With Donald Trump set to enter the White House in January and the future of the Clean Power Plan uncertain, Hastings Utilities is looking at strategic planning and potentially converting a coal-fired power plant to natural gas.
Keith Leonhardt, HU director of engineering, presented the Hastings Board of Public Works with a presentation summarizing the results of a pair of studies from engineering consulting firms Alstom, and Black and Veatch, that looked at the capital costs associated with converting the 76.3-megawatt, 35-year-old Whelan Energy Center No. 1 power plant to natural gas. Leonhardt said the average life span of a coal-fire power plan is 50 to 60 years.
Trump has favored repealing the Clean Power Plan, which the Environmental Protection Agency issued in August 2015 to reduce carbon dioxide emissions.
The total estimated capital cost for the conversion was estimated to be $18.13 million, which doesn’t include contingency or owner’s costs.
In a letter from Leonhardt to HU interim manager Al Meyer accompanying Leonhardt’s presentation, the reports provide HU with Alstom’s conclusions as to how the implementation of natural gas only, as well as three ratios of coal and natural gas firing, may affect current boiler thermal performance, emissions performance and unit operability. The estimated capital cost was $9.74 million.
In addition, Black and Veatch evaluated the capital cost for controls, raceway and National Fire Protection Association code compliance for the natural gas project. The estimated capital cost was nearly $1.3 million.
HU staff evaluated two preliminary options to provide a total requirement option for the natural gas supply to WEC 1. The estimated capital cost for the least costly option of the two, from Trailblazer Energy LLC, was $7.1 million. There would also be an annual commodity cost with Trailblazer Energy of at least $1.2 million.
Don Cox, HU director of marketing and energy supply, said coal is about half the cost of natural gas to provide the same amount of energy.
WEC-1 meets current emissions standards. That could change if the Clean Power Plan remains in effect, however.
HU environmental supervisor Marty Stange reported to the utility board in August 2015 that Whelan Energy Centers I and II collectively emit an average of 2,346 pounds of carbon dioxide per megawatt hour annually.
According to the Clean Power Plan, the interim goal for 2022 to 2029 is an average emission rate of 1,522 pounds per megawatt hour, a 31.97 percent reduction from current levels.
Beginning in 2030, the final goal is an annual emission rate of 1,296 pounds per megawatt hour, a 44.75 percent reduction.
The reports Leonhardt presented focused on capital costs and implementation to convert WEC-1 to natural gas rather than emissions. However, he said when WEC-1 is firing 100 percent natural gas, the plant has the potential to achieve predicted nitrogen oxide emissions of .11-.14 power per thousand British Thermal Units, down from current levels around .16.17, which are already under regulations.
The Clean Power Plan focuses on carbon dioxide emissions. Leonhardt said the reports didn’t address specific changes to CO2 levels but said after the meeting the reduction would be “significant.”
Leonhardt said the studies conducted by Alstom and Black and Veatch cost a total of $280,000 — $246,000 for Alstom; and $34,000 for Black and Veatch.
Board chairman Chuck Shoemaker asked if the money was well spent on the two studies.
HU staff members present said it was.
“We learned a lot of useful information that will be helpful down the road,” Meyer said.
Shoemaker said that he thought it was useful, as well.
“I wanted to know whether if we got stuck with some real significant rules on CO2 emissions what were our possible options to convert, in part, to natural gas,” he said.
Board member Jeanette Dewalt said she appreciated the information but wants to do more strategic planning with the power plant’s future.
Leonhardt said the study helped staff address an issue with ash deposits in the boiler.
When asked for his opinion, Mike Hernandez, HU director of electric production, who has worked in power plants for 40 years, said he has always looked at strategic plans. He said he believes Hastings Utilities should be forward thinking in addressing its aging electrical production facilities regardless of what happens with the Clean Power Plan.
“I think we got the brain power here,” he said. “I’ve only been here a year and a half, and you’ve got a lot of bright people here. We’ve just got to get in the room and start kicking those things around. If we do that, we’ll come up with a good plan.”
While Hastings Utilities doesn’t look to take immediate action based on the reports from Alstom and Black and Veatch, board members agreed that the information provided will aid strategic planning.
“The answer today is not ‘Thanks, we’re not going to do it. We’re going to put it on the shelf and never look at it again.’ The answer is we’ve got some information already and maybe at some point when things will come back and we’ll have to start looking at it again we’ll have it in our back pocket to do what we need,” Shoemaker said.