Talen Energy (NYSE: TLN), which took over the unregulated power plants of PPL Corp. at the beginning of June, is following through on a PPL plan to add natural gas firing “dual fuel” capability at the big Brunner Island coal plant in Pennsylvania.
In the slides for its Aug. 11 earnings call, Talen said it plans to install natural gas firing capability on all three Brunner Island generating units. This plant is located near the Marcellus/Utica shale gas-producing region, which provides a significant spark spread margin opportunity. The plan is to retain the current 100% coal firing capabilities.
Boiler modifications will allow use of either coal or gas, or combinations of the two, Talen added. There will be the flexibility to seamlessly change fuel blend during operation. This enhances the station’s risk/reward profile relative to PJM Interconnection’s Capacity Performance product.
Key aspects of the duel fuel project include:
- construction of a three-mile-long pipeline from the existing Texas Eastern Pipeline to the plant; and
- modification of existing oil-fired duct burners and igniters to also burn natural gas.
The total estimated cost is less than $110 million, with $6 million spent to date. The project completion is projected by the end of 2016.
GenerationHub had reported in September 2014 that PPL was permitting this gas-firing capability at Brunner Island, a 1,411-MW plant.
The earnings slides also mention plans for operation and maintenance improvements in the 2016-2017 period at the coal-fired Keystone and Conemaugh plants in Pennsylvania, which for many years have been co-owned by a changing mix of utilities and independent power companies. Said the slides about the project costs savings from these changes: “Improvement is reflective of Talen Energy’s ownership percentages in the facilities (16.25% of Conemaugh and 12.34% of Keystone). High case assumes collaboration of joint ownership to reduce plant operating costs to level comparable with the Montour facility. Low case assumes no improvement achieved.” Montour is another coal plant in Pennsylvania that had been owned by PPL and is now controlled by Talen.
The slides also show that the Talen coal plants in PJM, which include the ones mentioned here, haven’t been running all that hard lately. In the first half of this year, they ran at an average capacity factor of 47%, down from 57.9% in the first half of 2014. In the second quarter of this year, the average capacity factor for the PJM coal plants was a very weak 33%, compared to 46% in the first quarter of 2014. Some of the drop in both second quarter periods is due to the fact that the second quarter includes the “shoulder” spring months when power generation is between its winter and summer peaks. But comparing the second quarter figures from each year shows a very weak 2015 for the coal plants.