The Duke Energy Florida unit of Duke Energy (NYSE: DUK) is looking at adding new gas-fired capacity at its Suwannee River plant site as it looks to meet new power demand and replace things like the retired Crystal River 3 nuclear unit.
As of the end of 2013, Duke Energy Florida (DEF) had a summer total capacity resource of 11,258 MW, the utility noted in an annual 10-year site plan that it filed on April 1 at the Florida Public Service Commission. This capacity resource includes fossil steam (3,393 MW), combined-cycle plants (3,277 MW), combustion turbines (2,471 MW; 143 MW of which is owned by Georgia Power for the months June through September), utility purchased power (413 MW), independent power purchases (1,114 MW), and non-utility purchased power (590 MW).
The utility’s generation expansion plan includes two combustion turbines located at the Suwannee River site in 2016, additional summer capacity at the Hines Energy Center through the installation of inlet chilling, a combined cycle facility in 2018 in Citrus County, and a 2021 combined cycle facility at an undesignated site.
DEF issued a request for proposals (RFP) in October 2013 to seek competitive alternatives to the 2018 Citrus combined cycle project. The bid offer period under this RFP closed in December 2013 and are currently under evaluation.
DEF said it continues to seek market supply-side resource alternatives to enhance its resource plan and has extended a purchase power agreement with Southern Power beginning in 2016. Other short- and long-term power resources from 2016 through 2020 are also under evaluation and may impact the proposed Base Expansion Plan. DEF continues to evaluate alternatives to the base plan, including the 2018 Citrus combined cycle. DEF expects to file formal petitions regarding resource selections resulting from these evaluations during 2014.
EPA’s MATS rule raises issues for three oil- and coal-fired plants
The promulgation of the federal Mercury and Air Toxics Standards (MATS) presents new environmental requirements for the DEF units at Anclote, Suwannee and Crystal River.
- The three steam units at Suwannee are capable of operation on both natural gas and residual oil. These units will be able to comply with the MATS rule by ceasing operation on residual oil prior to the April 2015 MATS compliance date. Residual oil was removed from the site in 2013.
- DEF is continuing to execute projects at the Anclote facility to convert the two residual oil-fired units (974 MW summer) there to 100% firing on natural gas. Following completion of the project in 2014, DEF will conduct final tests to confirm performance levels.
- The coal-fired Crystal River Units 1 and 2 (869 MW summer) are not capable of meeting the emissions requirements for MATS in their current configuration and using the current fuel. In addition, under the terms of the revised air permit, in accordance with the State Implementation Plan for compliance with the requirements of the Clean Air Visible Haze Rule, these units are required to cease coal-fired operation by the end of 2020 unless SO2 scrubbers are installed prior to the end of 2018. DEF has received a one-year extension of the deadline to comply with MATS for Crystal River Units 1 and 2 from the Florida Department of Environmental Protection. This extension was granted to provide DEF sufficient time to complete projects necessary to enable interim operation of those units in compliance with MATS during the 2016–2020 period. DEF anticipates burning MATS compliance coals in Crystal River Units 1 and 2 beginning no later than April 2016. Although specific dates have not been finalized, DEF anticipates retiring the Crystal River Units 1 and 2 in 2018 in coordination with the 2018 Citrus combined cycle operations.
Peakers at several plants are on the chopping block
DEF said it continues to look ahead to the projected retirements of several of the older units in the fleet, particularly combustion turbines at Higgins, Avon Park, Turner and Rio Pinar as well as the three steam units at Suwannee.
- Turner Unit P3 (53 MW summer) is projected to retire at the end of 2014.
- The Avon Park (48 MW summer), Rio Pinar (12 MW summer) and Turner Units P1 and P2 (20 MW summer) continue to show anticipated retirement dates in 2016.
- The three Suwannee steam units (128 MW summer) are projected to retire by the spring of 2018.
- Operation of the peaking units at Higgins (105 MW summer) is being extended to 2020.
There are many factors which may impact these retirements, the utility noted, including environmental regulations and permitting, the unit’s age and maintenance requirements, local operational needs, their relatively small capacity size and system requirement needs.
DEF said it continues to seek out renewable suppliers that can provide reliable capacity and energy at economic rates. DEF continues to keep an open Request for Renewables (RFR) soliciting proposals for renewables projects. DEF’s open RFR continues to receive interest and to date has logged over 315 responses.
Although the proposed Levy Nuclear Project is no longer an option for meeting energy needs within the originally scheduled time frame, Duke Energy Florida said it continues to regard the Levy site as a viable option for future nuclear generation and understands the importance of fuel diversity in creating a sustainable energy future. Because of this the company will continue to pursue the combined operating license outside of the Nuclear Cost Recovery Clause with shareholder dollars as set forth in a 2013 settlement agreement. The company will make a final decision on new nuclear generation in Florida in the future based on, among other factors, energy needs, project costs, carbon regulation, natural gas prices, existing or future legislative provisions for cost recovery, and the requirements of the Nuclear Regulatory Commission’s combined operating license.