Dairyland Power looks at gas-fired options for 2020

Dairyland Power Cooperative’s load is growing and it is using a balanced and pragmatic approach to add natural gas generation to meet the future load obligations, the cooperative said a brief integrated resource plan (IRP).

This optional, short-form IRP was filed June 28 with the Minnesota Public Utilities Commission after the state legislature last year allowed Dairyland (DPC), which has few customers in Minnesota, to go this route.

DPC said it intends to use short-term capacity contracts to fulfill any short-term capacity deficits while it continues to evaluate its existing plants and new natural gas generation. Dairyland said it is currently meeting its planning reserve margin requirements and all of its renewable energy obligations and plans to do so in the future.

Dairyland’s decision to discontinue burning coal, as of the end of 2011, at Alma Units 1, 2, and 3 had no immediate impact on its ability to meet its Midcontinent ISO capacity and planning reserve margin requirement (PRMR) obligations. In the last three years of operations, Alma Units 1-3 provided less than 1% of DPC’s energy generation. In 2011, Dairyland announced it would cease burning coal at Alma Station Units 1-3. The capacity of each of these units was 17 MW.

Among its actions to secure new capacity is the fact that Dairyland has signed a 50 MW Capacity Purchase agreement with Wisconsin Energy Corp. for the years 2013-2015. Also, in 2010, DPC added Stoneman, a 40-MW baseload renewable energy facility, which helped mitigate the impact of Dairyland’s decision to cease burning coal at Alma Units 1-3.

Dairyland said it is also in the process of evaluating another 40 MW Capacity and Power Purchase agreement with an unnamed party for the years 2014-2018. In the longer term, DPC is assessing the need for a larger capacity addition in the 2018-2020 timeframe.

DPC currently has 1,030 MW of accredited capacity in MISO. This value is based on the UCAP ratings of the power plants. The UCAP ratings of the plants take the last three years forced outage rate into consideration for the rating of the plant.

DPC will meet its obligations through owned generation or capacity purchases through 2020. Under the current forecast of demand and resources, DPC will be 3 MW in deficit in 2020 and 13 MW in deficit in 2021.

DPC is exploring the potential to construct or participate in natural gas generation during 2018, 2019 or 2020 to diversify its portfolio and meet its capacity requirements. “Discussions are underway with a variety of developers and DPC is evaluating different ownership structures,” the IRP said. “DPC is currently evaluating which natural gas technology is most cost-effective for its members. DPC has narrowed its options to natural gas reciprocating engine technology or combined cycle. Either will provide the energy and capacity required by DPC in the 2020 timeframe.” Dairyland didn’t give a target figure for the new gas capacity, but a shaded area in a capacity chart in the IRP indicates that it is around 100 MW.

Still-existing coal capacity good for at least 15 more years

DPC said it regularly evaluates the future viability of its existing coal units. Currently, the DPC forecast assumes all existing units will provide capacity for the next 15 years. DPC is evaluating emission control costs necessary to bring the coal units to compliance with all Clean Air Act requirements and a federal Consent Decree entered in August 2012 in the U.S. District Court for the Western District of Wisconsin.

In 2007, Dairyland installed fabric filter “baghouses” designed to remove more than 99% of particulate matter from the exhaust gas stream at the Genoa 3 Station (129 MW) and the John P. Madgett Station (380 MW). In 2009, Dairyland also completed installation of a semi-dry flue gas desulfurization “scrubber” to remove SO2 at Genoa 3 plant. Dairyland has also installed equipment to reduce emissions of NOx at the John P. Madgett Station, the Genoa 3 Station, and Alma Units 4 (49 MW) and 5 (76 MW).

In the 2012 Consent Decree, Dairyland agreed to limits in emission rates and total annual amounts emitted for SO2 and NOx and particulate matter for the John P. Madgett Station, the Genoa 3 Station, and Alma Units 4 and 5. Dairyland also agreed to install selective catalytic reduction or equivalent alternative NOx control technology at John P. Madgett and selective non-catalytic reduction at Genoa 3. Dairyland said it has notified the U.S. Environmental Protection Agency that it will install dry sorbent injection (DSI) to further reduce SO2 emissions at John P. Madgett, and additional emission controls will be installed on Alma Units 4 and 5.

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.