Progress Energy seeks approvals of Anclote oil-to-gas conversion

Progress Energy Florida is working on multiple fronts on a conversion of its Anclote oil-fired power plant to natural gas, including through a June 18 air permit application filed at the Florida Department of Environmental Protection.

In a filing with the state agency, the utility said it was looking to avoid losing more than 1,000 MW of generating capacity to retirement.

The application by this subsidiary of Progress Energy (NYSE: PGN) covers both an air construction permit and prevention of significant deterioration approval. The current natural gas-firing capability for each unit is limited to 45% of the total heat input, but both units are currently configured to operate on 100% heavy oil. The change to 100% natural gas firing is needed to opt these units out of the U.S. Environmental Protection Agency’s new Mercury and Air Toxics Standards (MATS), the application noted.

Unit 1 is a Combustion Engineering-supplied design with a nameplate rating of 535 MW (summer) and 540 MW (winter). Unit 2 is also a Combustion Engeering facility with a nameplate rating of 525 MW (summer) and 530 MW (winter).

The gas conversion project requires the installation of new natural gas burners, including the replacement of the existing natural gas burners. Superheater surface area reductions, upgrade of associated superheater metallurgy and upgrading of the burner control and management system will also be needed. There would be two fuel gas heaters added, one for each unit, the air permit application noted. The application was written by consultant Golder Associates.

PEF also has an ongoing proceeding at the Florida Public Service Commission to include this project in its environmental cost passthrough program. Said a June 4 response by the company to a question about the reasons for this project: “The two Anclote units provide 1,011 MW of summer capacity on the PEF system. If the units were simply retired, the bulk of this capacity would need to be replaced with newly constructed or purchased generation in order to maintain reliable available capacity. There was also significant concern regarding the existing uncertainty around the final MATS compliance plans for other affected PEF units, especially [the coal-fired] Crystal River Units 1 and 2. In addition, because of the proximity of the Anclote Units to the Pinellas County load area, retirement of these units would result in the need for additional transmission system upgrades. Given these factors and the relatively low cost of the other two unit modification alternatives, it was concluded that retirement and replacement of the Anclote units in the near term was not a cost effective solution to MATS compliance.”

Said the company to the PSC about a relative fuel cost analysis: “The results of the analysis showed that the Anclote units are projected to save approximately $57 million (nominal) in fuel costs over the period 2013-2018 due to the displacement of residual oil with less expensive natural gas. However, the impact on overall system fuel costs was much larger. The opportunity to operate the Anclote units more efficiently reduces the need to operate other units which are either less efficient, or had been projected to operate in less efficient ways (e.g. at partial loads or making extra starts). This is particularly noticeable in operation of simple cycle combustion turbines, both owned and contracted via Purchase Power Agreement (PPA). The cumulative impact of these changes across the fleet leads to a projected fuel savings of more than $250 million (nominal) during that period.”

The June 4 filing with the PSC said that evaluations regarding Crystal River Units 1 and 2 are focused on the feasibility, cost and constructability of environmental controls on the units relative to alternative power options, and the cost and system impacts of those options. The coal-fired Crystal River Units 4 and 5, which got SO2 scrubber and selective catalytic reduction installations in recent years, have demonstrated emissions in compliance with the future requirements. Ongoing evaluations of these units are focused on potential modifications necessary to maintain continuous compliance in accordance with the specific monitoring and averaging requirements of the MATS rule, PEF noted.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.