Tampa Electric plans to increase the use of natural gas at its Polk Unit 1, which could back out some of the synthetic gas now fired in that unit that comes from an on-site gasification facility fueled by a petroleum coke/coal blend.
This TECO Energy (NYSE: TE) subsidiary applied May 15 at the Florida Public Service Commission for approval of the company’s recovery through the fuel adjustment clause of the capital costs associated with the conversion of certain equipment at the Polk Unit 1 IGCC to reduce the input costs of fossil fuel.
Polk 1 was placed in service in September 1996 and has a net summer and winter capacity of 220 MW. The unit currently uses a petroleum coke/coal blend as its primary fuel source with distillate oil as a backup. Although petcoke/coal accounts for about 98% of the energy generated by Polk 1, the unit also uses distillate oil to fire an auxiliary boiler and as a backup fuel, propane to fire a gasifier preheat burner and synthetic gas as part of the IGCC process.
“Tampa Electric has reviewed its operations at Polk 1 in an effort to determine whether any means exist to take advantage of the difference between the prices of distillate oil and propane and the price of natural gas that currently exists and which is projected to exist for the foreseeable future,” TECO said the filing. “Based on this review, the company has concluded that natural gas may be used beneficially in place of other fossil fuels in certain applications at Polk 1, thereby significantly reducing the total input cost of fossil fuel at Polk 1 which will directly benefit Tampa Electric’s general body of retail customers.”
The proposed project has four components, all of which will involve the use of natural gas that will be piped to Polk 1 from an existing natural gas main serving existing natural gas-fired capacity at the rest of the Polk plant.
First, the company proposes to convert a gasifier preheat burner which is currently fired with propane gas to burn natural gas. The company also proposes to convert an auxiliary boiler which is currently fired with distillate oil to burn natural gas and to use natural gas to replace synthetic gas at higher levels of output of its IGCC process when natural gas is less expensive. Finally, the company will utilize natural gas in place of distillate oil as the backup fuel for Polk 1.
The first three components of the project involve capital costs of about $1.3m. These components were described in a Jan. 3 letter filed with the commission and were further discussed during an informal meeting held with interested parties on Jan. 31. Since that meeting, the company has updated its estimates and completed plans for the fourth component, consisting of $13.5m in additional investment to convert the backup fuel source for the entire Polk Unit 1 IGCC system from oil to natural gas. The total projected cost of all four components of the proposed project is about $14.8m.
Based on its analysis of projected dispatch of Polk and the Btu unit costs of distillate oil, propane, syngas at higher levels of lGCC output and natural gas, the company calculates that the proposed conversion to natural gas in place of the other fossil fuels will save approximately $29.5m (net present value) over the initial five years after the conversion with continued savings over the 30-year remaining life of the unit after the initial five-year period.
The Polk plant is located in Polk County, about 40 miles southeast of Tampa and about 60 miles southwest of Orlando, said the Tampa Electric website. Polk Units 2 and 3 are 180-MW simple cycle combustion turbines that use natural gas and distillate oil. Unit 2 and Unit 3 started commercial operation in 2000 and 2002, respectively. Polk Units 4 and 5, which are 160-MW units, were completed in 2007. These two simple-cycle peaking units use natural gas.