The Florida Public Service Commission on Aug. 14 approved the conversion of Progress Energy Florida’s oil-fired Anclote plant to 100% natural gas, a move needed due largely to the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS).
PEF told the commission on March 29 that it will need to convert the largely oil-fired Anclote Units 1-2 to 100% natural gas. The final MATS rule establishes limits of emissions of various metals and acid gases from both coal and oil-fired electric generating units (EGUs), including, potentially, the coal-fired units at PEF’s Crystal River plant (Units 1-2 and 4-5), plus Anclote (Units 1-2) and Suwannee River (Units 1-3), PEF said.
The Aug. 14 approval allows PEF to pass along the costs of the conversion within an environmental cost recovery mechanism.
Anclote Units 1-2 currently have a maximum summer rating of 500 MW and 510 MW, respectively. The current natural gas firing capability for each unit is limited to 40% of the total heat input. Because the balance of the heat input is from heavy fuel oil, the units would be subject to MATS limits for oil-fired EGUs. However, PEF has determined that the most cost-effective compliance option is to convert the units to fire 100% natural gas and thereby remove the units from MATS regulation.
PEF, a subsidiary of Duke Energy (NYSE: DUK), said it considered two compliance alternatives for the Anclote units. The first option would achieve compliance with MATS through use of emissions controls, specifically low-NOx burners and an electrostatic precipitator (ESP). The second option is 100% gas. PEF determined that the natural gas option has economic benefits in terms of both capital costs and fuel savings. Based on conservative cost estimates associated with the emissions controls that would be necessary to achieve oil-fired compliance, the capital cost of the gas conversion is expected to be at least $12m less than those capital costs.
Cost of conversion pegged at $79m
PEF told the commission it expects to incur about $79m in total capital costs to convert the Anclote units to fire 100% natural gas. PEF expects to incur around $26m in 2012 and the remainder of about $53m in 2013. PEF anticipates that both converted units will be placed in service by the end of 2013.
Also, the Florida Department of Environmental Protection went out on July 30 with a draft air construction permit that covers this conversion. The DEP said the project will include:
- addition of three levels of natural gas burners to the existing natural gas burners on Units 1 and 2;
- addition of two fuel gas heaters;
- modifications to the natural gas delivery systems;
- replacement of the existing natural gas metering and regulating station;
- superheater surface area reductions;
- disabling of residual fuel oil firing capability;
- upgrade of superheater metallurgy; and
- upgrade of the burner control and management system.
PEF also requested a change in the allowable hours of operation for the two cooling towers from 4,500 hours/year/individual tower to an average of 4,500 hours/year/tower (i.e. 9,000 hours/year for the two towers combined).
“The capital cost of the company’s proposed natural gas conversion is approximately $79,000,000,” said a DEP technical document. “According to a PEF filing dated June 4, 2012, the company expects fuel savings of approximately $50,000,000 at the Anclote Plant and $268,000,000 over the entire PEF system between 2013 and 2018. According to the filing, 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).”