Alliant’s Riverside expansion to meet need due to coal, gas unit retirements

Alliant Energy’s (NYSE: LNT) Wisconsin utility, Wisconsin Power and Light (WPL), will by the end of this decade be retiring several of the coal-fired units in its fleet, plus some older, less-efficient, natural gas peaking resources are nearing retirement

WPL will need a new source of capacity and energy in 2019 to replace these retiring units, said the utility in an April 24 application filed at the Public Service Commission of Wisconsin (PSCW). Consistent with its mission, Alliant Energy is therefore proposing under this application to expand WPL’s existing Riverside Energy Center through the construction of a state-of-the- art, nominal 650-MW, combined-cycle, natural-gas-fired facility.

The Riverside Energy Center Expansion (RECE) is designed to cost-effectively meet the future energy needs of WPL’s customers, fulfill WPL’s capacity requirements, and provide reliable power generation in the coming decades. It is a two-on-one (2×1), natural-gas-fired, combined-cycle generating facility. At approximately 650 MW, this highly efficient facility will be capable of powering over 500,000 homes. The proposed project has an estimated cost of $750 million.

The capacity and energy need identified by WPL that this project will fill is driven primarily by the retirement of WPL-owned generating assets and modest projected peak- and annual-energy growth, averaging approximately 0.6% and 0.5% per year, respectively. WPL plans to retire several older units on or before Dec. 31, 2018. These retirements include the coal-fired Nelson Dewey Units 1 and 2 and Edgewater Units 3 and 4, which together provide approximately 470 MW of capacity. An additional 170 MW is anticipated to be retired by the end of the 2019/20 Midcontinent ISO planning year, which includes the 1950s-1970s vintage Rock River and Sheepskin combustion turbines. Together, these retirements will result in the loss of approximately 640 MW of capacity by the 2020/21 MISO planning year.

In 2013, the annual energy produced by the units scheduled to be retired totaled approximately 17% of WPL’s customer energy need. WPL’s current market position on energy from short-term contracts is also contributing to the need for a long-term energy resource. Together, these resources served approximately 30% of WPL’s energy needs in 2014.

The unit retirements, in addition to modest load growth, create significant capacity and energy shortfalls in 2019 and beyond. This contributes to the need for an intermediate or base-load capacity and energy resource by 2019, specifically a natural gas combined cycle (NGCC) resource. This need is consistent with other WPL filings, including its September 2013 response to the PSCW Strategic Energy Assessment (SEA) data request. The company’s assessment identified intermediate resources as offering the balance of size, availability and cycling that was most closely aligned with its needs.

As announced in July 2012, WPL will retire Edgewater Generation Station Unit 3 and Nelson Dewey Generating Station Units 1 and 2 by the end of 2015. This results in a loss of 270 MW. In addition, WPL currently plans to retire Edgewater Generation Station Unit 4 by the end of 2018, which would result in the loss of an additional 199 MW (WPL ownership share) of generation.

WPL’s analysis also assumes the retirement of the older Sheepskin and Rock River 3, 4, 5 and 6 combustion turbine units by mid 2020. WPL will, however, maintain flexibility with the retirement of these combustion turbine units through continued evaluation of MISO resource adequacy requirements, unit condition, and market conditions.

WPL noted that it evaluated, as part of the process leading to the Riverside expansion decision, converting Edgewater Unit 4 to natural gas by the end of 2018 and purchasing the Wisconsin Public Service Corp. (WPS) share of the coal unit. Cost estimates for the conversion and operating the unit on natural gas were made assuming Edgewater Unit 4 would operate through 2030. But WPL said it needs a resource that can provide both capacity and energy for WPL customers. If Edgewater Unit 4 were converted to natural gas, it would essentially be a capacity-only resource due to its limited potential for energy generation beyond what would be expected from a combustion turbine peaking unit. Also, a 1968 vintage coal unit that has been converted to natural gas has a higher risk of a reliability event than a new natural-gas facility such as the one proposed in the Riverside expansion application. 

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.