Wagner coal units seen as a key to Maryland energy supply

Plans to switch coals and/or add new air emissions controls on the two coal-fired units of the H.A. Wagner plant would be good for fuel diversity needs at a time when many coal-fired plants in the region are being shut.

That was a basic point made in June 9 testimony filed at the Maryland Public Service Commission by Ralph De Geeter, employed by the commission in the Engineering Division with responsibility for wholesale transmission and generation issues.

HA Wagner LLC, an affiliate of Riverstone Holdings LLC, had filed in January for approval of a certificate of public convenience and necessity (CPCN) on a new air emissions strategy for the Wagner plant. Notable is that H.A. Wagner is one of the Riverstone plants that would become part of the new Talen Energy. PPL Corp. (NYSE: PPL) and Riverstone announced June 9 their plans to contribute several power plants that each now holds to the newly-formed Talen Energy.

De Geeter said he has concluded that the proposed fuel modifications associated with the two coal-fired units at Wagner (Unit 2 and Unit 3) to facilitate reductions in emissions of certain pollutants for compliance with new air emissions requirements would be beneficial for the state of Maryland providing it meets the recommended conditions filed by the other state agencies that are intervenors in this proceeding. Among those new requirements is the federal Mercury and Air Toxics Standards (MATS).

In order to achieve compliance with MATS, Wagner is proposing two potential emissions reduction options (EROs) to reduce HCl emissions. One approach is to use dry sorbent injection (DSI) to enable other emissions controls at Wagner to remove more acid gas. The second approach is the combustion of subbituminous coal, either by itself or blended with bituminous coal. The content and characteristics of subbituminous coals are such that less chlorine is present in the coal and so less HCl will form and be emitted. The two approaches can be used in conjunction, with less sorbent injected into blends containing higher ratios of subbituminous coals. Each approach also offers additional emissions reductions benefits.

Coal is a shrinking presence in Maryland, and also the broader PJM region

“Compliance with the new MATS regulations is having an impact on the fuel mix used for power generation for both existing and proposed new generation in Maryland,” De Geeter wrote. “In addition, existing coal fueled generation has provided notice of deactivation (retirement) by May 2018. Recently issued Commission CPCN’s for new generation have been predominately fueled by natural gas. Currently, pending CPCN applications for new generation are also predominately (over 80%) to be supplied by natural gas.

“Maryland already has a significant and growing dependency on natural gas for a power generation fuel,” he added. “This dependency is demonstrated by the increase in natural gas as a fuel for power generation from 29% for existing generation to as much as 47% when combined with currently filed CPCN applications for new generation. Such potential growth in natural gas demand could only further increase both the electric and natural gas price volatility that was experienced in January and February of this past winter. A diversified power generation fuel mix that avoids over reliance on any one fuel could serve to minimize price volatility to ratepayers.”

Wagner is located within the BGE transmission zone of PJM Interconnection in Anne Arundel County, Md. The existing Wagner plant consists of five generating units providing a net summer generating capacity of approximately 975 MW. One natural gas-fueled unit provides 126 MW, two oil-fueled units provide a total of about 409 MW, and the two coal-fired units are 135 MW and 305 MW, or approximately 440 MW in total.

Should the requested CPCN not be approved, the two coal-fueled units would not be in compliance with air regulations becoming effective on April 16, 2015. “The units could be deactivated and cease commercial operation thereby having an adverse impact on the PJM transmission system, reducing generation capacity in Maryland which is becoming highly dependent on electric generation resources outside the State to supply the needs of electric customers,” De Geeter wrote.

Based on PJM information the total summer generating capacity located in Maryland as of June 1, 2014, was 12,079 MW. The fuel supply for Maryland generation is from a variety of fuels including natural gas, oil, coal, nuclear and renewable (wind, solar, biogas, etc.). Currently, natural gas fuels about 29%, oil approximately 10%, coal 39%, nuclear 14% and renewables 7% of Maryland generation, based on PJM information. However, this fuel mix will be impacted by deactivations (retirements) and new generation to be located in Maryland.

Dickerson, Chalk Point coal units to shut in Maryland about 2018

As of May 19, the owners of six generating units representing 1,300 MW, approximately 11% of existing Maryland generation capacity, have notified PJM of their intent to deactivate. The vast majority of the announced deactivation capacity (1,224 MW or 94%) is fueled by coal with a requested deactivation date of May 31, 2018. The remaining 76 MW uses natural gas as the primary fuel and has requested a deactivation date of June 1, 2015. The coal units are at NRG Energy’s (NYSE: NRG) Dickerson and Chalk Point plants. The 76 MW of gas is at Exelon’s (NYSE: EXC) Riverside Unit 4. Currently, coal is the largest fuel source for Maryland generation. 

There are a number of new generation projects that will enter the PJM capacity resource market during the next three years. The vast majority (approximately 97%) of the new generation of 1,849 MW will be supplied by natural gas from two new combined cycle projects. These are generation projects that have obtained CPCNs to permit construction and have completed the PJM generation interconnection study process. The two big gas-fired additions in Maryland are the CPV St Charles (785 MW) project of Competitive Power Ventures and the Wildcat Point (1,000 MW) project of Old Dominion Electric Cooperative.

John Sherwell, who works for the Power Plant Research Program (PPRP) of Maryland’s Department of Natural Resources, also filed June 9 testimony about the emissions impacts of the Wagner compliance plan.

Attached to Sherwell’s testimony was a detailed report on Wagner that said in part: “The subbituminous coal ERO will involve combustion of subbituminous coal for up to 100% of the fuel needs, including blending with bituminous coals. Wagner anticipates that the subbituminous coal will be sourced from either western locations in the U.S. (e.g., Powder River Basin [PRB] coal) or foreign countries (e.g., Indonesian Adaro coal).”

In a presentation that accompanied their June 9 announcement about Talen Energy, PPL and Riverstone indicated that the P.T. Adaro coal out of Indonesia, which has an unsually low sulfur content, is the chosen option for Wagner.

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.