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As gas prices rise, utilities plan new coal-fired plants Environmental groups concerned air pollution could increase Dan D’Ambrosio The Associated Press
Spurred on by stubbornly expensive natural gas prices, Western utility companies are contemplating new coal-fired electric power plants for the first time in more than a decade, a move that could worsen already deteriorating air quality across the region.
Utility regulators in at least six Western states are in the process of considering new plants or additions to existing ones.
The push, prompted by industry concern over the volatility in natural gas prices, comes as the Environmental Protection Agency is debuting a regional air pollution plan intended to clear haze lingering over wilderness areas.
While utility companies say the shift from natural gas to coal-fired plants will help them fill an increased demand at a cheaper price, environmentalists find the trend disturbing.
“We haven’t seen a coal plant built in Colorado in two decades and there’s a reason for that,” said Robin Hubbard of Environment Colorado. “Denver just had the dirtiest summer we’ve had in 18 years. We clearly need to look at other means of power generation.”
Utilities turned to natural gas for new power in the 1990s because the plants — essentially a jet turbine powering a generator — are cheaper to build and cleaner to operate.
But then came the run-up in fuel costs, which piled onto the higher capital costs.
Fuel costs for gas-fired plants are as high as 4 cents per kilowatt hour, while coal plants come in at about 1 cent, said Robert McIlvaine of McIlvaine Co., an energy consulting firm based in Northfield, Ill. Breaking point at about $3 per million Btu “The breaking point is somewhere around $3 per million Btus of natural gas,” McIlvaine said. “Below $3, gas-fired generation is more attractive than coal.”
A Btu, or British thermal unit, is roughly equivalent to the amount of heat generated by burning a kitchen match, according to Xcel Energy spokesman Steve Roalstad.
At the current price of $6 to $7 per million Btu, natural gas is not even close to competitive with coal. Some gas-fired plants around the nation are being shuttered because the cost to run them equals the sales price for the electricity generated, McIlvaine said.
Nationwide, as many as 90 new coal-fired plants are being considered with a combined capacity of 50,000 megawatts, McIlvaine said. That equals about 7 percent of the total power generation available in the United States and carries a price tag of about $75 billion.
One megawatt supplies the amount of electricity used by 400 to 900 homes in one year.
In Colorado, Xcel Energy is planning to build a 750-megawatt coal-fired plant near Pueblo, Colo., for $1.3 billion, while a comparable gas-fired plant would cost about $533 million.
Xcel had seen a 13 percent increase in per capita demand for electricity in the last decade, thanks to a proliferation of household appliances from big screen televisions to cell phone chargers, Roalstad said.
Over the next 10 years, the United States will need about 140,000 megawatts of increased power, with about one-half or more to come from coal plants, McIlvaine said. Less than half of planned plants usually built Jim Owen of Edison Electric Group, an industry trade organization, said it is too soon to tell just how big the coal-fired boom will be, given that less than half of planned plants are usually built.
The downside for coal-fired plants is that they are a major source of carbon dioxide emissions, the leading cause of global warming. Coal plants also emit sulfur dioxide, which creates acid rain; nitrogen oxide, which turns to ozone creating smog; and mercury, a neurotoxin especially dangerous to children.
Neither carbon dioxide nor mercury are currently regulated for coal-fired plants by the EPA, but proposed mercury rules are expected by the end of the year.
The technology for dealing with both types of emissions is just emerging. “I have not heard of any really viable carbon control technologies,” Roalstad said. EPA debuts regional air pollution plan As the plants are being built, the EPA is debuting a regional air pollution plan intended to improve visibility in 16 national parks and wilderness areas, including the Grand Canyon National Park in Arizona.
The Western Regional Air Partnership hopes to reduce sulfur dioxide emissions from coal-fired plants by 50 percent to 70 percent by 2040.
Environmentalists believe the EPA’s actions are another reason utilities are turning to coal plants now. “The theory is the industry sees carbon and mercury regulations coming and they have to get in their last push to get permits, because once those kick in, coal-fired electricity could cost more than wind,” said Matt Lewis of Resource Media in San Francisco.
Xcel’s new plant in Pueblo will meet all current emission requirements, as will any other plants the company builds in the future, Roalstad said. “Legislators and regulators can certainly draft legislation to accomplish what they want to accomplish,” Roalstad said. “We will comply with all regulatory requirements. We have no choice.” Base load demand growing Utilities are also gravitating toward coal because of base demand, which is the average amount of power a utility needs to produce for its customers. Coal has been the fuel of choice for base demand because it’s cheap compared to other fuels, and because once turned on, coal-fired power plants run 24 hours a day, seven days a week.
Peak demand is the amount of power a utility needs to have at its command when customers are cranking their thermostats to fend off extreme weather.
Roalstad said the last Xcel study, produced in 1999, called for an additional 2,000 megawatts of power to serve greater peaking loads, but not a greater base load.
Today, it’s a different story. Xcel now believes they do need a greater base load capacity because of more customers in Colorado.
Brunetti said recently that Xcel’s customer base has increased by 20 percent in the last decade, while peak load has gone up by 60 percent.
Coal-fired power plants are in the works in Arizona, Colorado, Montana, New Mexico, Utah and Wyoming. The biggest plant being contemplated is a 1,500-megawatt station on Navajo land in the Four Corners region.
McIlvaine said coal accounts for more than 50 percent of the nation’s electrical power and natural gas appears to be on the wane as a fuel source.
“Natural gas production is going to decline, there’s no question about that,” McIlvaine said. “There’s a 300-year supply of coal.”
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