Coal, Combined Cycle

2012 Operating Performance

Issue 12 and Volume 117.

Ameren Corp.'s Callaway Nuclear Generating Station near Fulton, Mo.
Ameren Corp.’s Callaway Nuclear Generating Station near Fulton, Mo. had a capacity factor of 100.4 percent, putting it at the top of the U.S. nuclear power plant capacity factor ranking.

Natural Gas Continues to Displace Coal

by Teresa Hansen, editor in chief, Electric light & power

Editor’s note: The Power Plant Operating Performance Report is published annually in Electric Light & Power magazine, one of Power Engineering‘s sister publications. The report is being published for the first time in Power Engineering and will be a regular annual feature of the magazine moving forward.

The 2012 power plant operating performance report reveals the continuation of a trend: Coal-fired capacity is losing out to natural gas. Last year Electric Light & Power reported that the total amount of electricity generated by all Energy Information Administration (EIA)-reporting coal-fired plants dropped some 4 percent from 2010 to 2011. That number was roughly 13 percent from 2011 to 2012, dropping the amount of electricity generated by all reporting coal-fired plants to just more than 1.5 million GWh. This decrease in coal-fired plant generation is the result of plants being retired because they can’t afford to meet environmental regulations and because many coal-fired plants are falling behind gas-fired plants on the dispatch list. Gas-fired combined-cycle plants that burn cheap natural gas are displacing coal-fired plants.

“Coal displacement is a big story. The coal plants on the 2012 top operating lists aren’t the ones being displaced, but many of the little guys are falling by the wayside,” said Tom Hewson, principal at Arlington, Va.-based Energy Ventures Analysis Inc. “All the low-cost solutions for reducing coal-fired emissions have been implemented. The only low-cost solution left is fuel switching. The country, therefore, lost a lot of coal generation due to displacement by natural gas.”

Last year’s power plant performance report revealed that gas-fired combined-cycle plants generated more electricity in 2011 than 2010, and this year’s report shows that trend is growing. The total amount of electricity generated by all EIA-reporting gas-fired combined-cycle power plants rose 24 percent from 2011 to 2012 to 972,131 GWh.

“The rise in natural gas generation is not because of load growth or higher demand for electricity,” Hewson said. “It is due to displacement of coal.”

Energy Ventures Analysis specializes in energy and environmental market analysis and has compiled the data for this industry report from Form EIA 906 “Power Plant Report” form for many years. The tables in this report are mostly self-explanatory, but a few observations follow.

Coal-fired Power Plant Performance

Coal Generation: Table 1

tab 1

This list is always made of coal plants with multiple large units.

“With no exceptions, units (on this list) are dispatched early because of their low variable costs,” Hewson said. “Some plants that are usually on the list, however, have been displaced because of low natural gas prices.”

Many of the plants displaced by natural gas are burning eastern coals, which are higher-priced than western and Powder River Basin (PRB) coals.

Eight plants fell off the top 20 coal-fired generation list from 2011 to 2012. Southern Co.’s 3,200-MW Bowen plant is most notable. Bowen has been in the top 20 for many years. It was No. 1 in 2009 and No. 13 in 2010. This year it fell to No. 44.

“Bowen is a large unit with all the emissions controls installed,” Hewson said. “The fact that it is being displaced says more about the plants that are displacing it rather than Bowen itself. It will be back on the list when gas prices go up and as other coal units are retired.”

Colstrip, another large unit that usually makes the list, dropped off in 2012—but just barely. It is No. 21.

Those plants that cannot or choose not to comply with Mercury and Air Toxics Standards (MATS) will be retired, and some units that have been on the list will come back, Hewson said. Most on the 2012 top 20 list already comply with MATS.

“Few coal plants are under construction or in advanced development, so we’re likely to see only a few changes in this annual list,” Hewson said.

The top 20 coal plants ranked by generation produced almost 21,000 GWh, or 6.3 percent, less electricity in 2012 than they did in 2011.

Coal Capacity Factor: Table 2

tab 2

Overall coal-fired capacity factors were down significantly in 2012 because of natural gas displacements. The top 20 capacity factor threshold in 2012 was only 87 percent compared with 91.7 percent in 2011.

To get on the top 20 coal capacity factor list, Hewson said, a unit needs to fall into one of two categories:

1. Co-generation unit with steam sales contracts that require high utilizations; or
2. Unit tied to a contract with a facility that needs a lot of electricity around the clock, such as Sandow No. 5 that supplies power to an aluminum facility.

It also helps to be located in the West near the coal seam or even at the mine mouth, Hewson said.

In 2011, six plants dropped off the list and were replaced. The new additions were western coal plants that burn coal that is more cost-competitive with natural gas than eastern coals.

Coal-fired Heat Rate: Table 3

tab 3

Qualifying coal heat rate for the top 20 plants was just slightly higher in 2012 than 2011: 9.874 mmBtu/MWh vs. 9.754 mmBtu/MWh. Because some coal-fired plants were displaced by natural gas in 2011, the heat rate for the entire reporting fleet of coal-fired plants was significantly higher: 11.51 mmBtu/MWh in 2012 vs. 10.45 mmBtu/MWh in 2011.

“Overall, coal units become less efficient and heat rates rise as unit utilization drops,” Hewson said. “In addition, as the lower-heat rate plants are retired, the heat rate of all reporting plants will continue to go up.”

Hewson said boiler heat rate is a function of three things:

1. Boiler design. Ultra-supercritical, supercritical or subcritical steam cycles.
2. Fuel quality. Eastern coal is dryer than PRB coal, so it burns more efficiently. The Btu value of eastern coal is about 12,000 Btu/lb. The Btu value of PRB and other western coal is typically 8,400 to 8,800 Btu/lb. This difference is mostly a result of moisture.
3. Plant utilization. Plants in high-utilization areas can operate at their optimum levels for long periods.

There was a lot of turnover on the top 20 heat rate list from 2011 to 2012. Eight fell off the list, including four of the top 10.

“Some fairly efficient plants didn’t make the list this year,” Hewson said.

The only ultra-supercritical plant that operated all 12 months of 2012, Longview, holds the No. 1 position. Most other plants on the top 20 list are supercritical plants, but a few subcritical units made the list, too, which is hard to do, Hewson said.

In addition, some PRB plants, Iatan, King, Nebraska City, Weston, JK Spruce and Rockport, made the top 20 heat rate list.

“Those plants burning higher-moisture coals should be congratulated for making this list,” Hewson said.

In past years, parasitic load from pollution controls often kept plants out of the top 20, but this is becoming less of a differentiating issue because post-combustion controls are needed for continued operation, he said.

Future cooling water rules likely will degrade performance further for units with once-through cooling water systems and might drop some from list, Hewson said.

In 2013, a second ultra-supercritical unit, American Electric Power Co. Inc.’s Turk Plant, reached full operation, so it likely will hold the No. 1 or 2 spot on next year’s list.

Nuclear Power Plant Performance

The units on this list are heavily utilized. Their fuel is cheap, and they are dispatched quickly. Plants with multiple units and high capacity make this list.

Three units normally considered for this list dropped out of the running in the past few years. Crystal River No. 3, shut down in 2009, remains offline and will not be restarted.

Fort Calhoun, shut down for scheduled refueling in April 2011, was not restarted.

It remained offline after flooding on the Missouri River and was placed under federal control after an electrical fire and the discovery of several safety violations.

The Nuclear Regulatory Commission planned to hold a public meeting in late November 2013 to discuss its restart. There isn’t a timeline for restart, but according to an article in the Omaha World-Herald, its owner, Omaha Public Utility District, included the plant in its 2014 operating plan budget.

San Onofre Nuclear Generating Station, No. 15 on last year’s list, was taken offline in January 2012 because of boiler tube failures. The plant remains offline, and Southern California Edison announced in late summer that it will not be restarted.

Kewaunee Plant in Wisconsin was retired in 2013. The retirement is the first by a for-profit company and not a utility.

“This retirement shows signs of problems for IPPs that cannot cover large fixed costs with energy margins alone,” Hewson said. “Additional retirements are likely, and new future capacity will depend on CO2 regulations.”

In 2015 or 2016, a new unit at Watts Bar will be added to the U.S. nuclear fleet, and some units have been uprated, so the total generation by nuclear plants should increase slightly in the next few years.

Nuclear Capacity Factor:

The story on capacity factor stays the same.

The units that make this list weren’t refueled during 2012.

“There is a lot of turnover on the capacity factor ranking list,” Hewson said. “Unit refueling pushes stations off the list.”

The threshold capacity factor for the top 20 plants dropped from 94.6 percent in 2011 to 92.3 percent in 2012.

The average capacity factor for the top 20 plants also fell from 2011 to 2012, from 97.7 to 96.1 percent.

The same was true for all EIA-reporting nuclear plants. The average capacity factor of the entire fleet was 89.0 percent in 2011 and 86.3 percent in 2012.

Gas-fired Combined-cycle Power Plant Performance

Gas-fired Combined-cycle Generation: Table 4

tab 4

Gas-fired combined-cycle generation increased significantly between 2011 and 2012 from continued coal unit retirement and improved unit dispatch from continuing low natural gas prices. The plants in the top 20 list generated 23,225 GWh more electricity in 2012 than the top 20 generators produced in 2011. The entire EIA-reporting plants’ production was up 188,798 GWh in 2012.

To qualify for the top 20 generation list, the plants had to generate much more electricity than in past years. The threshold for this list increased more than 1 TWh in 2012 to 6,858 GWh vs. 5,813 GWh in 2011.

Only three plants in 2011’s top 20 didn’t make 2012’s top 20. Four of the 2011 top five remained in the top five in 2012.

Larger-capacity multiple train units have a distinct advantage, as do plants that operate in the East where coal prices are high.

“All of these plants have benefited from low (natural gas) prices,” Hewson said. “Many on this year’s list will likely continue to appear on this list as coal is retired in areas where coal prices are high enough to allow natural gas to replace it. This will eventually cause natural gas prices to go up.”

Gas-fired Combined-cycle Capacity Factor: Table 5

tab 5

The key to getting on this list is to have loads that require high utilization rates, which allows plants to make efficiency gains.

There is always turnover in this category. Eight plants that made the 2011 top 20 list were absent in 2012, including Nos. 1 and 5.

The threshold capacity factor for the 2012 top 20 was nearly the same as the 2011 threshold.

The average capacity factor of the top 20, however, was down 1.5 percent from 91.7 percent in 2011 to 90.2 percent in 2012.

Gas-fired Combined-cycle Heat Rate: Table 6

tab 5

The top 20 heat rate list usually has much turnover, and 2012 was no different. Only half the plants from 2011 showed up on the 2012 top 20 heat rate list.

“The turnover from year to year shows how easy it is to drop out of this list,” Hewson said. “Given that most use the same type of machinery (F machines), it shows how small differences such as elevation or temperature can impact performance.”

The average heat rate of the top 20 plants was the same in 2012 as it was in 2011: 6.94 mmBtu/MWh. The average heat rate of all EIA-reporting plants, however, was higher in 2012: 8.42 mmBtu/MWh vs. 7.41 mmBtu/MWh in 2011.

“There is a tradeoff between efficiency and flexibility,” Hewson said. “Some unit designs trade losses in efficiency for improved operational flexibility, such as supplemental gas firing for peak load or gas cooling to increase output.”

There is a large change in heat rate efficiencies between low and full load. This list will be dominated increasingly by baseload units, he said.

Editor’s note: Energy Ventures Analysis Inc. provided all tables for this article. The annual operating rankings are published each year in Electric Light & Power magazine’s November/December issue. To compare the 2012 report to previous years, visit www.elp.com, select “Current Issues” and then select “Past Issues.”

More Power Engineering Issue Articles
Power Engineerng Issue Archives
View Power Generation Articles on PennEnergy.com