The planned conversion of two coal units at the Clinch River plant in Virginia, and the retirement of the other coal unit at the plant, is part of a broader Appalachian Power re-positioning of its generation fleet.
Various American Electric Power (NYSE: AEP) officials provided testimony that was filed May 29 with the Virginia State Corporation Commission as part of an application for approval of the Clinch River coal-to-gas conversion. The company at the same time has filed a similar application with the West Virginia Public Service Commission.
Among those writing testimony for the Virginia commission was John Torpey, employed by American Electric Power Service Corp. (AEPSC) as Director-Integrated Resource Planning.
The Clinch River gas conversion is a viable option to provide APCo with adequate capacity beyond 2015, Torpey noted. With capacity from the gas-converted Clinch River units, APCo will not require additional capacity until the converted Clinch River units are retired, which, for planning purposes, is assumed to be 2025.
There are a number of environmental rules that will impact APCo’s ability to operate its generating fleet in the future. To comply with these rules, APCo plans to retire 1,245 MW of coal-fired capacity prior to the 2015/2016 PJM Interconnection plan year, and to convert Clinch River Units 1 and 2 to natural gas-fired operation. But, APCo can meet its PJM capacity obligation through 2024/2025 by converting two of the three Clinch River units.
APCo looked at three alternatives for the coal-fired Kanawha River Units 1 and 2 and Sporn Units 1 and 3 and concluded that retrofitting these units with environmental controls was not economical. Specifically, for the Kanawha River units, which are of a similar design to the Clinch River units, two options were considered that would allow the units to operate for an additional ten years. These options ranged in cost from $914/kW to $2,407/kW. Another option was considered that would have extended the Kanawha River units’ lives for five years, and this was estimated to cost $486/kW. These initial capital costs are significantly greater than the Clinch River gas conversion cost of $134/kW, so they were not subjected to further evaluation.
The AEPSC Fuel, Emissions and Logistics (FEL) group evaluated providing natural gas to each of APCo’s sub-critical unit sites. They considered the pipeline infrastructure requirements, gas transportation and service costs, the availability of gas supply and basis differentials. As a result of this evaluation, APCo and AEPSC determined that the Clinch River site was best suited for future consideration for gas-fired generation.
The coal-fired Amos and Mountaineer units in West Virginia are included in the capacity position through the entire planning period. The APCo capacity position assumes that on Jan. 1, 2014, APCo will own the two-thirds share of Amos Unit 3 currently owned by Ohio Power (OPCo) and 50% of OPCo’s Mitchell Units 1 and 2 currently owned by OPCo for a total of 1,647 MW (nominal). The transfer of that capacity to APCo’s service is now up for review at the West Virginia Public Service Commission.
Torpey also outlined how renewables fit into the APCo portfolio. APCo currently receives 375 MW of wind resources from the Camp Grove, Fowler Ridge (Phases I and II), Grand Ridge and Beech Ridge projects through 20-year power purchase power agreements (PPAs). Further, APCo owns 92 MW of conventional hydroelectric power and 586 MW of hydro pumped storage capacity. APCo expects to comply with both Virginia’s voluntary Renewable Energy Standard and West Virginia’s Alternative and Renewable Energy Portfolio Act, and has included certain renewable capacity in its plan to meet these standards. Because renewable energy, in the form of the wind power agreements, is an intermittent resource, it has limited capacity value in PJM (approximately 13% of nameplate capacity).
Clinch River is old, little used and ripe for conversion
The Clinch River plant, located in Cleveland, Va., began operating over fifty years ago, in 1958. Units 1 and 2 were completed in 1958, with a nominal generating capacity of 235 MW for each generating unit. Unit 3 was completed in 1961, also with 235 MW of nominal capacity. In recent years the units have aged and environmental requirements have evolved, so they have been used as “cycling” units (i .e. use is based on hourly system demand level rather than continuous use) and the frequency of usage has declined to some degree.
As a result of the EPA’s Mercury and Air Toxic Standards (MATS), the company is faced with a choice of whether to retrofit Clinch River, convert all or part of the plant to natural gas or retire the units and purchase replacement power from the market. A conversion of Clinch River Units 1 and 2 to natural gas and the retirement of Unit 3, is the best alternative to meet the capacity need taking into account economic and environmental considerations, as well as recognizing fuel diversity. The conversion of Unit 3 is not required to meet anticipated load levels.
After conversion, Clinch River 1 and 2 will be nominally rated at 2,461 mmBTU/hr each and 242 MW net generation. The conversion is anticipated to begin construction in the second quarter of 2015, with Unit 1 completed by the end of the fourth quarter of 2015 and Unit 2 completed by the end of the second quarter of 2016.
Robert Walton, employed by the AEPSC as Managing Director of Projects, said the major unit modifications planned for Clinch River Units 1 and 2 include, but are not limited to, changes to the existing boilers and unit control systems to accommodate the combustion of natural gas in lieu of coal, the addition of a new natural gas pipeline lateral, the installation of new fuel handling facilities for the natural gas, and major modifications to the associated balance of plant systems.
After the conversion of Units 1 and 2, it is expected that they will continue to operate in a fashion similar to their performance as coal-burning units. 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 peak electricity demand periods.
Units 1 and 2 are expected to maintain their current generating 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).