AEP unit seeks approval for coal-to-gas conversion at Clinch River

American Electric Power (NYSE:AEP) subsidiary Appalachian Power has requested approval from state regulators to convert a portion of the existing Clinch River coal plant in Russell County, Va., to operate with natural gas.

Changing two of the three generating units from coal-fired to natural gas-fired is the least-cost alternative to meeting customers’ power needs, positively supports the economy and reduces emissions, the company said in a May 29 statement. The company has indicated for some time that this conversion has been in the works.

“For more than 50 years three generating units at the Clinch River Plant have served Appalachian’s customers well,” said Charles Patton, Appalachian Power president and COO. “However, they are not equipped to meet recently approved and anticipated environmental requirements and must shut down. Converting two of the Clinch units to natural gas and retiring the third is the best alternative to meet energy needs, taking into account economic and environmental considerations and diversifying the company’s power plant fleet.” 

APCo is asking the West Virginia Public Service Commission (PSC) to allow the company to proceed with the conversion and provide a mechanism for recovery of the $65m associated with the project in a future proceeding. If approved, the conversion would cost a residential customer using approximately 1,000 kilowatt-hours a month less than 50 cents a month once the units are operational.

Another aspect of the project involves extending a natural gas pipeline to serve the plant. The pipeline will be constructed, owned and operated by a third party. The total project will cost substantially less than constructing a new combined-cycle natural gas plant or a combustion turbine peaking unit.         

Appalachian seeks approval of the request by February 2013 to enable the company to meet construction deadlines in 2015 and 2016. The company has also requested approval for the conversion from the Virginia State Corporation Commission. The converted natural gas units are expected to be operational in 2016. When complete, the two units will have the capacity to generate 484 MW. Currently, the three existing units can generate 705 MW.

These old coal units have been lightly used lately

Clinch River is a three-unit facility, with each unit having a nominal capacity of 242 MW. Units 1 and 2 (which will be converted to gas) began operating in 1958 and Unit 3 (to be shut) in 1961. The plant is located near Cleveland, Va. The aging units have lately been used as “cycling” type units and their frequency of usage has declined.

Conversion of the Clinch River Plant is part of an overall effort to meet Appalachian Power customers’ future electric needs. In a separate, longstanding request with the West Virginia PSC, the company seeks to add low-cost generating capacity from two other West Virginia coal plants to its fleet.

Currently, APCo is about 73% reliant on coal. With the planned retirement of several older units, the companies’ application for the proposed asset transfers of the non-APCo share of the coal-fired Amos Unit 3 and 50% of the Mitchell plant, and the Clinch River conversion, APCo’s reliance on coal would drop to about 69% and its reliance on natural gas would increase from around 14% to about 19%.

Clinch River Units 1 and 2 had an average net capacity factor of about 25% during the 2011-2012 peak electricity demand periods and as gas-fired units are expected to operate at an average net capacity factor of about 28% during summer peak demand periods. The converted units will allow the plant to provide reliability benefits and potentially offset higher-priced market purchases during peak time periods.

Units 1 and 2 are expected to maintain their current output capability of about 247 MWg with no change anticipated in the generators’ nameplate rating. The expected net dependable capacities for each unit after the conversion are 242 MWn (winter) and 237 MWn (summer). The average seasonal heat rates at full load for the converted units are expected to be 10,000 Btu/kWh (summer) and 9,900 Btu/kWh (winter). The units will also be able to offer certain generation-related ancillary services to transmission providers including synchronized reserves, day-ahead reserves and voltage support, APCo told the West Virginia commission.

It will be necessary for a gas transporter to construct about six miles of natural gas pipeline lateral on a yet to be determined route from East Tennessee Natural Gas LLC’s (ETNG) Nora lateral line onto the Clinch River property. A request for proposals for gas transportation service for the plant, including the operation and maintenance of a new pipeline, was issued during the first quarter of 2013 in order to validate current market conditions and to meet the project’s construction and in-service schedule.

APCo said AEP used Babcock & Wilcox and Worley Parsons in its initial design efforts for this project.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at