Carbon Capture and Economics Dominate COAL-GEN

Issue 9 and Volume 112.

Louisville, Ky. welcomed COAL-GEN 2008 in mid-August and carbon capture and economic themes dominated talk among the 3,500 attendees, a record crowd.

Conference delegates heard that continued development of carbon capture and sequestration (CCS) technology is critical to keeping coal a primary source of U.S. electric power production. Despite substantial costs and energy penalties associated with carbon capture—and the even greater challenges posed by carbon storage—most major equipment manufactures and other coal industry experts think economic and technical problems associated with CCS can and will be resolved.

Conference delegates also heard that there is no single way carbon can best be captured from coal plants. A range of technologies including pre-combustion (integrated gasification combined cycle, IGCC), in-combustion (oxy-firing) and post-combustion (ammonia and amine) will likely fill specific niches depending on fuel, altitude, weather, plant vintage and related public policy directives.

A third theme at COAL-GEN, was that replacing old coal-fired plant with supercritical and ultra-supercritical coal plants represents the fastest, most economical way to increase baseload generating capacity while reducing carbon emissions.

A presentation by Dr. Bert Rukes and Lothar Balling of Siemens Power Generation, “Market Success of 800 MW Ultra-Supercritical Steam Power Plants in Europe,” revealed that a 1 percent improvement in power plant combustion efficiency reduced CO2 emissions by 2.4 million metric tons. That same improvement caused NOX and SO2 emissions to fall by 2,000 metric tons each and particulates by 500 tons. Fuel costs also fell by 2.4 percent.

“The most straightforward way to reduce CO2 is to improve efficiency,” said Rukes. Between 1981 and 2004, his company’s supercritical coal plant boilers have increased efficiency from 37.5 percent to 47 percent.

A Blue Ribbon panel of experts took part in a special session to discuss implications of a July 11 federal court decision vacating the Clean Air Interstate Rule (CAIR). Panelists agreed that the court had overstepped its bounds in vacating the rule and will potentially further hinder environmental improvements to the U.S. coal fleet. Most panelists in the session (presented by Power Engineering magazine) agreed, however, that the best response for companies that already have invested billions of dollars in equipment and SO2/NOX credits to comply with CAIR is to stay the course.

Audience members at the COAL-GEN 2008 Keynote Session learned of some of the challenge that carbon capture and its sequestration are likely to present electric power generators. Click here to enlarge image

“Significant CO2 reduction is now possible with supercritical units and retrofits,” said Gene Hernandez of Doosan Babcock, “and can yield significant CO2 reduction even without capture and sequestration.” As an example, he cited replacing vertical boiler tubes with newer technology tubes.

During the Megasession “CCS: Moving from Research to Reality,” John Wheeldon of the Electric Power Research Institute said “the challenge is to reduce CO2 emissions while sustaining economic well-being.” Consistent with a common sentiment heard throughout the conference, EPRI’s analyses show CCS will be essential to keep coal competitive. EPRI is coordinating the Ultra-Gen Initiative, which intends to demonstrate a commercially viable coal-fired boiler by 2015 that will operate at 1,450 F.

Gary Spitz of AEP, the largest coal-fired electric utility in the U.S., said the company projects the percentage of coal in its generation portfolio will grow in the future—from 51 percent to 53 percent. He said that the amine approach to carbon capture requires a parasitic load of about one-third of the plant’s output and also requires a clean flue gas with single-digit SO2.

Alan Farmer of TransAlta said that under the current Canadian regulatory protocol, no plant will be built there after 2012 that is not “CCS-ready.” Such a requirement might be easier to achieve in Alberta which has a robust market for enhanced oil recovery using captured CO2. He said the province has the ability to store all the carbon produced there for 150 years. Two-thirds of the capital needed for fully CCS-ready plants will likely come from government. “The financial benefits are still not sufficient to make CCS economically justified,” he said. He based his conclusions on a cost of $40/ton for CO2 capture and a projected EOR market value ranging from $90 to $200/ton.

A second Magasession, “Coal Project Cost Control in Today’s Market,” was chaired by Steve Logue of Kiewit Power and featured six leading engineering/construction firms. Attendees heard that a common cost-control strategy is to spend a lot of time and effort early on in the project to manage risk. Clinton Smith of Fluor warned against making construction schedules too short, which can drive up the cost of labor and increasing risk.

A Power Engineering magazine Webcast “The Real Meaning of ‘Carbon Capture Ready’” (see page 82) was broadcast live from the COAL-GEN exhibit floor and is available for replay at www.power-eng.com.—Steve Blankinship

Weston Unit 4 Enters Service

Wisconsin Public Service Corp. has brought its Black & Veatch-designed Weston Unit 4 electric generation plant online for commercial operation. The new unit utilizes advanced supercritical and emissions technology.

The unit was built for around $774 million, or $1,420/kW on a net basis and $1,300/kW on a gross basis.

The cost is one indication that “WPSC did it at just the right time,” said Tom O’Brien, project manager and associate vice president at Black & Veatch. He gave a project update at COAL-GEN in Louisville, Ky. in August. He estimated the unit’s construction cost today would be “north of $3,000/kW.”

WPSC’s Weston 4 Unit is a 545 MW facility and is the first in Wisconsin to use advanced mercury reduction technology. The new plant is the fourth pulverized-coal-fired power plant at the Weston site and is adjacent to the Weston 3 unit that began operating in 1981.

Weston 4 unit is also one of only a few supercritical units to be constructed in the United States during the last 10 years.

Weston Unit 4(left). Courtesy WPSC. Click here to enlarge image

Key construction challenges involved material lead time, labor issues (particularly related to iron workers and steel erection) and steam blow. O’Brien cited project successes that included a multi-prime contract approach, off-site fabrication of some parts, a project labor agreement and a partnership agreement with OSHA. In addition, WPSC operators were “involved heavily”, particularly in startup planning, which began four years ago and involved more than 200 items.—David Wagman

Limestone 3 Deal Eases Opposition

NRG Texas LLC, a unit of NRG Energy, Inc. reached agreements with the Texas Clean Air Cities Coalition and the Environmental Defense Fund in which the two groups will drop their opposition to the Limestone 3 permit application in response to a number of commitments related to emissions of carbon dioxide (CO2), nitrogen oxides (NOX), sulfur dioxide (SO2) and mercury (Hg) and to other environmental issues including reductions in water usage.

Both environmental groups initially announced their intention to intervene in and oppose NRG’s permit application to add an 800 MW unit to Limestone Station. Currently, two units at Limestone generate over 1,700 MW of baseload generating capacity.

The agreements include the following emissions reduction measures:

  • Until a federal climate change program is implemented, NRG will offset or sequester 50 percent of the carbon generated by the new unit in a manner that is verifiable. The intent is to make the unit’s carbon profile roughly equal to that of a gas-fueled plant. These efforts could include agricultural and forestry sequestration, retiring older, less efficient generation assets; bringing new wind or solar generation online; and implementing postcombustion carbon capture and sequestration technology at the WA Parish Plant.
  • NRG agreed not to build another coal-fueled plant in Texas unless the plant uses integrated gasification combined cycle (IGCC) or ultra-supercritical coal technology and sequesters or offsets at least 50 percent of the future plant’s CO2 emissions.
  • Sitewide NOX, SO2 and mercury emissions for all three units will not increase with the addition of the new unit and will fall below the 2006 levels of the two existing units following startup.

Artist’s concept of NRG Energy’s proposed 800 MW Limestone 3 unit in Texas. Click here to enlarge image

In addition, NRG agreed to build or support development of a utility-scale solar energy project in Texas, if economically feasible as determined by criteria in the agreement. If NRG does not build or take part in a utility scale solar plant, NRG will contribute to a trust that would fund Texas energy efficiency projects.

NRG also said it will commit to reduce water usage at the new plant by almost 60 percent (about 5,000 acrefeet per year) through conservation and use of advanced air cooling technology.

NRG will commit resources for a terrestrial sequestration pilot project in West Texas that will remove carbon from the atmosphere and alleviate pressure on the Ogallala Aquifer. It also agreed to back a project to demonstrate that geologic sequestration of CO2 is an effective technique, sequestering a significant amount of carbon in the process. Both projects will be managed by the Environmental Defense Fund.

NRG also said it will retrofit or replace a substantial portion of its non-road diesel equipment with Tier 2 or better equipment, further reducing NOX emissions.—David Wagman

U.S. Uranium Production Lags 2007

Production of uranium concentrate in the United States was 1,073,315 pounds uranium oxide (U3O8) for the second quarter 2008, 32 percent higher than the previous quarter, but 4 percent lower compared with the second quarter 2007 production. The U.S. Department of Energy’s Energy Information Administration reported that for the first half of 2008, U.S. uranium concentrate production totaled 1,883,504 pounds U3O8. This was 17 percent lower than the 2,282,273 pounds produced during the first half of 2007.

One U.S. mill (White Mesa Mill) and five U.S. in-situ-leach plants (Alta Mesa Project, Crow Butte Operation, Kingsville Dome, Smith Ranch-Highland Operation and Vasquez) were reported to be producing uranium concentrate during the second quarter. At the end of June, the White Mesa Mill was milling uranium-bearing ore taken from mines. For roughly the last three years, the facility milled alternate feed only.

Meanwhile, Cameco Corp said it temporarily suspended remediation work at the No.1 shaft at its Cigar Lake uranium project, which flooded in 2006, due to an increase in the rate of water inflow to the mine.

No. 1 shaft had been pumped down to 430 meters below surface when the water increase was reported in mid-August. The inflow rate rose steadily to around 600 cubic meters an hour, which the company said was beyond the range that can be managed while sustaining work in the shaft. The mine is around 500 meters deep and its underground workings are at the 480-meter level.

Work in the shaft has been suspended to determine the source and characteristics of the inflow, implications for planned remediation work and the impact, if any, on the restart of production.—David Wagman

Business Briefs

Hyperion Power Generation received a letter of intent from investment company TES Group to buy the Hyperion Power Module, a 27 MWe nuclear power reactor. The intention is to buy up to six units for various projects in Europe and the Middle East, at some $25 million each. Hyperion said that if these projects are successful, TES could potentially buy up to 50 units. The Hyperion Power Module is a small self-regulating hydrogen-moderated and potassium-cooled reactor fuelled by powdered uranium hydride. It is designed to operate for 5 to 10 years before being returned to the factory for refuelling. The reactor is about 1.5 meters wide and 2 meters high and has no moving parts. Hyperion said it has had preliminary talks with the Nuclear Regulatory Commission and said a U.S. design certification application is possible in 2012. That’s also when the company plans to begin manufacturing the plants in New Mexico. The design is licensed from the U.S. Department of Energy’s Los Alamos National Laboratory. Hyperion said it could build 4,000 units for sale worldwide.

The Nuclear Regulatory Commission said it found no environmental impacts that would prevent Southern Nuclear Operating Co from gaining an Early Site Permit (ESP) for its Vogtle site in Georgia. An ESP confirms in principle that a site is suitable for the possible future construction and operation of a new nuclear power plant. It enables a company to complete a vital part of the planning permission process before committing to the capital outlay required to build a new plant. The permits are valid for 20 years, allowing the company to apply for a combined construction and operation license (COL). Southern Nuclear submitted its application to the NRC for an ESP for Vogtle in August 2006. The company has also applied to the NRC for a COL for two Westinghouse AP1000 reactors on the Vogtle site. Vogtle currently houses two PWRs, which started operation in 1987 and 1989. Together, these Westinghouse-design units produce 2,300 MWe.

Regulators approved a plan by Xcel Energy to shut down two coal-fired power plants in Colorado, thought to be the first time a utility has volunteered, and regulators have approved, a plan to shut down power plants because of CO2 emissions. Together the plants can generate 229 MW. Xcel proposed replacing the coal-fired generators at Denver’s Arapahoe power plant with 480 MW of natural gas-fired capacity. A regulatory decision on that plan has been postponed. The Cameo plant is scheduled to close by December 2010. The Arapahoe station would close by December 2012.

South Texas Project Unit 1 turned 20 at the end of August. Using a Westinghouse pressurized water reactor, STP 1 led all 439 reactors worldwide in electrical generation last year. The unit also has delivered two breaker-to-breaker production runs by operating continuously between refuelings, about 18 months of non-stop service. Unit 1 completed its first breaker-to-breaker run in October 2006 and its second just this past March. STP was Power Engineering magazine’s 2007 Project of The Year for Best Nuclear Project. The plant is owned by Austin Energy, CPS Energy and NRG Texas.

Google.org is investing nearly $11 million in technology to expand U.S. geothermal reserves. The organization will invest $6.25 million in AltaRock Energy, a startup that is developing enhanced geothermal system (EGS) technology. Potter Drilling, a company that is developing hard-rock drilling technology to be used for geothermal, also received $4 million from Google.org.

Oregon regulators reportedly want to cut haze-causing pollutants from Portland General Electric Co.’s Boardman coal plant by 65 percent by 2014, which would require $400 million worth of added controls. The state Department of Environmental Quality said the proposal also would cut emissions of sulfur dioxide and oxides of nitrogen by 81 percent within 10 years. The plant 150 miles east of Portland is the largest stationary source of the pollutants in Oregon. A study this year concluded that it is responsible for more than half the haze in the Columbia Gorge at times of the winter.

Projects & Contracts

EPCOR Utilities Inc. selected Siemens Fuel Gasification Technology GmbH & Co. KG as the technology provider for the design of a coal gasification facility. The selection is the latest step in the EPCOR-led front end engineering and design (FEED) of an IGCC technology power plant that could deliver improved air quality and capture carbon emissions for permanent storage. Siemens will licence its SFG-500 coal gasifier technology to the FEED project. If subsequent investment and construction decisions go as planned, a 270 MW (net) generating station using the technology would be targeted to start operations in 2015. The Alberta Energy Research Institute, Natural Resources Canada and EPCOR each contributed C$11 million (US$10.4 million) to the C$33 million (US$31.1 million) FEED project, which is located at EPCOR’s Genesee Generating Station, southwest of Edmonton, Alberta. The FEED project is being conducted in conjunction with the Canadian Clean Power Coalition.

Wärtsilä North America Inc. has been awarded an engineered equipment supply contract by GEUS, a municipally-owned electric power system in Greenville, Texas. The contract for the 25 MWe gas-fired power plant is valued at over $19 million. The plant will help meet the community’s 113 MW peak demand. It will also be dispatched to meet ERCOT’s requirements. The power plant will operate on pipeline quality natural gas and feature three Wärtsilä 20V34SG engines, along with mechanical, electrical and control auxiliaries, switchgear and exhaust emission controls. Wärtsilä will also provide installation and commissioning support, as well as factory training.

Hydro-Québec will invest C$1.9 billion (US$1.79 billion) to refurbish the 675 MW Gentilly-2 nuclear generating station in Bécancour, Quebec. Refurbishing the plant will extend its operation until about 2040. The project has two components: refurbishment of Gentilly-2 nuclear generating station, commissioned in 1983, and construction of a solid radioactive waste management facility (SRWMF). Engineering and procurement for the project’s refurbishment will start in 2008 and construction work will begin in 2011. The plant is expected to return to service in 2012. Construction activities will consist of refurbishing the reactor, the turbo-generator unit, as well as the control and support systems. Construction work on the SRWMF is divided into four phases. Phase 1, already underway, will meet the plant’s immediate operating requirements with the building of storage units for low- and medium-level solid radioactive waste. Phase 2 will provide storage for radioactive waste arising from plant refurbishment work. The other phases will meet the plant’s needs until the end of its operating life.

Unified Testing Services, a member of TUV Rheinland North America, announced that its non-destructive examination services contract with Southern Co. was renewed for an additional three years. UTS will provide non-destructive testing and examination services at approximately 20 of Southern Co.’s power generation plants in Alabama, Florida, Mississippi and Georgia. Some of the plants include Alabama’s Gaston Steam Plant, Florida’s Plant Crist and Mississippi’s Plant Daniel. The contract involves weld inspection during outages or rebuilds and component inspection of power-generating turbines and boilers, as well as high-pressure piping. UTS plans to employ various non-destructive testing techniques including radiographic, magnetic particle, ultrasonic and liquid penetrant inspections.

Pacific Gas & Electric has signed agreements to buy power from OptiSolar Inc., which plans to build a 550 MW farm of thin-film photovoltaic panels. SunPower Corp. will deliver power from another 250 MW plant, both sites in San Luis Obispo, Calif. Both contracts with are dependent on several factors including the extension of a federal investment tax credit slated to expire December 31. Measures to renew the tax credit, which make the power produced by solar farms affordable for PG&E, have failed eight times so far this year. PG&E vice president of energy procurement Fong Wan told a newspaper that without the tax credits, the solar projects won’t happen. PG&E is required by state law to source 20 percent of its power from renewables by 2010 and 30 percent by 2017. SunPower’s farm is expected to begin producing power in 2010 and be completed by 2012. OptiSolar won’t begin producing power until 2011 and will be completed by 2013.

Navasota Energy Partners LP said it plans to build a third natural gas-fired power plant in Texas and to expand two of its existing gas-fired power plants. Navasota said it expects to obtain a state air permit soon to build the new 550 MW Madison Bell Energy Center in Texas, the third of its gas-fired plants. Navasota’s third gas plant will be identical to the company’s existing facilities, the Quail Run Energy Center and the Colorado Bend Energy Center. Both plants began producing power in 2007 and were eventually expanded to produce 550 MW each. Navasota Energy received air permits in May to expand each location by another 275 MW, to a total of 825 MW per site. Operations are intended to begin in 2010.

Southern California Edison signed a 20-year contract with DCE, a unit of Caithness Energy, to provide up to 909 MW of wind power. Financial terms were not disclosed. The project involves installing 303 wind turbines across 30 square miles in north-central Oregon between 2011 and 2012. The project reportedly requires no additional or upgraded transmission lines.

Emerson Process Management received a contract from Huaneng Group to apply its Plantweb digital plant architecture at Haimen, a new ultra-supercritical, coal-fired power plant being built in China’s Guangdong province. The plant will use digital bus technologies. When completed, the six-unit plant will have a total generating capacity of more than 6,000 MW. The plant is being built in two phases (four units for the first phase, two units for the second phase). Under the contract, Emerson will install its Ovation expert control system for units 1 and 2, which are expected to go into service December 2008 and March 2009, respectively. Emerson has also entered into a purchase agreement with Huaneng Group to automate units 3 and 4.

People & Personnel

Calpine Corp.’s Board of Directors appointed Jack A. Fusco as President and Chief Executive Officer. He will also serve as a member of Calpine’s Board of Directors. Mr. Fusco succeeds Robert P. May, who served as Calpine’s CEO since December 2005 and earlier this year announced his intention to retire when his successor was in place. Mr. Fusco served as Chairman and CEO of Texas Genco Inc. until 2006. From 2002 until July 2004, Mr. Fusco was the exclusive energy investment advisor to Texas Pacific Group. Earlier in his career, Mr. Fusco helped to found Orion Power, an independent power producer, serving as a Board member and the company’s CEO until 2002.

Donald Jernigan, who has been serving as site vice president of Dominion’s Surry Nuclear Power Station, joined TVA as senior vice president of nuclear operations. In his new role, he will provide day-to-day oversight of plant operations. The position has been vacant since the promotion of Preston Swafford to executive vice president of TVA’s Fossil Power Group last summer. In addition, Tom Coutu, currently vice president of Exelon’s Midwest Region Operations, was to join TVA’s Nuclear Power Group at the end of September. Mr. Coutu will fill the position of vice president of Nuclear Support, which currently oversees emergency services and nuclear functional area managers for maintenance, operations, radiological protection, chemistry and outage/work management.

Allied Power Group named Bernhard Rudolph as CFO and Alan Lovelace, PE, as Engineering Manager. Mr. Rudolph served as CFO for Preco Turbine Services for eight years prior to GE acquiring the company in 2001. He and a partner then founded TriStar Turbine Technologies, with Mr. Rudolph serving as CFO and owner. When TriStar was sold to North American Energy Services, Mr. Rudolph became Division Controller for four divisions. Mr. Lovelace will be responsible for heading development of a full line of repair operation for all Westinghouse components, as well as heading research and development to refine Allied’s repair techniques to all GE and Westinghouse repairs. Mr. Lovelace comes to Allied Power Group from TRS.

Mergers & Acquisitions

The board of Electricité de France (EdF) has authorized management to increase the company’s stake in Constellation Energy from the current 4.97 percent to 9.9 percent. Under federal regulations, a company owning at least 10 percent of a U.S. electric utility company is subjected to increased reporting requirements and investments limits. In July 2007, Constellation and EdF agreed to form a strategic joint venture to operate new nuclear power plants in both the United States and Canada. The 50/50 joint venture—called UniStar Nuclear Energy—will develop, own and operate a possible standardized fleet of US EPR units envisaged by the UniStar scheme, itself a joint venture between Constellation and France’s national nuclear technology company Areva. At that time, it was agreed that EdF may buy up to 9.9 percent of Constellation’s outstanding common shares over the next five years—limited to 5 percent in the first year—and place an observer on its board.

(for more Questions visit www.power-eng.com) Click here to enlarge image

NorthWestern Energy said it hired Robert C. Rowe as its new president and chief executive officer. Rowe, a former commissioner of the Montana Public Service Commission, will assume the role immediately. He replaces Michael J. Hanson, who resigned his post, but will remain a consultant with the utility company. Rowe is co-founder and senior partner at Balhoff, Rowe & Williams LLC, an energy and telecommunications consulting firm. NorthWestern is considering a site in Montana for a proposed natural gas fired electric generation project. The project would provide regulating reserves within the company’s transmission control area and must be approved by the Montana Public Service Commission prior to the company committing to construction.