20th Annual POWER-GEN International

Issue 11 and Volume 112.

Welcomes the World to Orlando, Florida

Here’s a guide to making the most of your time at POWER-GEN International and NUCLEAR POWER International. There’s a full week of comprehensive Competitive Power College courses; networking events, including the POWER-GEN International 20th Anniversary Networking Reception, the Projects-of-the-Year Gala and Networking Roundtable Breakfasts; three topical mega-sessions; a technical tour; and a golf tournament.

Five diverse keynote speakers set the tone for POWER-GEN International’s 20th gathering at 9:30 Tuesday morning, December 2.

Leading off will be Jerry Paul, president and managing member of Capitol Energy and Capitol Energy Florida Services, which provide governmental consulting services. He is the Distinguished Energy Fellow at the University of Tennessee’s Howard Baker Center for Public Policy. A nuclear engineer and attorney, Paul has represented Florida’s 71st district in the Florida House of Representatives and was the United States’ chief operating officer and deputy administrator of the U.S. National Nuclear Security Administration. Paul holds a law degree from Stetson University College of Law, a bachelor’s degree in marine engineering from the Merchant Marine Academy and a post-baccalaureate degree in nuclear engineering from the University of Florida.

J. M. Bernhard Jr. is the founder, chairman, president and CEO of The Shaw Group, a global company with 27,000 employees offering engineering, construction and technology services to the energy, chemical, environmental, infrastructure and emergency response markets. Under his leadership, The Shaw Group has grown through a series of strategic acquisitions to more than $5 billion in revenues since its inception in 1987. Shaw has been named to the Fortune 500 list three times and is one of the youngest companies to appear on the list. In 2001, Bernhard received the first Ernst and Young “U.S. Entrepreneur of the Year” Award.

Jacques Besnainou was appointed president of Areva Inc. and president and CEO of Areva NC Inc. this past September 1. Besnainou holds Master of Science degrees in mathematics, engineering and public policy from Ecole Polytechnique and Ecole des Mines, which are France’s leading engineering schools. He has acquired nearly 20 years of management and systems engineering experience in both France and the United States. Besnainou began his career in 1987 as a management consultant for a French investment bank, but was soon appointed advisor to the French Ministry of Industry for civilian nuclear affairs. In 1993, he joined the Ecobilan Group, an environmental consulting firm specializing in life cycle assessments. After becoming CEO, he negotiated its sale to PricewaterhouseCoopers in 2000.Besnainou joined COGEMA Inc. in 2001 as executive vice president in charge of used nuclear fuel management operations in the U.S. In 2005, he was appointed to the Areva Nuclear Executive Committee in charge of the back-end sector.

Rick Duke joined NRDC from McKinsey & Co., where he consulted on strategy, operations and organization. Prior to that, he led a team that assessed the cost-effectiveness of global greenhouse gas abatement opportunities. Before joining McKinsey, Dr. Duke worked as an assistant economist for the Federal Reserve Bank of New York. He also managed the Honduran office of a renewable energy company and consulted for the International Finance Corp. Dr. Duke completed his graduate education in Public and International Affairs at Princeton. His doctoral dissertation develops the economics of public support for emerging energy technologies. He has published on a range of technology and economics topics.

Thomas Farrell II is chairman, president and CEO of Dominion. He previously held the post of vice president and general counsel. Farrell earned his undergraduate degree in economics in 1976 and his law degree in 1979, both from the University of Virginia. He is a member of the Institute of Nuclear Power Operations, the Edison Electric Institute and the Council of Foreign Relations’ Independent Task Force on Climate Change.

Full Slate of Conference Sessions

On Tuesday, December 2, at 1:30 P.M., the session Next Generation Power Supply Technologies—“Greentech” is Growing Up will present a panel discussion discussing emerging energy technologies and the role of venture capital, private equity and strategic investors in financing “green” energy companies and start-ups. The panel will consist of senior executives from leading-edge renewables, emissions control technology and advisory companies who will discuss their businesses and their specific technologies, including development and testing of advanced biofuels for use in power generation, the development of new hydroelectric facilities, emerging pre- and post-combustion coal technologies and new SmartGrid technologies.

On Wednesday, December 3, at 9:30 A.M., Realities of Carbon Capture will present a panel discussion on how the current thinking about climate change goes beyond traditional environmental controls and extends to the new world of carbon capture and storage. Many facets are being considered by climate change thinkers including technology, legislation/regulation and economic impact. Panelists will provide unique insights on the progress of each of these aspects as well as the potential upsides and downsides.

On Wednesday, December 3, starting at 1:30 P.M., the role of coal and natural gas in future generation will be discussed in a session focusing on environmental impacts and challenges on future resource planning—with emphasis on coal—during a session titled Risks and Road Blocks to Coal Generation Development.

In the Environmental Issues track, several sessions will address mercury capture issues that still loom large despite a national shift toward carbon dioxide. At the session Mercury Considerations in a Post-CAMR World on Wednesday beginning at 9:30 A.M., presenters will discuss the U.S. circuit court’s decision to overturn EPA’s Clean Air Mercury Rule.

In the Fossil Technologies track, supercritical coal plant designs and technologies will be the focus of several sessions, including Supercritical Power Plants on Tuesday, December 2, starting at 1:30 P.M. The session covers advanced supercritical plant design considerations, materials selection and actual operating experience of domestic and international projects.

Circulating fluidized bed (CFB) technology, now seeing more use worldwide due to its scalability and fuel flexibility, is also a part of the Fossil Technologies track, including a session on Wednesday starting at 9:30 A.M., Update of CFB Applications and Developments. The session will discuss CFB applications dealing with opportunity fuel firing, emissions performance and high temperature applications, including supercritical and ultra-supercritical.

Major Mega-Sessions

On Thursday, December 4, beginning at 9:30 A.M., a trio of two-hour mega-sessions conclude the 20th Anniversary edition of POWER-GEN International.

As more renewable energy sources stream onto the U.S. grid, issues once only thought of in future terms are coming to the forefront. Integration of Renewable Energy Technologies Into the U.S. Grid looks at how renewable energy technologies are blending—and will blend in the future—into the grid. Wind power has been the second largest form of new electric generation built in the U.S. for three years running. Geothermal energy is poised to grow over the next few years and biomass is likely to be a choice for co-firing with coal and new power generation capacity in several regions of the country. Central station solar generation holds huge promise in many parts of the western and southwestern regions of the U.S.

Equally timely is the mega-session, Carbon Capture Readiness at Utility Scale. The panel discussion will cover carbon capture readiness and demonstration projects for utility-scale applications. It will also cover potential legislation under the new U.S. administration and carbon trading.

A third mega-session will focus on the bread-and-butter large-frame gas turbine. The panel will discuss the current status of large machine performance and improvement modifications and each major original equipment manufacturer will update fleet operating status.

Mix, Mingle, Schmooze

Technical sessions, professional development opportunities and dynamic plenary events are just part of the value and excitement of being at the world’s largest power event. The ability to mix, mingle and schmooze with industry professionals from all over the world is a major reason so many people come to Orlando in December.

POWER-GEN International’s 20th Anniversary Networking Reception takes place Wednesday, December 3, from 5:00 P.M. to 7:00 P.M., in the Delegate Restaurant area. Cost is $45.00. Energy Provider program participants and all international delegates are admitted free.

In keeping with POWER-GEN International’s 20-year legacy, a special highlight will be entertainment by the legendary ’80s/’90s rock band Starship, which has also been known as Jefferson Starship and the Jefferson Airplane. Join your fellow power industry professionals to celebrate POWER-GEN International’s 20th anniversary with food, drinks and entertainment.

Special Night for Notable Projects

Power Engineering magazine’s Projects of the Year Awards gala grows even grander in its third year. This year’s gala will be held on Monday, December 1, from 7:00 P.M. to 10:00 P.M. at the Rosen Centre Hotel’s Junior Ballroom. Cost is $75.00 per person.

This highly-anticipated POWER-GEN event begins with a cocktail reception, followed by a three-course dinner. The award winners—nominated by the industry and selected by Power Engineering magazine’s editors—are announced and presented with awards recognizing their exceptional contributions to the power generation industry. The gala is open to the award winners, their guests and all POWER-GEN International attendees. Be a part of this special evening recognizing the best of the best in innovation and technology.

Technical Tour

As always, POWER-GEN International will include a technical tour of a local power plant. This year’s technical tour starts at the Orange County Convention Center on Monday, December 1, at 9:30 A.M., with a bus trip to the 410 MW Cane Island gas-fired plant.

Unit 1 is a General Electric LM6000 PA aero-derivative simple cycle combustion turbine primarily used for peaking. Unit 2 is a GE Frame MS7001EA in combined cycle with a Nooter/Eriksen triple pressure HRSG that provides steam for a GE Fitchburg axial exhaust straight condensing turbine. Unit 3 is a GE 7241FA+e in combined cycle with a Aalborg triple pressure reheat HRSG that provides steam for a GE A10 reheat steam turbine. Unit 3 was the first combined cycle in Florida to install an SCR.

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For complete details, visit www.power-gen.com.

It’s POWER-GEN International’s 20th anniversary party, but you can drive home in the gift!

Save on the airfare home when you drive away in style in your brand new 2009 Corvette…

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…this year’s POWER-GEN International floor giveaway. Entering is easy—just just visit the exhibit floor, have your entry card stamped by sponsoring companies and turn it in for your chance to win! Details are at www.power-gen.com and at the show in Orlando!

50 Countries Weigh Nuclear New Build

Nuclear reactors may produce more than one-fifth of global electricity by 2050 as demand for power rises in countries such as China and India, according to a report by the Organization for Economic Cooperation and Development.

At the higher end of forecasts, atomic power output would climb to 22 percent of the total in 2050 from the current 16 percent, according to the study published by Paris-based OECD’s Nuclear Energy Agency. To reach this level, 54 reactors would need to be built each year between 2030 and 2050. At present 439 reactors are operating in the world.

WNA said 90 new nuclear plants are approved and twice that number are proposed. Click here to enlarge image

Some 50 countries are considering introducing nuclear power and another 12 are actively preparing for it. More than 90 new plants are approved and in the planning stage, while at least double that are proposed, according to the World Nuclear Association. Applications have been filed for about 20 reactors in the U.S. China plans to quadruple nuclear capacity from existing and new reactors by 2020. As of June, 41 reactors were being built around the world, with an average construction time of 62 months, the OECD said.

Uranium supplies are sufficient to expand the industry at least until 2050, the OECD report said. “The current resource-to-consumption ratio is better than that of gas or oil.’’

The IAEA’s director general Mohamed ElBaradei reiterated a call for international control over the nuclear fuel cycle to prevent using a civilian atomic energy industry for weapons development.

“We could start with a nuclear fuel bank under the IAEA,” with a view to bringing all new enrichment and reprocessing operations under multinational control and eventually existing facilities as well, he said. “Ambitious and creative measures are necessary if we are ever going to halt the spread of nuclear weapons.”—David Wagman

Texas Pushes Transmission Decision

Already playing host to more wind generation than any other place in the United States, Texas is now grappling with how to get it to customers. And because it does not have enough transmission in the right places, wind project deployment in the state appears to be slowing.

In October, the Public Utility Commission of Texas (PUC) urged a consortium of eight transmission companies to come to terms and decide who will do what and where with regard to building new transmission. The PUC set a hearing date in December and put pressure on parties to reach agreement before then.

With wind projects in the balance, Texas regulators are pushing for a December decision. Click here to enlarge image

The cost of the favored scenario for the state’s competitive renewable energy zone (CREZ) transmission plan could be at least $5 billion. That would pay for new transmission lines from remote west Texas into load centers elsewhere in the state. The plan would accommodate about 18,500 MW by 2012, more than three times the current amount. “A settlement that will help us accelerate the process and begin to turn dirt and get infrastructure built is a good policy,” said Barry Smitherman, PUC chairman.

Texas currently leads the nation with 5,800 MW of wind-generating capacity. But FPL Energy, the largest wind developer in the state, has delayed construction of a wind farm in Wilbarger County, due largely to the transmission issue.

“Until we get the transmission bottleneck cured, development will slow,” said Ned Ross, director of regulatory affairs for FPL Energy. Requests to connect about 200 MW of new wind were canceled in August and completion of 120 MW was delayed until 2009. About 330 MW has also been temporarily removed from current projects, according to monthly reports by the Electric Reliability Council of Texas (ERCOT). Overall, ERCOT now projects the state will have 8,549 MW of installed wind capacity by year end, down from earlier estimates exceeding 9,200 MW.

Any pause could be short-lived, however. Higher Perpetual Energy, a Texas wind farm developer, last month formed a joint venture business with DeWind to develop 620 MW of wind power using 310 DeWind D8.2 turbines. The initial phase of 620 MW has development costs in excess of $1 billion across four projects in the Texas Panhandle.

Eight “joint party” transmission companies, including American Electric Power and Oncor, have banded together seeking commission approval to build all the proposed new lines. Besides Oncor and two AEP transmission companies, others in the consortium include Electric Transmission Texas, Lower Colorado River Authority Transmission Service, Sharyland Utilities, South Texas Electric Cooperative and Texas Municipal Power Co. Although intended to provide favored access to renewable energy generators, the lines would be able to carry non-renewable energy as well, so long as congestion issues are not a concern.

The PUC set March 1 as the deadline for resolving who builds what and where. It said it hopes to resolve issues no later than January 1.—Steve Blankinship

Geothermal Resource Growth

Time was when geothermal energy (long associated with erupting geysers and temperatures above 1,000 F) was considered a valuable source of renewable electricity in places where it was easily accessible (such as The Geysers in California) but otherwise rare and expensive to look for.

New technology may change that. Geothermal heat can produce power at temperatures lower than you may typically find in your kitchen, let alone inside a power plant boiler.

Condenser and cooling towers at The Geysers geothermal facility in California. Click here to enlarge image

As a prime example: For more than two years, the Chena Hot Springs Resort in Alaska, powered by UTC Power’s PureCycle geothermal power plant technology, has been drawing energy from the lowest temperature geothermal power source ever used in a commercial thermal power application, 165 F. In 2006, the Chena geothermal installation was selected renewable energy Project of the Year by Power Engineering magazine’s editors.

In September, UTC Power announced that the first two production units of its PureCycle geothermal power system—installed in July and early August at the Burgett Greenhouse in Animas, N.M.—are exceeding performance expectations. Power from the units is used to displace grid electricity required to support 32 acres of greenhouse operations at the site. The system produces no emissions in generating electricity and uses no fuel.

UTC Power’s geothermal system can operate at temperatures from 200 F to 300 F, previously thought to be uneconomical for commercial power production. The system resulted from more than six years of research and development work involving UTC Power, United Technologies Research Center and the Department of Energy (DOE).

Raser Technologies of Provo, Utah, has ordered 200 PureCycle systems for various projects it is developing across the Western U.S. Such low-temperature geothermal applications offer the possibility of using relatively tepid geothermal temperatures located fairly close to the earth’s surface to make power.

According to the Geothermal Energy Association (GEA), the United States continues to rank as one of the leaders in geothermal energy growth. It remains a world leader in online geothermal energy capacity with 30 percent of the world’s total. As of this past August, geothermal electric power generation in seven western states stood at almost 3,000 MW. Currently 103 projects are underway in Alaska, Arizona, California, Colorado, Florida, Hawaii, Idaho, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming. When developed, these projects could provide 4,000 MW of electric power generating capacity.

“Given the high reliability and capacity factors for geothermal power, this would meet the household electricity needs of Los Angeles, Phoenix, San Francisco and Seattle combined,” said Karl Gawell, the GEA’s executive director.

Geothermal is also getting its share of attention from government funding programs. U.S. Geothermal’s Raft River site in Idaho is one of 21 projects chosen by DOE to demonstrate the viability of enhanced geothermal programs. The company also operates geothermal projects at San Emidio, Nev., and has completed testing a new well as part of its exploration activities at Neal Hot Springs in eastern Oregon.

The Raft River site has the potential to access a fairly typical range of production temperatures and will offer an opportunity to study the in-place permeability of the geologic horizon that hosts the geothermal reservoir, then measure the impact of thermal fracturing using three different fluid temperatures. Fracturing can occur when cold water is injected into a well where hot rock exists. If targeted results are not achieved after thermal fracturing, hydraulic fracturing using pressurized fluids may be studied. In each case the increase in permeability due to fracturing will be measured.

Successful completion of the DOE program at Raft River is expected to provide new information on the successive changes in fracturing and permeability due to increasing differences between the temperature of the in-place rock and the temperatures of the injected fluid.—Steve Blankinship

Initial Oxy-Firing CO2 Capture Testing Completed

Babcock & Wilcox recently concluded initial testing of its oxy-firing process and is currently analyzing the results. Although a full report on the results will not be available until early next year, B&W has issued preliminary findings.

The tests were conducted at the Babcock & Wilcox Clean Environment Development Facility in Alliance, Ohio, by B&W and Air Liquide beginning in late 2007. The facility is essentially a mini power plant that does not generate electricity.

Dozens of research and development programs are underway in the U.S. and worldwide testing a variety of approaches for capturing carbon dioxide from coal plants.

Whereas some approaches capture CO2 on a post combustion basis using amines or ammonia, another approach—oxy-firing—captures a highly concentrated stream of CO2 in the boiler.

In the B&W test, the boiler was designed to achieve the same time-temperature profiles as measured in commercial units and has been used for many years to help develop new burner technology and test emissions control processes.

Following a water-jacketed furnace-convection pass is a full compliment of emissions control equipment including electrostatic precipitator (ESP), baghouse, and both dry and wet flue gas desulfurization (FGD) scrubbers that can be configured in numerous arrangements.

The oxy-fuel testing used an ESP followed by wet FGD with moisture control. Oxygen was injected at the burner and in both primary and secondary recycle streams; amounts were varied. Conversion of the facility to oxy-fuel capability began in January 2007. After startup and shakedown, full oxy mode was first achieved in October 2007. This was followed by several days of testing with bituminous coal, which was completed a month later.

Since the pulverizer was sized for lignite, it is oversized for bituminous coal. Consequently, the bituminous testing used an indirect fired bin system in which the coal was pulverized and moved by conveyor to a storage bin and then metered into the coal pipe.

Following the bituminous tests the system was converted to direct firing (coal from the pulverizer was conveyed directly to the burner as in a commercial plant). Sub-bituminous coal testing began in early 2008 but was halted by weather and coal handling issues. It was resumed in May. Testing with Saskatchewan lignite was completed in early June.

In addition to testing three different kinds of coal, oxygen distribution, recycle flows and moisture removal were also varied. The effects on burner performance, gas composition, ESP and wet FGD performance were monitored. Testing did not include compression and storage. The resulting flue gas was vented from the existing stack.

B&W and Air Liquide said early results have shown a significant reduction in NOX generation in the oxy mode, as was previously seen in smaller pilot tests, as well as the ability to achieve essentially the same ESP and wet FGD performance as obtained with air firing.

Oxygen injection and mixing were proven to be good and control of the unit through the transition, load raising and lowering and various trips (including master fuel trips) was manageable and suited for automation.

B&W and Air Liquide are working toward achieving a 100 MW net demonstration plant.—Steve Blankinship

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NERC Shaves 10-Year Peak Demand Growth

Summer peak demand growth across the U.S. will go up by more than 16 percent between 2008 and 2017. That estimate came from the North American Reliability Corp. in its 2008 Long-Term Reliability Assessment.

NERC said the 16.6 percent rate of growth is more than a full percentage point lower than what it forecast a year ago. The downward adjustment shaves the equivalent of roughly one full year of growth from its forecast. The net effect is to improve the outlook for capacity margins across most of North America over the next 10 years.

Even so, NERC said more resources will be needed to hit short-term capacity margin targets in the Desert Southwest and Western Canada (see table on page 44).

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Environmental initiatives and transmission shortages were also among the most important issues facing electric reliability in North America over the coming 10 years. While the total miles of transmission additions have increased slightly over the 2007 report, generation additions are projected to significantly outpace new transmission development.

The report also highlighted other key reliability developments, including the improvement of capacity margins, a projected 750 percent growth in wind generation and significant anticipated growth in energy efficiency.

In another key finding, NERC found that protection system mis-operations are causing about 40 percent of North America’s bulk power system outages.

Since 2007, North America’s capacity margins in many regions have seen improvement. However, more resources will be needed to maintain reliable service in Western Canada and the Desert Southwest regions in the future.

According to the report, wind generation has become the primary reported focus of renewable resource development in North America, with some 145,000 MW of new wind resources planned or proposed for the next decade.

Policy and regulations aimed at energy independence, climate change and greenhouse gas emissions, seem to be the most significant drivers for development of new renewable resources. The report also recommended that transmission must be constructed to enable management of both the uncertainty and variability of wind resources.

The total number of transmission circuit-miles is expected to increase by 1,700 in the U.S. and 1,000 in Canada over the next decade.

The report found that more resources and investment will be essential in maintaining reliable infrastructure as new generation supply is expected to outpace transmission growth by nearly two times. In addition, many new supply resources are likely to be located remote from demand centers—particularly in the case of wind generation.—Jeff Postelwait

FPL Energy Trims New Wind Capacity Plans

In light of the current economic and credit environment, FPL Group said it will reduce capital expenditures for 2009, including planned expenditures for wind energy projects.

The company ranks among the largest wind energy developers in the U.S. Earlier plans called for capital expenditures of approximately $7 billion in 2009. The revised plan cuts that amount to $5.3 billion.

Of the $1.7 billion reduction, approximately $1.3 billion involves deferring new wind project development. The company had previously planned to add around 1,500 MW of wind power projects in 2009. The revised plan calls for building 1,100 MW instead.

FPL Group said it has a pipeline of 29,000 MW of potential wind projects. It still plans to add 7,000 to 9,000 MW of new wind capacity from 2008 to 2012.

FPL Group said it plans to reduce 2009 capital expenditures by approximately $400 million for projects associated with system growth that is no longer expected.

In a conference call, FPL said third quarter wind energy conditions were the worst it had seen in 35 years of tracking wind data. Electricity generated by FPL’s wind farms—especially in Texas and the Great Plains, came in below projected output.—Jeff Postelwait

Partial Solar Eclipse at Duke Energy

Duke Energy cut in half its $100 million plan to place solar-electric panels on North Carolina rooftops. Duke’s revised proposal calls for $50 million in spending over two years to generate 8 MW from up to 425 solar sites.

Consumer advocates for the state Utilities Commission called the proposal too aggressive and expensive, according to newspaper reports.

Duke cut by half its proposed solar panel installation target. Click here to enlarge image

Under a 2007 state law, Duke has to use renewable energy sources to generate 12.5 percent of its retail sales by 2021. Solar power has to be a small but growing part of that mix, beginning in 2010. Under Duke’s original proposal, the utility would generate 16 MW of electricity by installing solar photovoltaic panels on as many as 850 rooftops and ground sites, most at commercial or institutional buildings. The power would feed into the power grid.

Staff at the state’s regulatory commission objected, saying Duke didn’t need the full rooftop plan to meet its solar-power obligations through 2014. Duke has already contracted to buy 16 MW from a SunEdison solar farm.

The size of the original proposal could also have affected development of lower-cost forms of renewable energy, the staff said. Duke could “bank” excess solar credits for future years, it said, but miss the chance to generate power more cheaply if solar costs come down as expected.

According to news reports, a 2007 state law directs Duke to use renewable energy sources to generate 12.5 percent of its retail sales by 2021. Solar power has to be a part of that mix, beginning in 2010.—Jeff Postelwait

Exelon Generation to Buy Wind Power

Exelon Generation Co. LLC said it plans to buy 198 MW of output from the 396 MW Twin Groves Wind Farm in Bloomington, Ill., some 150 miles southwest of Chicago. Exelon bought the off-take agreement from Constellation Energy Commodities Group Inc. The deal closed September 30. Terms were not disclosed.

Horizon Wind Energy LLC is owned by EDP Renovaveis, one of the world’s largest wind energy players. Horizon will continue to own and operate Twin Groves, which went commercial in January 2008.

Twin Groves consists of 240 wind turbine generators, with a rated capacity of 1.65 MW each. The project is spread out over 22,000 acres.

The wind resource in Illinois has long been considered mediocre, until a study conducted by the U.S. Department of Energy and the National Renewable Energy laboratory identified several areas in the state that could be commercially viable wind sites, some in central Illinois. The Bloomington Moraine, on which the Twin Groves project is developed, is one of the four largest moraines in Illinois and was formed during the Wisconsin glacial episode some 14,000 to 25,000 years ago.

Project elevations range from approximately 650 to more than 900 feet above sea level. The site selected for Twin Groves offers economical production and usage of wind power with its strong wind resource, access to electricity transmission lines, proximity to power markets and open cropland.

Sargent & Lundy LLC, engineer for the project’s high-voltage components, coordinated with Commonwealth Edison to design a 345-kV interconnection substation, Blue Mound, to comply with their standards and requirements of the PJM interconnect agreement. As wind power projects have increased in output capacity, new design issues needed to be addressed to accommodate the unique characteristics of wind turbines with the operation of the electric power grid, including the specification of capacitor bank operating systems to meet power factor correction requirements. Also, with each project phase generating approximately 200 MW, the fault current levels in the 345/34.5-kV collector substations presented a challenge in achieving a cost-effective design without exceeding equipment ratings.—David Wagman

Geothermal Technology Produces Power at Oil Wells

Ormat Technologies has successfully tested a geothermal application that could help extend the life of existing oil fields. In a joint project with the Department of Energy, Ormat is co-producing geothermal power at operating oil wells.

The project uses an Ormat Energy Converter, a power generation technology based on Organic Rankine Cycle, which can generate power from low, medium and high temperatures.

Ormat’s ORC unit produces more than 250 kW of geothermal power at a producing oil well. Click here to enlarge image

Organic Rankine Cycle technology is already used in geothermal and recovery energy generation using hot water produced during oil and gas field production.

Lucien Bronicki, chairman and CTO of Ormat Technologies, said the Ormat Energy Converter’s tests at the Rocky Mountain Oilfield Test Center near Casper, Wyo., show the technology’s efficiency and cost-effectiveness. By generating power at the site, the energy converter will increase the productivity and possibly extend the longevity of existing U.S. oil fields.

“Basically, the OEC works well with a wide range of lower grade heat sources,” Bronicki said. “Ormat is now taking the next step in this direction by co-producing electricity with oil at very low heat source temperatures.”

The technology costs about $1 million to put into place.

Many oil and gas wells produce hot water as well as fossil fuels. These wells, in general, produce fluids at temperatures below 220 F. This is estimated to be capable of producing as much as 5,000 MW of power.

The tests of the new geothermal generation technique were conducted at Naval Petroleum Reserve No. 3, a site the DOE uses as a testing ground for new oil, gas and renewable technologies.

The power system is an air-cooled, Organic Rankine Cycle power plant provided by Ormat and installed by the test center. With sufficient hot water, the plant is capable of producing a net output from between 150 kW to about 250 kW.

The binary power unit brings produced hot water through pipelines to a heat exchanger in the power system. In the heat exchanger, the geothermal fluid heats and vaporizes a secondary working fluid, which is typically an organic fluid with a low boiling point.

Organic vapors drive a turbine that powers a generator in a fashion similar to a coal-fired or nuclear power plant, however the heat-exchange system recovers energy that might be lost in less efficient systems.

The unit used at test center had been tested in other situations, but was never before used in an oil field for on-site generation. For example, the unit being used is similar to the 250 kW air-cooled unit that has been producing electricity from 210 F geothermal water at an Austrian resort since 2001.—Jeff Postelwait

Power Credit Fundamentals Look OK, S&P Says

Regulated electric and gas utilities and power companies have not been immune to the devastatingly rapid consequences of negative market sentiment.

The rated U.S. regulated utility and merchant power companies’ total debt outstanding is $505 billion. As of June 30, 2008, these companies’ balance sheets contained an aggregate of more than $31 billion of cash and short-term investments.

Most power companies should be able to refinance pending maturities. Click here to enlarge image

Nevertheless, according to a report by Standard and Poor’s titled “The U.S. Utility and Power Sector Appears Well Positioned to Manage Refinancing Requirements,” most, if not all, power companies should be able to refinance pending maturities despite the unsettled state of the credit market.

Recent high-profile events like the rapid loss of investor confidence in Constellation Energy Group Inc. that coincided with the final days of Lehman Brothers Holdings Inc. and the sudden termination of a “sleeving” arrangement (a guarantee by one party, including the posting of collateral, to support specific obligations of another party) between Reliant Energy Inc. and Merrill Lynch & Co. Inc. have raised concerns about the industry’s overall ability to handle stress.

However, the underlying credit fundamentals of the utility and power industry do not support these concerns, at least in the short to medium term.

“That’s the conclusion we reached after we reviewed the cash position, pending debt maturities, and available revolving credit capacity of the investor-owned electric, gas, and water utilities and the merchant power industry,” said Standard & Poor’s credit analyst Richard Cortright.

In a development related to the credit crisis, Entergy said in late October that its planned separation of its non-utility nuclear business from its regulated utility business through a tax-free spin-off now may be postponed.

In November 2007, the company announced plans to create Enexus Energy Corp. to be a standalone owner of six of its current 11-reactor fleet. In addition, it plans to create another company, Equagen, to take operating responsibility for the Enexus’ and Entergy’s reactors.

In a filing to the U.S. Securities and Exchange Commission, Entergy said, “State regulatory decisions and financing are now the critical path. Entergy continues to target receiving regulatory decisions in the fourth quarter. However, due to unprecedented turmoil in the financial markets, it is uncertain whether or not financing fundamental to the spin-off transaction can be effected in the near-term.” It added, “Entergy and Enexus stand ready to launch the financing when market conditions are favourable for such an issuance.”

Standard & Poor’s said in its report that although the utility industry’s credit quality and that of diversified power companies is solidly investment grade and near-to-intermediate-term outlook is stable, continued deferral of costs coupled with the current recessionary economic conditions and the associated uncertainty of U.S. and global financial markets will erode financial metrics. If these conditions continue for an extended period, they could threaten ratings.

In June 2008 Duke Energy Corp. issued $250 million of senior unsecured debt due 2013 at 5.65 percent. This is almost exactly the same coupon as PECO Energy’s secured issue of September, but the Duke paper is rated BBB+, S&P said.

Regarding speculative-grade companies, especially the merchant power generators, S&P said it believes that risks associated with near-term refinancing requirements are manageable given ample sources of liquidity and limited maturities.

In addition, several utilities successfully “tested” the availability of their bank facilities during Lehman’s decline.

Two companies have gone further: Duke Energy drew down $1 billion off its $3.2 billion facility to ensure access to sufficient liquidity now rather than risk a further weakening of the markets generally. And American Electric Power Co. Inc. drew down $1.4 billion under its existing credit facilities to increase flexibility and provide a liquidity bridge until the capital markets improve.

At the same time, however, capital expenditure projections are significant, perhaps unprecedentedly so, the ratings agency said.

The regulated electric utility sector alone estimates capital spending needs in the range of $180 billion in 2009 and 2010. The merchant sector’s capital expenditure plans are limited principally to maintenance and certain environmental commitments, which can all be funded from internally generated funds.

Standard & Poor’s said it expects companies may adjust their current spending estimates, perhaps significantly, because of the current economic crisis.

These adjustments will not be so much to reduce or eliminate the expenditures permanently as to defer them for some indeterminate period.

In the meantime, the companies will instead direct expenditures, on a much lower scale, to maintaining what in many instances is a rapidly aging and increasingly unreliable infrastructure rather than on the more expensive option of building new plant.—Jeff Postelwait and David Wagman

Business Briefs

The Indiana Court of Appeals upheld regulators’ approval of Duke Energy Corp.’s proposed 630 MW, $2.35 billion Edwardsport coal gasification power plant, handing a defeat to environmental groups opposed to the project. The plant is scheduled to go online in 2012. The Sierra Club, Citizen Action Coalition of Indiana, Valley Watch and Save the Valley appealed the Indiana Utility Regulatory Commission’s November 2007 approval of the project. Work on the plant began in July.

Rhode Island has granted Deepwater Wind the right to develop an offshore wind farm that would generate 15 percent of the state’s electricity in the coming decade. Deepwater said the project will consist of about 100 turbines more than 20 miles off the coast of Rhode Island and cost from $1 billion to $2 billion. The firm builds large platforms originally designed for offshore drilling rigs, meaning they can operate in deep waters, ideally out of sight from land.

FPL Energy said in a conference call that third quarter wind energy conditions were the worst it has seen in 35 years. The company, which is the largest wind power developer in the U.S., said wind farm production came in below projections in Texas and the Great Plains. In Texas, where the company has almost 2,000 MW of wind turbines, September’s production was 53 percent of long-term average. For the entire quarter, Texas production was 72 percent of normal. For the year, however, FPL’s wind production is at 98 percent of normal.

UTC Power’s first two production geothermal power systems installed this summer at the Burgett Greenhouse in Animas, N.M., are exceeding performance expectations. The units produce electricity from geothermal hot water. Power from the units is used to displace grid electricity required to support the 32 acres of greenhouse operations at the site. UTC Power’s geothermal system can operate at 200 F to 300 F, temperatures previously thought to be uneconomical for commercial power production. Similar systems have been in operation since 2006 at Chena Hot Springs Resort in Alaska.

Calpine Corp. and Mitsui & Co. Ltd. completed construction of the 1,005 MW Greenfield Energy Centre near Sarnia, Ontario, Canada. Greenfield is a limited partnership between units of Calpine and Mitsui, each holding a 50 percent project interest. In 2005, Greenfield was awarded a 20-year contract with the Ontario Power Authority to construct and operate the combined cycle power plant.

An analysis by Oak Ridge National Laboratory says annual carbon dioxide emissions from burning fossil fuels and manufacturing worldwide have grown 38 percent since 1992. The study shows CO2 emissions increased from 6.1 billion tons in 1992 to 8.5 billion tons last year and indicated that the source of emissions has shifted dramatically as energy use in developing countries has grown, notably in China and India.

Xcel Energy will increase the use of biomass at its Bay Front Power Plant in Ashland, Wis. When complete, Bay Front will be the largest biomass-fueled power plant in the Midwest and one of the largest in the nation. It currently uses more than 200,000 tons of waste wood each year, and when the additions are complete, will consume an additional 185,000 to 250,000 tons of biomass, primarily forestry products, per year.

President Bush signed a bill aimed at preventing Russia from flooding the U.S. market with uranium and protecting the Paducah Gaseous Diffusion Plant in Paducah, Ky. The legislation is aimed at limiting Russia’s future U.S. market share for commercial grade uranium to 20 percent of total electricity demand and preventing proliferation of bomb-grade uranium.

ExxonMobil and Pratt & Whitney Rocketdyne have agreed to develop next-generation technology to convert coal, coke or biomass to synthesis gas that could facilitate the use of carbon capture and storage to reduce greenhouse gas emissions from power generation. The two companies will work to develop a new gasification reactor system that will improve efficiency and reduce the cost of converting raw materials into gas.

General Electric and the School of Energy Resources at the University of Wyoming plan to build a plant in Wyoming that will gasify high-moisture sub-bituminous southern Powder River Basin coal. Most gasification in the U.S. happens in low-altitude states such as Texas, Louisiana and Florida.

Construction & Contracts

General Physics Corp. won a contract by Societatea Nationala Nuclearelectrica (Romania) to provide performance engineering services (thermodynamic modeling, performance testing, and plant thermal performance analyses) for the Cernavoda Nuclear power plant. This is the second recent award to provide performance engineering services to CNE. The two projects are a part of CNE’s effort to improve thermal performance and increase generating capacity of the CANDU 6 type nuclear units, each designed to have a gross electric power output of 706 MWe.

Areva and Northrop Grumman will build a facility in Newport News, Va., to supply the U.S. nuclear energy sector. The joint venture will build heavy components such as reactor vessels, steam generators and pressurizers for the U.S. Evolutionary Power Reactor, Areva’s Generation III+ nuclear reactor. The companies plan to invest more than $360 million in the 330,000 square foot facility.

A federal appeals court sided with a judge who earlier stopped work on a 600 MW coal-fired power plant in Illinois. The court agreed with a lower court that ruled EnviroPower needs a new air permit with stricter pollution controls. Illinois environmental regulators issued a permit in July 2001. At the time they said construction had to start within 18 months. But the company failed to meet that and other guidelines and the permit expired. Three years later the company decided to start work on the project, hoping to use the original air permit. The Sierra Club sued and won the lawsuit as well as a late October appeals court decision. No immediate word was available on whether privately-held EnviroPower would appeal the ruling.

USEC Inc. has awarded an EPC contract worth about $1 billion to Fluor Corp. for USEC’s American Centrifuge Plant in Piketon, Ohio. The American Centrifuge Plant is being developed to provide long-term nuclear fuel production to support current U.S. nuclear power plants as well as those expected to be built in the U.S.

Vogt Power International Inc. received an order to supply the heat recovery steam generators (HRSGs) for Conectiv Energy’s Delta Power Plant near Delta, Pa. The plant will generate a nominal 545 MW of electricity. Vogt Power will supply three two-pressure level HRSGs with emissions equipment consisting of selective catalytic reduction systems. The SCR systems will allow the plant to meet strict state emissions guidelines by reducing nitrogen oxides. The plant will have a dual fuel capability, consuming either natural gas or ultra low-sulfur fuel oil.

The Shaw Group has been awarded an EPC contract valued at approximately $400 million by NV Energy for the continuing construction of a new 500 MW combined cycle, natural gas-fired power plant to be built at the Harry Allen Generating Station north of Las Vegas, Nev.

Jacobs Engineering Group will provide pre-FEED (front-end engineering and design) services for Epcor’s proposed 270 MW Genesee integrated gasification combined cycle project in Alberta, Canada. The Genesee IGCC plant would demonstrate coal gasification-based combined cycle electrical power generation technology in a single train unit on a commercial scale.

Chicago Bridge and Iron won an EPC contract valued at more than $150 million to build two nuclear containment vessels for a southeastern U.S. utility consortium. These are the first two containment vessels for the Westinghouse USAP 1000 New Plant Initiative. The vessels each will be more than 120 feet in diameter and 215 feet high. They will house the reactors for two expected new power plants, each having a capacity of around 1,100 MW. Work on the vessels is set to start next year, with the first vessel scheduled for completion in 2014.

ADA-ES will buy four multiple-hearth furnaces and a boiler to generate steam to activate carbon as part of a project in Louisiana that will use the company’s mercury control technology. ADA believes the contracts keep the company on the path to maintain the schedule for the plant to start producing activated carbon the first half of 2010.

A consortium of Areva and Bechtel Power has been contracted by UniStar Nuclear Energy to complete detailed design engineering for a proposed Areva U.S. Evolutionary Power Reactor adjacent to Constellation Energy’s Calvert Cliffs nuclear plant in Maryland. The detailed design/engineering work is in preparation for construction of the advanced Generation III+ U.S. EPR. UniStar and partners AmerenUE and PPL, are developing plans for U.S. EPRs in Maryland, New York, Missouri and Pennsylvania.

Brevini USA has announced plans for a new facility in Muncie, Ind., to make wind turbine gearboxes. Brevini will invest more than $60 million to retrofit an existing 60,000-square-foot building and add 150,000 square feet of manufacturing space at the site in 2010.

Polymarin Composites and Wind Water Technologies plan to invest $20 million to transform a former manufacturing plant in Little Rock, Ark., into a combined wind turbine blade and nacelle manufacturing facility.

People & Personnel

Robert J. Buckler, president and chief operating officer of Detroit Edison and a 35-year veteran of the company, is retiring in December. The DTE Energy board of directors elected Steven E. Kurmas president and chief operating officer of Detroit Edison to succeed Buckler. Buckler joined Detroit Edison in 1972 as an engineer. He held various positions of greater responsibility and was elected president & COO of DTE Energy Distribution in 1998 and of Detroit Edison in 2005. Kurmas currently is DTE Energy’s executive vice president of fossil generation. In his new position, he will be responsible for power generation, fuel supply, electric distribution, customer service, marketing activities and assorted support functions. He is a graduate of Wayne State University with bachelor and master’s degrees in chemical engineering.

Peggy Fowler, CEO of Portland General Electric, is retiring March 1. She has been CEO since April 2000 and will be succeeded January 1 by Jim Piro, CFO, who has 28 years with PGE. Fowler joined PGE as a chemist in 1974. Piro said the company will continue to develop wind and solar energy projects and to promote all-electric cars.

The American Nuclear Society named Jack Tuohy as its new Executive Director. Tuohy has a 38-year background in corporate management, consulting, academia and nuclear engineering. Most recently, he served as Director of Hitachi America Ltd, where he oversaw the introduction of Hitachi nuclear products and services into the U.S. market. Tuohy succeeds Harry Bradley, who is retiring, but will continue to serve in an advisory role with ANS.

UniStar Nuclear Energy LLC, a joint venture between Constellation Energy and EDF Group, named Greg Gibson vice president for regulatory affairs. Gibson joins UniStar from South Texas Project Units 3 and 4. He will oversee licensing of UniStar’s planned fleet of at least four of Areva Inc.’s U.S. Evolutionary Power Reactors (U.S. EPRs) in the United States.

Public Service Enterprise Group elected Thomas P. Joyce as president and chief nuclear officer of PSEG Nuclear. Joyce has been the senior vice president-operations at PSEG Nuclear since June 2007. In that role he was responsible for the operation of the Salem Unit 1 and 2 and Hope Creek generating stations. He had previously served as the site vice president of the Salem station where he led the station to numerous performance records. Joyce has more than 32 years of experience in commercial nuclear power operations. Prior to coming to PSEG in January 2005, he was the site vice president of Exelon Nuclear’s Braidwood station. Joyce also held leadership positions at Exelon’s Byron, Dresden and Zion stations and in the corporate offices of both Exelon Corporation and Exelon Nuclear.

Mergers & Acquisitions

Exelon is offering to buy NRG Energy in an all-stock deal worth around $6.2 billion. The offer represents a 37 percent premium to the October 17 closing price for NRG shares. NRG said it would study the offer. An Exelon-NRG merger would create a company with around 47,000 MW of generating capacity, including some 18,000 MW of nuclear. Exelon is the largest nuclear generator in the U.S. NRG is a 44 percent owner of the South Texas nuclear project. It owns 23,000 MW of generating capacity in North America and another 1,000 MW worldwide.

Puget Sound Energy will purchase the recently completed 310 MW Mint Farm gas-fired plant in southwest Washington state from Wayzata Opportunities Fund for $240 million.

Swedish power group Vattenfall has bought AMEC Wind Energy for $222 million cash.

French energy company Electricite de France SA dropped its bid for Constellation Energy Group Inc. because of the global credit crisis. EdF said it still hopes to develop four new nuclear reactors in the U.S. and is studying other options. MidAmerican Energy Holdings Co., a unit of Warren Buffett’s Berkshire Hathaway, in September said it would buy Constellation for $4.7 billion, or $26.50 a share, plus an immediate infusion of $1 billion. Both companies’ boards and shareholders approved the deal. EdF, which owns 9.5 percent of Constellation stock, called Buffett’s offer inadequate and offered $35 a share. MidAmerican Energy applied with the Federal Energy Regulatory Commission for approval of the takeover. It has requested a decision by mid-January.

Tenaska Capital Management LLC is buying a 1,100 MW natural gas-fired power plant near South Haven, Mich., from MACH Gen LLC. Financial terms were not disclosed. The plant has been operating since 2004. MACH Gen was created in 2003 to own, manage and finish building four power plants developed by Pacific Gas & Electric’s National Energy Group.