Duke Energy Carolinas LLC has lately added new coal, gas and nuclear generating capacity, in large part to make up for coal- and gas-fired generation that has been or will be taken off line due to age and environmental regulations.
Clark Gillespy, President of Duke Energy Carolinas, a unit of Duke Energy (NYSE: DUK), described the power plant retirements in March 18 rate case testimony filed at the South Carolina Public Service Commission.
The additions to the generating fleet – including the new, coal-fired Cliffside Unit 6 – will allow for the retirement of older, less efficient generation or generation that cannot be environmentally compliant in a cost-effective manner. Since beginning a fleet modernization program, the company has retired 587 MW of fossil capacity, including the May 2011 retirement of Units 3 and 4 at the Buck coal-fired station, the October 2011 retirement of Units 1-4 at the Cliffside coal plant, and retirement of Units 1-3 at the Dan River coal-fired station in April 2012. Another 710 MW of coal fired generation will be retired in 2013, including Buck Units 5-6 and Riverbend Units 4-7.
The company also retired 350 MW of its oldest (1960s vintage) combustion turbines in October 2012, Gillespy noted. For planning purposes, Duke Energy Carolinas’ 2012 Integrated Resource Plan (IRP) has assumed all of these retirements as well as an additional retirement of 370 MW of coal-fired generation by 2015. The coal-fired generation resources the company plans to retire represent all of its coal capacity without installed flue gas desulfurization facilities (also known as “SO2 scrubbers”).
These retirements, both those already completed and those projected in the future, are driven by a series of new proposed U.S. Environmental Protection Agency rules regulating multiple areas relating to generation resources, such as mercury, SO2, NOx, coal combustion by-products and fish impingement/entrainment.
Although the company has not made a firm decision as to when the final 370 MW of coal-fired generation not equipped with SO2 scrubbers will be retired, in anticipation of these increased control requirements, the 2012 IRP incorporates a planning assumption that these units will be retired by 2015. Based on these assumptions, the 2012 IRP assumes that approximately 890 MW of coal-fired generation capacity will be retired earlier than the company previously projected in its 2009 IRP.
Duke Energy Carolinas’ operations are heavily dependent on coal generation, representing approximately 37.56% of the company’s owned installed capacity and approximately 44.67% of its 2011 net generation. Duke Energy Carolinas’ portfolio also includes 5,173 MW of owned nuclear capacity. The company owns 2,538 MW at the Oconee facility in South Carolina (which is 100% of the capacity at that site), 2,200 MW at the McGuire facility in North Carolina (100% of the capacity at the site), and 435 MW at the Catawba facility in South Carolina (which is 19.25% of the capacity at that site).
Duke’s Miller outlines generating fleet changes
Joseph Miller Jr., Director of Strategic Engineering for Duke Energy Business Services LLC, noted in his March 18 testimony that Duke Energy Carolinas, as part of its overall generation modernization effort, has taken a proactive approach to address load growth over time, safety, and environmental concerns with air, water, waste, and climate change, an aging portfolio of generation assets, relicensing requirements, and other new or updated regulatory guidelines.
The company has added new generation capacity of 620 MW with the Buck CC, the first combined cycle plant in the company’s carolinas region; completed dam remediation efforts at Paddy Creek and Catawba to address updated federal seismic regulations; addressed relicensing requirements for hydro facilities; installed environmental equipment to comply with the North Carolina Clean Smokestacks Act and the 8-hour Ozone Standard; and, provided additional hydro capacity with a new powerhouse at Bridgewater and turbine upgrades at the Jocassee pumped storage facility. The company also increased capacity with the addition of renewable generation.
The most significant projects being added are new generation assets. The company declared both Unit 6 at Cliffside Steam Station and the Dan River combined cycle facility operational in December 2012. The commercial operation of Cliffside Unit 6 is a significant milestone for the company and completes the multi-year modernization project for the Cliffside Steam Station. The addition of the generation capacity from Dan River CC also further increases the company’s use of natural gas at a time when pricing has been at historical lows, and features state-of-the-art technology for increased efficiency, fuel flexibility, and significantly reduced emissions. Other capital projects included in this rate request are associated with replacement of boiler components, environmental controls equipment, material handling functions, hydro relicensing efforts, and hot gas path inspections at combustion turbine sites.
The company’s fossil/hydro and renewable generation fleets as of Dec. 31, 2012, consists of approximately 15,000 MW of generating capacity, made up as follows:
- Coal-fired – 7,882 MW;
- Hydro – 3,229 MW;
- Combustion Turbines – 2,770 MW;
- Combined Cycle Turbines – 1,240 MW; and
- Solar PVDG – 8 MW.
Coal units being thinned out over time
The coal-fired assets consist of seven generating stations and a total of 22 units. The company has 13 units that are larger coal-fired facilities with a total of 6,802 MW of capacity. Each of these units is equipped with emission control equipment, including selective catalytic or selective non-catalytic reduction (SCR or SNCR) equipment for removing NOx and flue gas desulfurization (FGD or scrubber) equipment for removing SO2. The remaining nine coal-fired units – considered to be intermediate or cycling units – include six that are also equipped with SNCRs. In addition, all 22 coal-fired units are equipped with low NOx burners.
The company has a total of 31 simple cycle combustion turbine (CT) units, of which 29 are considered the larger group providing approximately 2,687 MW of capacity. These 29 units are located at Lincoln, Mill Creek and Rockingham Stations, and are equipped with water injection systems that reduce NOx and/or have low NOx burner equipment in use. The Lee CT facility includes two units with a total capacity of 82 MW equipped with fast-start ability in support of Oconee Nuclear Station. The 1,240 MW shown as “combined cycle turbines” represent the Buck CC and Dan River CC facilities that began commercial operation in late 2011 and late 2012, respectively. These facilities are equipped with the latest technology for emission control including SCRs, low NOx burners, and carbon monoxide/volatile organic compounds catalysts.
Changes within the fleets since a 2011 rate case include the addition of 1,445 MW when Dan River CC and Cliffside Unit 6 were declared available for commercial operation on December 10th and December 30th of 2012, respectively. Due to age and obsolescence, the company retired older CTs at Buck, Buzzard Roost, Dan River, and Riverbend stations for a reduction of 350 MW.
“As part of the fleet modernization program, the Company is retiring the remaining two units at Buck, Units 5 and 6 (256 MWs), along with Units 4 through 7 (454 MWs) at Riverbend Steam Station by April 1, 2013,” Miller noted. “These assets have served customers well for multiple decades, and at 58 to 60 years old are at the end of their useful lives. Additionally, Duke Energy has already agreed to retire these units in progressive fashion under the Cliffside Unit 6 air permit and merger agreements. These units had been slated for retirement in April 2015; however, have been operating infrequently in recent years and were expected to operate less due to low natural gas prices and new generation resources that are more efficient.”