The conversion of the existing Albright coal plant to natural gas is not cost-effective and the idea of building new natural gas-fired capacity at the site would need further examination, said Monongahela Power.
Lack of a nearby gas pipeline is a significant complication, the company said in a recent filing with the state.
On June 1, Mon Power, a unit of FirstEnergy (NYSE: FE), filed with the West Virginia Public Service Commission answers to various questions posed by the commission related to the proposed deactivation later this year of the Albright, Rivesville and Willow Island coal plants.
One question was whether the company had looked at converting Albright to natural gas. FirstEnergy’s primary analysis focused on the feasibility of retrofitting the three subcritical coal plants to comply with the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS). “It was determined that it was not cost effective to make these investments given the high capital cost and the plants’ relatively uncompetitive position in the market,” the company added. “Additionally, FirstEnergy reviewed alternate uses of the Albright plant, namely fuel switching to either biomass or natural gas. These analyses did not contemplate the replacement of the units’ boilers or turbines. In both instances we concluded that these options were also economically unattractive. Both of these conversions would require a significant capital outlay to facilitate the fuel switch. Furthermore, the fuel switch would not materially change the efficiency (heat rate) of the generator. Thus, even if an alternative fuel were used, Albright would remain uncompetitive with modern plants using the alternative fuel.”
Due to a combination of high capital and fuel costs, the Albright retrofit and fuel switching options require materially higher revenue per MWh than a new combined cycle alternative. Building a combined cycle plant at the existing Albright site may be more advantageous than constructing one at a greenfield site in that it has the potential to reduce capital development costs. An obvious benefit of an existing site is the ownership of the land and appropriate zoning for power plant operation. Other advantages may exist but will require further investigation to confirm, the company noted.
On the other hand, reuse of an existing site may have certain disadvantages to a greenfield site such as lack of proximity to a natural gas pipeline since there is no existing natural gas pipeline into Albright. “Accordingly, we will continue to consider the merit of site reuse before equipment removal/site demolition would occur,” the company said.
Another commission question had to do with whether EPA’s proposed new CO2 rule, which applies in theory to only new power plants, would also apply to the three coal plants if they were shut for some period and then refurbished and restarted. “The EPA rule on CO2 emissions proposed in March 2012 (‘Proposed CO2 Rule’) ostensibly regulates new sources and not existing sources,” said Mon Power. “Though EPA attempted to exclude reconstructed or modified units from the scope of this rule it is unlikely that such units will be excluded in the future due to additional rulemaking or litigation. If Mon Power were to mothball the three plants and then return them to service at a later time, application of the Proposed CO2 Rule would depend on the extent of modifications made to the units. Significant modifications to the boilers or combustion infrastructure would likely constitute a ‘major modification’ and trigger the new source performance standards (thereby precluding their classification as ‘existing’ plants) and require installation of carbon capture technologies. The threshold limit under the Proposed CO2 Rule is 1000 lbs per MWh. That limit will likely allow new gas combined cycle units to avoid carbon capture since their rate of CO2 emission is less. However, conversion of a coal unit to a natural-gas fired facility generally results in a higher emission rate of about 1200-1300 lb, thereby requiring carbon capture technologies.”
The utility added: “In sum, the prospect of CO2 emission limits has been among the factors weighing against the continued operation of the existing plants. However, the main factors in deciding to deactivate the plants were the age and lack of efficiency of the plants, along with the Mercury and Air Toxic Standards rule, that make continued operation of the plants cost prohibitive due to the pollution control equipment that would be needed to achieve regulatory compliance. For these reasons, Mon Power does not see merit in mothballing the plants.”
On March 9, Monongahela Power and Potomac Edison made an informational filing in a shut expanded net energy costs (ENEC) proceeding about a plan to close the three plants by Sept. 1. The commission on April 2 asked for more information, which was filed by the company on April 30. Then in a May 17 order, the commission asked for additional information, which led to the June 1 response.
The plants are:
Albright – is a subcritical plant located in Preston County that was built in 1952 and has a capacity of 292 MW.
Rivesville – is a subcritical, two-unit plant located in Marion County that was built in 1919 and has a capacity of 121 MW.
Willow Island – is a two-unit subcritical plant located in Pleasants County that was built in 1949 and has capacity of 243 MW.