Monday, June 28, 2010

North Carolina Coal to Gas Conversion Under Way

About six months ago, North Carolina utility Progress Energy announced that it would shutter 11 coal-fired generating plants.  It was a bold move that anticipated increased carbon dioxide emission controls and lower tolerance for pollutants like mercury, sulfur dioxides and nitrogen oxides.  A couple of weeks ago, Siemens announced that it won a contract from Progress for five new high-efficiency gas turbines at two sites that housed six doomed coal turbines, the H.F. Lee Energy Complex near Goldsboro and the Sutton Plant near Wilmington. 

The decision by Progress was based more on economics than environment.  The five new turbines will replace six coal fired plants that were put in service in 1951, 1952, 1954, 1955, 1964 and 1972, respectively. It does not make sense to invest hundreds of millions of dollars in equipment that is at the end of its useful life when the investment will result in still sub-standard equipment.  But the environmental impact is substantial.  From the New York Times article:
"Per kilowatt-hour generated, the new gas-fired generators will reduce carbon dioxide emissions by 60 percent and nitrogen oxides by 95 percent from levels produced by their coal-fired predecessors. Nearly 100 percent of sulfur dioxides will be eliminated, and all of the mercury, Siemens said."
Because the gas turbines are going into existing facilities, the implementation time period will be a couple of years since there will be no need for land acquisition and permitting. 

Siemens also received an order for six gas turbine generators from Florida Power & Light to replace old oil/gas generators in Riviera Beach and Cape Canaveral, FL.  The FP&L move was about upgrading the efficiency of the plants, although the move will result in lower carbon dioxide emissions.

The Times article is an interesting read because Siemens talks about how the nature of the company's business with utilities is changing.  Rather than augmenting capacity, utilities are starting to replace generating capacity and restructure their power generation infrastructure in advance of eventual environmental regulation.  This should lead to greater displacement of coal by gas, which should yield more efficient power generation and lower pollution. 

You can say what you will about energy/environmental regulation, but I think the ultimate benefits will be tangible and positive.

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