A discussion of the future of the coal-fired Martin Drake power plant was on the agenda for the Jan. 22 meeting of the Colorado Springs Utilities Board.
A background memo attached to the meeting agenda said that consultant HDR has finished a report that contains 12 alternatives, compared according to expected cost (Financial Return on Investment, or FROI), and Sustainability (Sustainability Return on Investment, or SROI). SROI modeling includes anticipated costs as well as potential environmental and social costs and impacts. As an example, the SROI modeling includes significant additional costs associated with potential future regulations for greenhouse gas emissions.
The study showed continued operation of the Drake plant for the next 30 years is the least-cost option. If environmental sustainability were the priority, then the plant could be retired as soon as 2019.
The board will hear a presentation from study program manager Navigant Consulting at its February meeting. “The Board will discuss a decision process, timelines and other factors that need to be considered, including the 2012 Electric Integrated Resource Plan, additional public input, and the upcoming recommendation from the Utilities Policy Advisory Committee regarding the Energy Vision,” said the memo. “A Board decision on the organization’s future energy supply is expected by summer 2014.”
In 2012, the board requested a study to evaluate alternatives for when and how the Drake plant could be decommissioned. The board appointed a citizen task force to oversee the project, hired Navigant Consulting to serve as the study project manager and hired HDR to provide technical, operational and financial analysis.
The HDR report, officially dated Dec. 23, 2013, said that new environmental regulations are pushing emissions projects for both CSU coal plants:
- Addition of flue gas desulfurization systems to Drake 6 and 7 in 2015,
- Addition of a flue gas desulfurization system to Nixon in 2017,
- Addition of dry sorbent injection for SO2 emissions control to Drake 5 in 2015,
- Addition of dry low NOx burners and overfire air to all Drake and Nixon units, and
- Addition of selective catalytic reduction (SCR) for NOx control on all Drake and Nixon units in 2023.
Said the report in summary: “The Drake Power Plant is considered a relatively average aged power plant compared to the overall age of the U.S. coal fleet in operation. Of the 1400 coal plants (344 GW) listed by the 2011 EIA database, nominally 500 units or 35 percent of the coal fleet were installed in 1960 (Drake Unit 5 age) or earlier which represent (52.5 GW) or only 15 percent of the installed capacity. Furthermore, since 2011 over 100 coal units that are included in the above EIA data have been reported retired with additional forecast retirements estimated to be in the 20-50 GW range. This would suggest that ongoing operation of Drake beyond 20 years (Base Case) would place all Drake units over an age of 60 years which is a limited and unique historic operating age group (i.e. achieved by less than 16 percent of the currently installed coal fleet and less than 3.5 percent of the defined operating capacity) without factoring in increased pressure and forecast near term retirements due to cost and regulatory issues. The key question to be addressed by CSU and the Colorado Springs community is when to actually retire the plant. The alternatives analysis conducted through this study process provides the comparative analysis of the selected retirement dates that range from 4-30 years to support such a comprehensive assessment and determination by the decision makers and stakeholders.”
There are three Drake units, Unit 5, Unit 6, and Unit 7, which are currently operational. All three are capable of producing full load output on either natural gas or coal and utilize fully enclosed boilers and steam turbines with heat rejection via wet, evaporative cooling towers. Fuel supply to the facility is primarily Powder River Basin coal from Wyoming with limited natural gas (primarily for boiler ignition) and biomass co-firing. U.S. Energy Information Administration data shows coal suppliers in 2013 were the North Antelope Rochelle mine of Peabody Energy (NYSE: BTU) and the Black Thunder mine of Arch Coal (NYSE: ACI).
- The Drake Unit 5 boiler is a Riley Stoker Stirling type boiler. The unit has been in service since 1960. The unit is nominally rated at 44 MW and utilizes a Westinghouse steam turbine generator.
- The Unit 6 boiler is a Babcock & Wilcox Stirling Power design. It is rated at 66 net MW, also utilizes a Westinghouse steam turbine generator, and has been in service since 1968.
- Unit 7 is slightly larger than the other two units with a nominal rating of 127 MW. This unit also uses a Babcock & Wilcox boiler and was placed into service in 1974.