DTE Electric plans to retire the coal-fired Trenton Channel Unit 7 by April 15, 2016, the compliance deadline under a one-year extension of the federal Mercury and Air Toxics Standards (MATS), said the utility in an annual Power Supply Cost Recovery plan filed Sept. 30 at the Michigan Public Service Commission.
Among the DTE officials providing supporting testimony was John O. Yurko, employed by DTE Electric as a senior technical specialist in the Generation Optimization Organization. DTE Electric is a unit of DTE Energy (NYSE: DTE).
Said Yurko in his testimony: “The total capacity from Company-Owned generation in 2015 is 12,466 MW, which includes the recent purchase of the Renaissance natural gas combustion turbines and expected purchase of the Dean (formerly called East China) natural gas combustion turbines by the Company. From 2015 to 2016 there is a net 98 MW decrease of capacity in the owned DTE Electric generation fleet resulting from the retirement of Trenton Channel Unit 7, which also results in a 40 MW decrease on Trenton Channel Unit 9, partially offset by a Ludington generating capacity increase of 48 MW as the upgrade project continues, with two units projected to be completed in 2016, plus a 4 MW increase in Solar.”
Ludington is a pumped storage hydro facility that DTE Electric co-owns with fellow Michigan utility Consumers Energy. A table attached to his testimony shows Trenton Channel going from a net demonstrated capacity of 630 MW in 2015, to 480 MW in each year of the 206-2020 period. But another table shows Trenton Channel generation as projected to be 2,540 GWh in 2016, falling to 2,055 GWh in 2017, then rebounding to 2,486 GWh in 2018. So apparently the remaining units of the plant will run harder after the shutdown of Unit 7.
Yurko added: “In 2017, the Company is projecting an increase of 124 MW in owned capacity resulting from 50 MW of additional owned wind generation, 50 MW of additional owned solar generation and 24 MW from the Ludington upgrade project. In 2018 and 2019, another 24 MW increase is projected in each year, respectively, from the Ludington project. The additional Ludington capacity in 2019 completes the upgrades of all 6 Ludington units. In 2020, the current projection is to retire both units 2 and 3 of the River Rouge Power Plant as well as the peaking generation at this site, for a total decrease of 551 MW.”
River Rouge 2 and 3 are both coal-fired units.
Yurko noted: “Trenton Channel 7 is forecasted to retire by April 15, 2016. An Attachment Y filing has been submitted to [the Midcontinent ISO] and Trenton Channel 7’s retirement has been approved by MISO. River Rouge 2 and 3 are forecasted to retire by May 31, 2020. An Attachment Y has not yet been submitted to MISO for the River Rouge units as of the filing of this 2016 PSCR Plan in September 2015.”
The table in his testimony shows the River Rouge net demonstrated capacity going from 540 MW in each year of the 2015-2019 period, down to zero in 2020.
Yurko also touched on the expected use of reduced emissions fuel (REF), which is coal treated with chemical additives that help reduce stack emissions during combustion. “DTE Electric expects to utilize REF at Monroe, St Clair, and Belle River Power Plants during the 2016-2020 timeframe on some or all of the units operating at those plants. At Monroe, the Company expects that approximately 99% of all the coal consumed on all the units from 2016-2020 will be treated with REF. At St Clair Units, the Company expects approximately 50% of all the coal consumed at St Clair for 2016-2020 will be treated with REF. At Belle River Power Plant for 2016-2020 the Company expects that 80% of the coal being burned will be treated with REF.”
The big (3,086 MW) Monroe coal plant will run pretty hard over the next five years, with 15,651 GWh of output in 2016, rising to 16,429 GWh in 2017, 16,156 GWh in 2018, 16,079 GWh in 2019 and peaking at 17,011 GWh in 2020.
Ryan C. Pratt, Supervisor of Planning and Procurement within the Fuel Supply department at DTE, said in Sept. 30 testimony: “The Company’s 2016 PSCR plan and five-year forecast again include projections for the use of petroleum coke at DTE Electric’s Monroe Power Plant (MPP)…. Petroleum coke requirements are expected to be met through purchases that are one year or less in duration. Petroleum coke is our lowest cost fossil fuel and will replace higher priced coal thereby reducing the fuel expense for our customers.
“The long-term forecast of coal prices assumes the Company’s continued reliance on lower delivered cost low sulfur western (LSW) coal. For 2016, about 91% of all coal tonnage consumed is projected to be LSW coal. The LSW coal is procured from the Powder River Basin, which is located in southern Montana and northeastern Wyoming. The balance of the Company’s coal is purchased from Central and Northern Appalachia. Coals from this region include mid sulfur eastern (MSE), high sulfur eastern (HSE) and low sulfur southern (LSS).”
60% of Michigan’s coal capacity would be shut by 2030 under Clean Power Plan
Also supplying Sept. 30 supporting testimony about overall fuel matters, including a shift by DTE toward gas-fired generation, was Matthew T. Paul of DTE Electric.
“The Company’s expectation of a fundamental shift from a heavily weighted coal generation fleet to more natural gas fired generation is primarily driven by new environmental regulations,” Paul wrote. “The Environmental Protection Agency (EPA) finalized the first ever national standards to reduce mercury and other toxic air pollution (Mercury and Air Toxics Standards – MATS) from coal and oil-fired power plants. In addition, the EPA finalized its Clean Power Plan (CPP) that includes establishing final emission guidelines for states to follow in developing plans to reduce greenhouse gas (GHG) emissions from existing fossil fuel-fired electric generating units (EGUs). Specifically, the EPA is establishing carbon dioxide (CO2) emission performance rates representing the best system of emission reduction (BSER) for existing fossil fuel-fired EGUs.
“These regulatory developments, along with the planned retirement of a number of coal fired generating units, are causing the currently expected fundamental shift from a heavily weighted coal generation fleet toward lower carbon resources including a substantial increase in natural gas fired generation.
“DTE Electric expects that over the next 15 years, a significant portion of its coal generation fleet will be retired. Based on preliminary analysis of the Clean Power Plan, DTE Electric expects that natural gas combined cycle gas turbine (CCGT) generation will likely be the most economic source of replacement generation. Based on the Clean Power Plan Final Rule, DTE Electric expects to retire more than half of the Company’s coal-fired generation capacity by 2030. DTE Electric’s natural gas requirements are estimated to increase to in excess of 100 Bcf per year as the current long-term plan includes three new CCGTs being built by 2030.
“[A] significant amount of coal-to-gas switching is currently expected to occur throughout Michigan and the MISO region. Driven by environmental regulations, the Company currently expects that 60 percent of the coal-fired capacity in Michigan, representing 30 percent of the state’s total generation capacity, will retire by 2030. MISO is estimating approximately 13 GW of coal-fired generation retirements due to MATS and as much as an additional 28 GW due to the CPP. These retirements are expected to cause a continued MISO capacity reserve margin decline, leading to capacity shortages in Zone 7 (Michigan’s lower-peninsula) by 2016 and shortages across the region as early as 2020.
“Because gas-fired generation is widely considered to be the most economic replacement generation capacity, MISO estimates that nearly 20 GW of new gas-fired generation will be built by 2020. Driven by increased natural gas demand for power generation, total Michigan natural gas demand is currently expected to increase by nearly 20 percent between 2015 and 2025.”