Duke Energy Florida is projecting a coal burn of 5.1 million tons in 2013 at its Crystal River power plant, at an average cost of $89.16/ton.
This Duke Energy (NYSE: DUK) subsidiary on Aug. 2 filed its latest fuel projections with the Florida Public Service Commission as part of an annual fuel cost review case. The filing is a “true up” of previous projections for 2013 fuel burn and costs with actual figures for the first half of the year and latest estimates for the last half of the year.
In the first half of this year, the actual coal burn was 2.4 million tons at an average of $88.89/ton.
Crystal River has four coal units; 1-2 and 4-5. Unit 3 is a shut nuclear facility. Units 1-2 are smaller, older, more lightly used and may have to be shut in the next few years due to clean-air concerns. Units 4-5 are newer, larger and have relatively new emissions controls, so they tend to run harder.
Crystal River Unit 1 will have an especially tough last half of the year. Month-by-month projections for capacity factors show the unit with a factor of 53.5% in July, falling to 24.2% in October, then to only 1.1% in December. Unit 2 has a projected capacity factor of 51.8% in July, falling to 15.2% in October, then rising to 31.8% in December. Unit 4 is projected at 74.3% in July, 63.8% in October and 81.1% in December. Unit 5 is projected at 72.9% in July, 61.1% in October and 83.7% in December.
A monthly fuel report that Duke filed with the commission on Aug. 2 for the month of June shows a split in the types of coal bought.
- One type was high-sulfur coal from the Illinois Basin from suppliers American Coal, Eagle River Coal LLC, Knight Hawk Coal LLC and Riverview Mining LLC, with average delivered prices in June in the $62-$65/ton range. This is apparently coal for the scrubbed Units 4 and 5 that is shown as delivered to the Associated Terminals transloading point, not to Crystal River itself. This delivery point is apparently why these high-sulfur deliveries don’t show up in U.S. Energy Information Administration monthly reports on Crystal River coal purchases.
- The other type is lower-sulfur Central Appalachia coal out of eastern Kentucky from Arch Coal Sales, Blackhawk Mining and B&W Resources at delivered costs of $109-$123/ton. This coal is shown as being directly delivered to Crystal River and so it also shows up in the EIA data. This is apparently the coal for the unscrubbed Units 1 and 2.
The Florida Department of Environmental Protection on July 8 issued a final air permit approval for a Duke Energy Florida test burn program, to be completed by the end of this year, at Crystal River Units 1 and 2.
Said the DEP approval: “The test burn program will involve the temporary installation, testing, and operation of new coal blends, equipment, and process. The coal blending of Powder River Basin (PRB) with Western Bituminous (WB) will be done offsite to reduce fugitive emissions impacts. As part of the test burn program, Units 1 and 2 will have additional temporary post combustion controls such as hydrated lime injection and activated carbon injection upstream to the electrostatic precipitator. This authorization is only for a test lasting no more than ninety days in duration to determine whether this fuel blend along with post combustion controls reduces overall emissions impact.”
The worst case emission scenario would be firing WB coal only. The test burn program is an attempt to reduce overall emissions such as particulate matter, acid gases, and mercury to determine the potential for Units 1 and 2 to comply with the federal Mercury and Air Toxics Standards (MATS) during the 2015 through 2020 timeframe.
In April 1 testimony filed at the Florida commission, utility official Benjamin Borsch said the utility cannot continue to operate the Crystal River Units 1 and 2 without implementation of additional measures to bring the units into compliance with MATS. Accordingly, the two main options that PEF considered were: installing new emission control systems to reduce NOx, SO2 and mercury emissions; and retiring the units and replacing the generation.
DEF has decided that installing emission controls at Crystal River Units 1 and 2 is not the most cost-effective option. PEF is now evaluating alternative fuel options that would allow Crystal River Units 1 and 2 to continue operating in compliance with MATS for a limited period of time, which is the reason for the coal test burns. If these tests are successful, it may be possible for PEF to extend Crystal River Units 1 and 2 operations to 2020 while still being in compliance with MATS.