) plant to capture and sequester CO2.

Duke’s James Rogers: Bridging the gap.
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Rogers said any future Duke coal plants would need to have the ability to capture and store CO2 underground. He said Duke has researched building pipelines to send CO2 to the Midwest for storage, but determined it would be too expensive. Instead, Rogers said he envisions boosting major transmission capabilities so Duke could build future coal plants in the three Midwestern states it serves. It would build nuclear power plants in the South.

Rogers said the $2.4 billion Cliffside project was needed to “bridge the gap” to a non-carbon world. He also reiterated a proposal for a national tax on electricity that everyone who uses power would have to pay. That money would be targeted to research and development to find alternative ways to produce clean energy.—Steve Blankinship

Carbon Capture Projects Re-Group After FutureGen Reversal

The U.S. Department of Energy’s decision to withdraw its support for the FutureGen project has the FutureGen Alliance and other carbon capture coal plant proposals reassessing their chances to partner with DOE on various fronts. Coupled with DOE’s announcement that it would withdraw financial support to build a $1.8 billion zero-emissions coal plant near Mattoon, Ill., was the statement that it may opt instead to fund a series of smaller projects.

DOE was to have funded about three-fourths of the FutureGen project. It citied escalating costs and the fact that other projects aimed at similar goals were moving forward. Some of those projects now may be better positioned to receive some of the funding initially earmarked for FutureGen.

Shortly after the DOE announcement, Kentucky Governor Steve Beshear said he had a team of economic and energy staffers ready to help develop proposals aimed at bringing a project to Kentucky. The state was one of almost a dozen initially considered for the original FutureGen project. Similar revitalized initiatives are underway in other states that had earlier sought the FutureGen project.

Meanwhile the FutureGen Alliance said it remained focused on Mattoon, hoping to keep the original project alive or at least able to deliver a clean coal technology project to the community.

“The FutureGen Alliance continues to believe the FutureGen project is in the public interest,” said Alliance Board Chairman Paul Thompson. He said the alliance believes its project is critical to developing clean-coal technology in the shortest amount of time. “The key is, don’t close doors,” said Mike Mudd, FutureGen Alliance CEO. “We hope to be able to meet, discuss issues and come up with a positive resolution.”—Steve Blankinship

Business Briefs

Interstate Power and Light Co. proposed to retire coal-fired generating units and switch the fuel source of other coal-fired units to natural gas when its proposed 630 MW, hybrid coal Sutherland Generating Station Unit 4 becomes operable in 2013. As part of its proposal, IPL would retire Lansing Generating Station’s coal-fired units 2 and 3. In addition, the company would permanently switch the fuel source of its Dubuque Generating Station Units from coal to natural gas.

UniStar Nuclear Energy, a joint venture between Constellation Energy and the EDF Group, has told the U.S. Nuclear Regulatory Commission it plans to submit a Combined License (COL) application in late 2008 for a potential advanced design, 1,600 MW nuclear reactor at Constellation’s Nine Mile Point Nuclear Station in upstate New York. The site was selected for a potential U.S. Evolutionary Power Reactor (U.S. EPR). UniStar said it has yet to make a final decision to build a new reactor at Nine Mile Point.

Alstom and The Dow Chemical Co. announced a joint development and commercialization agreement for advanced amine scrubbing technology for the removal of CO2 from low pressure flue gases produced by fossil fuel-fired power plants and other major industries. Under the agreement, Alstom will commercialize and manage installation of carbon capture equipment using an already developed process. Dow will support Alstom by leveraging its technical capabilities to co-develop an optimized capture system.

Westinghouse Electric and Emerson Process Management announced a 10-year extension to an existing agreement in which Emerson provides key technology for automation of nuclear power plants that use the Westinghouse AP1000 design. The agreement also selects Emerson for existing facility modernization.

Areva won commercial nuclear fuel contracts with U.S. utility companies Constellation Energy Inc., Tennessee Valley Authority, PPL Corp. and AmerGen Energy Co. The contracts have a combined market value of over EUR200 million ($291 million). Constellation ordered 10 reload batches of fuel for units 1 and 2 of the Calvert Cliffs nuclear power plant. TVA’s Browns Ferry unit 1 ordered two reload batches of blended low enriched uranium (BLEU) with delivery beginning in 2010 and continuing through 2012. Under a contract extension, Areva will provide six reload batches for PPL’s Susquehanna units 1 and 2. Deliveries begin in 2011 and continue through 2016. AmerGen signed a contract extension for nuclear fuel for the Three Mile Island unit 1 nuclear plant. Areva will provide five reload batches beginning in 2009 and continuing through 2017 with options through 2021.

Projects & Contracts

Interstate Power and Light Co. received a decision from the Iowa Utilities Board regarding its request for ratemaking principles pertaining to its proposed construction of up to 200 MW of wind power in Iowa. Regulators approved a return on equity of 11.7 percent and a 25-year depreciation life. IPL expects to begin construction on a 200 MW wind power project at the Whispering Willow Warm Farm in 2009. The project is expected to be completed in 2010 at a cost of $400 to $450 million ($2,000 to $2,250/kW).

Pratt & Whitney Power Systems signed an agreement with Tampa Electric Co. for five 60 MW FT8 SWIFTPAC units. The units will provide 300 MW of reserve energy for use during high electricity demand periods. Four units will be located at the Bayside Power Station and one unit will be at the Big Bend Power Station, both in the Tampa area. Delivery will start in the fourth quarter 2008, with commercial operation planned for summer 2009. Financial terms were not disclosed.

CER Generation LLC is buying the 80 percent complete Hillabee Energy Center, a 774 MW natural gas-fired power project near Alexander City, Ala., from Calpine for $155 million (or $200/kW). The project is expected to be operational in 2010 when construction and permitting are finalized.

Padoma Wind Power LLC, a unit of NRG Energy, Inc., has entered into a 50-50 joint venture with BP Alternative Energy North America Inc. to build the first phase of the Sherbino wind farm near Ft. Stockton, Texas. The wind farm will use 50 Vestas 3 MW wind turbine generators for a total generating capacity of 150 MW. Padoma is managing the construction, which began in late 2007. The project is scheduled to begin commercial operation during the second half of 2008. BP will handle operations and dispatch.

PSEG Power plans to build a $150 million power plant next to an existing generating station. The new plant is the first step in a planned expansion of the company’s fleet of power plants. PSEG Power, a unit of Newark-based Public Service Enterprise Group intends to add up to 1,000 MW of gas-fired generating capacity to help meet peak demand. The new 138 MW natural gas-fired plant is expected to provide electricity in 2010.

The Ohio Environmental Protection Agency issued a final air permit for the 1,000 MW, $2.5 billion coal-fired American Municipal Power Letart Falls station. The EPA says the permit requires AMP-Ohio to use the best available control technology to limit emissions of carbon monoxide, particulate matter, nitrogen oxide and a variety of other pollutants. The agency said the mercury emission limit is more stringent than what is required for any other power plant in Ohio.

People & Personnel

El Paso Electric Co. said President and Chief Executive Ershel Redd resigned to pursue other business opportunities after less than a year at the helm. The utility named COO J. Frank Bates as interim president and CEO and said its board will start searching for a replacement immediately.

Mark C. McCullough has been named senior vice president, Fossil and Hydro Generation for American Electric Power. He has been AEP’s vice president, Fossil and Hydro Generation-Baseload Assets since 2003. McCullough succeeds Bill Sigmon, who was named AEP’s senior vice president, Engineering, Projects and Field Services last year. McCullough has worked his entire career at AEP.

Andrew (Andy) White will head a new department at General Electric, meant to rationalize and speed development of non-carbon technologies. White was previously president and CEO of GE’s nuclear energy division. Jack Fuller succeeds White as president and CEO of the nuclear business unit. Fuller formerly led integration activities at the Global Nuclear Fuels alliance between GE, Toshiba and Hitachi.

Jan Carr, CEO of the Ontario Power Authority, plans to step down in June. Carr was appointed at the beginning of 2005 after a year as vice-chair at the Ontario Energy Board.