Duke Energy Indiana told the Indiana Utility Regulatory Commission in the Nov. 2 filing of its latest 20-year integrated resource plan (IRP) that it has modeled a number of scenarios related to complying with the U.S. Environmental Protection Agency’s newly-final Clean Power Plan, though it already plans to retire a significant amount of coal-fired capacity for other reasons.
This Duke Energy (NYSE: DUK) subsidiary is Indiana’s largest electric utility, serving approximately 800,000 electric customers in 69 of Indiana’s 92 counties. Its service area spans 22,000 square miles and includes Bloomington, Terre Haute, and Lafayette, and suburban areas near Indianapolis, Louisville, Ky., and Cincinnati, Ohio. The IRP is dated Nov. 1 and was filed with the commission the next day.
Based on its superior performance in scenario and sensitivity analyses, the Carbon Tax Portfolio with Additional CC was selected by Duke Energy Indiana as the preferred resource plan. This portfolio stands out due its combination of relatively low cost with lower exposure to market risk. Also, it enables the transition to a generating portfolio that has the flexibility to either comply with the final Clean Power Plan (CPP) rule for greenhouse gas reductions or perform well without carbon regulation.
The Carbon Tax Portfolio with Additional CC retires the coal-fired Wabash River units 2-6, oil fired combustion turbine (CT) generation and the coal-fired Gallagher units 2 and 4, while adding resources like combined heat and power, energy efficiency, solar, biomass and combined cycle (CC) resources. Over the longer term, this portfolio can add more renewable and CC generation if carbon regulation remains in force. If carbon regulation is repealed, this portfolio can make additions of more traditional generation (primarily gas turbine technology) to minimize customer costs.
The total installed net summer generation capability owned or purchased by Duke Energy Indiana is currently 7,507 MW. This capacity consists of 4,765 MW of coal-fired steam capacity, 595 MW of syngas/natural gas combined cycle capacity (Edwardsport IGCC), 285 MW of natural gas-fired CC capacity, 45 MW of hydroelectric capacity and 1,804 MW of natural gas-fired or oil-fired peaking capacity. Also included is a power purchase agreement with Benton County Wind Farm (100 MW, with a 13 MW contribution to peak modeled).
The coal-fired steam capacity consists of 14 units at four stations – Gibson, Cayuga, Gallagher and Wabash River. The syngas/natural combined cycle capacity is comprised of two syngas/natural gas-fired combustion turbines and one steam turbine at the Edwardsport Integrated Gasification Combined Cycle (IGCC) station. The CC capacity consists of a single unit comprised of three natural gas-fired combustion turbines and two steam turbines at the Noblesville Station. The hydroelectric generation is a run-of-river facility with three units at Markland on the Ohio River. The peaking capacity consists of seven oil-fired diesels at the Cayuga and Wabash River stations, seven oil-fired CT units at Connersville and Miami-Wabash, and 24 natural gas-fired CTs at five stations (Cayuga, Henry County, Madison, Vermillion, and Wheatland). One of these natural gas-fired units has oil back-up.
Under the preferred scenario, the planned retirements by year are:
- 2016 – Wabash River Units 2-6, 668 MW, coal, possible conversion of Unit 6 to natural gas instead;
- 2018 – Connersville Units 1-2 CTs, 86 MW; and Miami-Wabash, Units 1-3, Units 5-6 CTs, 80 MW;
- 2019 – Gallagher Units 2 and 4, coal, 280 MW; and
- 2031 – Gibson Unit 5, coal, 310 MW.
This is a total of 1,424 MW of retirements out to 2035, the end of the IRP forecast period.
On the addition side of that preferred portfolio is a total of 290 MW of solar additions over the 20-year period, scattered in increments of 10 MW to 30 MW in various years of the period. There is also a total of 450 MW of wind, with yearly additions in the 2022-2029 period (except for 2025), and one 50-MW addition in 2035, but no other years outside of that.
Also to be added by year (total of 1,119 MW), at unspecified locations, are:
- 2020 – Combined Cycle, 448 MW; and Cogen, 15 MW;
- 2031 – Combined Cycle, 448 MW; and
- 2033 – Combustion Turbine, 208 MW.
Although there is not currently an Indiana or federal renewable energy portfolio standard (REPS), the company believes it is prudent to plan for one. The carbon regulation scenarios initiate a REPS in 2020, with a minimum of 5% by 2030. A small percentage of solar projects were accelerated in the 2016 to 2020 timeframe for installation and operation knowledge, which would enable access to any early reduction credits included in the final CPP.
The largest units for the utility are the five Gibson coal units at approximately 620-630 net MW each, and the two Cayuga coal units at approximately 500 MW each. The smallest coal-fired units on the system are three 85-MW Wabash River units. The peaking units range in size from 2-3 MW oil-fired internal combustion units at Wabash River and Cayuga to 115 MW natural gas-fired CTs at Wheatland.
Some coal units already headed into history due to MATS rule
Analyses performed in the 2011 IRP and in Duke Energy Indiana’s Mercury and Air Toxics Standards (MATS) rule Phase 2 Compliance Plan showed that retirement of Wabash River units 2-5 was more economical than retrofitting these units to comply with MATS. The assumed retirement date in the 2013 IRP was the MATS compliance date of April 16, 2015. But the utility got a one-year extension deadline due to transmission system reliability issues identified by the Midcontinent ISO due to the retirements of units 2-5. MISO’s study determined that unit 6 was an essential unit that must operate to support the transmission grid in the local Terre Haute area if units 2 through 5 are no longer available. It also found that a new high voltage transmission line must be constructed to resolve these transmission reliability issues and relieve unit 6 of its essential status. The construction of this line could not have been completed by the MATS compliance date. Duke Energy Indiana currently estimates that the project could be completed in 2016, hence the need for the MATS extensions.
Wabash River unit 6 continues to be evaluated for natural gas conversion and no decision been made. Duke Energy Indiana said it is currently investing in preliminary engineering necessary to support a conversion of Wabash River unit 6 from coal-fired to gas-fired, but is planning to further assess the economics of proceeding with conversion to natural gas under the final EPA Clean Power Plan rule.
Duke Energy Indiana has completed the installation of NOx-reducing selective catalytic reduction (SCR) systems on the two units at Cayuga Station, which will aid in effective capture of mercury in the existing flue gas desulfurization systems by enhancing mercury oxidation. In addition to the SCRs, calcium bromide systems are being tested at Cayuga to help further enhance mercury oxidation. The Cayuga units are already equipped with wet scrubbers for SO2 reduction, which also result in reduction of emissions of other acid gases regulated under MATS. Finally, systems for prevention of re-emission of mercury captured in the scrubbers have also been installed at Cayuga for both units.
Gibson Station Units 1 through 5 are all equipped with SCRs, wet scrubbers, calcium bromide systems and mercury re-emission prevention systems. Precipitator refurbishment projects for Units 3 and 4 are complete, and Unit 5 is scheduled for the fall of 2015.
The Gallagher units are well equipped for MATS rule compliance, with existing fabric filters for particulate control, as well as hydrated lime injection for SO2 and acid gas control.