That question isn’t as flippant as it may sound. If you look at the type of plant that’s familiar to the generation of power industry personnel who have retirement within view and compare it with the sort of facilities the incoming generation of workers will be operating, you might be surprised.
It’s not just a matter of more digitized and remotely monitored power plant systems. The new definition of a fossil plant is likely to include everything from plants whose main function is something other than power generation to those whose fuel source can switch from coal to gas to biomass to hydrogen.
Power plants produce power. That would seem self-evident, but it’s no longer universally true. As our cover story on the AES Huntington Beach plant demonstrates, a formerly conventional gas-fired plant can step into an entirely new role (with relatively little prep time)—operating synchronous condensers to support less-predictable clean energy sources on the grid.
Polygeneration—the production of saleable byproducts in addition to electricity—is another scenario for a vastly different sort of fossil-fired plant, as explained in “Is Polygeneration the Future for Clean Coal?” Even without polygeneration, generators are exploring their options for revenue-generating byproducts (see “Converting Sulfur from Flue Gas into Fertilizer”).
A major advantage of gas-fired generation is its greater operating flexibility, compared with coal units. But it’s not just gas plants that are being called on to operate more flexibly these days. (This won’t be news to those of you who have already been forced to cycle coal plants in response to low capacity margins and high wind integration.) Our Global Monitor story “The Advent of Flexible Coal” looks at how, with minimal equipment modifications but more significant changes in operational practices, formerly baseload generating plants can add value in an energy system that is more dynamic from points of generation to points of electricity use. In fact, in Germany, where new coal-fired plants are being built along with renewable generation, baseload designs are out; flexibility is in.
Yes, there is a cost to this new way of operating, but there’s one sort of cost or another to every energy mix. For reliability, fuel-hedging, and other reasons, flexible operation may be just the ticket for life-extension of U.S. coal plants “on the bubble” for retirement.
Then there are plants that can fuel-switch or cofire multiple fuels, as you’ve seen in previous issues of POWER. Why would anyone (at least in the U.S.) consider modifications to enable fuel switching when there’s an abundance of shale gas? Anyone who has watched natural gas prices this winter can answer that.
The Costs of Overreliance on Gas
Remember the fevered excitement over U.S. shale gas reserves and the widespread predictions of low natural gas prices as far as the eye can see? Well, the markets didn’t get that memo. Natural gas futures prices hit a four-year high in January. Then, on Feb. 6 in the cash market, Henry Hub gas for next-day delivery traded as high as $9/MMBtu—higher than any time since August 2008—and closed at $7.18. Multiple rounds with the Polar Vortex can be blamed, but this isn’t the first cold winter in U.S. history, and it won’t be the last. Companies building new capacity with an eye on long planning horizons and long asset life spans, as well as politicians and regulators influencing the mix of new capacity, should be able to understand that simple fact.
Though analysts worried that a surge of production would exhaust natural gas storage capacity in 2013, the U.S. Energy Information Administration (EIA) reported that weather-related record high withdrawals from storage early in 2014 have led to record low storage levels. As a result, the EIA said, “working gas levels in the Lower 48 states fell below the minimum storage level for the same week in the previous 5-years for the first time since EIA started reporting the statistic in 2004.”
The East has felt the cold and the supply pinch the worst. When PJM asked customers in southwestern Pennsylvania to conserve electricity during the mid-January deep freeze because it was worried about being able to meet demand, Pittsburgh media reported that some citizens and lawmakers were wondering if PJM, which had promised reliability would not be jeopardized by shuttering two coal-fired power plants last fall, acted too hastily in that decision. I’m not about to adjudicate that decision, but we may be reaching the point where public utility commissions and federal regulators need to switch up their games to ensure that fossil plants are not unduly penalized in the market or by compliance requirements for providing flexible service.
Does Coal Have a Future?
Yes, coal-fired generation has a future, but it won’t look like its past. It will be different worldwide for a host of reasons, from the need to manage water resources more efficiently, to compliance with emissions requirements, to a new generation of workers who expect a technology assist in virtually every daily activity—from tooth brushing to banking to boiler operation.
Adapting to new modes of operation won’t always be easy, but there are opportunities for new businesses and for smart, flexible companies to reshape the future of fossil generation. ■
— Gail Reitenbach, PhD is editor of POWER. Follow her @GailReit and the editorial team @POWERmagazine.