Roundtable Panelists: A Balanced Portfolio Is Key

The second day of ELECTRIC POWER began with the event's traditional Executive Roundtable, an always-lively wide-ranging discussion of topics by a panel of five industry thought-leaders. Engaging in this year's roundtable were (photo, from left to right): David Wagman, panel moderator and ELECTRIC POWER content director; Tom Kiernan, CEO of the American Wind Energy Association; Bob Dairymple, TVA's senior VP of coal and gas operations; Cris Eugster, CPS Energy's chief generation and strategy officer; John Ragan, president of NRG Energy's Gulf Coast Region; and Bill Mohl, president of Entergy Wholesale Commodities.

Though panelists touched on a number of pressing industry issues, including natural gas's emergence as a preferred fuel and the possible impact of liquefied natural gas exports on domestic gas prices, they all agreed with varying reasons that cultivating a balanced portfolio will be key to future utility strategies to increase resilience in the face of climate change, and to counter challenges posed by distributed generation.

The TVA's Dairymple stressed that there's a need for all fuel components—for baseload power as well as renewables—but it was critical to make decisions based on resource adequacy and the relative cost of power. Entergy's Mohl agreed, but cautioned that system planners must consider long-term objectives and implications, including costs to customers and larger goals, such as how regions will meet their greenhouse gas goals. "Nobody has taken the big picture into consideration as they've planned these capacity markets," he said.

Renewables had already become a key part of NRG's portfolio mix and that diversification is expected to go a long way to strengthen the company's resilience, said Ragan, echoing Kiernan's statement that "The future is now, renewables are now." Kiernan went on to counter a claim that wind—as well as natural gas—was making nuclear uneconomic, saying his wind industry group is "hugely supportive of the nuclear industry," but wind is poised to continue its stellar growth.

(IMAGE ROUNDTABLE)

The Future of Coal

The "Future of Coal" theme of Track 1 sessions has provided speakers with a chance to share their knowledge and offered many discussion opportunities for conference attendees this week.

How to Keep a Coal Plant in the Money

In today’s electricity markets­—driven by short-term price trends, environmental rules, and competition from low-cost gas—actually making money with a coal-fired generating unit can be a doubtful proposition. That’s particularly true with older plants that are less efficient and have less capital sunk in them.

But the answer may not be to shut these plants down, said Mike Borgstadt of the engineering consulting firm Burns & McDonnell in session 9C: The Future of Coal Plants on Wednesday morning. It may make sense to take those money-losing units out of baseload service and run them seasonally. It turns out that there are times of the year when power prices are high enough for the plant to more than cover costs. And there are times when prices are so low that the plant bleeds dollars.

So, said Borgstadt, take a look at the patterns of when the plant is in the red and in the black. It could turn out to make sense to shut the plant down during those losing months, reaping cost savings in maintenance, fuel, and even human resources, as the workers assigned to the unit that is shut down can be shifted elsewhere.

It’s not a quick and easy fix, he said. It takes analysis, a sharp pencil, and planning not only for how to shut the unit down temporarily but also how to bring it back into service.

Fuel Flexibility Is the Gift That Keeps on Giving

Although Daniel Donochod, fuel flexibility strategy manager for Duke Energy, noted that there aren’t many new coal plants being built, the ones that are still in operation need to be maintained, invested in, and stay competitive. Because fuel cost is such a large part of a power plant’s operating cost, there are big opportunities for plants that have fuel flexibility.

Donochod  (photo) 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.

Lowering fuel costs through fuel diversity isn’t free, however. Senior management needs to be involved because investments are 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 have saved $600 million in fuel costs. Once fuel flexibility is an option, it is the gift that keeps on giving.

For more on fuel flexibility, watch for the May issue of POWER, which will be looking at how circulating fluidized bed boilers offer additional options.

[IMAGE DONOCHOD]

Fast Ramping Demands Better Designs

Increased penetration from intermittent renewable generation is challenging combined cycle plant profitability as increased cycling sends maintenance costs up while lucrative baseload roles are taken by wind and solar. That hardly means all is lost, however, as properly designed plants can ramp quickly and stay profitable by pursuing opportunities in ancillary markets, several speakers explained in Wednesday’s sessions in Track 2.

Omar Rubio of Siemens Energy described two major ramping episodes in Germany and California last year, when multiple gigawatts of renewable generation came off the grid over a short period of time, and grid operators had to ramp up major amounts of conventional generation to replace it. Such episodes will only become more common, and that means a big opportunity for fast-starting combined cycle plants that can meet the need.

Gordon Smith of GE Power & Water discussed two of the main challenges of fast starts: stresses on the heat recovery steam generator (HRSG) and managing NOx emissions. Relatively minor HRSG design changes can minimize thermal stresses and increase steam turbine responsiveness. Meanwhile, predictive modeling to better manage NH3 additions to the SCR can help keep emissions under control even when turbine output is erratic.

Honoring the World’s Top Plants

POWER magazine on Wednesday recognized the 2013 winners of its prestigious Top Plant Awards. If your plant has distinguished itself by innovative design or engineering upgrades, producing power more reliably or economically than comparable plants, or demonstrating a new generation or environmental controls technology, don’t miss the opportunity to see your plant profiled in POWER. The application deadline for 2014 awards is April 30, 2014.

[photo]

Federal Backing for Fossil Fuel Projects

The informative EP Theater continues today on the Exhibit Floor at 10:45 a.m. featuring Entergy’s storm incident commander Greg Grillo, who will reveal how his company plans for disaster preparedness. Wednesday's lineup showcased various topics ranging from natural gas price and supply forecasts, energy procurement in California, NERC compliance audits, and more.

During the Wednesday EP Theater morning session, Douglas Schultz, director of origination at the Department of Energy (DOE), described how the federal agency awards loan guarantees through its Loans Program Office (LPO) to eligible technologies that show innovative commercial potential but have no private financial backers. The DOE is willing to consider even projects that "need 100% lending from us because no other lender is willing to come forward," Schultz said. To date, the agency has disbursed $32 billion to 30 projects under Sections 1703 (nuclear), 1705 (renewables), and advanced technology vehicles manufacturing. Schultz said that almost all these federally financed "first-of-a-kind" projects have been a success: Only 2% of the total amount disbursed proved to be outstanding losses, such as from the bankruptcy of the now-infamous thin-film solar cell maker Solyndra.

And at least $40 billion remains to be disbursed. The $8 billion advanced fossil energy projects solicitation announced this December reopens a 2008 solicitation, which was limited to coal gasification technologies but whose applicants withdrew as natural gas prices fell, Schultz explained. The new fossil energy solicitation seeks to award long-term financing to innovative U.S. projects that can reduce greenhouse gas emissions and have a "reasonable prospect of repayment." These could include projects for coal and gas carbon capture, geologic storage, combined heat and power, waste recovery, and chemical looping or other processes that isolate fuel from air during combustion. The two-part application process is open until 2016.

Show and Tell

Our exhibitors are here because they have valuable services and equipment to share, and they love to talk about them, so we asked a few folks in the booths to tell us how their companies are helping to create a strong future for the power industry. 


223 Siemens: We provide innovative ideas for customer needs, focusing on efficiency and reducing carbon footprints.

522 NAES: We believe in technology which allows us to conduct a better analysis of a project and get critical info out ahead of time.

711 Industrial Info Resources: We connect product and service providers to plants and projects, thus streamlining the process.

801 ZACHRY: We create value through optimizing safety, cost and duration, and reduce resources necessary for our customers.

1140 ABB: Power is our core and we provide automation solutions for plant efficiency as well as for the environment.

824 All Erection & Crane: By investing in new technology and equipment, we save our customers money through efficiency.

IMAGE, caption:

All Erection & Crane is the lobby banner sponsor.

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