By David Wagman, Chief Editor
Las Vegas, Nev.-based NV Energy decided last month to postpone plans to build the first phase of the Ely Energy Center, a 1,500 MW ultra-supercritical coal-fired power plant in the east central part of the state.
The company faced a July deadline to file its integrated resource plan with state regulators. The plan must address the proposed $5 billion project.
“The Ely Energy Center is going to be very difficult to build,” Michael Yackira, president and CEO of NV Energy, told me in an interview at his company’s headquarters just days before the utility announced its decision postponing Ely.
But, if a coal plant was going to be built anywhere in the United States, then Ely would have been the site, Yackira said. The local community supported it, the governor supported it, Native American tribes supported it. And planned transmission lines (a part of the project that remains intact) would help link the northern and southern parts of the company’s system while adding capacity for still more renewables.
But Ely faced two big problems. First, estimated project costs had risen to around $5 billion (including $600 million for the 250-mile-long transmission line). Second, Yackira expected federal climate change legislation to be enacted sometime during the current Congress, putting pressure on coal-fired generation.
The Ely Energy Center, first announced in 2006, was to evolve in two phases. The first phase would include two 750 MW power blocks using ultra-supercritical technology. Although rare in the U.S. (the now-retired Philo 6 in Ohio and the 50-year-old Eddysport I plant in Pennsylvania are notable exceptions), ultra-supercritical power plants are being developed elsewhere.
Recent units under design or in operation outside the U.S. use main steam temperatures between 1,050 F and 1,120 F and reheat steam temperatures between 1,050 F and 1,148 F. Avedöre 2 in Denmark was designed for ultra-supercritical operations and operates at 4,425 psia. Siemens Energy recently completed the North Rhine-Westphalia reference power plant, a nominal 600 MW 50 Hz plant. And Huaneng Power International, along with Mitsubishi Heavy Industries, commissioned two 1,000 MW units at Yuhuan Power Plant in 2006.
A second planned phase at Ely would have added an integrated gasification combined cycle (IGCC) plant capable of capturing and sequestering carbon. That plant would have been added once IGCC and carbon capture and sequestration both were commercially viable at utility scale.
Now, however, the company (formerly known as Sierra Pacific Resources) is shelving power plant portions of the project. “We think Ely is going to be difficult” to build, Yackira told me.
Ely was intended to reduce NV Energy’s high dependence on natural gas as a generation fuel. Around 70 percent of the company’s native generation is natural gas-fired. The plan was to cut that to around 40 percent. At the same time, 40 percent would come from coal, an increase from 20 percent at present and a strategy almost counter to national trends. The remainder would have been made up by renewables, part of the company’s mandated plan to hit 20 percent from renewables and conservation by 2015.
NV Energy also planned to shut three older, less environmentally friendly power plants in the southern part of Nevada.
“A lot has changed since 2006” when those plans first were announced, Yackira said.
For one thing, climate change legislation seems high on the Obama administration’s agenda. Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, has set a goal of achieving climate change legislation by Memorial Day.
“I believe climate change legislation will happen in this Congress,” Yackira said.
For another thing, NV Energy has added more than 3,500 MW of native generation over the past several years, through acquisition and new construction. Today, the company owns around 6,000 MW of capacity. That means the company is better able to fully utilize a transmission line even without the Ely Energy Center.
Yackira said NV Energy has spent the last several years diversifying its generating portfolio to include more efficient natural gas plants. This strategy in turn lowers the cost of fuel for customers, even if natural gas continues to make up 70 percent of its fleet.
“If Ely never happens diversity will occur through renewable energy or reduction of consumption that will reduce the need for additional power plants,” Yackira told me. NV Energy could remain around 70 percent natural gas dependent with renewable sources contributing even more than the currently mandated 20 percent.
But look carefully at what NV Energy was suggesting with Ely. It planned to build a highly efficient coal-fired power plant to replace older, less efficient and less environmentally friendly facilities. The result would have been a relatively low-cost power plant with a carbon footprint no larger than a natural gas-fired station. Lower emissions and a more diversified fuel mix. What’s wrong with that?
Elsewhere in this issue, industry consultant Bob McIlvaine makes a compelling argument for just that sort of strategy: build new supercritical and ultra-supercritical power plants as a big step toward enhancing power plant efficiency and reducing carbon footprints. One potentially controversial idea McIlvaine puts forward suggests that some of these new power plants could have a commercial lifespan as short as 15 years. They would retire as zero-carbon sources of electricity are introduced.
NV Energy’s master plan for the Ely Energy Center made a lot of sense. Diversify fuel sources, retire inefficient plants, develop appropriate renewable resources and build transmission lines to support a 21st century load demand profile. Scrapping the power plant portion of the plan seems to be a step backwards.