As we enter 2014, we reflect back on some of the biggest energy headlines of 2013. What follows is a list of the top 10 stories in power generation last year.
#10: Duke Energy to retire Crystal River nuclear power plant
The plant began operation in 1977 and has been offline since 2009, when it went into safe shutdown for a scheduled refueling and maintenance outage, during which a crack was discovered in the concrete containment wall. According to Duke, the company determined the plant was salvageable but that the cost of the repairs made the project uneconomical.
Duke is considering building a natural gas fired power plant to replace the power produced by Crystal River, and has said it will work with the roughly 600 full-time employees at the retired facility to find them new work in other Duke Energy organizations.
#9: U.S. coal-fired power plants invested more than $30bn on scrubbers in four years
Owners of coal-fired power plants invested more than $30 billion in flue gas desulfurization systems, also known as scrubbers, between 2007 and 2011, according to a report from the U.S. Energy Information Administration.
According to the report, scrubbers were installed at around 110 coal-fired power plants in 34 states during that time, raising the amount of scrubbed generating capacity in the U.S. from 115 GW to just more than 191 GW. That number represents a little less than 60 percent of coal-fired, steam electric generation capacity in the U.S.
According to the EIA, utilities made the investments in scrubbers in response to several regulatory initiatives, including the U.S. Environmental Protection Agency’s Clean Air Interstate Rule.
The increase in installed scrubbers has helped create a reduction of SO2 emissions, which were 68 percent lower in 2011 than the 1990 level and 46 percent lower than the 2007 level. Other factors in that reduction include coal-fired plants burning less coal and switching to a lower sulfur coal.
Plant operators in Ohio, Pennsylvania, West Virginia, Maryland and Georgia made 43 percent of the total national investment in scrubbers, spending a total of $13 billion between 2007 and 2011, according to the EIA. Ohio plants spent more than any other state, making a $3.6 billion investment in scrubbers over that time period.
#8: EPA to finalize revised Boiler MACT rule
U.S. Environmental Protection Agency (EPA) plans to present a less costly Boiler Maximum Achievable Control Technology (MACT) rule to the boiler industry this spring, said Gina McCarthy, assistant administrator for the EPA Office of Air and Radiation, in a recent statement.
The EPA will continue to work with permitting authorities and industry members on the Boiler MACT rule, which was initially issued in March 2011 and stopped through a stay provision issued by the EPA in May 2011. McCarthy said the agency will soon issue a no action assurance letter to those affected by the MACT rules.
EPA will not enforce any of the administrative notification requirements in the old rules for a period of time, while it works to finalize the rules by the spring of this year, according to McCarthy. The most recent revisions were published in the Federal Register on Dec. 23. The revised rule will be less costly than the original which will still include all of the health benefits of the original rule, McCarthy said.
The rules are expected to affect only a small segment of boilers. “The standards would focus on the less than one percent of boilers that emit the majority of pollution from this sector,” McCarthy said.
EPA Administrator Lisa P. Jackson said there is no reason to believe the EPA will face additional court actions prior to finalizing the rule, and the agency has the tools to address any possible actions. Those tools include the no action notice letters, or the issuance of a 90-day stay made possible through the Clean Air Act if a source faces compliance issues. The EPA could also issue a longer stay under the Administrative Procedures Act, consistent with the court’s opinion.
#7: Mississippi Power requests $600mn for Kemper County IGCC plant
Mississippi Power asked state regulators for an additional $540 million to build the 582 MW Kemper County integrated gasification combined-cycle (IGCC) power plant, bringing the cost up to $3.42 billion after Department of Energy grants and cost cap exceptions are included. Rising labor, piping and other material costs and lower productivity are to blame for the increase.
“While we are disappointed that costs have increased, we believe we have done the right thing by remaining accountable to our customers,” said Ed Day, president and CEO of Mississippi Power. “Equally important is keeping the promise we made in the settlement agreement with the Mississippi Public Service Commission to limit the total rate base for the plant to $2.4 billion, net of Department of Energy grants and cost cap exceptions.”
Due to the Jan. 24 settlement, investors will have to cover the rest, resulting in a $540 million loss in the first quarter, according to WLOX-TV.
The utility said in a release that the final component of the gasifier was lifted into place, and the water treatment facility and combined-cycle cooling tower are completed. The plant is scheduled to begin operations in May 2014.
#6: AEP to stop burning coal at three power plants
American Electric Power (NYSE: AEP) will stop burning coal at three power plants in the Midwest and pay $8.5 million as part of a revision of a 2007 settlement with the U.S. Environmental Protection agency, states and environmental groups.
AEP will stop burning coal at the Tanners Creek Generating Station Unit 4 in Indiana, the Muskingum River power plant Unit 5 in Ohio, and the Big Sandy power plant Unit 2 in Kentucky by 2015, according to the agreement made public Feb. 25. The company made the revised agreement because it wanted to use a less expensive technology to reduce emissions at the Rockport power plant in southern Indiana in exchange for other concessions.
The closing of the plants means AEP will retire around 2,000 MW of total coal-fired power capacity. The company had previously stated it intended to close the coal-fired units or convert them to other fuels.
AEP is also agreeing to develop 50 MW of solar power in 2013 as well as 150 MW of wind or solar power in Indiana or Michigan by 2015.
#5: Sandy Creek coal-fired power plant set to go online in April
The Sandy Creek coal-fired power plant is being fired up intermittently for testing purposes and will go online full-time in April, according to a report from the Waco Tribune. The plant is located in Riesel, Texas.
The 900 MW coal-fired power plant, which cost around $1 billion to build, had its boiler badly damaged when it overheated during testing in 2011. The plant was also involved in a federal Clean Air Act lawsuit that was settled in 2011 with Sandy Creek agreeing to mercury and soot emissions below what its permit had allowed.
The plant’s contracts with wholesalers will not go into effect until the plant is ready to run full time, but it is selling electricity into Texas’ power grid during the testing phase, according to the Tribune.
#4: NRC denies Calvert Cliffs 3 nuclear plant license
Members of the Nuclear Regulatory Commission today upheld the licensing board’s decision to deny a construction and operating license for the proposed 1,500 MW Calvert Cliffs 3 nuclear reactor in Maryland, according a release from the public relations firm The Hastings Group.
The decision not to allow the reactor, according to the release, marks the first time in history that the NRC has upheld a license denial for a commercial nuclear reactor, and only the second time a commercial nuclear facility has been denied a license at all (the other being a Louisiana uranium enrichment facility shut down in 1997).
The denial of a license to the petitioner UniStar Nuclear was based on a finding that the nuclear plant would have been in violation of key provisions of the Atomic Energy Act. UniStar Nuclear is owned entirely by Electricite de France (EDF), which is itself owned primarily by the government of France—the Atomic Energy Act prohibits foreign ownership, control or domination of a nuclear reactor in the U.S. The plant would have been a European Pressurized Reactor constructed by Areva, which is itself mostly owned by the government of France.
#3: NV Energy merger with MidAmerican Energy completed
MidAmerican Energy Holdings closed its merger with NV Energy on Dec. 19 after receiving final approvals from state and federal authorities.
The merger was first announced on May 29 in which MidAmerican would purchase all outstanding shares of NV Energy’s common stock for $23.75 per share in cash. The companies’ boards of directors approved the deal, and the transaction received final approvals from the Public Utilities Commission of Nevada, the Federal Energy Regulatory Commission and the U.S. Department of Justice.
NV Energy will continue to be run by CEO Michal Yackira until his retirement effective June 2014. Paul Caudill, who recently served as president of MidAmerican Solar, is joining NV Energy as president, effective immediately. The utility will continue to operate as a separate company, and will still be headquartered in Las Vegas.
#2: Georgia Power seeks to retire 2,061 MW of coal- and oil-fired generating capacity
The company will request to decertify units 3 and 4 at Plant Branch; units 1-5 at Plant Yates; and units 1 and 2 at Plant McManus, all located in Georgia, by April 16, 2015, the effective date of the U.S. Environmental Protection Agency’s (EPA) Mercury and Air Toxics (MATS) standard. The units at Branch, Yates and Kraft units 1-3 are coal-fired generating units. Kraft Unit 4 is an oil- or natural gas-fired unit and McManus units 1 and 2 are oil-fired.
The company expects to seek a one-year extension of the MATS compliance date for Plant Kraft and retire those units by April 16, 2016. Additionally, Georgia Power will ask to decertify Boulevard 2 and 3 combustion turbine generating units upon approval of the Integrated Resource Plan.
Georgia Power will also request that units 6 and 7 at Plant Yates switch from coal to natural gas. Additionally, Unit 1 at Plant McIntosh will switch from burning Central Appalachian coal to Powder River Basin coal. The company also announced that the conversion of Plant Mitchell Unit 3 from coal to biomass cannot be completed before 2017 due to regulatory uncertainty related to the Industrial Boiler Maximum Achievable Control Technology rule.
Georgia Power received approval in March 2012 for the decertification of units 1 and 2 at Plant Branch, effective Dec. 31, 2013 and Oct. 1, 2013, respectively; and unit 4C at Plant Mitchell effective March 26, 2012. The three units total 602 MW of generating capacity.
The rest of Georgia Power’s coal-fired fleet are currently undergoing the installation of emission controls.
#1: Edison may retire both San Onofre nuclear units
Southern California Edison is considering retiring both of its Pacific coast nuclear reactors, the Associated Press reports.
Both reactors at Edison’s San Onofre Nuclear Generating Station, located between San Diego and Los Angeles, have been offline since January 2012 following the discovery of serious system flaws. Keeping the combined 2,250 MW units offline has come at a price tag of $574 million, a cost that has been passed on to power customers and shareholders.
“There is a practical limit to how much we can absorb that risk,” said Edison CEO Theodore Craver in a conference call of Wall Street analysts, according to the AP.
Craver said a decision on the future of the entire facility is expected before the end of 2013.