DRAFT

Northwest Power Planning Council
New Resource Characterization for the Fifth Power Plan

Coal-fired Power Plants

May 17, 2002

This paper describes the technical characteristics and cost and performance assumptions to be used by the Northwest Power Planning Council for assessments involving new coal-fired power plants. The intent is to characterize a typical facility, recognizing that actual facilities will differ from these assumptions in the particulars. We anticipate using these assumptions in price forecasting and system reliability assessment models. Others may use the Council's technology characterizations for their own purposes.

Coal-fired steam-electric power plants are a mature technology, in use for over a century. Coal-fired power plants are the major source of power in eastern electricity supply systems and the second largest component of the western grid. Currently, over 36,000 megawatts of coal steam-electric power plants are in service on the western electricity grid, comprising about 23% of generating capacity. In recent years, however, the economic and environmental advantages of combined-cycle gas turbines, low load growth and promise of advanced coal-based technologies with superior efficiency and environmental characteristics eclipsed conventional coal-fired steam-electric technology, at least in the United States. Since 1990, less than 500 megawatts of new coal-fired steam electric plant entered service on the western grid.

The future prospects for coal-fired steam-electric power plants may be changing. Like reciprocating internal combustion engines, another mature technology, the economic and environmental characteristics of coal-fired steam-electric power plants have greatly improved. These factors, combined with the prospect of stable or declining coal prices may reinvigorate the competition between coal and natural gas and lessen the near-term prospects for revolutionary coal-based technologies.

The capital cost of coal-fired steam-electric plants has declined about 25% (constant dollars) since the early 1990s with little or no sacrifice to thermal efficiency, reliability or environmental performance. This cost reduction is attributable to plant performance improvements, automation and reliability improvements, equipment cost reduction, reduced construction schedule, and increased market competition (DOE, 1999). Coal prices also have declined during this period as a result of stagnant demand and productivity improvements in mining and transportation. By way of comparison, the Council's 1991 power plan estimated the overnight capital cost of a new coal-fired steam-electric plant to be $1775/kW and the cost of Powder River coal at $0.68/MMBtu (year 2000 dollars). The capital and fuel costs proposed for the Fifth Power Plan are $1468/kW and $0.71/MMBtu, respectively.

Though the economics have improved, other issues associated with future development of coal-fired power plants remain largely unchanged. The issues cited in the Fourth Power Plan - air quality impacts, carbon dioxide and global climate change, water impacts, solid waste, site availability, coal transportation, electric power transmission and impacts of coal mining and transportation - remain significant.

The proposed reference plant is a subcritical 400 megawatt pulverized coal-fired unit. It is one of two or more co-located similar units. Because of increasing constraints on the availability of water, we assume the plant is equipped with dry mechanical draft cooling. The plant would be equipped with flue gas desulfurization, fabric filter particulate control and would use combustion NOx control. In view of cost and performance improvements achieved in recent years with conventional technology, the potential for further improvements, and difficulties experienced with development of advanced technologies, future improvements in cost and performance is based on evolutionary improvements to conventional technology.

Issues:

• In previous power plans, location-specific coal-fired power plant costs (including transmission interconnection and site infrastructure) were based on actual Northwest sites that had been proposed for development. The availability of capacity for future development was based on the same approach. This approach no longer appears practical now that power price forecasting and other Council analyses demand a west-wide view. What approach should the Council use in expanding the basis plant assumptions to the various load-resource areas used in the Council's models?  What are the important variables among prospective sites?  Do we need to assess possible constraints on resource development?
• What should we assume with respect to future environmental requirements for coal-fired capacity?  Will mercury and other air toxins be controlled and how would plant cost and performance be affected?  The reference design does not include selective catalytic reduction (SCR) for additional NOx control. Should we assume that SCR would be typically installed on new plants.
• The proposed scheduled outage factor seems high (~30 days/yr) but is consistent with GADS data and new plant design objectives. Do this assumption require revision?
• Our current assumption regarding future technology development is limited to heat rate improvement and is taken from the Energy Information Administration Annual Energy Outlook 2002. The basis is unclear. Should we look at an alternative approach, e.g. adoption of some advanced technology or achievement of US DOE performance goals by some future date?
• Capital replacement assumptions affect the retirement of existing capacity in power price forecasting and other modeling. Are the proposed assumptions realistic?

References

DOE (1999):  US Department of Energy. Market-based Advanced Coal Power Systems. March 1999.

EIA (2001):  US Department of Energy, Energy Information Administration. Assumptions to the Annual Energy Outlook 2002.   December 2001.

Table 1:  Resource characterization: Coal-fired power plants