Putting combined cycles back in use

Turbomachinery International, Jul/Aug 2005 by Phillips, Jeffrey

REPOWERING TO IGCC COSTS NEARLY THE SAME AS A NEW PULVERIZED COAL PLANT

For over twenty years, the U.S. power industry has considered building new coal-based Integrated Gasification Combined Cycle (IGCC) plants. But existing Natural Gas Combined Cycle (NGCC) plants are now on the table as candidates for repowering with cheaper fuels, such as gas derived from refinery residues.

For instance, in May 2005, Calpine Corporation, owner of one of the largest combined cycle fleets (over 25,000 MW) in the U.S., announced at its annual stockholders meeting that it intends to retrofit up to 10% of its fleet with gasification technology in order to reduce fuel costs. Analysis shows that repowering an NGCC cycle plant would cost the same as or less than building a new Super Critical Pulverized Coal (SCPC) plant.

Falling capacity utilization

Starting in 1998 an enormous building boom of NGCC plants started in the U.S. During the period from 1998 through 2004, 135,000 MW of new combined cycle capacity was added. When coupled with the 74,000 MW of new simple cycle capacity added during the same time, the total new gas-fired capacity during the past seven years represents a 28% increase in the total generating capacity of the U.S. compared to the installed base in 1997.

The cumulative effect of this large capacity expansion coupled with the recent rise in natural gas prices has had a negative impact on the capacity factors of the U.S. combined cycle fleet (Figure 1, capacity factor is defined as the MW-hr of power generated during a time period divided by the MW-hr that could have been generated if a plant operated at 100% load over that period). Last year the average combined cycle capacity factor was approximately 30%, and in some parts of the country it was less than 20%.

Many of the plants built during the combined cycle boom were independent power plants that were financed on the basis of having capacity factors of 80% or more. This was a logical assumption based on the natural gas price in 1998 of $2.00/MMBtu; however recent prices for natural gas have been in the range of $5 to $8/MMBtu (Figure 2). As a result of the collapse in capacity factors, many of these plants have not been able to produce enough revenue to pay their mortgages and have been foreclosed by the financing banks.

The people left holding a title to a natural gas-fired combined cycle plant must be asking themselves if there is a way to make money with these relatively unused assets, which unfortunately burn expensive fuel. In addition, as a matter of national public policy, the U.S. should be asking whether it is desirable to allow these fuel-efficient, clean power producers to lie fallow while older, less fuel-efficient, less environmentally benign coal plants run almost continuously. One ray of hope for combined cycle owners is the use of coal gasification technology, which can convert relatively cheap solid fuel into a gaseous fuel that can be burned in combined cycles.

Switch to petcoke

The Electric Power Research Institute (EPRI) has a long history in nurturing the development of gasification technology for power generation. In the 1980s EPRI, together with several leading power industry organizations, sponsored the first IGCC power plant in the U.S., the Cool Water project in Barstow, California. Cool Water was a 100 MW plant based on what is now the GE Energy coal gasification process and employed a GE 7E turbine. The plant operated for five years starting in June 1984 and proved the technical feasibility of IGCCs.

The heat rate (10,950 Btu/kW-hr) and size of the plant, however, were not competitive, and the plant was mothballed after its demonstration period. The gasification plant was dismantled and moved to Coffeyville, KS, where it is now part of a petroleum coke-to-ammonia fertilizer plant owned by Coffeyville Resources.

The equity partners in the Cool Water project were EPRI, Texaco, Bechtel, GE, Japanese Cool Water Partnership and Southern California Edison. Non-equity financial contributors included Sohio, ESEERCo and the Office of Synfuels Projects of the U.S. Treasury Department.

During the 1990s, four new IGCCs in the 250-to-300 MW size range were built; two in Europe and two in the U.S. The two U.S. projects (Wabash River and Tampa) received significant subsidies from the U.S. Department of Energy via the Clean Coal Technology program, while the Elcogas IGCC project in Puertollano, Spain, received funding from the European Union's Thermie program to cover 5.5% of the plant's capital cost.

Demkolec, the 253 MW IGCC in Buggenum, Netherlands, received no direct government subsidies, but was built as a demonstration project by a consortium of Dutch electric utilities. The plant has since been sold to Nuon and operates as an independent power project.

Unlike the Cool Water project, the four IGCCs built in the 1990s have heat rates superior to or competitive with conventional coal plants. They range from 8,200 Btu/kW-hr for the Spanish Elcogas plant to 9,600 Btu/kW-hr for the Tampa IGCC plant in Florida. The former is a highly integrated plant which uses the compressor of the combustion turbine to supply pressurized air to the oxygen plant, while the Tampa plant features a much simpler design with no integration between the turbine and the oxygen plant. This latter approach, while less efficient, has proven to be more flexible and easier to operate.