Duke Energy Carolinas reports poor coal burn figures

Duke Energy Carolinas, which retired the coal-fired Dan River Units 1-3 (total of 276 MW of capacity) on April 1, burned a total of 11.2 million tons of coal in the August 2011-July 2012 period, and received 13 million tons.

Those figures were in a monthly fuel report for July that the utility, a unit of Duke Energy (NYSE: DUK), filed Sept. 12 at the North Carolina Utilities Commission. As an illustration of just how poor the August 2011-July 2012 coal burn figure of 11.2 million tons really is, the July 2011 fuel report by the utility, filed last September at the commission, shows a coal burn figure for the August 2010-July 2011 period of 15.6 million tons.

Less than a decade ago Duke Energy Carolinas was burning 18 million tons annually, the company said.

One interesting point is that Duke Energy Carolinas reported no spot coal purchases in the month of July 2012 for any of its plants, which would normally be a heavy burn period due to summer heat. The Lee and Riverbend plants took delivery of no tons of coal in July. The leading plant for coal take in July was the two-unit, 2,220-MW Belews Creek facility, with 496,803 tons of entirely contract coal taken at an average delivered cost of $94.59/ton. The next biggest was the four-unit, 2,078-MW Marshall plant, at 221,024 tons and $97.78/ton. In July, the coal plants took delivery of a total of 940,875 tons of coal.

During the August 2011-July 2012 period, only the Belews Creek coal plant ran particularly hard, with an 80.43% capacity factor during the period for Unit 1 and 74.49% for Unit 2. Cliffside Unit 5, at 555 MW of capacity, had a capacity factor of only 31.25%. The new Cliffside Unit 6 coal facility went into pre-commercial operation in June. The Marshall capacity factors for that 12-month period ran from 27.46% for Unit 1, up to 61.83% for Unit 4.

There are several coal plants that are classified by the utility as “cycling,” meaning they tend to run only during high-demand periods. In that group, Allen Units 1-5 had capacity factors during the August 2011-July 2012 period that ranged from 11.08% for Unit 2, up to 36.95% for Unit 4. The top capacity factor for the period for Buck Units 5-6 was 14.19% for Unit 5. Cliffside Units 1-4, which Duke retired in October 2011 as part of the regulatory deal to build Unit 6, didn’t run at all during the period. The three units at Lee barely ran, with the top capacity factor being 10.47% for Unit 3. Riverbend’s four coal units also ran little, with the top capacity factor for the 12-month period of that group being 9.22% for Unit 7.

The Short Term Action Plan of Duke Energy Carolinas, which identifies actions to be taken over the next five years, explains some of those poor coal utilization figures. That plan includes a number of coal shutdowns and conversions to natural gas. The utility detailed the plan in an integrated resource plan (IRP) that it filed with the South Carolina Public Service Commission on Sept. 1.

Among the highlights in the Duke Energy Carolinas short-term plan:

  • Continue to evaluate and plan for the retirement of older coal generation. Buck Units 3-4 were retired in May 2011. Cliffside Units 1-4 and Dan River Units 1-2 were retired in October 2011 and April 2012, respectively. Retirements of the remaining unscrubbed coal units at Buck, Riverbend and Lee are currently planned for April 2015 to correspond with compliance with the Mercury and Air Toxics Standards. The to-be-retired units and their capacities are: Riverbend Units 4-5 (94 MW each); Riverbend 6-7 (133 MW each); Buck 5-6 (128 MW each); Lee Units 1-2 (100 MW each); and Lee Unit 3 (170 MW).
  • Complete construction of the 825-MW Cliffside Unit 6. As of August, the project is in testing phase with commercial operation expected in September. The North Carolina Utilities Commission (NCUC) approval for Cliffside Unit 6 required the retirement of the coal-fired Cliffside Units 1-4 no later than the commercial operation date of the new unit. In addition to retiring Cliffside 1-4, the air permit for the new Cliffside unit requires the retirement of 350 MW of older coal generation by 2015, a further 200 MW by 2016, and an additional 250 MW by 2018. “If the NCUC determines that the scheduled retirement of any unit identified for retirement pursuant to the IRP will have a material adverse impact of the reliability of electric generating system, Duke Energy Carolinas may seek modification of this plan,” the IRP noted.
  • Continue to assess the conversion of Lee Unit 3 from coal to natural gas. This unit is reflected in the 2012 IRP as a retired coal unit in the fourth quarter of 2014 and converted to natural gas by Jan. 1, 2015. Lee was originally designed to burn natural gas or coal. Switching to gas now would avoid adding costly pollution control equipment or replacing the 370 MW of capacity with a more expensive alternative. Previous plans were for conversion of all three Lee units to gas. But, upon further evaluation, for IRP planning purposes, Lee Units 1-2 will be retired as coal units with no plans for conversion to gas in 2015.

In an IRP section on fuel supply, the company pointed out that until the economic downturn in 2008, it had burned about 18 million tons of coal annually. In 2009, the burn dropped and has remained in the yearly range of 14 million to 16 million tons of coal. The IRP said that projected coal burns for the near-term are declining further due to lower natural gas prices, the addition of the gas-fired Buck CC plant, more stringent environmental regulations on coal units and lower load growth.

The 11.2 million tons of August 2011-July 2012 coal burn reported in the Sept. 12 fuel report, against the 15.6 million tons burned in the prior 12-month period, bears out the coal burn freefall reported in the IRP.

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.