Most commonly, coal-to-gas switching has been used to identify the phenomenon of natural gas combined-cycle plants moving ahead of less efficient coal plants in the dispatch curve due to relatively low natural gas prices. The term also has been used at times to identify a switch from coal to natural gas at power plants capable of burning both fuels, as well as to identify the trend of coal plants undergoing conversion to be able to burn natural gas.
The latter has been of growing interest as the nation moves closer to implementation of the U.S. EPA’s Mercury and Air Toxics Standards, also known as the MATS rule. As natural gas plants are not covered under MATS, a possible conversion of some coal plants to natural gas has become a compliance option worth examining for generators.
A number of steam turbine coal plants across the nation have the capability to burn both natural gas and coal and may be a starting place for identifying possible plants for conversion. SNL Energy examined plant fuel burn data to identify plants capable of burning both fuels.
Overall, 197 facilities with a total operating capacity of 78,544 mw have been identified as using coal and natural gas for electricity generation during at least one month since 2008. For those plants, the volume of gas burned increased 11% in 2011 compared to 2008. During the same period, the volume of coal burned by the plants fell 9%.
While plants capable of burning both fuels have increased their usage of natural gas in the low-gas-price environment, the overall increase in gas consumption has been minimal. This reflects the fact that most plants do not have units capable of burning natural gas alone and instead use gas largely during periods of startup. Some of the increase in natural gas burned can be attributed, then, not to a switch at the facility from coal to natural gas but rather to a switch to using natural gas in lieu of oil during periods of startup. Many coal plants have also moved away from baseload operation in recent months, which has increased plant cycling and the number of startups, thus increasing the amount of startup fuel burned. While many coal plants burning some natural gas may not have full capability to burn all or mostly gas at some units, there may be some value in identifying plants that burn both fuels.
In the EPA’s planning analysis for MATS, conversion to natural gas was a modeled compliance option. The EPA identified two types of costs for gas conversion, boiler modification costs and the costs of building a natural gas feeder system to connect with a nearby gas transmission network. Plants that already burn some natural gas may have some advantage here when it comes to the gas feeder system component of fuel conversion. The fact that the plants already burn some gas indicates proximity to a natural gas network. While the feeder system would probably require significant upgrade in many cases, there is likely be some infrastructure in place that would tend to lower the costs of expanding the feeder system.
By NERC Region
The ReliabilityFirst Corp. region of the North American Electric Reliability Corp. has 55 power plants with a total operating capacity of 24,103 mw that burned coal and natural gas during at least one month since 2008. The network of gas pipelines in RFC is most dense around the border of West Virginia, Ohio and Pennsylvania. RFC is followed by Southeastern Electric Reliability Council in terms of operating capacity, with 38 power plants with an operating capacity of 16,815 mw having burned coal and gas. The Midwest Reliability Organization followed RFC with 45 power plants that burned coal and natural gas during the period studied, with a total operating capacity of 10,082 mw.
When looking at the nation’s regional transmission organizations, MISO has the most plants burning both coal and natural gas, 76, with a total operating capacity of 21,268 mw, averaging 280 mw. MISO was followed by PJM, where 32 power plants burned coal and natural gas, with a total capacity of 14,932 mw. CAISO had four power plants with a total operating capacity of 2,757 mw, for the largest average size of plants, 689 mw. A significant number of power plants fell outside of the RTOs and accounted for approximately 27% of the total capacity of plants burning both natural gas and coal.
The top 20 power plants accounted for roughly 40% of the total operating capacity of the plants that burned coal and natural gas in 2011. The James H. Miller Jr. station, owned by Alabama Power Co. and PowerSouth Energy Cooperative, was the largest power plant burning both fuels in the U.S. The plant has an operating capacity of 2,739 mw and is in SERC. Miller burned 1.3 million cubic feet (Mcf) of natural gas in 2011, which was more than double the volume of natural gas it burned in 2008. The quantity of coal burned at the plant declined slightly in 2011, falling 2% compared to 2008.
The Four Corners plant in New Mexico was the second-largest plant that burned both fuels in 2011. Four Corners, which is jointly owned by various parties and operated by Arizona Public Service Co., has five units with an aggregate operating capacity of 2,100 mw. It burned approximately 650,000 Mcf of natural gas in 2011, which is an increase of 76% from 2008, when it burned only 370,000 Mcf of natural gas. The delivered natural gas cost at Four Corners decreased significantly in 2011. The price fell from approximately $13 per Mcf in 2008 to $7.50 per Mcf in 2011, a decrease of about 42%. The price for coal during the same time period fell by only 7%. The Harrison power plant, owned by Allegheny Energy Supply Co. and Monongahela Power Co., comes in third in the list of top 20 power plants burning coal and natural gas in 2011. The Harrison County, W.Va., plant’s three units burned 4.6 million tons of coal in 2011, which was down 18% compared to the coal burned in 2008. The amount of gas burned at the plant increased 34% over the same period.
Hameed is an analyst for SNL Financial Review. SNL Energy closely tracks utilities and can provide custom data and reports. For more information, visit: www.snl.com.
Upcoming, Recent Coal-fired Power Unit Retirements
By Jesse Gilbert & Michael Niven
Although various federal clean air regulations remain in legal limbo, U.S. power companies are continuing to commit to closures of older coal-fired generating units, with several prominent generators finalizing new retirements in recent months.
An updated SNL Energy analysis finds that U.S. power companies have formalized plans to retire 30,321 mw of coal-fired generating capacity between 2012 and 2021. SNL Energy’s last examination of announced coal-fired unit retirements, published March 28, showed that generators had firm plans to retire approximately 25,000 mw of coal capacity during the period.
Data for SNL Energy’s analysis is based on planned coal unit retirements with a firm retirement year that was either publicly disclosed by the company or confirmed by SNL Energy.
Coal retirement announcements came fast and furious in 2011 after the U.S. The EPA finalized its Cross-State Air Pollution Rule and unveiled its Mercury and Air Toxics Standards, but confirmations slowed in early 2012 as implementation of CSAPR and MATS became bogged down in court.
While both rules were being challenged, utilities announced new retirements of confirmed projected retirements. The past few months have seen a noticeable uptick in either new retirement announcements or confirmation of projected retirements. Most recently, Duke Energy Corp., in late July, announced it will retire its H.B. Robinson coal plant in South Carolina and accelerate the closure of its Cape Fear station in North Carolina. Both plants will be shuttered by October 1. Duke also recently filed plans with Indiana regulators to retire four units at its coal-fired Wabash River station in 2015.
Several other generators have also formalized retirement plans in recent months, including DTE Energy Co., which is retiring Detroit Edison Co.’s Harbor Beach coal plant as soon as August 2013, and RC Cape May Holdings, which reached an agreement with New Jersey regulators to close unit 1 at the jointly owned B.L. England plant.
On a company-specific level, American Electric Power Co. Inc., the nation’s largest coal burner, leads the pack in the amount of coal capacity scheduled to be retired between 2012 and 2016, during which the company plans to shutter nearly 5,100 mw of coal capacity. Other generators with a significant amount of retiring capacity during the 2012-2016 period include Duke Energy, with 4,179 mw; GenOn Energy Inc., with 3,468 mw; FirstEnergy Corp., with 3,352 mw; and the Tennessee Valley Authority, with 1,034 mw.
So far in 2012, AEP has already retired 450 mw of coal capacity, Duke has shuttered 559 mw and GenOn has retired 108 mw.
About the Authors
Gilbert is a senior analyst for SNL Financial Review and Niven is a reporter for SNL Financial Review.