The Michigan Department of Environmental Quality (MDEQ) on July 25 approved an air permit-to-install for a natural gas-fired power plant planned by Consumers Energy in Thetford Township in northern Genesee County, Mich.
“We appreciate the Michigan Department of Environmental Quality’s thorough review and timely approval of this air permit request,” said Tim Sparks, Consumers Energy’s vice president for energy supply operations, in a July 26 statement. Consumers Energy is a unit of CMS Energy (NYSE:CMS).
Approval of the air permit accomplishes the first major step before Consumers Energy proceeds with the $750m project. Additional steps include approval of a certificate of necessity filed July 12 with the Michigan Public Service Commission, and suitable financing.
The Thetford project is expected to create 600 construction jobs, about 30 operating and support jobs, and ongoing economic benefits for the regional I-75 corridor and Genesee County. Total direct and indirect benefits tied to the Thetford project is estimated at $320m for the state and greater Genesee County, according to an independent, third-party economic impact study.
The certificate of necessity filing, allowed for under Michigan’s energy reform law, provides Consumers Energy’s comprehensive analysis for the 700-MW natural gas plant. The PSC review process for the filing is expected to take nine months.
When operational in 2017, the Thetford plant will produce about 50% less carbon emissions than seven older coal units it will replace. This switch in generation will help Consumers Energy reach its greenhouse gas reduction target of 20% by 2025.
Consumers Energy owns the 230-acre Thetford Township site, which features access to high-volume natural gas delivery and high-voltage power transmission lines. The current project schedule calls for construction to begin in 2014 and for the new combined cycle power plant to begin serving Consumers Energy’s electric customers in 2017.
The plant was permitted at 1,400 MW, so there is room for expansion above the planned 700 MW in the current version of the project.
Thetford will be needed to replace seven deactivated coal units
The Thetford project is part of Consumers Energy’s 2013 Integrated Resource Plan (IRP), filed along with the July 12 application at the PSC. The IRP report and supporting materials represent the results of extensive analysis of the capacity and energy needs of Consumers Energy’s customers over more than 25 years from 2013 through 2040 and evaluation of the most cost-effective combinations of resources to meet those needs under an array of future scenarios and sensitivities.
The results of this analysis show a capacity and energy supply need beginning in 2016, primarily caused by the company’s intention to suspend operations at seven of its smaller coal fired generating units, the application said. “Originally scheduled to stop generating April 16, 2015, in order to comply with the start of enforcement of the US EPA’s Mercury and Air Toxics Standards, CMS requested and was granted an extension by the Michigan Department of Environmental Quality to extend the compliance date for the seven units to April 16, 2016. The suspension of operations of these units will reduce the available installed capacity of Consumers Energy’s electrical supply resources resulting in a significant shortfall of electric generating capacity to meet electric load and reserves required by the Midcontinent Independent System Operator (‘MISO’). The analysis conducted for this IRP shows that the need for energy and capacity is best met with a high capacity factor resource. The resource type that most economically fills this need is a natural gas fueled combined cycle generating plant with a nominal output of approximately 700 MW, supplemented by other resources.”
Charles Hookham, employed by HDR Engineering as Vice President-Utility Projects, said in supporting testimony that after review of a number of different options, the company selected a combined cycle configuration for the proposed Thetford Plant utilizing two large frame combustion turbine generators (CTGs) each coupled to a heat recovery steam generator (HRSG) and single steam turbine/generator (ST/G). “We believe that this arrangement, known in industry as a 2×1 combined cycle, offers the best combination of reliable and efficient performance, nominal generation of 700 MW, low emissions and manageable cost of construction and schedule risk issues,” Hookham added.
The term “nominal” is used as the actual power out is a function of ambient environmental conditions. During summer months when the air intake is warm to hot, net power generation may be slightly less than 700 MW, but winter power output may well approach 800 MW, Hookham noted.
‘Classic 7’ coal units to be shut, with others getting new air controls
Linda Hilbert, Manager of Environmental Services at Consumers, said the seven coal-fired units to be suspended are BC Cobb Units 4 and 5, JC Weadock Units 7 and 8, and JH Whiting Units 1, 2, and 3 (called the “Classic 7”). This will result in a 926 MW reduction in capacity in 2016. The capital cost to install needed environmental equipment on these units is anticipated to be about $400m, at a minimum. This cost assumes lower cost controls for Mercury and Air Toxics Standards (MATS) compliance. There is the potential that the lower cost controls may not be feasible for one or more of these units and thus higher cost controls would be required for MATS compliance which would increase this amount.
Hilbert said Consumers has moved and is continuing to move to install emissions controls on the coal units that it doesn’t plan to shut. For SO2 compliance, it began the installation of Spray Dry Absorbers (SDAs) at Karn Units 1 and 2 and Campbell Unit 3 in 2010. For NOx compliance, it currently has Selective Catalytic Reduction (SCR) installed at Karn Units 1 and 2 and Campbell Units 2 and 3.
Activated Carbon Injection (ACI) coupled with a particulate matter collection device is required by 2016 to achieve the mercury reductions required by both the MATS and a Michigan mercury rule. Some form of Flue Gas Desulfurization (FGD), which also needs to be paired with a particulate matter collection device, is required in order to achieve the reduction of acid gases required by MATS. The Campbell units applied for and were granted a one-year MATS compliance extension. Campbell Units 1 and 2 will be equipped with Dry Sorbent Injection (DSI) and Campbell Unit 3 and Karn Units 1 and 2 will be equipped with SDAs for acid gas reduction. All five units will also be equipped with Pulse Jet Fabric Filters (PJFF) and ACI for mercury reductions.