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Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
Compliance with the Clean Air Act: Remove, Retrofit or Replace
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Compliance with the Clean Air Act: Remove, Retrofit or Replace

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TRC Vice President Ed Malley presented this webinar about the best options available to power plants trying to comply with stringent air regulations. Ed discussed: …

TRC Vice President Ed Malley presented this webinar about the best options available to power plants trying to comply with stringent air regulations. Ed discussed:
• The cost/benefits of control technology investments
• The economic, environmental and CSR issues related to closure decisions
• How to develop a strategic plan that allows you to be successful

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  • 1. Compliance with the Clean Air Act: Remove Retrofit or Replace? RE POWER Initiative November 15, 2012
  • 2. RE POWER™ Summary Fuel economics, generation technology, energy efficiency and more stringent regulations are changing the U.S. generating fleet. Gas turbine plants are winning in the power supply auctions and gaining market share from coal and oil fired steam plants. Re Power ™ - Retire, Retrofit or Replace Retirements are estimated at 60 GW of coal plant closures of a total of 340 GW, or approximately 500 boiler/turbine units. Retrofits are estimated to be 103 GW of a total of 340 GW, or about 200 fuel switch or scrubber projects on larger plants. Replacements with combined cycle gas turbine plants are estimated at 35 GW, or 70 GTs at 500 MW per plant in PJM, MISO and SERC ISOs. Forecast capital spend is $70 – 100 billion. CONFIDENTIAL 2
  • 3. Do We Need to Replace All Closed Plants?Regional reserve margin estimates and targets for summer2012 3
  • 4. What Does Reserve Capacity Look Like?Current (2010) capacity by initial year of operation and fuel type 4
  • 5. What Coal Plants are Retiring?Announced coal plant capacity retirements 2011-2020 As of June 10, 2011 Source: SNL Energy Map credit: J. Bellavance, C. Kerr CONFIDENTIAL 5
  • 6. Where are the Retrofit Projects?SO2 emissions by coal plant, 2010Short tonsEach of these red dots will likely turn green or go away. CONFIDENTIAL 6
  • 7. What about New Build?  Forecast new build is 35 GWs of combined cycle gas turbine from 2015 - 2020.  PJM 9 GW  MISO 8W  SERC 20 GW  Timing is from 2015 – 2020.  CALISO, ERCOT and NYISO will likely need new build, subject to permitting and rate issues. 7
  • 8. Fuel DiversityExhibit 2:Natural Gas Futures vs.MMBtu EquivalentCAPP Coal FuturesPrices Trillion kilowatt hours per yearU.S. ElectricityNet Generation byFuel, 1990-2035 8
  • 9. Economic Market Drivers Reduce Variable Costs  Natural gas ($2.50 - $4 per MMBTU is competitive with coal ($3.00 per MMBTU).  Combined cycle gas turbine technology heat rate is 30% more efficient than steam boiler technology. Reduce Fixed Costs  Real estate taxes, labor, maintenance Minimize Capital Expenditures  CCGT new build cost of $750 - $1000 per KW is comparable to retrofit cost of $450 – 750 per KW.  Third party capital for merchant power plants  Balance sheet financing for retrofit control technology CONFIDENTIAL 9
  • 10. Incremental Capital and Operating Expendituresfor Scrubbing Old Plants vs. New Gas Turbines Incremental Investment Incremental Capital Operating Cost Flue Gas Desulfurization $300 – 500 per KW $0.43 / MWHr Selective Catalytic $150 – 300 per KW $0.47 / MWHr Reduction Activated Carbon $5 – 10 per KW $0.30 / MWHr Incremental Labor 0 $2,000,000 / year Total Retrofit $450 – 800 per KW $3.40 / MWHr New Build Combined Cycle $750 – 1000 per KW 0.47 / MWHr for SCR Gas Turbine 10
  • 11. RE POWER Regulatory Drivers Utility MACT Compliance Final 1 Hour NAAQS Rule for SO2 and NOx Mercury and Toxic Substances Rule (“MATS”) Issued November 2011 – Three Year Compliance Period Best Technology available for cooling water intake structures§316(B) Coal Combustion Residue Management (rules pending). 11
  • 12. Making the Right Decision - Playbooks Business Objective for Deregulated Generators  Maximizing shareholder return  Positive cash flow and IRR > cost of capital Economic Growth  Revenue potential in particular market  Competitive cost profile Environmental Excellence  Compliance with current rules  Compliance with pending or likely rules Corporate Responsibility  Generating reliable power at competitive rates 12
  • 13. Retirements – Sell It or Demolish? Engineering During Decommissioning  Pre-demolition surveys for asbestos, hazardous materials, structures, utility relocations, asset and real estate valuation, permitting and future use  Contract plans and specifications Abatement, Decommissioning and Demolition  Pre-qualified bidders, procurement and construction support Remediation and Restoration to Suit Future Use As-is, where is sales  May involve substantial cash plus the plant  Watch out for the boomerang! 13
  • 14. Retrofits Fuel Switching  Coal to low-sulfur coal and coal to gas switching are popular options.  May address SOx, but not NOx  Cooling Water 316(b) issue remains Tweaking Existing Scrubbers  May address MATS but not SOx and NOx Scrubbing Old Coal Plants  Hard to justify investing up to $700/KW in 50 year old coal fired steam turbine plants with high heat rates  2,651 MW of clean coal plants were recently sold for $400,000,000 or $151/KW. 14
  • 15. Replacements Current EIA reserves indicate that closed plants do not need to ve replaced in kind. Load pockets, CALISO, ERCOT and NYISO may be exceptions. New CCGTs are competitive in power auctions and capture base load market. Gas turbines with SCRs for NOx removal Air cooled condensers to avoid cooling water regulations Merchant power or PPAs 15
  • 16. Waterside Station 16
  • 17. Hunter’s Point, San Francisco 17
  • 18. Austin Energy Holly Street 18
  • 19. Glenwood Landing and Rockaway NY 19
  • 20. Astoria Energy Center, New York City Permitting of the old NYPA Poletti and the new NYPA 500 MW Plants NYPA Poletti – Engineering During Decommissioning Astoria Energy I & II Siting, Licensing and Permitting Astoria Energy II (Suez and SNC Lavalin) Environmental Oversight 20
  • 21. Questions?Ed MalleyP: 646.522.6488 | E: emalley@trcsolutions.comwww.trcsolutions.com

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