What a difference a year makes – particularly in the gas business. Last winter, US natural gas prices were hitting new heights, exceeding the $10 per million Btu mark. This prompted a good deal of talk about a revival in coal-fired generation. But by January 2002, gas prices were back down to about $2.30 per million Btu, which is not much different from where they were in the period 1994 to 1999. This has undoubtedly weakened the short-term economic case for coal firing and taken some momentum out of its resurgence.

The dramatic upward rise in US natural gas prices started in 2000, and can be attributed to limitations in US domestic production capacity arising from a sustained period of low oil and natural gas prices. Strong economic growth (remember that ?) caused unprecedentedly high demand, and the situation was exacerbated by a very hot summer, an unusually cold winter and what the US Energy Information Administration calls a “poor storage position heading into the winter season” [November 2000 to February 2001].

These conditions spawned a renewed interest in the possibilities of coal generation. If you add up all the new coal-fired power plants recently mooted in the USA, ranging from the firmly planned to the tentative, you arrive at a total of more than 90 projects amounting to about 50 000 MWe of proposed new coal capacity. However, with the current economic downturn coupled with the drop in natural gas prices, it remains to be seen how much of this actually gets built.

Currently there is under construction/commissioning less than 2000 MWe, most of which is circulating fluidised bed systems designed to operate on what might be called low grade niche fuels. Some 1000 MWe of the total is accounted for by two large CFB projects, lignite-fuelled Red Hills, which is expected to go commercial in late February after experiencing a number of delays, and Reliant Energy’s Seward plant, which will run on coal-waste and is due to go on line in 2004. A couple of 300 MWe CFB repowering projects are underway at Jacksonville (to be fuelled with blends of coal and petcoke), while at Southern Illinois Power Co-op’s Marion plant an existing plant is being repowered with a 120 MWe CFB. The other coal units under construction are: AES Corp’s Beaver Creek (60 MWe), Black Hills’ Wygen 1 (90 MWe) and Corn Belt Energy’s Elkhart (91 MWe).

Around 6000 MWe of coal capacity has got as far as the permitting stage, and some 3000 MWe of this is accounted for by Peabody Energy’s two mine mouth projects, Thoroughbred and Prairie State.

Like most of the other projects currently under consideration in the USA these will use tried and trusted subcritical technology, and not make use of the benefits offered by supercritical steam conditions, notably dramatically increased efficiency.

As pointed out by Jack Makuch of Consulting Services lnternational at December’s Power-Gen International conference, supercritical technology was introduced into the United States as long ago as the 1950s and Philadelphia Electric’s Eddystone 1 operated for some time at main steam conditions of 5000 psig and 1200°F. However, while supercritical plants were popular in the 1960s in the United States, the technology was all but abandoned in the 1970s, because of technical problems, both real and imagined, with the early designs, coupled with a period of rising interest rates and reduced growth rates in electricity demand.

Despite good experience since then with supercritical systems in Europe and Asia, including Russia, Japan and Korea, US power companies still seem to perceive the technology as exotic and problematic and in an increasingly cost conscious environment have not been able convince themselves that the advantages may be worth the extra investment.

However, there is one notable exception. As part of its $7 billion Power the Future plan, Wisconsin Energy Corp (WEC) is proposing to build, at Oak Creek, two 600 MWe supercritical coal-fired plants plus, once it deems the technology proven, an IGCC plant. The plan also includes two 500 MW CCGTs.

Last October the WEC plan received preliminary broad-brush approval from the Public Service Commission of Wisconsin, and a subsidiary, WE Power, has been established to build the new plants.

The WEC approach reflects a strong commitment to developing coal generation and WEC boasts that when it first announced Power the Future, in September 2000, it was the only energy company in the USA proposing a project to build significant new coal-based generating units. However the Power the Future plan must still receive extensive review on engineering, cost and environmental issues.

It remains to be seen how strong the commitment to coal would remain in the face of sustained low natural gas prices. However, if one takes a longer term perspective, which WEC, commendably, is aiming to do, some very good arguments remain for coal, not least of which is the need for fuel diversity and the need to have some protection against natural gas price volatility.

Thinking small and old

Large coal plants using advanced technology may have many advantages when it comes to future new build. But it is worth remembering that old, and relatively small, coal-fired plants, using technology from 20 or 30 years ago still provide the backbone of the US power generation industry. Particularly significant therefore is a project to be carried out at the 100 MWe AES Greenidge unit 4 plant, which aims to demonstrate technologies for reducing NOx, SOx, particulate and mercury emissions that are claimed to be cost-effective at small scale.

For many smaller boilers, in the 50-300 MW size range, the prospect of increasingly stringent future environmental regulations are a particular worry because many current emissions control technologies are prohibitively expensive to backfit at these sizes. As there are estimated to be around 500 such plants in the USA, accounting for a sizeable share of total capacity, the Greenidge project should prove valuable.