Two Colorado Powerplants Moving From Coal to Natural Gas
In an effort to get a jump on pending environmental rules, Colorado regulators in late December approved plans to retire six coal-fired units at two utilities, switch two units from coal to natural gas and build two natural gas-fired powerplants.
Driven by a state law, Minneapolis, Minn.-based Xcel Energy plans to spend about $1 billion by 2017 retiring 591 megawatts, switching 700 MW from coal to natural gas and building a 570-MW gas-fired plant. The utility will also add pollution control equipment at two powerplants. Xcel believes that its plan is less expensive than adding pollution control equipment to all its affected plants.
Under the same law that aims to slash nitrogen oxide emissions, Black Hills Energy, Rapid City, S.D., will retire a 42-MW plant and replace it with a 92-MW gas-fired unit.
The Colorado Public Utilities Commission found the utility plans to be an efficient way to tackle future regulations. “With these decisions, we have taken bold steps to reduce air pollution from powerplants in a way that will be less expensive to consumers than any other course,” PUC Chairman Ron Binz says. “This is vastly preferable to waiting for the Environmental Protection Agency to impose a plan for cleaning up powerplant emissions.”
The Colorado utilities are not alone in making major changes to their powerplant portfolio. In early December, Oregon environmental regulators approved a plan for Portland General Electric to shut its 585-MW coal-fired Boardman, Ore., powerplant by 2020, about 20 years earlier than originally expected. Under the plan, PGE will forego spending about $500 million on pollution control equipment.
And in November, Interstate Power and Light, based in Cedar Rapids, Iowa, says it planned to retire various small, inefficient powerplants totaling about 300 MW, a move that will cut the utility's coal-fired capacity by about 18%. Like most other utilities, IPL does not expect to build new coal-fired plants because of the uncertainty around how greenhouse gas emissions may be regulated.
The shifts in states like Colorado and Oregon are likely the beginning of major changes in utility power plant portfolios. Over the next 25 years, Black & Veatch, an engineering and consulting firm in Overland Park, Kansas, expects utilities to move away from coal-fired generation and toward natural gas, nuclear and renewable resources.
Black & Veatch estimates that by 2035, coal plants will account for about 21% of electric production in the U.S., down from 48% in 2011. Gas-fired generation will jump to 40% of production from 21% next year. Renewable generation will climb from 4% next year to 11% and nuclear power will inch up from 20% to 21% by 2035.
In making its November forecast, Black & Veatch assumed that a greenhouse gas cap-and-trade program would be started by 2016 and that other pending environmental regulations would lead utilities to retire about 54,000 MW of coal-fired plants, mainly in the East.
Besides retiring coal-fired plants and switching others to natural gas, utilities are preparing to launch major pollution control projects, according to Black & Veatch's Andrew Byers, associate vice president for environmental management.
The Environmental Protection Agency is in various stages of developing at least six major rules that will affect powerplants, Byers says. The rules range from the Transport Rule aimed at reducing sulfur dioxide and NOx in 31 Eastern states to once-through cooling affecting powerplants that draw on river, lake and ocean water, he says.
The pending rules will require utilities to add new equipment and make structural changes to existing plants, Byers says. However, because the rules still are unfinished, utilities are in a wait-and-see mode, unable to move ahead with some projects, Byers says.
Once the rules are finished, there could be a major crunch as utilities begin projects. There may not be enough resources like labor, equipment and engineering firms to complete projects in time to meet expected EPA schedules, Byers warned. “There's a great concern in the industry,” he says.
