Fuel Flexibility Is the Gift That Keeps Giving

Against the backdrop of low-priced natural gas and increasing renewable capacity, finding ways to stay competitive as operating costs continue to rise at coal-fired power plants is getting increasingly difficult. Fuel flexibility can help keep coal plants in the mix.

All power plants must continually strive to control operating expenses, but it is particularly important for coal-fired facilities to cut costs these days to stay competitive while meeting ever-more-stringent environmental requirements. By some estimates, the addition of a modern air quality control system (AQCS)—including activated carbon injection, selective catalytic reduction, flue gas desulfurization (FGD), and baghouse components—can result in a 50% increase in operating expenses due to the cost of consumables, such as activated carbon, ammonia, and lime, as well as additional labor to operate and maintain the extra equipment.

Worse yet, these estimates don’t take into account catalyst or bag and cage replacements; additional steam, water, and auxiliary power usage; or by-product transport costs. With the additional overhead expenses, finding savings in other areas is imperative. Developing a fuel flexibility strategy is one way some companies have found to save a significant amount of money.

During the ELECTRIC POWER Conference & Exhibition (EP) held in New Orleans this April, Daniel Donochod, PE, fuel flexibility strategy manager for Duke Energy (Figure 1), gave a presentation entitled “Keeping Coal Competitive—Fuel Flexibility.” In it, Donochod explained how Duke Energy has diversified its fuel mix and, in the process, positioned itself for better environmental compliance.

1. Fuel diversification. Daniel Donochod, PE of Duke spoke about fuel flexibility. Source: POWER/Aaron Larson

Duke Energy is the largest electric utility in the U.S., with about $114 billion in assets and roughly 58 GW of generating capacity. Like many companies, its generation portfolio has changed dramatically since 2005. Back then, coal accounted for about 55% of total output, but the company estimates that in 2015 coal will fuel only 38% of its electricity output. During the same period, natural gas–fired generation is expected to increase from 5% to 24%, essentially picking up all of the lost coal generation and more.

Although Donochod noted that there aren’t many new coal plants being considered in the U.S., the ones that are still in operation need to be maintained, invested in, and stay competitive. Because fuel expense is such a large part of a power plant’s operating cost, there are big opportunities for plants that have fuel flexibility. (For more, see “Fuel-Flexible CFBs Add Flexibility to Resource Plans” in the May issue, online at powermag.com.)

The process of moving toward fuel flexibility requires a team effort. It demands station management to be on board to help promote the strategy. Fuel procurement personnel, central engineering, outage and project group members, environmental staff, and perhaps most importantly, operators and production managers must all collaborate for the program to be successful.

Donochod suggested that having a dedicated team that is focused on fuel flexibility is important. “When you have people focus on something, you don’t get them pulled in a bunch of different directions. They’re focused on the mission,” he said.

Every plant is different, but some items that need to be considered when developing a fuel diversity strategy include: fuel-handling systems, potential slagging and fouling concerns, SO3 mitigation capabilities, combustion issues, FGD operation, and wastewater treatment. In some cases, the coal will be drier, resulting in more dust. Chute liners may be necessary to prevent plugging issues. Additives may be needed, such as magnesium hydroxide, to keep the slag friable and improve sootblowing effectiveness. Getting the boiler combustion tuned properly prior to making changes is also very important. A lot of testing is usually necessary, so starting with a good baseline allows easier evaluation of future adjustments.

Blending is also a critical factor for fuel flexibility. “Coal is not coal,” Chuck Renner, inspection and performance testing manager for SGS Minerals Services, said during another coal track breakout session. What he meant by the statement is that there is a great deal of variability in coal from different parts of the country (see sidebar) and world. Even coal from the same mine can vary considerably from one seam to another.

PRBCUG Focuses on Safe Coal Handling

Andy Dobrzanski, Mark Collett, and Dave Markle were among the presenters at the Powder River Basin Coal Users’ Group (PRBCUG) annual conference held Mar. 31 to Apr. 3, 2014, in conjunction with the ELECTRIC POWER Conference in New Orleans.

The PRBCUG provides in-depth presentations and discussions promoting the safe, efficient, and economic use of PRB coals by companies that currently use, or are considering the use of PRB coals. While several speakers mentioned housekeeping’s important role in the safe operation of facilities, other topics were also covered in depth.

One was fly ash–handling systems and PRB coal ash. Dobrzanski, fuel supply manager for DTE Energy’s Monroe Power Station, noted that PRB coal fly ash size is typically finer than bituminous fly ash and normally has very low unburned carbon due to the reactivity of the fuel. The majority of the ash is removed as fly ash—70% to 90% of the total quantity—in a baghouse or electrostatic precipitator.

Although Dobrzanski said that bottom ash systems at Monroe are still wet systems, problems such as the Dan River ash spill are putting pressure on the industry to move toward dry ash systems. “There are different types of systems—hydraulic, mechanical, pneumatic, and vibratory systems—that collect bottom ash dry,” Dobrzanski said. “Those are some of the items that we need to look at going forward to meet the standards that I’m sure will be developed very shortly.”

Mark Collett, director of mining and minerals for River Consulting, discussed electrical standards and area classifications. “There should be an electrical classification drawing for every substation in the plant so you can always look on that and see how an electrical area is classified,” said Collett. “If you don’t know what the classification of the areas of the plant are, there’s something wrong.”

Hot work procedures were also a “hot” topic, but one can’t talk about hot work without discussing fire protection. Duke Energy’s Dave Markle noted that the only guidance that the Occupational Safety and Health Administration provides coal plants is that if they have decided to have a fire protection system, then it must be maintained. “We are responsible for fire protection ourselves,” he said. “There’s no guidance for it, except if you have it, you maintain it.” In other words, just like so many things, “It’s up to us!”

With that in mind, the primary objective of blending is to mix the coal to maximize uniformity. Producing the desired blend requires accurate information about coal quality and proper control of the proportions blended. “You can’t control what you don’t measure,” said Renner. “A competent quality assurance plan includes verification of sampling, analysis and weighing equipment, and methods.”

In order to achieve consistent results, representative samples and precise analysis are required. Acceptable blending can result in increased profits. Renner noted that one plant—burning three million tons of coal per year—was successful in blending 10% of a much less expensive product, which saved the company $3 million.

Lowering fuel costs through fuel diversity isn’t usually free, however. Senior management needs to be involved because investments are often required. Donochod said, “Try to get your funding separate from your maintenance capital. Don’t get into a dogfight with maintenance capital, because you’ll never win. Strategic projects need to have their own bucket.”

In the end though, the investment can pay off. From January 2012 through February 2014, Duke Energy’s Carolina stations saved $160 million in fuel costs. Once the investment has been made and fuel flexibility is an option, it is the gift that keeps on giving. ■

Aaron Larson is a POWER associate editor (@AaronL_Power, @POWERmagazine).