The Tennessee Valley Authority (TVA) now anticipates spending about $2.3bn through 2018 to add controls to its coal-fired units, which is less than the previous projection of $3.4bn due to the utility’s increasing reliance on cleaner energy resources and the idling/retirement of more coal-fired units which otherwise would have had to have been controlled.
Also, the EPA’s final Mercury and Air Toxics Standards were less restrictive than predicted, TVA noted in its Nov. 16 annual Form 10-K report. However, the addition of cleaner energy resources to the TVA system and the transmission upgrades that are necessary to accommodate unit idling/retirements have their own costs. TVA has added five gas-fired combined-cycle generating facilities to its fleet since 2007. More combined-cycle generating facilities may be added to TVA’s fleet in the future.
As of Sept. 30, TVA had 11 coal-fired plants consisting of 50 active units, accounting for 13,605 MW of summer net capability. As of Sept. 30, TVA had nine inactive units. Inactive units may be in three categories: retired, mothballed, or inactive reserve.
- Retired units are unavailable for service and are not expected to return to service in the future. TVA currently has no retired units.
- Mothballed units are unavailable for service but can be brought back into service after some maintenance with an appropriate amount of notification, typically weeks or months. As of Sept. 30, TVA had eight mothballed units: Shawnee Unit 10, Johnsonville Unit 7 and Widows Creek Units 1-6.
- Inactive reserve is where a unit is unavailable for service but can be brought back into service after some minor maintenance in a relatively short time, typically measured in days. As of Sept. 30, TVA had one unit in inactive reserve: Johnsonville Unit 8.
Coal-fired plants have been subject to increasingly stringent regulatory requirements over the last few decades. Also, in April 2011, TVA entered into two agreements. The first is a Federal Facilities Compliance Agreement with EPA. The second is with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups.
Under the agreements, TVA committed to retire 18 of its 59 coal-fired units by the end of 2017 and was generally absolved from any liability, subject to certain limitations and exceptions, under the New Source Review (NSR) requirements of the Clean Air Act (CAA) for maintenance, repair, and component replacement projects that were commenced at TVA’s coal-fired units prior to the execution of the agreements. Failure to comply with the terms of the environmental agreements would subject TVA to penalties.
Plans firm for some coal units, under review for others
The status of the coal shutdowns and retrofits covered by the agreements is:
- John Sevier, two units affected, no existing scrubbers or SCR, (need under environmental deals to retire both units by no later than Dec. 31, 2012), plan is to do so. John Sevier has four active units, with 704 MW (net summer dependable) of capacity, located in Tennessee.
- Johnsonville, 10 units affected, no scrubbers or SCRs, (need under agreements to retire six units by end of 2015, four others by end of 2017), plan is to do so, with Units 7 and 8 idled on March 1 of this year, and Units 5-6 and Units 9-10 to be idled by Sept. 30, 2013. Johnsonville, located in Tennessee, has eight currently active units with 924 MW of capacity.
- Widows Creek, six units affected, scrubbers and SCRs on Units 7-8, (need to retire two of Units 1-6 by July 31, 2013, retire two of Units 1-6 by July 31, 2014, and retire two of Units 1-6 by July 31, 2015), idled Units 1-6 in October 2011. This Alabama plant has two currently active units with 938 MW of capacity.
- Allen, three affected units, SCRs on all three, (need to install scrubbers or retire by Dec. 31, 2018), had planned to install scrubbers on all three units but now re-evaluating. Allen, located in Tennessee, has three active units with 741 MW of capacity.
- Bull Run, one affected unit, already equipped with scrubber and SCR, (need to continuously operate all emissions equipment), plan is to do so. Bull Run, located in Tennessee, has one active unit with 863 MW of capacity.
- Colbert, five units affected, SCR on Unit 5, (need to remove from service, control, convert or retire Units 1-4 by June 30, 2016, and remove from service, control or retire Unit 5 by Dec. 31, 2015, then control or retire any removed from service units within three years), still under evaluation. Located in Alabama, Colbert has five active units (1,184 MW).
- Cumberland, two affected units, scrubbers and SCRs already on both, (need is to continuously operate all emissions controls), plan is to do so. Located in Tennessee, Cumberland has two active units (2,470 MW).
- Gallatin, four affected units, no SCRs or scrubbers in place, (need to control, convert or retire all four units by Dec. 31, 2017), plan is to add scrubbers and SCRs on all four units by that deadline. Gallatin, located in Tennessee, has four active units (704 MW).
- John Sevier (separate from action mentioned above), two affected units, no scrubbers or SCRs in place, (need to remove from service two units by Dec. 31, 2012, and control, convert or retire those units by end of 2015), plan is to remove from service Units 3-4 by end of 2012, still evaluating further actions for those units.
- Kingston, nine affected units, scrubbers and SCRs currently on all nine, (need to continuously operate all emissions equipment), plan is to do so. Kingston, located in Tennessee, has nine active units (1,398 MW).
- Paradise, three affected units, scrubbers and SCRs now on all three, (need to upgrade scrubbers on Units 1-2 by end of 2012), plan is to do so. Located in Kentucky, Paradise has three active units (2,201 MW).
- Shawnee, two affected units, no scrubbers or SCRs in place, (need to control, retire or convert Unit 1 and 4 by end of 2017), still evaluating what to do. Shawnee, located in Kentucky, has nine active units (1,206 MW).
- Widows Creek (separate from above), scrubbers and SCRs now on Units 7-8, (need to continuously operate emissions equipment on these units), plan is to do so.
Exclusive of the actions required under the environmental agreements, TVA noted that it idled Shawnee Unit 10 in October 2010. TVA said its long-range plans will continue to attempt to balance the costs and benefits of significant investments at its remaining coal-fired plants without scrubbers and/or SCRs. TVA expects to decide whether to control, convert, or retire its remaining coal-fired capacity on a unit-by-unit schedule.
Transmission upgrades may be required to maintain reliability when some coal units become inactive. TVA invested $48m in such upgrades between 2011 and 2012, and estimates future expenditures for transmission upgrades to accommodate inactive coal-fired units to be $430m for 2013 to 2016.
Also in the coal area, TVA, hit by a costly spill of wet ash in 2008 at the Kingston plant, is planning to convert all of its wet coal combustion residuals (CCR) facilities to dry collection facilities. The expected cost of the CCR work is between $1.5bn and $2bn, and the work is expected to be completed by 2022.
TVA’s coal consumption, as might be expected, drops in latest year
Coal consumption at TVA’s facilities during 2012 and 2011 were approximately 29 million tons and 36 million tons, respectively. At Sept. 30, 2012, and 2011, TVA had 28 days and 29 days of system-wide coal supply at full burn rate, respectively, with net book values of $402m and $404m, respectively.
During 2012, long-term contracts made up 97% of coal purchases and short-term contracts accounted for the remaining 3%. TVA plans to continue using contracts of various lengths, terms, and coal quality to meet its expected consumption and inventory requirements. During 2012, TVA purchased coal by basin as follows: 43% Illinois Basin; 37% Powder River Basin; 19% Utah and Colorado; and 1% Appalachia.
To reduce SO2 emissions, TVA has installed scrubbers on 17 of its coal units, and switched to lower-sulfur coals at 41 units. In August 2011, the TVA Board approved adding scrubbers to three units at Allen and four units at Gallatin subject to completing environmental reviews. In August 2012, the TVA Board canceled the scrubber projects at Allen and TVA is currently re-evaluating its options for this plant.
To reduce NOx emissions, TVA installed SCRs on 21 coal-fired units, installed selective non-catalytic reduction systems on two coal-fired units (although TVA is no longer operating one of these systems because of technical challenges), installed High Energy Reagent Technology systems on seven coal-fired units, installed low-NOx burners or low-NOx combustion systems on 46 coal-fired units, optimized combustion on 12 coal-fired units, and began operating NOx control equipment year round when units are operating (except during startup, shutdown, and maintenance periods) starting in October 2008. Also, in August 2011, the TVA Board approved adding SCRs to four units at Gallatin subject to completing environmental reviews.