It has been a couple of years since this industry insider last covered the future of power generation in depth.
While you may have picked up bits and pieces about it in his quarterly “Big Money Talks” columns, here’s a wide-ranging, detailed update. If your operations use electricity, consider it a loud wake-up call.
By William C. “Bill” Livoti, Baldor Electric Co., A Business of ABB
New, emerging technology for cleaner electricity production will play a vital role in our economic growth. How and when this technology is implemented and at what cost will determine the future of our existing base load fleet. But what’s going to happen in the meantime? With the focus on renewable energy and the negative press surrounding fossil fuels and nuclear, the power industry has few options to meet growing demand. The answer to this dilemma is simple: Efficiency is the future of power generation.
A problem with our existing fleet
To put it kindly, the existing fleet of U.S. power plants has grown rather “long in the tooth.” As Fig. 1 shows, approximately 530 gigawatts of power—that’s 51% of all generating capacity—is now being produced by plants that were at least 30 years old as of 2010.
Fig. 1. More than half of our generating capacity is being produced by plants that were at least 30 years old as of 2010. (Click to enlarge.)
(Source: U.S. Energy Information Administration)
The oldest plants tend to be hydropower. Then come our coal-fired operations—the majority of which went online before 1980—and our nuclear plants, which were constructed from the late 1960s into the 1980s.
Figure 2 provides a breakdown by age, fuel source and capacity of the existing fleet. Many of the gas-fired plants are less than 10 years old (65% being combined cycle as opposed to simple cycle). Approximately 73% of all coal-fired capacity falls into that 30-years-or-older category as of 2010. (Note: The average efficiency of the entire coal fleet is only around 33%.) The “other” category includes solar, biomass and geothermal, as well as landfill gas, municipal solid waste, etc.
Fig 2. This breakdown by age, fuel and capacity of the existing U.S. power fleet paints a troubling picture. (Click to enlarge.)
(Source: U.S. Energy Information Administration)
Natural gas appears to be today’s fuel of choice. Gas production is at its highest level since 1971. Almost 237 gigawatts of gas-fired capacity (most of it in combined-cycle operations) has been added in this country since 2000—representing 81% of total generation-capacity additions from 2000 to 2010. The primary driver behind this surge is existing air-pollution restrictions and pending legislation. Investor-owned utilities (71% of the existing fleet in the U.S.) can’t risk investing in coal-fired plants.
In addition to generating capacity that began coming online via natural gas-fired units in the early 2000s, “renewable” units—primarily wind and solar (CSP and PV)—began coming online in the late 2000s.
According to the June 16th edition of Today in Energy, the annual growth in U.S. wind capacity had been averaging 40%. Since 2006, 36% of total electric power industry capacity additions have been wind generators. The economic downturn, however, and an uncertain regulatory environment (particularly relating to the renewal of production and investment tax credits) led to fewer wind-capacity additions in 2010 and 2011—and seems to be on track for even lower levels in the future. Solar energy projects, though, are a different story. Compared with wind, solar seems robust—for now. That could change, depending on political winds.
So what and what if
So, what does the age of our power plants and plant energy sources (fuel type) have to do with efficiency, OUR economic growth and YOUR operation’s survival? If your facility is operating in the most efficient, most cost-effective manner, it could mean reduced profit. On the other hand, if the overall efficiency of your facility can be improved (i.e., reduce energy consumption), you have the opportunity to maintain your profit margin. Where am I going with this?
Utilities are being “attacked” from all sides. We’ve discussed this before: On one side, it’s special interest groups protesting coal (global warming, heavy metals, etc.); wind (noise and birds); solar (turtles and other desert creatures). On the flip side, it’s EPA restrictions, primarily directed at coal, and Washington’s failure to develop an energy plan. Case in point, according to the National Energy Technology Laboratory, is the fact that 11 new coal plants totaling 6682 MW were commissioned in 2010 (the most in 25 years). Since December 2010, though, only 1599 MW of new capacity has been announced—and 6418 MW of planned coal power-generation projects have been canceled.
As to those older, inefficient plants that the utilities have relied on for over 30 years…
Roughly half of U.S. power plants still use once-through cooling and lack state-of-the-art emissions controls (scrubbers). Yet, in March 2011, EPA proposed Best Technology Available (BTA) regulations for existing facilities. What does that mean? Section 316(b) of the federal Clean Water Act requires plants to use the best technology available to minimize the adverse environmental impacts of cooling water intake structures. In 2001, EPA issued national regs identifying closed-cycle cooling as BTA for new plants.
New and proposed EPA regulations include:
- Proposed Clean Air Transport Rule
- Proposed Coal Combustion Residuals rule
- Proposed Tailoring Rule (covering greenhouse-gas emissions)
- Ozone NAAQS (National Ambient Air Quality Standards)
- Pending National Emission Standard for Hazardous Air Pollutants and cooling water regs under Section 316(b) of the Clean Water Act
The agency will take final action on those regulations by July 2012. The impact could be considerable. For example, the EPA Cross-State Air Pollution Rule could close 20-50 GW of un-scrubbed coal plants:
- Over 25 GW of retirements have already been announced nationally.
- Nearly 100 GW of un-scrubbed coal is in the CSAPR-affected states.
- Estimates indicate 20-30 GW may be retrofitted for SO2.
- An additional 40 GW will retrofit to meet NOx and mercury requirements.
- 20-30 GW more will retire due to SO2 reduction costs.
There’s currently a lot of posturing going on in the power industry. Many large, coal-heavy producers are threatening to close plants if pending legislation passes. American Electric Power, Duke Energy and Progress Energy have announced old coal-fired plant retirements—placing an estimated 65 GW of capacity “at risk” when (if) these operations shut down. The million-dollar question: What do you replace them with?
- Cleaner Coal? Unlikely, based on public sentiment and the cost of meeting the above referenced regulations.
- Solar? Great concept, plenty of federal incentives, unfortunately the cost per kW is still high and overall plant efficiency is low.
- Nuclear? Economics have jeopardized nuclear energy’s resurgence in the United States. Now, the potential for tougher safety requirements and regulatory scrutiny threatens to pile on more uncertainty and re-ignite a public backlash against a technology that until recently has been viewed by the power industry and others as a prime defense against global warming.
- Wind? The low capacity factor of wind turbines relative to coal and other fossil-fueled power plants limit wind’s viability as a primary source of power. (Note: “capacity factor” is simply the ratio of actual energy produced by a power plant to the energy that would be produced if it operated at rated capacity for an entire year.) Capacity factors of successful wind-farm operations range from 0.20 to 0.35. These can be compared with factors of more than 0.50 for fossil-fuel power plants and over 0.60 for some of the new gas turbines. That being said, wind advocates believe wind energy, in the near future, will be the most cost-effective source of electrical power we have. A good case can be made that it already has achieved such a status.
The future outlook
Looking ahead 15 to 20 years, the primary source of electricity, according to a new projection from consulting firm Black & Veatch, will be natural gas. Why? It’s the fossil fuel with the least greenhouse-gas impact on the atmosphere, releasing 43% less CO2 than coal. Add to the equation new, vast U.S. reserves of natural gas in places like the Marcellus Shale Formation.
By 2034, according to Black & Veatch, nearly half of U.S. electricity will come from natural-gas combustion turbines (simple cycle) or combined-cycle units, whereas conventional coal-fired generation will shrink to just 23%. Nuclear will grow to provide nearly 150,000 megawatts of electricity as renewables jump from just 54,000 megawatts today (excluding hydroelectric dams) to more than 165,000 megawatts in 2034. Will this actually transpire? It’s anybody’s guess given the politics and world economy. Regardless, the trend of switching from coal to natural gas already exists, even with a moderate level of carbon-emission prices. If natural gas remains competitive as a fuel, it’s unlikely that you’ll see more “conventional” coal-fired power plants.
That being said, even with demand-side management and energy efficiency, we still expect some growth in demand, requiring additional power generation—which will come at a price to both utilities and end-users.
You’re probably already aware of the energy-efficiency programs (demand side) available to the end-user: Most utilities offer attractive incentives to cut consumption. It’s too bad that “demand-side” energy-efficiency programs alone will not achieve the energy reduction necessary to control the cost of electricity. This is not to suggest that the following proposal is the answer to our rising energy pain. It can, however, serve as a common-sense approach to minimizing the sticker shock we will all see as utilities are forced to upgrade their infrastructure.
An alternate solution to control energy costs
As noted previously, the average efficiency of a coal-fired power plant is 33%. The losses are indicated in Fig. 3.
Fig. 3. A typical pulverized coal-fired power plant (Click to enlarge.)
Looking deep into their operations, utilities could realize savings through improving process/systems efficiency while reducing waste and EFOR risk. As an added bonus, efficiency also impacts reliability and increased workforce productivity. This would allow the power industry to achieve sustainability and minimize rate hikes. Although the industry hasn’t changed the way it generates power in over 75 years, there is hope, as evidenced by the following quotes from a powerful industry leader:
“To ensure a sustainable and secure energy future, I have two aspirations for this country—that we substantially de-carbonize our energy supply in this century and that we become the world’s most energy-efficient economy.
“Practically speaking, the way we can begin to achieve these aspirations is to take an entirely new path—and change the way we think about and use energy in this country.”
… James E. Rogers, chairman, CEO and president, Duke Energy
Mr. Rogers goes on to say:
“Challenges in the areas of energy and the environment can be met not by doing without technology, but rather by continuing to develop it to save energy and protect the environment—in other words, by developing more efficient technologies.”
The average annual operating heat rate of the typical U.S. coal-fired power plant is approximately 10,400 Btu/kWh. Because operating units report heat rates that include performance at all levels (due to load swings), the numbers are usually significantly higher than the design heat rate.
- Improving efficiencies of energy systems will play a major role in solving the energy and environmental problems of the future. To improve efficiency, there must be a rapid technology transfer. This means using ultramodern technologies when building and/or upgrading power-supply systems, thereby using fuels more efficiently so that less damage is done to the climate and resources aren’t used up.
- Higher efficiency means lower fuel consumption and fewer pollutant emissions.
- The most important indicator for the energy efficiency of a power plant is its electrical efficiency.
- For coal-fired power plants, further improvements in efficiency primarily depend on two variables:
- Increasing the two steam parameters, pressure and temperature
- Reducing losses in the steam water cycle.
- Target efficiency should exceed the 53% mark by 2020. Coal consumption per kilowatt hour will be only 230 grams, with CO2 emissions of 620 grams.
Several relatively inexpensive power-plant modifications/upgrades (as compared with new construction) can improve plant heat rate, reduce parasitic load and improve uptime availability and reliability while reducing the financial impact on end-users (as well as the utility). These, in turn, can help other U.S. industries survive. They include:
- Control systems (digital, online performance monitoring, etc.)
- High-efficiency motors on all major rotating equipment
- Variable-frequency drive motors on all major rotating equipment
- FD/ID fans
- Boiler feed pumps
- Condensate pumps
- Heater drain pumps
- Mechanical draft cooling towers
- VFD/PM technology
- Circulating water pumps
- Controlled start with gearmotor technology
Walking the talk
It’s time for the utilities to walk the talk. While we appreciate the demand-side incentives they’ve been offering, such incentives won’t get the industrial sector where it needs to be. In short, the power generators need to do some serious housekeeping. As evidenced by his remarks quoted on page 22 of this article, Duke’s James Rogers seems to clearly understand the situation. Well said, Mr. Rogers. MT
U.S. Energy Information Administration
SEIA Solar Energy Industries Association
Today In Energy
Illustrated History of Wind Power Development
Sargent and Lundy
Bill Livoti is senior principal engineer, Power Generation and Fluid Handling, with Baldor Electric Co., a business of ABB. Based in Greenville, SC, he also writes the quarterly “Utilities Manager” column entitled “Big Money Talks” for MAINTENANCE TECHNOLOGY. Email: firstname.lastname@example.org.
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