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                                                                                                                            Energy
                                                                                                                           Procedia
                                                     Energy Procedia 100 (2008) 000–000
                                                     Energy Procedia (2009) 4347–4354
                                                                                                                   www.elsevier.com/locate/XXX
                                                                                                                  www.elsevier.com/locate/procedia



                                                                  GHGT-9

    Evaluating options for U.S. coal fired power plants in the face of
       uncertainties and greenhouse gas caps: the economics of
               refurbishing, retrofitting, and repowering.
                                         Rodney Geisbrecht* and Phil Dipietro
                                       U. S. Department of Energy, Pittsburgh, Pennsylvania, 15236 USA

                                   Elsevier use only: Received date here; revised date here; accepted date here




Abstract

Facing a cost for emitting carbon dioxide, U.S. entities that own coal-fired power plants have a number of options to pursue as
alternatives to retiring the plant and investing in a new one with lower carbon emissions. These include: (1) continuing to operate
business as usual and obtaining emission allowances as needed, (2) switching to or cofiring low carbon fuels, (3) retrofitting with
carbon capture and sequestration (CCS), (4) repowering with an advanced coal technology incorporating CCS, and (5)
refurbishing to improve plant efficiency in combination with any of the previous options. Markets for refurbishing, retrofitting,
and repowering were assessed using data bases of existing coal fired power plants along with the Energy Information
Administration’s (EIA) National Energy Modeling System (NEMS) code, which was modified to undertake an integrated
analysis of how retrofit and repowering options would compete with other options for managing the fleet of coal fired power
plants. Sensitivities with respect to key uncertainties are presented, including carbon values, natural gas prices, CCS incentives,
and system-wide cost effectiveness of refurbishing in conjunction with retrofitting or repowering.

The indicated market for coal fired power plants that could be retrofitted with near commercial CCS technology under carbon
cost scenarios ranging from 45 - 60 $/MTCO2e (metric ton CO2 equivalent) is on the order of 100 GW. A similar market is
apparent for repowering, but with technologies that are as yet not commercialized. Below 30 $/MTCO2e, CCS technologies
would not deploy without incentives. While refurbishing can extend the market for either retrofitting or repowering, its impact
will depend on the extent to which efficiency as well as other cost related factors can be collectively upgraded.
© 2009 Elsevier Ltd. All rights reserved.
c 2008 Elsevier Ltd. All rights reserved

Carbon Capture and Sequestration; Coal Fired Power Plants, Retrofitting; Repowering; Refurbishing; National Energy Modeling System.




1. Introduction

   Disposition of existing coal-fired power plants is a major issue in strategies to cap the emissions of greenhouse
gases in global climate change scenarios. In scenarios where emissions are severely capped by a carbon emission
allowance price (as set by carbon caps or carbon taxes), options for continuing to operate as a coal fired power plant


   * Corresponding author. Tel.: +0-412-386-4870; fax: +0-412-386-4604.
   E-mail address: rgeisb@netl.doe.gov.
doi:10.1016/j.egypro.2009.02.248
4348                           R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354
                                        Author name / Energy Energy Procedia 1 000–000

(CFPP) are: (1) retrofitting, (2) repowering, and (3) refurbishment in combination with either of the previous. The
preferred option for any given plant is expected to depend on a plant’s characteristics such as its age, configuration
with respect to other emission controls, heat rate, capacity, dispatch, and site specific factors. An integrated system-
wide assessment of these options requires a plant level description of the fleet. The National Energy Modeling
System (NEMS) of the Energy Information Administration (EIA) is an integrated assessment tool which
incorporates a plant level data base, but modifications were required to extend the standard retrofitting model in
NEMS from a 3-P (three pollutant—sulfur oxides, nitrogen oxides, and mercury) to a 4-P formulation (the fourth
pollutant being carbon dioxide). From a modeling perspective, the logic required to allow for refurbishing,
retrofitting, or repowering in NEMS is similar, so the modifications enabled a consistent framework for the
endogenous competition of these options taking into account important associated penalties in capacity and heat
rate. Using this extended form of NEMS and generic factors for cost and performance of refurbishing, retrofitting,
and repowering as a function of plant characteristics such as heat rate, exploratory assessments were undertaken on
how these options could compete with the “standard” options: purchase of emission allowances (status quo),
retirement (investment in a new plant), and fuel switching (lower carbon fuels).

2. NEMS extension from 3-P to 4-P formulation

   NEMS modifications can be confined to a single program file (UECP.F) and a single input file
(EMMCNTL.TXT). The revised files run “seamlessly” in the background without affecting NEMS scenarios where
CCS is not a factor, automatically engaging only when carbon values are sufficient to support CCS [1]. The files are
readily swapped into archived NEMS files, available from the EIA [2].

2.1. Plant configurations, retrofit options, and retrofit rules

   NEMS characterizes coal fired power plant configurations by indexes to indicate which emission controls are
currently installed. An unused configuration index (“SC”) was adapted to indicate an installed CCS retrofit, which
required specification of new retrofit options and plant configurations. To limit the combination of configurations to
a practical subset, a “retrofit rule,” was adopted. Two retrofit rules were examined. The simpler G1 rule restricts
CCS retrofit to plants already in complete 3-P configuration. G1 requires only 1 additional retrofit option (addition
of the CO2 retrofit). G2 allows for CCS retrofit to any plant as long as the missing 3-P components are added as
well, but this rule requires 24 additional retrofit options. Twelve new plant configurations, reflecting complete 4-P
configurations, were required with either the G1 or G2 rule. As part of the rationale for G1 and G2, at least some
measure of advanced sulfur control is generally necessary in solvent-based process designs for CO2 capture. Results
presented herein were all developed using the G2 rule.

2.2. Heat rate and capacity penalties

   Heat rate and capacity penalties are major cost considerations in retrofitting or repowering for CCS. Since
NEMS is designed to endogenously model energy supply and demand, including electricity, it is important to
explicitly express these penalties in NEMS for a consistent determination of their effective costs. To do so required
modifications at certain points in the NEMS code where linear program coefficients are calculated to account for
capacity, fuel consumption, and emissions as a function of capacity retrofitted.

3. Generic process models

  This paper focuses on an exploratory NEMS-based assessment of retrofitting. Brief descriptions of repowering
and refurbishing studies are included for completeness, but details will be presented elsewhere when finalized.

3.1. Retrofitting

   The envisioned retrofitting process uses an advanced solvent for post combustion capture (i.e. flue gas
scrubbing). A generic cost representation is assumed valid across the fleet, without consideration of site specific
R. Geisbrecht, P. Dipietro / Energy Procedia 1 (2009) 4347–4354                                     4349
                                                                           Author name / Energy Procedia 00 (2008) 000–000




                                         Capital Cost and Capacity Derating
                                                                                                                      $4/MTCO2e from a recently completed baseline
                                                  Capital        Derating                                             study for fossil energy plants [4].
                        1.50                                                              0.35

                        1.25                                                              0.30                           Cost data from the NETL study of the Conesville
                                                                                                                      plant were restated in two important respects for use
   MM 2006_$/ tph CO2




                                                                                          0.25
                        1.00
                                                                                          0.20                        as a generic model in NEMS. First, costs were stated




                                                                                                  kw/kw
                        0.75
                                                                                          0.15                        per unit of CO2 removed, which relates generically to
                        0.50
                                                                                          0.10                        a plant’s heat rate for a given CO2 removal level.
                        0.25                                                              0.05                        Secondly, capacity and heat rate penalties were
                        0.00                                                              0.00                        expressed explicitly to integrate with the capacity
                               30   40      50          60              70    80     90
                                           CO2 Removal Level, Percent                                                 planning and fuel supply models in NEMS. A key
                                                                                                                      objective of the Conesville study was to assess CO2
                                                                                                                      removal costs over the range of 30 percent to 90
 Figure 1. A minor generic dependency of capacity derating on                                                         percent removal, as shown in Figures 1 – 2. The
 heat rate is not shown here.
                                                                                                                      capacity derating factor, or capacity penalty, arises
                                                                                                                      from steam extraction for solvent regeneration and
                                           Variable O&M and Fixed O&M
                                                                                                                      power consumption for CO2 compression. Since
                                                     VOM         FOM
                                                                                                                      boiler firing is unchanged in the underlying
                        8.00                                                               1.40

                        7.00
                                                                                                                      retrofitting process design, heat rate and capacity
                                                                                           1.20

                        6.00
                                                                                                                      penalties are coupled:
                                                                                                  2006_$/hr/tph CO2




                                                                                           1.00
   2006_$/ton CO2




                        5.00
                                                                                           0.80
                        4.00                                                                                            Final Heat Rate = Original Heat Rate          / (1 –
                                                                                           0.60
                        3.00                                                                                          Capacity Derating Factor)
                                                                                           0.40
                        2.00

                        1.00                                                               0.20
                                                                                                                      3.2. Repowering
                        0.00                                                               0.00
                               30   40       50             60          70    80      90
                                           CO2 Removal Level, Percent
                                                                                                                         In an assessment of repowering yet to be
                                                                                                                      completed, oxyfuel combustion repowering is being
 Figure 2. O&M is dominated by variable O&M.                                                                          compared to solvent based retrofitting. Oxyfuel
                                                                                                                      combustion repowering is a well known alternative to
factors. A recent NETL study of an advanced amine                                                                     solvent based retrofitting, and differences are being
process retrofitted into Unit 5 of American Electric                                                                  assessed with respect to incremental costs and their
Power’s (AEP) Conesville, Ohio plant undertaken by                                                                    dependencies on plant factors, including required 3-P
NETL in conjunction with Alstom Power was used as                                                                     controls and their associated costs. In the retrofitting
a basis for the cost data for capture [3]. This plant                                                                 study, 3-P control requirements relating to protection
was selected because it serves as an accurate                                                                         against solvent degradation were provisionally
representation of existing coal-fired power plants that                                                               addressed through the G2 retrofit rule. Modifications
may be candidates for CCS retrofitting. Unit 5 is a                                                                   to the G2 rule may be appropriate for oxyfuel
450 MW, pulverized coal-fired, subcritical pressure                                                                   combustion repowering.
steam plant with a 9,749 Btu/kWh (HHV) heat rate,
flue gas desulfurization, and a boiler in-service date                                                                3.2.1.   Brownfield repowering
of November 1, 1976. Post-capture costs, including
CO2 transportation, injection, and MMV are                                                                               From a modeling standpoint, brownfield
additional, with an assumed generic value of                                                                          repowering is different from retrofitting or
                                                                                                                      conventional repowering in that cost and
4350                           R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354
                                        Author name / Energy Energy Procedia 1 000–000

performance factors for the repowered plant are                                                          CCS Retrofits
effectively decoupled from those of the original
                                                                             180
plant. In an exploratory study not presented in this                         160
paper [5], assumptions were made for the degree to                           140
which investment in a new coal fired plant would be                          120
reduced if installed on a site with an existing coal                         100                                                             60_90




                                                                        GW
fired power plant (brownfield capital factor), and the                        80
                                                                                                                                             45_90
                                                                                                                                             30_90
repowering process was assumed to be an integrated                            60

gasification combined cycle (IGCC) with CCS, using                            40

DOE R&D program goals for cost, performance, and                              20

commercial availability. R&D risks and uncertainties                           0
                                                                               2005       2010    2015          2020       2025       2030
in usage of a generic brownfield capital factor (it’s
magnitude and suitability, or lack thereof, for
competing non-coal technologies) blur the distinction                 Figure 3. A need to model sustainable deployment rates is
between brownfield repowering and new capacity                        suggested by retrofit rates as high as 50 GW per year in the 60
                                                                      $/MTCO2e case.
builds which effectively replace retired capacity (i.e.
“greenfield” repowering). Nonetheless, a brownfield                                                Coal Capacity Retirements

capital factor of 15 percent resulted in substantial                          250
repowering by the envisioned IGCC with CCS
technology. The subset of the fleet for brownfield                            200

repowering is generally expected to be different from                                                                                          60_90
                                                                              150                                                              60_00
that for retrofitting since they should exist on                                                                                               45_90
                                                                         GW




opposite ends of the spectrum with respect to heat                            100
                                                                                                                                               45_00
                                                                                                                                               30_90
rate and economic viability.                                                                                                                   30_00

                                                                               50

3.3. Refurbishing
                                                                                   0
                                                                                   2005    2010    2015          2020          2025   2030

    As an indicator of the load of CO2 to be captured
and sequestered per unit of power produced, heat rate
                                                                       Figure 4. Coal capacity retirements, the sum of plant retirements
is an important plant factor governing the economic
                                                                       and capacity deratings from retrofits, are reduced by the retrofit
viability of retrofitting or repowering. Lower profit                  option at high carbon taxes.
margins and dispatch rates, generally associated with
high heat rate plants, would further erode the viability              factors that may be equally important, such as
of retrofitting or repowering. Most plants are likely                 dispatch rate and existing emission controls.
to have heat rates above a nominal limit for
retrofitting or repowering, generally expected to be                  4. Carbon tax runs (AEO2007 side cases)
about 10,000 Btu/KWh. Some of these plants could
be a target for refurbishment, whereby various cost                      A series of runs were completed to examine the
and performance factors are upgraded. Principle                       impact of the retrofitting option at various carbon
among these factors would be heat rate [6]. This                      taxes. Carbon tax side cases of the AEO2007 were
paper presents an exploratory NEMS based                              used with the tax starting in 2015 and ramping up to a
assessment of refurbishing in conjunction with                        constant level by 2020. The extent of retrofitting in
retrofitting, based on the assumption that heat rates of              the fleet depended strongly on the carbon tax. As
all plants could be reduced to a generic value, varied                shown in Figure 3, 45 $/MTCO2e acted as a
over the range 7 – 10,000 Btu/KWh, with negligible                    threshold for retrofitting, below which it was
incremental costs relative to those for retrofitting.                 preferable to purchase emission allowances (legend
Obviously, the cost effectiveness of refurbishing is                  entries of the type 30_90 signify 30 $/MTCO2e and
plant specific, depending upon such factors as a                      90 percent CO2 removal). Coal plant retirements,
plant’s age, and simple refurbishing based solely on                  builds of nuclear plants, and utility CO2 emissions
heat rate excludes other plant cost and performance                   reflected the adoption of retrofitting.
R. Geisbrecht, P.name / Energy Procedia 00 1 (2009) 4347–4354
                                                                 Author Dipietro / Energy Procedia (2008) 000–000                                        4351

                                          Nuclear Builds                                     emissions reductions over time was somewhat
               400
                                                                                             dependent on the tax level. Since retrofits could act
               350
                                                                                             to offset the purchase of emission allowances at
               300
                                                                                             lower taxes and the retirement of coal plants at higher
               250
                                                                              60_90          taxes, the impact on CO2 emissions could be
                                                                              60_00
                                                                              45_90          different. At 45 $/MTCO2e and 60 $/MTCO2e,
  GW




               200
                                                                              45_00
                                                                              30_90
                                                                                             utility emissions in 2030 were about 70 to 85 percent
               150
                                                                              30_00          below those in 2005, respectively, levels ordinarily
               100
                                                                                             associated with extensive retirement of coal plants
                50
                                                                                             and deployment of carbon neutral technologies.
                 0
                 2005       2010   2015          2020        2025    2030                    Retrofitting thus functioned largely as an alternative
                                                                                             pathway to reduced emissions at high tax levels.
Figure 5. Build requirements for new carbon neutral capacity, like
                                                                                             5. Carbon cap runs (AEO2008 side cases)
nuclear, are less severe at high carbon taxes with the retrofit option.

                                                                                                A series of runs were completed to examine the
   Coal capacity retirements in Figure 4 include both
                                                                                             impact of the retrofitting option in the Lieberman-
capacity deratings of retrofitted plants and actual
                                                                                             Warner Climate Security Act (S.2191), which
plant retirements.     At 45 $/MTCO2e, capacity
                                                                                             includes a complex set of incentives, including one
deratings through 2030 were 30 GW, corresponding
                                                                                             targeted to CCS. The AEO2008/S2191 side case
to the 30 percent derating factor for the 90 percent
                                                                                             developed by the EIA was used as a basis. The
CO2 removal levels used in this study. At 60
                                                                                             resultant carbon emission allowance price track was
$/MTCO2e, capacity deratings increased to about 50
                                                                                             about 5 to 10 percent higher with the retrofitting
GW. Factoring in these deratings, 128 GW of actual
                                                                                             option. As shown in Figure 7, about 120 GW of
plant retirements were avoided at 45 $/MTCO2e,
                                                                                             retrofits through 2030 reduced the need for builds of
while 149 GW were avoided at 60 $/MTCO2e.
                                                                                             nuclear and renewables by about 55 and 15 GW,
                                                                                             respectively; noteworthy given the questionable
   As shown in Figure 5, projected builds of nuclear
                                                                                             feasibility of projected nuclear and renewables builds
fell by about 100 GW with the retrofit option at the
                                                                                             in the reference case of roughly 250 GW and 100
higher tax levels where significant emissions
                                                                                             GW, respectively, over 15 years. Coal and oil/gas
reductions are achieved but which require builds of
                                                                                             capacity increased by about 40 and 30 GW,
nuclear in excess of 350 GW over a 15 year period, a
                                                                                             respectively, the latter primarily due to builds of
level whose feasibility is open to question (roughly 2
                                                                                             natural gas combined cycles with CCS.
GW of nuclear builds every month for 15 years).
                                                                                             6. Sensitivities and uncertainties
           As shown in Figure 6, the impact on CO2
                                     Utility CO2 Emissions                                                        Capacities w/wo CCS Retrofits

               3000                                                                               500

                                                                                                  450
               2500
                                                                                                  400                                                    ccs retrofits
                                                                                                                                                         coal 3P
                                                                              60_90               350
               2000                                                                                                                                      coal 4P
  MMmTCO2e/Y




                                                                              60_00               300
                                                                                                                                                         nuclear 3P
                                                                              45_90
                                                                                             GW




               1500                                                                               250                                                    nuclear 4P
                                                                              45_00
                                                                                                  200                                                    renew 3P
                                                                              30_90
               1000                                                                                                                                      renew 4P
                                                                              30_00               150
                                                                                                                                                         oil/gas 3P
                                                                                                  100                                                    oil/gas 4P
                500
                                                                                                  50

                     0                                                                              0
                     2005   2010   2015          2020        2025    2030                           2005   2010   2015       2020        2025     2030




Figure 6. The retrofit option at 90 percent CO2 removal essentially                         Figure 7. Legend entries 4P and 3P designate with and without the
offers a complementary pathway to reduced emissions.                                        retrofit option, respectively.
4352                                      R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354
                                                       Author name / Energy Energy Procedia 1 000–000


                                 CCS Retrofits                                       high gas prices. The sensitivity to uncertainties
       300
                                                                                     surrounding gas prices points up the general problem
                                                                                     of using an AEO reference case based on business as
       250
                                                                                     usual assumptions that may be inappropriate for high
       200                                                          60_90_0          carbon value scenarios, especially those related to the
                                                                    60_90_5
                                                                    45_90_0          role and price of natural gas and the cost and
  GW




       150
                                                                    45_90_5
                                                                    30_90_0
                                                                                     elasticity of supply of new carbon neutral
       100
                                                                    30_90_5          technologies like nuclear.
        50

                                                                                     6.2. Refurbishing
         0
         2005   2010      2015        2020       2025     2030

                                                                                        Figure 9 shows the impact of simple
                                                                                     refurbishments based solely on heat rate for the
Figure 8. Retrofits are increased by higher gas prices, but only at
high carbon emission allowance prices.
                                                                                     limiting case of negligible incremental costs (legend
                                                                                     entry RHR designates the final heat rate of the
                                                                                     refurbished plant, before retrofitting). Negligible
                       CCS Retrofits (45 $/mTCO2e Case)
                                                                                     retrofits were added by refurbishing to 10,000
       250
                                                                                     Btu/KWh, but about 20 GW and 110 GW were added
       200
                                                                                     when the refurbishment option was extended to 9,000
                                                                                     and 7,000 Btu/KWh, respectively. Considering the
       150
                                                                   baseline
                                                                                     likely technical and economic challenges of
                                                                                     upgrading plants to heat rates below 10,000
  GW




                                                                   RHR = 9K
                                                                   RHR = 7K
       100
                                                                                     Btu/KWh, the potential for cost effective
        50
                                                                                     refurbishment in conjunction with retrofitting would
                                                                                     appear to depend on the possibility of upgrading
         0                                                                           additional plant cost and performance factors.
         2005   2010      2015        2020        2025    2030


                                                                                     6.3. CCS bonus incentives
Figure 9. Legend entry “RHR” designates heat rate to
which all plants can be refurbished prior to a retrofit.
                                                                                        Climate change legislative proposals often include
                                                                                     a package of incentives for CCS. The Lieberman-
6.1. Gas prices                                                                      Warner Climate Security Act of 2007 (S.2191)
                                                                                     includes a CCS bonus allowance, which prescribes a
   An important uncertainty in this study was the                                    rate of emission allowances earned for each unit of
price of natural gas, a preferred lower carbon content
fuel in many carbon control scenarios [7]. Many                                                            New Coal Builds and CCS Retrofits

analysts believe globalization of the gas market will                                      140

make projections of gas prices inherently risky, and                                       120
some analysts believe NEMS consistently under                                              100
predicts natural gas prices [8]. The impact of higher                                                                                                 Coal 1X
                                                                                            80
gas prices was investigated by increasing the                                                                                                         Coal 2X
                                                                                      GW




                                                                                            60                                                        Retrofit 1X
transmission tariff for delivery to electric utilities by                                                                                             Retrofit 2X
                                                                                            40
5 $/MCF, with the expected impacts on price of
delivered gas to electric utilities. As shown in Figure                                     20


8, the impact of higher natural gas prices depended                                          0
                                                                                             2005   2010     2015        2020        2025      2030
on carbon value (legend entries of the type 30_90_5
signify 30 $/MTCO2e, 90 percent CO2 removal, and 5
$/MCF gas price adder). At 60 $/MTCO2e, CO2
                                                                                    Figure 10. Legend entry 2X designates a doubling of the S.2191
retrofits increased about 80 GW (coal plant                                         system-wide limit on CCS bonus allowances. The incentive is not
retirements fell about 45 GW, allowing for 25 GW of                                 extended to existing plants in the S.2191 formulation used in this
capacity deratings from retrofits). At 30 $/MTCO2e,                                 study, but only to new plants.
significant CO2 retrofits were not observed even with
R. Geisbrecht, P.name / Energy Procedia 00 1 (2009) 4347–4354
                                                                           Author Dipietro / Energy Procedia (2008) 000–000                                                                      4353

CO2 sequestered over the first ten years of CCS                                                                   would occur, with two qualifications. First, the
operations, subject to a system-wide cap on total                                                                 decision model in Figure 11 is for a specific plant,
bonuses available, with rules for prorating and phase                                                             instead of a fleet with a distribution of plant cost and
out of the incentives program. The impact of the                                                                  performance factors. A distribution of plants could
bonus allowance on new builds of integrated                                                                       result in asymptotic limits to retrofit penetration as a
gasification combined cycles with CCS is clearly                                                                  function of CEA price, as observed in Figures 3, 7,
seen in Figure 10 (legend entry 2X designates a                                                                   and 8. Secondly, the competing new plant levelized
doubling of the S.2191 CCS bonus allowance limit).                                                                cost of electricity (COE) in Figure 11 represents a
Although one would expect a similar impact on CCS                                                                 mix of underlying new plant technologies, suggesting
retrofits if the CCS bonus incentives extended to                                                                 sensitivities to such factors as gas prices, as observed
existing plants, the AEO2008/S2191 side case clearly                                                              in Figure 8.
does not extend the bonus to existing plants.
However, such an extension has to be regarded as a                                                                7.2. Fleetwide distribution of plant heat rates
likely possibility in any potential legislation.
                                                                                                                     The distribution of heat rates in the NEMS plant
7. Discussion                                                                                                     data base offers a perspective on the potential market
                                                                                                                  for retrofitting, repowering, and refurbishing. As
                                                                                                                  shown in Figure 12, about 125 GW of capacity
7.1. Interpretive model of decision options                                                                       occurs in plants with a heat rate below 10,000
                                                                                                                  Btu/KWh, roughly consistent with the NEMS results
   A simple decision model based on selection of the                                                              in Figures 3 and 8. These plants should be the most
option with lowest levelized cost of electricity offers                                                           promising targets for retrofitting. A plant with a
a perspective on the observed trends in retrofitting.                                                             higher heat rate could be made viable for retrofitting
As shown in Figure 11, a minimum carbon emission                                                                  by first refurbishing to a lower heat rate, depending
allowance (CEA) price is suggested below which                                                                    on other factors related to its cost structure (dispatch
retrofits would be uneconomic and a maximum price                                                                 rate, operating costs, fuel costs, existing 3-P controls,
above which retirements would be preferred, if an                                                                 etc.). All else equal, if plants up to 10,500 Btu/KWh
option to retrofit were unavailable. Between these                                                                could be refurbished to 10,000 Btu/KWh for
limits would be an interval of CEA prices where                                                                   negligible incremental costs relative to the costs of
retrofits would mostly impact emissions rather than                                                               retrofitting, then the market for retrofitting could be
retirements, while above this interval, the converse                                                              increased to about 230 GW. The NEMS results in
                                                                                                                  Figure 9 indicate a much lower potential than
                                                                                                                  indicated in Figure 12, however, which suggests that
                          Hypothetical Effect of CEA Price on Retrofit Decision Options
                                                                                                                  plant factors other than just heat rate will be
                          Existing CFPP      50% Retrofit       85% Retrofit     New Carbon Neutral Plant
                                                                                                                  important in system-wide assessments.
                0.1



                                   minimum cea for retirement
               0.08                                                                                                                         Existing Plants Coal Capacity in NEMS
                                                                                                                                        cumulative ranking; plants > 50 MW annual dispatch


                                                                                                                        350
               0.06
  COE, $/kwh




                                                                               maximum cea for retrofit                 300

               0.04                                                                                                     250
                                               minimum cea for retrofit
                                                                                                                   GW




                                                                                                                        200
               0.02                              Existing CFPP: 10,000 Btu/k W h at 1.5 $/MMbtu
                                                 Retrofit Options: 30, 40 $/mTCO2e at 50, 85 % CCS                      150
                                                 New Carbon Neutral Plant: 0.065 $/k W h (AEO07 Nuclear)

                                                                                                                        100
                 0
                      0            20                40                   60             80                1 00
                                                                                                                         50
                                        Carbon Emission Allowance Price, $/mTCO2e                                         9600   9800         10000       10200        10400       10600     10800   11000
                                                                                                                                                              BTU/KW H



Figure 11. COE (levelized cost of electricity), excludes costs for
transportation, injection, MMV (measurement, monitoring,                                                          Figure 12. A heat rate limit of 10,000 – 10,500 Btu/KWh for 90 %
verification) , and net backs from CO2 sales or CCS incentives.                                                   CCS retrofitting implies a market of 125 – 230 GW, respectively.
4354                              R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354
                                           Author name / Energy Energy Procedia 1 000–000

8. Conclusions

   NEMS can be readily extended into a tool for integrated assessment of the options for existing coal fired power
plants in climate change scenarios. Simple coding extensions operating seamlessly in the background of a standard
NEMS         simulation    offer     a    framework        for     consistently    comparing      options.        In
exploratory studies using generic models for retrofitting, repowering, and refurbishing, a perspective was gained on
potential markets and their dependency on such factors as the carbon emission allowance price, incentives under
likely climate change legislation, and key uncertainties. For some applications, particularly the assessment of
refurbishing, it was apparent that some elaboration of the generic models would be desirable to take into account
important plant specific factors. Since NEMS incorporates a plant level data base with multiple attributes, such
elaborations should be straightforward. Aside from developing insights into management strategies for the fleet of
existing power plants, other possible applications of the tool would be to assess technological progress and to
provide a basis for scoping the requirements of infrastructure for CO2 sequestration.


Acknowledgements

  Alan Beamon and Jeff Jones of EIA provided valuable assistance with the NEMS-based strategy and required
coding modifications.


References

    1.   R. Geisbrecht, Retrofitting Coal Fired Power Plants for Carbon Dioxide Capture and Sequestration - Exploratory Testing of NEMS
         for Integrated Assessments, DOE/NETL-2008/1309, January 18, 2008.
    2.   EIA Office of Information Analysis and Forecasting, NEMS Code Archive: ftp://eia.doe.gov/pub/oiaf/; Model Documentation:
         http://www.eia.doe.gov/oiaf/forecasting.html.
    3.   M. Ramezan, N. Nsakala, L. Gearhart, R. Hestermann, and B. Rederstorff, Carbon Sequestration for Existing Power Plants
         Feasibility Study, ME-AM26-04NT41817.401.01.01.003, Final Draft Report, Oct. 31, 2006.
    4.   J. Klara, M. Woods, P. Capicotto, J. Haslbeck, N. Kuehn, M. Matuszewski, L. Pinkerton, M. Rutkowski, R. Schoff, and V. Vaysman,
         Cost and Performance Baseline for Fossil Energy Plants – Vol 1, Bituminous Coal and Natural Gas to Electricity, DOE/NETL –
         2007/1281, Final Report, May 2007.
    5.   P. Dipietro, C. Nichols, G. Vaux, C. Zaremsky, J. Murphy, and M. Ramezan, Reducing CO2 Emissions by Improving the Efficiency of
         the Existing Coal-fired Power Plant Fleet, DOE/NETL-2008/1329, July 23, 2008.
    6.   R. Geisbrecht, Repowering Coal Fired Power Plants for Carbon Dioxide Capture and Sequestration – Further Testing of NEMS for
         Integrated Assessments, DOE/NETL-2008/1310, January 23, 2008.
    7.   American Council for Capital Formation and National Association of Manufactureres, Analysis of the Lieberman-Warner Climate
         Security Act (S.2191) Using the National Energy Modeling System (NEMS).
    8.   T. Considine, and F. Clemente, Do EIA natural gas forecasts contain systematic errors?, 20 Aug 2007 by ASPO-USA; source:
         http://www.energybulletin.net/33661.html.

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Celik2007
 

Geisbrecht2009

  • 1. Available online at www.sciencedirect.com Energy Procedia Energy Procedia 100 (2008) 000–000 Energy Procedia (2009) 4347–4354 www.elsevier.com/locate/XXX www.elsevier.com/locate/procedia GHGT-9 Evaluating options for U.S. coal fired power plants in the face of uncertainties and greenhouse gas caps: the economics of refurbishing, retrofitting, and repowering. Rodney Geisbrecht* and Phil Dipietro U. S. Department of Energy, Pittsburgh, Pennsylvania, 15236 USA Elsevier use only: Received date here; revised date here; accepted date here Abstract Facing a cost for emitting carbon dioxide, U.S. entities that own coal-fired power plants have a number of options to pursue as alternatives to retiring the plant and investing in a new one with lower carbon emissions. These include: (1) continuing to operate business as usual and obtaining emission allowances as needed, (2) switching to or cofiring low carbon fuels, (3) retrofitting with carbon capture and sequestration (CCS), (4) repowering with an advanced coal technology incorporating CCS, and (5) refurbishing to improve plant efficiency in combination with any of the previous options. Markets for refurbishing, retrofitting, and repowering were assessed using data bases of existing coal fired power plants along with the Energy Information Administration’s (EIA) National Energy Modeling System (NEMS) code, which was modified to undertake an integrated analysis of how retrofit and repowering options would compete with other options for managing the fleet of coal fired power plants. Sensitivities with respect to key uncertainties are presented, including carbon values, natural gas prices, CCS incentives, and system-wide cost effectiveness of refurbishing in conjunction with retrofitting or repowering. The indicated market for coal fired power plants that could be retrofitted with near commercial CCS technology under carbon cost scenarios ranging from 45 - 60 $/MTCO2e (metric ton CO2 equivalent) is on the order of 100 GW. A similar market is apparent for repowering, but with technologies that are as yet not commercialized. Below 30 $/MTCO2e, CCS technologies would not deploy without incentives. While refurbishing can extend the market for either retrofitting or repowering, its impact will depend on the extent to which efficiency as well as other cost related factors can be collectively upgraded. © 2009 Elsevier Ltd. All rights reserved. c 2008 Elsevier Ltd. All rights reserved Carbon Capture and Sequestration; Coal Fired Power Plants, Retrofitting; Repowering; Refurbishing; National Energy Modeling System. 1. Introduction Disposition of existing coal-fired power plants is a major issue in strategies to cap the emissions of greenhouse gases in global climate change scenarios. In scenarios where emissions are severely capped by a carbon emission allowance price (as set by carbon caps or carbon taxes), options for continuing to operate as a coal fired power plant * Corresponding author. Tel.: +0-412-386-4870; fax: +0-412-386-4604. E-mail address: rgeisb@netl.doe.gov. doi:10.1016/j.egypro.2009.02.248
  • 2. 4348 R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354 Author name / Energy Energy Procedia 1 000–000 (CFPP) are: (1) retrofitting, (2) repowering, and (3) refurbishment in combination with either of the previous. The preferred option for any given plant is expected to depend on a plant’s characteristics such as its age, configuration with respect to other emission controls, heat rate, capacity, dispatch, and site specific factors. An integrated system- wide assessment of these options requires a plant level description of the fleet. The National Energy Modeling System (NEMS) of the Energy Information Administration (EIA) is an integrated assessment tool which incorporates a plant level data base, but modifications were required to extend the standard retrofitting model in NEMS from a 3-P (three pollutant—sulfur oxides, nitrogen oxides, and mercury) to a 4-P formulation (the fourth pollutant being carbon dioxide). From a modeling perspective, the logic required to allow for refurbishing, retrofitting, or repowering in NEMS is similar, so the modifications enabled a consistent framework for the endogenous competition of these options taking into account important associated penalties in capacity and heat rate. Using this extended form of NEMS and generic factors for cost and performance of refurbishing, retrofitting, and repowering as a function of plant characteristics such as heat rate, exploratory assessments were undertaken on how these options could compete with the “standard” options: purchase of emission allowances (status quo), retirement (investment in a new plant), and fuel switching (lower carbon fuels). 2. NEMS extension from 3-P to 4-P formulation NEMS modifications can be confined to a single program file (UECP.F) and a single input file (EMMCNTL.TXT). The revised files run “seamlessly” in the background without affecting NEMS scenarios where CCS is not a factor, automatically engaging only when carbon values are sufficient to support CCS [1]. The files are readily swapped into archived NEMS files, available from the EIA [2]. 2.1. Plant configurations, retrofit options, and retrofit rules NEMS characterizes coal fired power plant configurations by indexes to indicate which emission controls are currently installed. An unused configuration index (“SC”) was adapted to indicate an installed CCS retrofit, which required specification of new retrofit options and plant configurations. To limit the combination of configurations to a practical subset, a “retrofit rule,” was adopted. Two retrofit rules were examined. The simpler G1 rule restricts CCS retrofit to plants already in complete 3-P configuration. G1 requires only 1 additional retrofit option (addition of the CO2 retrofit). G2 allows for CCS retrofit to any plant as long as the missing 3-P components are added as well, but this rule requires 24 additional retrofit options. Twelve new plant configurations, reflecting complete 4-P configurations, were required with either the G1 or G2 rule. As part of the rationale for G1 and G2, at least some measure of advanced sulfur control is generally necessary in solvent-based process designs for CO2 capture. Results presented herein were all developed using the G2 rule. 2.2. Heat rate and capacity penalties Heat rate and capacity penalties are major cost considerations in retrofitting or repowering for CCS. Since NEMS is designed to endogenously model energy supply and demand, including electricity, it is important to explicitly express these penalties in NEMS for a consistent determination of their effective costs. To do so required modifications at certain points in the NEMS code where linear program coefficients are calculated to account for capacity, fuel consumption, and emissions as a function of capacity retrofitted. 3. Generic process models This paper focuses on an exploratory NEMS-based assessment of retrofitting. Brief descriptions of repowering and refurbishing studies are included for completeness, but details will be presented elsewhere when finalized. 3.1. Retrofitting The envisioned retrofitting process uses an advanced solvent for post combustion capture (i.e. flue gas scrubbing). A generic cost representation is assumed valid across the fleet, without consideration of site specific
  • 3. R. Geisbrecht, P. Dipietro / Energy Procedia 1 (2009) 4347–4354 4349 Author name / Energy Procedia 00 (2008) 000–000 Capital Cost and Capacity Derating $4/MTCO2e from a recently completed baseline Capital Derating study for fossil energy plants [4]. 1.50 0.35 1.25 0.30 Cost data from the NETL study of the Conesville plant were restated in two important respects for use MM 2006_$/ tph CO2 0.25 1.00 0.20 as a generic model in NEMS. First, costs were stated kw/kw 0.75 0.15 per unit of CO2 removed, which relates generically to 0.50 0.10 a plant’s heat rate for a given CO2 removal level. 0.25 0.05 Secondly, capacity and heat rate penalties were 0.00 0.00 expressed explicitly to integrate with the capacity 30 40 50 60 70 80 90 CO2 Removal Level, Percent planning and fuel supply models in NEMS. A key objective of the Conesville study was to assess CO2 removal costs over the range of 30 percent to 90 Figure 1. A minor generic dependency of capacity derating on percent removal, as shown in Figures 1 – 2. The heat rate is not shown here. capacity derating factor, or capacity penalty, arises from steam extraction for solvent regeneration and Variable O&M and Fixed O&M power consumption for CO2 compression. Since VOM FOM boiler firing is unchanged in the underlying 8.00 1.40 7.00 retrofitting process design, heat rate and capacity 1.20 6.00 penalties are coupled: 2006_$/hr/tph CO2 1.00 2006_$/ton CO2 5.00 0.80 4.00 Final Heat Rate = Original Heat Rate / (1 – 0.60 3.00 Capacity Derating Factor) 0.40 2.00 1.00 0.20 3.2. Repowering 0.00 0.00 30 40 50 60 70 80 90 CO2 Removal Level, Percent In an assessment of repowering yet to be completed, oxyfuel combustion repowering is being Figure 2. O&M is dominated by variable O&M. compared to solvent based retrofitting. Oxyfuel combustion repowering is a well known alternative to factors. A recent NETL study of an advanced amine solvent based retrofitting, and differences are being process retrofitted into Unit 5 of American Electric assessed with respect to incremental costs and their Power’s (AEP) Conesville, Ohio plant undertaken by dependencies on plant factors, including required 3-P NETL in conjunction with Alstom Power was used as controls and their associated costs. In the retrofitting a basis for the cost data for capture [3]. This plant study, 3-P control requirements relating to protection was selected because it serves as an accurate against solvent degradation were provisionally representation of existing coal-fired power plants that addressed through the G2 retrofit rule. Modifications may be candidates for CCS retrofitting. Unit 5 is a to the G2 rule may be appropriate for oxyfuel 450 MW, pulverized coal-fired, subcritical pressure combustion repowering. steam plant with a 9,749 Btu/kWh (HHV) heat rate, flue gas desulfurization, and a boiler in-service date 3.2.1. Brownfield repowering of November 1, 1976. Post-capture costs, including CO2 transportation, injection, and MMV are From a modeling standpoint, brownfield additional, with an assumed generic value of repowering is different from retrofitting or conventional repowering in that cost and
  • 4. 4350 R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354 Author name / Energy Energy Procedia 1 000–000 performance factors for the repowered plant are CCS Retrofits effectively decoupled from those of the original 180 plant. In an exploratory study not presented in this 160 paper [5], assumptions were made for the degree to 140 which investment in a new coal fired plant would be 120 reduced if installed on a site with an existing coal 100 60_90 GW fired power plant (brownfield capital factor), and the 80 45_90 30_90 repowering process was assumed to be an integrated 60 gasification combined cycle (IGCC) with CCS, using 40 DOE R&D program goals for cost, performance, and 20 commercial availability. R&D risks and uncertainties 0 2005 2010 2015 2020 2025 2030 in usage of a generic brownfield capital factor (it’s magnitude and suitability, or lack thereof, for competing non-coal technologies) blur the distinction Figure 3. A need to model sustainable deployment rates is between brownfield repowering and new capacity suggested by retrofit rates as high as 50 GW per year in the 60 $/MTCO2e case. builds which effectively replace retired capacity (i.e. “greenfield” repowering). Nonetheless, a brownfield Coal Capacity Retirements capital factor of 15 percent resulted in substantial 250 repowering by the envisioned IGCC with CCS technology. The subset of the fleet for brownfield 200 repowering is generally expected to be different from 60_90 150 60_00 that for retrofitting since they should exist on 45_90 GW opposite ends of the spectrum with respect to heat 100 45_00 30_90 rate and economic viability. 30_00 50 3.3. Refurbishing 0 2005 2010 2015 2020 2025 2030 As an indicator of the load of CO2 to be captured and sequestered per unit of power produced, heat rate Figure 4. Coal capacity retirements, the sum of plant retirements is an important plant factor governing the economic and capacity deratings from retrofits, are reduced by the retrofit viability of retrofitting or repowering. Lower profit option at high carbon taxes. margins and dispatch rates, generally associated with high heat rate plants, would further erode the viability factors that may be equally important, such as of retrofitting or repowering. Most plants are likely dispatch rate and existing emission controls. to have heat rates above a nominal limit for retrofitting or repowering, generally expected to be 4. Carbon tax runs (AEO2007 side cases) about 10,000 Btu/KWh. Some of these plants could be a target for refurbishment, whereby various cost A series of runs were completed to examine the and performance factors are upgraded. Principle impact of the retrofitting option at various carbon among these factors would be heat rate [6]. This taxes. Carbon tax side cases of the AEO2007 were paper presents an exploratory NEMS based used with the tax starting in 2015 and ramping up to a assessment of refurbishing in conjunction with constant level by 2020. The extent of retrofitting in retrofitting, based on the assumption that heat rates of the fleet depended strongly on the carbon tax. As all plants could be reduced to a generic value, varied shown in Figure 3, 45 $/MTCO2e acted as a over the range 7 – 10,000 Btu/KWh, with negligible threshold for retrofitting, below which it was incremental costs relative to those for retrofitting. preferable to purchase emission allowances (legend Obviously, the cost effectiveness of refurbishing is entries of the type 30_90 signify 30 $/MTCO2e and plant specific, depending upon such factors as a 90 percent CO2 removal). Coal plant retirements, plant’s age, and simple refurbishing based solely on builds of nuclear plants, and utility CO2 emissions heat rate excludes other plant cost and performance reflected the adoption of retrofitting.
  • 5. R. Geisbrecht, P.name / Energy Procedia 00 1 (2009) 4347–4354 Author Dipietro / Energy Procedia (2008) 000–000 4351 Nuclear Builds emissions reductions over time was somewhat 400 dependent on the tax level. Since retrofits could act 350 to offset the purchase of emission allowances at 300 lower taxes and the retirement of coal plants at higher 250 60_90 taxes, the impact on CO2 emissions could be 60_00 45_90 different. At 45 $/MTCO2e and 60 $/MTCO2e, GW 200 45_00 30_90 utility emissions in 2030 were about 70 to 85 percent 150 30_00 below those in 2005, respectively, levels ordinarily 100 associated with extensive retirement of coal plants 50 and deployment of carbon neutral technologies. 0 2005 2010 2015 2020 2025 2030 Retrofitting thus functioned largely as an alternative pathway to reduced emissions at high tax levels. Figure 5. Build requirements for new carbon neutral capacity, like 5. Carbon cap runs (AEO2008 side cases) nuclear, are less severe at high carbon taxes with the retrofit option. A series of runs were completed to examine the Coal capacity retirements in Figure 4 include both impact of the retrofitting option in the Lieberman- capacity deratings of retrofitted plants and actual Warner Climate Security Act (S.2191), which plant retirements. At 45 $/MTCO2e, capacity includes a complex set of incentives, including one deratings through 2030 were 30 GW, corresponding targeted to CCS. The AEO2008/S2191 side case to the 30 percent derating factor for the 90 percent developed by the EIA was used as a basis. The CO2 removal levels used in this study. At 60 resultant carbon emission allowance price track was $/MTCO2e, capacity deratings increased to about 50 about 5 to 10 percent higher with the retrofitting GW. Factoring in these deratings, 128 GW of actual option. As shown in Figure 7, about 120 GW of plant retirements were avoided at 45 $/MTCO2e, retrofits through 2030 reduced the need for builds of while 149 GW were avoided at 60 $/MTCO2e. nuclear and renewables by about 55 and 15 GW, respectively; noteworthy given the questionable As shown in Figure 5, projected builds of nuclear feasibility of projected nuclear and renewables builds fell by about 100 GW with the retrofit option at the in the reference case of roughly 250 GW and 100 higher tax levels where significant emissions GW, respectively, over 15 years. Coal and oil/gas reductions are achieved but which require builds of capacity increased by about 40 and 30 GW, nuclear in excess of 350 GW over a 15 year period, a respectively, the latter primarily due to builds of level whose feasibility is open to question (roughly 2 natural gas combined cycles with CCS. GW of nuclear builds every month for 15 years). 6. Sensitivities and uncertainties As shown in Figure 6, the impact on CO2 Utility CO2 Emissions Capacities w/wo CCS Retrofits 3000 500 450 2500 400 ccs retrofits coal 3P 60_90 350 2000 coal 4P MMmTCO2e/Y 60_00 300 nuclear 3P 45_90 GW 1500 250 nuclear 4P 45_00 200 renew 3P 30_90 1000 renew 4P 30_00 150 oil/gas 3P 100 oil/gas 4P 500 50 0 0 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030 Figure 6. The retrofit option at 90 percent CO2 removal essentially Figure 7. Legend entries 4P and 3P designate with and without the offers a complementary pathway to reduced emissions. retrofit option, respectively.
  • 6. 4352 R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354 Author name / Energy Energy Procedia 1 000–000 CCS Retrofits high gas prices. The sensitivity to uncertainties 300 surrounding gas prices points up the general problem of using an AEO reference case based on business as 250 usual assumptions that may be inappropriate for high 200 60_90_0 carbon value scenarios, especially those related to the 60_90_5 45_90_0 role and price of natural gas and the cost and GW 150 45_90_5 30_90_0 elasticity of supply of new carbon neutral 100 30_90_5 technologies like nuclear. 50 6.2. Refurbishing 0 2005 2010 2015 2020 2025 2030 Figure 9 shows the impact of simple refurbishments based solely on heat rate for the Figure 8. Retrofits are increased by higher gas prices, but only at high carbon emission allowance prices. limiting case of negligible incremental costs (legend entry RHR designates the final heat rate of the refurbished plant, before retrofitting). Negligible CCS Retrofits (45 $/mTCO2e Case) retrofits were added by refurbishing to 10,000 250 Btu/KWh, but about 20 GW and 110 GW were added 200 when the refurbishment option was extended to 9,000 and 7,000 Btu/KWh, respectively. Considering the 150 baseline likely technical and economic challenges of upgrading plants to heat rates below 10,000 GW RHR = 9K RHR = 7K 100 Btu/KWh, the potential for cost effective 50 refurbishment in conjunction with retrofitting would appear to depend on the possibility of upgrading 0 additional plant cost and performance factors. 2005 2010 2015 2020 2025 2030 6.3. CCS bonus incentives Figure 9. Legend entry “RHR” designates heat rate to which all plants can be refurbished prior to a retrofit. Climate change legislative proposals often include a package of incentives for CCS. The Lieberman- 6.1. Gas prices Warner Climate Security Act of 2007 (S.2191) includes a CCS bonus allowance, which prescribes a An important uncertainty in this study was the rate of emission allowances earned for each unit of price of natural gas, a preferred lower carbon content fuel in many carbon control scenarios [7]. Many New Coal Builds and CCS Retrofits analysts believe globalization of the gas market will 140 make projections of gas prices inherently risky, and 120 some analysts believe NEMS consistently under 100 predicts natural gas prices [8]. The impact of higher Coal 1X 80 gas prices was investigated by increasing the Coal 2X GW 60 Retrofit 1X transmission tariff for delivery to electric utilities by Retrofit 2X 40 5 $/MCF, with the expected impacts on price of delivered gas to electric utilities. As shown in Figure 20 8, the impact of higher natural gas prices depended 0 2005 2010 2015 2020 2025 2030 on carbon value (legend entries of the type 30_90_5 signify 30 $/MTCO2e, 90 percent CO2 removal, and 5 $/MCF gas price adder). At 60 $/MTCO2e, CO2 Figure 10. Legend entry 2X designates a doubling of the S.2191 retrofits increased about 80 GW (coal plant system-wide limit on CCS bonus allowances. The incentive is not retirements fell about 45 GW, allowing for 25 GW of extended to existing plants in the S.2191 formulation used in this capacity deratings from retrofits). At 30 $/MTCO2e, study, but only to new plants. significant CO2 retrofits were not observed even with
  • 7. R. Geisbrecht, P.name / Energy Procedia 00 1 (2009) 4347–4354 Author Dipietro / Energy Procedia (2008) 000–000 4353 CO2 sequestered over the first ten years of CCS would occur, with two qualifications. First, the operations, subject to a system-wide cap on total decision model in Figure 11 is for a specific plant, bonuses available, with rules for prorating and phase instead of a fleet with a distribution of plant cost and out of the incentives program. The impact of the performance factors. A distribution of plants could bonus allowance on new builds of integrated result in asymptotic limits to retrofit penetration as a gasification combined cycles with CCS is clearly function of CEA price, as observed in Figures 3, 7, seen in Figure 10 (legend entry 2X designates a and 8. Secondly, the competing new plant levelized doubling of the S.2191 CCS bonus allowance limit). cost of electricity (COE) in Figure 11 represents a Although one would expect a similar impact on CCS mix of underlying new plant technologies, suggesting retrofits if the CCS bonus incentives extended to sensitivities to such factors as gas prices, as observed existing plants, the AEO2008/S2191 side case clearly in Figure 8. does not extend the bonus to existing plants. However, such an extension has to be regarded as a 7.2. Fleetwide distribution of plant heat rates likely possibility in any potential legislation. The distribution of heat rates in the NEMS plant 7. Discussion data base offers a perspective on the potential market for retrofitting, repowering, and refurbishing. As shown in Figure 12, about 125 GW of capacity 7.1. Interpretive model of decision options occurs in plants with a heat rate below 10,000 Btu/KWh, roughly consistent with the NEMS results A simple decision model based on selection of the in Figures 3 and 8. These plants should be the most option with lowest levelized cost of electricity offers promising targets for retrofitting. A plant with a a perspective on the observed trends in retrofitting. higher heat rate could be made viable for retrofitting As shown in Figure 11, a minimum carbon emission by first refurbishing to a lower heat rate, depending allowance (CEA) price is suggested below which on other factors related to its cost structure (dispatch retrofits would be uneconomic and a maximum price rate, operating costs, fuel costs, existing 3-P controls, above which retirements would be preferred, if an etc.). All else equal, if plants up to 10,500 Btu/KWh option to retrofit were unavailable. Between these could be refurbished to 10,000 Btu/KWh for limits would be an interval of CEA prices where negligible incremental costs relative to the costs of retrofits would mostly impact emissions rather than retrofitting, then the market for retrofitting could be retirements, while above this interval, the converse increased to about 230 GW. The NEMS results in Figure 9 indicate a much lower potential than indicated in Figure 12, however, which suggests that Hypothetical Effect of CEA Price on Retrofit Decision Options plant factors other than just heat rate will be Existing CFPP 50% Retrofit 85% Retrofit New Carbon Neutral Plant important in system-wide assessments. 0.1 minimum cea for retirement 0.08 Existing Plants Coal Capacity in NEMS cumulative ranking; plants > 50 MW annual dispatch 350 0.06 COE, $/kwh maximum cea for retrofit 300 0.04 250 minimum cea for retrofit GW 200 0.02 Existing CFPP: 10,000 Btu/k W h at 1.5 $/MMbtu Retrofit Options: 30, 40 $/mTCO2e at 50, 85 % CCS 150 New Carbon Neutral Plant: 0.065 $/k W h (AEO07 Nuclear) 100 0 0 20 40 60 80 1 00 50 Carbon Emission Allowance Price, $/mTCO2e 9600 9800 10000 10200 10400 10600 10800 11000 BTU/KW H Figure 11. COE (levelized cost of electricity), excludes costs for transportation, injection, MMV (measurement, monitoring, Figure 12. A heat rate limit of 10,000 – 10,500 Btu/KWh for 90 % verification) , and net backs from CO2 sales or CCS incentives. CCS retrofitting implies a market of 125 – 230 GW, respectively.
  • 8. 4354 R. Geisbrecht, P. Dipietro / Procedia 00 (2008)(2009) 4347–4354 Author name / Energy Energy Procedia 1 000–000 8. Conclusions NEMS can be readily extended into a tool for integrated assessment of the options for existing coal fired power plants in climate change scenarios. Simple coding extensions operating seamlessly in the background of a standard NEMS simulation offer a framework for consistently comparing options. In exploratory studies using generic models for retrofitting, repowering, and refurbishing, a perspective was gained on potential markets and their dependency on such factors as the carbon emission allowance price, incentives under likely climate change legislation, and key uncertainties. For some applications, particularly the assessment of refurbishing, it was apparent that some elaboration of the generic models would be desirable to take into account important plant specific factors. Since NEMS incorporates a plant level data base with multiple attributes, such elaborations should be straightforward. Aside from developing insights into management strategies for the fleet of existing power plants, other possible applications of the tool would be to assess technological progress and to provide a basis for scoping the requirements of infrastructure for CO2 sequestration. Acknowledgements Alan Beamon and Jeff Jones of EIA provided valuable assistance with the NEMS-based strategy and required coding modifications. References 1. R. Geisbrecht, Retrofitting Coal Fired Power Plants for Carbon Dioxide Capture and Sequestration - Exploratory Testing of NEMS for Integrated Assessments, DOE/NETL-2008/1309, January 18, 2008. 2. EIA Office of Information Analysis and Forecasting, NEMS Code Archive: ftp://eia.doe.gov/pub/oiaf/; Model Documentation: http://www.eia.doe.gov/oiaf/forecasting.html. 3. M. Ramezan, N. Nsakala, L. Gearhart, R. Hestermann, and B. Rederstorff, Carbon Sequestration for Existing Power Plants Feasibility Study, ME-AM26-04NT41817.401.01.01.003, Final Draft Report, Oct. 31, 2006. 4. J. Klara, M. Woods, P. Capicotto, J. Haslbeck, N. Kuehn, M. Matuszewski, L. Pinkerton, M. Rutkowski, R. Schoff, and V. Vaysman, Cost and Performance Baseline for Fossil Energy Plants – Vol 1, Bituminous Coal and Natural Gas to Electricity, DOE/NETL – 2007/1281, Final Report, May 2007. 5. P. Dipietro, C. Nichols, G. Vaux, C. Zaremsky, J. Murphy, and M. Ramezan, Reducing CO2 Emissions by Improving the Efficiency of the Existing Coal-fired Power Plant Fleet, DOE/NETL-2008/1329, July 23, 2008. 6. R. Geisbrecht, Repowering Coal Fired Power Plants for Carbon Dioxide Capture and Sequestration – Further Testing of NEMS for Integrated Assessments, DOE/NETL-2008/1310, January 23, 2008. 7. American Council for Capital Formation and National Association of Manufactureres, Analysis of the Lieberman-Warner Climate Security Act (S.2191) Using the National Energy Modeling System (NEMS). 8. T. Considine, and F. Clemente, Do EIA natural gas forecasts contain systematic errors?, 20 Aug 2007 by ASPO-USA; source: http://www.energybulletin.net/33661.html.