Power Magazin January 2013

Vol. 157 No.
1 January 2013

Transforming the Grid
2013 Industry Forecast
Russian Power Revolution
Californias Future:
Distributed Generation
Hunting Black Swans
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ON THE COVER
The Electric Power Research Institute, which contributed the cover story, titles our cover il-
lustration Tomorrows Power System. It depicts the shift from almost exclusively central
station generation and one-way power flows to a system in which power users are also
sometimes generators, and in which both energy and information flow in two directions.
Courtesy: EPRI 2012, All rights reserved
COVER STORY: RESEARCH AND DEVELOPMENT
20 Emerging Technologies Enable No Regrets Energy Strategy
The Electric Power Research Institute (EPRI) anticipates unprecedented change in
the electricity industry over the next 10 to 20 yearsmore than in the previous
100. To copelet alone thrivethe industry needs to continue innovating and
adapting to the changing markets and consumer demands. Heres EPRIs rundown
of collaborative research it is engaged in to develop a no-regrets portfolio of
technologies that should allow utilities to maintain a reliable, environmentally
sound, and reasonably priced electricity supply in the face of uncertainty and
enormous upheaval.
SPECIAL REPORTS
2013 INDUSTRY FORECAST
30 Slow Growth Aheadwith Unexpected Flares of Activity
The power generation industry is a long-lead-time business with long-lifecycle in-
frastructure, so any diversion from familiar operating parameters (shale gas, were
looking at you) can spell difficulties for generation owners, grid dispatchers, and end
users. POWER editors and contributors look at the likely scenariosand surprises
ahead for the U.S. and Europe.
40 Coal Battered Early, Later Rebounds
Shale gas development in the U.S. has changed the tune for power generators, lead-
ing to a game of musical chairs for coal- and gas-fired power dispatch. Gas may be
leading the dance now, but dont count coal out.
42 Natural GasFired Plants Continue Rollercoaster Ride
When combined cycle peakers reach peak capacity factors of 80%, you know market
fundamentals have changed. There may be more supply now than during the previ-
ous gas bubble, but there are still factors that could burst that bubble.
POWER IN RUSSIA
44 The Russian Power Revolution
Russia holds some of the largest fossil fuel reserves in the world and has become a
major fuel exporter. Domestically, however, those resources have not guaranteed a
reliable electricity infrastructure. We look at the history of the Russian power indus-
try, previous reforms, and the latest plan to modernize a sector hobbled by Soviet-
era assets and operations. Will $615 billion be enough?
Established 1882 Vol. 157 No. 1 January 2013
20
30
44
www.powermag.com POWER
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January 2013 2
FEATURES
ASSET MANAGEMENT
50 The Electric Grid: Civilizations Achilles Heel?
Todays electric grid has become too essential to modern life and too vulnerable to
human and natural threats. Thats the argument made by several industry experts.
Although they may disagree about the most likely threats, and about how to defend
against those threats, they agree that if a major grid failure were to occur, the effects
would be unprecedented.
FUTURE POWER
53 Distributed Generation: Californias Future
Once again, California is serving as energy industry paradigm changer. This time
the shift is from central-station generation to increasingly pervasive distributed
generationin large part driven by the states renewable energy mandates.
How California copes with the associated gear-grinding will be instructive for
the rest of the U.S.
DEPARTMENTS
SPEAKING OF POWER
6 My Top 10 Predictions for 2013
GLOBAL MONITOR
8 World Energy Outlook Foresees Distinct Generation Shift
9 Floating Solaron Water
10 THE BIG PICTURE: The Coal Pile
FOCUS ON O&M
14 Safety a Main Theme at Asian Coal Users Meeting
16 Controlling Fugitive Combustible Coal Dust
LEGAL & REGULATORY
18 Calif. Cap-and-Trade: Bull or Bear Market?
By Allison Davis and Kerry Shea, Davis Wright Tremaine
57 NEW PRODUCTS
COMMENTARY
64 The Electric Power Industry: A Post-Election Assessment
By H. Sterling Burnett, PhD, senior fellow, National Center for Policy Analysis
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The stories in this issue look ahead to the power industrys future. Online, associated
with this issue (on our homepage, www.powermag.com, during the month of January
or in our Archives any time), youll find these web exclusives that look back at how we
got where we are today:
Navigant Announces Coal-Fired Generation Operational Excellence Awards
Grading My 2012 Industry Projections (By Editor-in-Chief Bob Peltier)
Too Dumb to Meter, Part 7 (The Atomic Earth-Blaster, Chariot Swings Down to
Alaska, and Sedan Side Trip to Nevada chapters from Contributing Editor Kennedy
Maize)
Russias Power Profile (A detailed supplement to the special report in this issue, by
Senior Writer Sonal Patel)
And remember to check our Whats New? segment on the homepage regularly for just-
posted news stories covering all fuels and technologies.
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January 2013 4
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January 2013 6
SPEAKING OF POWER
My Top 10 Predictions
for 2013
A
year ago in this column, I pre-
dicted that 2012 would be piv-
otal for the power generation
industry, and it was. Coal-fired gen-
eration dropped precipitously and
gas-fired generation accelerated much
faster than industry predictions. Early
in 2012 the unthinkable occurred:
coal- and gas-fired generation crossed
paths at about 32% for a short period
of time, although coal subsequently be-
gan a slow recovery for the remainder
of the year. Our 2013 Industry Forecast
(p. 30) discusses the likely price and
usage trends to expect this year, which
are reflected in many of my 2013 pre-
dictions.
Looking back over the past years pre-
dictions, I graded myself a strong B,
slightly down from the past two years (a
detailed discussion of my individual scores
is available as an online supplement to
this issue). Like coal, Im expecting a
comeback in 2013.
10. Kyoto 2 is DOA. The Kyoto Protocol ex-
pired on Dec. 31, 2012, and an exten-
sion (Kyoto 2) was formulated in late
2011 as an interim measure until a new
treaty was negotiated, slated for 2015.
COP18, which ended on Dec. 7, made
no tangible progress. Few nations have
backed Kyoto 2, and Russia, Japan, and
Canada have rejected the measure un-
less China and India also accept bind-
ing targets. In 2013, China and India
wont engage, and the European Union
(EU) will stay at arms length until there
is agreement for carryover of unused
emissions allowances, which the many
small member countries disagree with.
9. Coal Combustion Residuals, and
Cooling Water Intake Structures Rules
Go Live. Why would the administration
go into low gear with these two regula-
tions in 2012 and delay post-election
into 2013 unless the rules were oner-
ous? Expect coal ash to be reclassified
as a special waste and new plants (plus
some existing ones) to be forced to be-
gin the move from once-through cool-
ing to cooling towers.
8. Natural Gas Prices Rise. Expect the
average price of natural gas used for
power generation to rise 20% and the
amount of electricity produced by natu-
ral gas to drop by at least 10% in 2013,
below 2012 levels.
7. Coal Use Rises, But No New Plants Are
Built. As gas prices rise, the use of coal
for power generation will follow suit,
but at a lower rate. Expect coal-fired
generation to rise 7% to 8% in 2013,
over 2012 levels. Unfortunately, no new
coal plants will begin construction in
the U.S. in 2013.
6. The EU Embraces Coal. EU member
countries will begin construction of sev-
eral new supercritical coal-fired plants
in 2013 in preference to gas-fired com-
bined cycle plants. The price of natural
gas imported from Russia into the EU
is pegged to the price of oil, making
indigenous coal a very attractive fuel,
particularly when carbon allowance are
at historic lows, and the EU has already
reached its 2020 carbon dioxide reduc-
tion goals.
5. The EPA Fracks Gas. On the same day
the Environmental Protection Agency
(EPA) released New Source Performance
Standards (NSPS) for the oil and natural
gas industry (Aug. 16, 2012), a group
of associations petitioned the EPA ad-
ministrator for reconsideration of cer-
tain provisions (now pending). Also,
the petitions of eight industry groups
challenging the NSPS were combined
and filed with the D.C. Circuit Court
of Appeals on Oct. 15, 2012. The first
hearing is set for Dec. 21, 2012. I pre-
dict that the EPA will make small ad-
justments in the rule to correct the
most egregious errors, but the Court
of Appeals will strike down the rule for
many of the same reasons it did the
Cross-State Air Pollution Rule.
4. Demand Stays Flat. The Energy In-
formation Administrations (EIAs) An-
nual Energy Outlook 2013 Early Release
Overview (AEO2013 Overview) predicts
that demand for electricity will rise at
a rate of 0.9% for 2013. In my opinion,
the prospects for an economic stall
in early 2013 are very high, thereby
quenching the hope of an increase in
the GDP growth rate. Electricity de-
mand will grow at the more pedestrian
rate of 0.7%.
3. Electricity Costs Rise. The average
domestic cost of electricity will reach
a new milestone of 12 cents/kWh in
2013, an increase of about 2%, accord-
ing to the EIA.
2. LNG Stays Home. The EIAs December
2012 release of its AEO2013 Overview
predicts that a surplus of natural gas
will be available for liquefied natural
gas (LNG) export by 2016, and the
volumes are double those predicted
in last years report. With legislators
calling on President Obama to declare
a moratorium on gas exports and only
a single new export terminal approved
(Cheniere Energys facility in Sabine
Pass, La.) to date, the infrastructure is
unlikely to be in place by 2016 to ex-
port any significant additional quanti-
ties. Other than Cheniere Energy, dont
expect approvals for additional export
terminals in 2013, which will make the
EIA predictions moot.
1. The Carbon Tax Dies. Perhaps the
most disturbing concept under dis-
cussion by our congressional repre-
sentatives on both sides of the aisle
is the political viability of a carbon
tax. Spurring on that discussion was
the September 2012 study by the Con-
gressional Research Service that sug-
gested the U.S. budget deficit could
be reduced 50% in 10 years if a $20
per metric ton carbon tax were en-
acted. The tax is represented by some
as a way to fight climate change, al-
though many legislators are more in-
terested in the tax as a new revenue
source, and others wish to use the
revenues to stem the flow of federal
budget red ink. Expect plenty of talk
but little action, because a tax by any
other name is still a tax.
I dont expect everyone to agree with
each of my predictions. If you have strong
feelings, aye or nay, let me know at editor@
powermag.com.
Dr. Robert Peltier, PE is POWERs
editor-in-chief.
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January 2013 8
World Energy Outlook Foresees Distinct
Generation Shift
Global generating capacity is poised to soar by more than 72%,
to 9,340 GW, by 2035 from 5,429 GW in 2011, despite retire-
ment of about 1,980 GW, the International Energy Agency (IEA)
forecasts in its World Energy Outlook 2012, released in November.
Nearly half of this new capacity growth will be propelled by new
natural gas plants and wind farms; new coal and hydro facilities
are expected to add about 15% each. An estimated $9.7 trillion
will be needed to float new capacity additions, with another $7.2
trillion for new transmission and distribution lines, roughly 40%
of which will be needed to replace aging infrastructure.
Demand for electricity is set to grow faster than for any other
final form of energy worldwide through 2035, ballooning at an
average rate of growth of 2.2% per yearat least 38% of which
will be driven by China and 13% by Indiabased on the IEAs
central New Policies Scenario (which takes into account existing
policy commitments and assumes that those recently announced
are implemented). By 2030, just 12% of the worlds population
will still lack access to power, compared with 19% in 2010.
Government Policies to Determine a Future Fuel Mix
Gross electricity generation worldwide will, meanwhile, increase by
more than 70% from 21,408 TWh in 2010 to almost 36,640 TWh in
2035, the report says. Fossil fuels will continue to dominate the
generation fuel mix, led by coal, even though coal generation will
see a significant decline in its share of total generation (Figure 1).
Shares of natural gas and non-hydro renewables are slated to
increase, denoting a broader trend toward more diversity in the
fuel mix both in Organisation for Economic Co-operation and De-
velopment (OECD) and non-OECD countries. According to the IEA,
the projected shift in the types of power generation fuels and
technologies will be influenced by several factors, foremost of
which will be government policies, which can affect investment
in new generating capacity and how existing plants are operated,
specifically in the nuclear and renewable sectors. Policies on
nuclear vary considerably across countries: some continue to en-
courage public and private investment in new capacity, while oth-
ers ban the use of nuclear energy or have introduced programmes
to phase it out, the IEA says. But capital costs will also play an
enormous role, as will carbon prices, and water scarcity, which
can pose reliability risks for coal-fired and nuclear plants while
also influencing the generation mix and generating costs.
The Flight of Wind and Solar PV
In 2035, the report forecasts, almost two-thirds of the capacity
in operation today will still be generating power. Gas- and coal-
fired plants will make up the bulk of gross capacity additions, but
wind capacity will also make its mark. About half of the projected
1,250 GW of gross wind capacity additions will be installed in
OECD countries. The fledgling solar photovoltaic (PV) sector will
also take off with a global capacity increase that is almost as big
as that of hydropower and 2.5 times as large as the net increase
in nuclear capacity, the IEA says (Figure 2). It notes, however,
that power generated from new solar capacity will be consider-
ably less than the increase in nuclear power generation, reflect-
ing the much lower average availability (capacity factor) of these
plants and the variable nature of their output.
Some Regions to See Marked Change
Certain recent events will distinctly shape future power plans
for some countries. In the U.S., for example, the recent shale
gas boom and environmental regulations geared toward coal and
oil plants have put the nation on track to see a sharp increase
in gas-fired generation to replace nearly 110 GW of retired coal
capacity by 2035, the report estimates.
Japan is still experiencing energy-related aftershocks from
the March 2011 Fukushima Daiichi incident, and a September-
1. Changing states. According to the International Energy Agencys
(IEAs) newly released World Energy Outlook 2012, the share of electric-
ity generation by source and region in the New Policies Scenario shows
a marked shift away from coal to natural gasfired generation. Courtesy:
World Energy Outlook 2012 OECD/IEA 2012, figure 6.2, page 183

Coal

Gas

Oil

Nuclear

Bioenergy

Hydro

Wind

Solar PV

Other renewables
10,850 TWh
13,300 TWh
10,560 TWh
23,340 TWh
21,140 TWh
36,640TWh
2010
2035
2010
2035
2010
2035
OECD
Non-OECD
World
0% 20% 40% 60% 80% 100%
Retirements:
20122025

20262035
Capacity additions:
20122025

20262035
Net capacity change
Coal
Gas
Oil
Nuclear
Bioenergy
Hydro
Wind
Solar PV
Other
600 300 0 300 600 900 1,200 1,500
GW
2. When one door shuts. About a third of new capacity addi-
tions through 2035 will replace retired generating facilities. More than
50% of new capacity additions will be from new gas plants and wind
farms, and about 30% will come from coal and hydropower, the In-
ternational Energy Agency forecasts. Courtesy: World Energy Outlook
2012 OECD/IEA 2012, figure 6.2, page 183
January 2013
|
released Innovative Strategy for Energy and Environment aims
to reduce reliance on nuclear power, which had in 2010 provided
a quarter of all electricity generated in Japan. But even if no new
nuclear plants are built through 2035 beyond the two reactors at
Shimane-3 and Ohma that are already at an advanced stage of
construction, and existing plants are subjected to shorter life-
times, nuclear generation could recover a 20% share by 2020
(but could be slashed to 15% by 2035, its share picked up by
renewables), the current Outlook suggests.
The European Union (EU), which pioneered and continues to
be at the forefront of renewable deployment, in 2011 drew away
from gas-fired generation (which fell by 17%) and moved toward
coal-fired generation (which increased by 11%), driven by higher
gas prices and lowered carbon prices in the systemwide Emissions
Trading System. The IEA forecasts that trend will continue in the
short term even if carbon prices increase over the 20132020
period. The share of coal-fired generation will drop dramatically
from 26% in 2010 to just 9% in 2035, the report says, citing
higher carbon prices and a greater penetration of renewables.
Gas-fired generation will also regain market share in the longer
term as the share of nuclear power will decline (from 28% in
2010 to 22% in 2035) as more capacity is retired.
One notable trend emerging globally concerns increased urgen-
cy to reform competitive electricity markets to buttress against
increased price volatility associated with the surge of renewables
and ensure that the risks of investing in other capacitysuch
as flexible peaking plants, storage, interconnection or demand
responseare correctly priced, the report says. With more in-
terconnections being established between neighboring markets
to uphold system adequacy, electricity markets are becoming in-
creasingly integrated.
Floating Solaron Water
The recent explosive growth of massive solar plants in some of
the worlds most remote deserts has stolen some of the spotlight
from smaller solar installations that float on water. But in No-
vember, a concept proposed by researchers at Norwegian foun-
dation DNV (Det Norske Veritas) for a dynamic floating offshore
solar field concept stirred up myriad possibilities, particularly for
congested urban regions such as coastal megacities.
The so-called SUNdy concept essentially involves a floating
hexagonal array that can be grouped together for a power capac-
ity of as much as 2 MW (Figure 3). Multiple islands connected
together make up a solar field of 50 MW, DNV said.
SUNdy uses thin-film 560-W photovoltaic (PV) solar panels that
are flexible and lighter than the traditional rigid glass-based mod-
ules, allowing them to undulate with the oceans surface, as Sanjay
Kuttan, managing director of the DNV Clean Technology Centre in
Singapore, explained. The key to creating an ocean-based structure
of this size is the use of a tension-only design. Rather like a spiders
web, this dynamic, compliant structure yields to the waves, yet is
capable of withstanding considerable external loads acting upon it.
According to Dr. Kuttan, separating the solar arrays into pre-
fabricated sections allows for large-scale manufacturing and
streamlined assembly offshore. The cable grid provides for main-
tenance access in the form of floating gangways. Below the sur-
face, the shape of the island is maintained by the tensile forces
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January 2013 10
THE BIG PICTURE: The Coal Pile
About 1,199 new coal-fired facilities (as defined by the World Research Institute)a total installed capacity of 1,401 GWwere
being proposed globally as of July 2012, spread across 59 countries. China and India account for about 76% of the proposed coal
power capacities, and Chinese and Indian companies lead the pack of 483 firms proposing to build the new plants. These are the 10
countries leading the global coal power boom. Sources: World Research Institute, International Energy Agency
Copy and artwork by Sonal Patel, Senior Writer
Key developers: state-owned Huaneng (66 plants),
state-owned Guodian (55 plants), state-owned Datang
(43 plants), state-owned Huadian (37 plants), state-
owned China Power Investment (31 plants)
1. CHINA
2. INDIA
3. RUSSIA
4. TURKEY
5. VIETNAM
6. S. AFRICA
7. U.S.
8. UKRAINE
9. POLAND
10. GERMANY
519,396 MW (455 plants)
#3: 2,615.46 TWh
48,000 MW (48 plants)
#9: 156.76 TWh
34,725 MW (30 plants)
#34: 14.98 TWh
22,633 MW (8 plants)
#6: 232.20 TWh
20,236 MW (36 plants)
#2: 1,890.06 TWh
14,000 MW (14 plants)
#15: 60.46 TWh
12,086 MW (13 plants)
#10: 133.42 TWh
12,060 MW (10 plants)
#4: 251.15 TWh
Key developers: state-owned NTPC (47 plants),
state-owned Maharashtra State Power Generation Co.
(14 plants), JSW Group (12 plants), Andhra Pradesh
Power Generation Corp. (11 plants), Essar Energy (11
plants)
KEY
Proposed coal
plant capacity

Global rank of
total coal
generation
in 2009
36,719 MW (49 plants)
#17: 54.23 TWh
557,938 MW (363 plants)
#1: 2,891.66 TWh
3.
4.
7.
8.
9.
6.
5.
10.
2.
1.
concentrations in lue gas cause concerns from both an environmental and
corrosion standpoint. Uncontrolled injection of control reagents wastes money. With the MCS03,
real time control of your acid problem is a reality. Thanks to specially adapted IR spectral ranges
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best candidates for open positions. The Careers-in-POWER job board on powermag.com allows visitors to
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CIP10 ad_8.125x11v3.indd 1 2/14/11 2:41:21 PM
04_PWR_010113_GM_p8-13.indd 11 12/14/12 11:25:24 AM
|
January 2013 12
from the lengthy spread mooring.
DNV said that the island has also been optimized for solar ca-
pability and cabling efficiency. The solar arrays are divided into
electrical zones feeding electricity produced into two main switch-
es collecting the power for voltage step up at a central transformer
(2 MVA 480/34.5 kV). From the offshore solar farms central island,
30-kV electrical transmission lines connect, tying other islands in
series to form a closed loop and continue to the electrical sub-
station onshore for grid connection, said Kevin Smith, global seg-
ment director for DNV KEMAs Renewable Energy Services.
The concept of a floating solar array is not new, though only a
handful of developers seem to be involved so far. Israeli startup
Solaris Synergy in February 2011, for example, installed a modular
floating concentrating PV system at the Arava Institute for Envi-
ronmental Studies Center for Renewable Energy and Energy Con-
servation north of the Israeli resort town of Eilat that connects to
the Israel Electric Corp. grid. Solaris Synergy has also so far signed
strategic partnership agreements with Mekorot (the Israeli national
water company) and French power company EDF for deployment of
their first operational pilot plants of 12 to 15 kW each.
The company says it is focusing future efforts on water bod-
ies associated with hydroelectric dams, pumped storage instal-
lations, and cooling ponds of electric power plantslocations
that typically have existing power grid connections. The company
claims that a massive market potential exists for the technology
using these industrial water surfaces aloneenough to pro-
duce a total of 90 GW of solar power.
Other players include French company Sky Earth, which has op-
erated a pilot project in the south of France since February 2011
and is now developing 12-MW and 4-MW projects in that region.
Associated drawbacks of floating solar plants have also al-
ready been established. Aside from cumbersome maintenance
and repair, concerns have been voiced about solar energy con-
centration levels on a rocking platform. Then there are ecologi-
cal and cost concerns.
Sonal Patel is POWERs senior writer.
3. Rocking solar. A concept proposed by Norwegian foundation
DNV calls for a hexagonal solar panel array that floats on the seas
surface. DNV says a collection of these arrays, totaling 4,200 solar
panels, could form a solar island the size of a large soccer stadium and
be capable of generating 2 MW. Courtesy: DNV
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Engine-Generators Facilities/Buildings & Systems
Five Biomass Powerplants Now in Detailed Design
Owners Engineer Now for a 900 MW Combined
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Prelim Design Now for a 1.2 MGPD Industrial
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PowerMag112012.indd 1 12/4/2012 9:13:17 AM
Check out the new POWER iPad app!
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04_PWR_010113_GM_p8-13.indd 13 12/14/12 11:26:11 AM
|
January 2013 14
Safety a Main Theme at Asian Coal
Users Meeting
Power plant operators, managers, and other professionals from
across Southeast Asia met in Hong Kong in early November for
the second annual Asian Sub-Bituminous Coal Users Group meet-
ing, created to share information and best practices related to
safety, handling, combustion, characteristics, and risk manage-
ment of the fuel. This years co-hosts were CLP Power and HK
Electric. The event was organized by the Powder River Basin Coal
Users Group and TradeFair Group, which publishes POWER.
Presentations during the two-and-a-half-day event focused on
boiler management and coal-handling best practices.
Danny S. Lau, engineer I (materials handling), with Hong Kong
Electric Co., said a number of benefits come with the use of low
calorific value (LCV) coal, which includes subbituminous variet-
ies. He struck a conference theme by saying subbituminous coal
also presents a number of problems to users such as increased fire
risk, coal spillage and fugitive dust, and generation unit derates.
These problems must be mitigated to prevent any catastrophic
failure of coal-handling and combustion equipment, he said. At
the Lamma Power Station near Hong Kong, where he works, coal
yard operations were reengineered and coal-burning equipment
was modified to accommodate increased use of LCV coal.
Lau said the high moisture content of LCV coal adversely affects
both pulverizer performance and the combustion process. As a result,
mill inlet temperatures at the power plant were restricted to below
200C to minimize the risk of a mill fire when handling LCV coals. The
mill outlet temperature also had to be lowered from 75C to around
60C to 65C. At the Lamma station, in-mill drying is the accepted
method of preparing coal for pulverized fuel burning, and Lau reiter-
ated industry standards of achieving a proper dryness in the coal by
manipulating primary airflow and temperature.
These standards were achieved at the Lamma plant in part
by modifying the mills. These modifications included installing
a dynamic classifier, which helped improve the fineness of the
pulverized fuel; installing a dynamic vane wheel to improve mill
airflow; changing the separators to deflectors to minimize the
accumulation of residual coal; and installing a mill inerting sys-
tem to admit steam into the system in case of a fire.
In addition, the mill and the boiler were retuned to handle
LCV coals in an effort to obtain optimal operation and system
performance. The tuning involved adjusting the mill outlet tem-
perature in accordance with a coal fuel ranking system. Under the
system, bituminous coal with a calorific value between 7,800 and
6,380 kcal/kg was classified as A, highcaloric value subbitu-
minous coal of between 6,380 and 5,800 kcal/kg was classified
as B, lowcaloric value subbituminous coal of between 5,800
and 4,600 kcal/kg was classified as C, and lowercaloric value
subbituminous coal of less than 4,600 kcal/kg was classified as
D. (Note that 1 kcal = 3.97 Btu and 1 kg = 2.2 pounds.)
Boiler control parameters were adjusted, depending on the
classification of the coal being burned. For example, existing
boiler control function curves had been set for highcaloric value
coal (6,300 kcal/kg), but that practice resulted in an oversupply
of combustion air when LCV coal was used. This had the dual ef-
fects of reducing boiler efficiency and increasing the coal flow.
Lau said that Lamma station operators learned that, based on the
tuning results, excess O
2
could be trimmed 1% at full load and
0.5% at half load. This adjustment enhanced boiler efficiency
and alleviated unit derating when LCV coal was burned.
Lau reported several improvements to plant operations as a re-
sult of the modifications. First, plant output increased when two
types of LCV coal labeled A and B were burned. Following new
settings that placed the mill outlet temperature at 70C, excess O
2

at 3.2%, and the induced draft fan blade opening at 83%/77%,
electrical output using coal A rose some 28.3 MW from a base of
322.4 MW to 350.7 MW. Auxiliary power consumption dropped by
0.31%, and boiler efficiency rose 0.79%. New settings applied to
coal B combustion resulted in an increase of 17.3 MW from a base
of 348.6 MW, to 365.9 MW. Auxiliary power consumption dropped
by 0.74% and boiler efficiency rose 0.53%.
The improvement in boiler efficiency was attributed to reduc-
1. Asian coal users confab. Delegates to the second annual
Asian Sub-Bituminous Coal Users Group meeting in Hong Kong min-
gle prior to the start of a conference session. The meeting drew power
generators from across Asia and North America to discuss the safe,
efficient, and economic use of sub-bituminous coal by generating com-
panies. Source: POWER, David Wagman
2. Korean coal connection. Sung-Won Ha (right), senior man-
ager with Korea South-East Power Co., answered questions following
his presentation at the second annual Asian Sub-Bituminous Coal Us-
ers Group conference, which was held in Hong Kong in early Novem-
ber. Source: POWER, David Wagman
January 2013
|
tion in excess air as well as uplifting of mill inlet temperature,
Lau said. The latter would increase the hot primary airflow, thus
lowering the flue gas temperature and dry flue gas loss.
Sung-Won Ha, senior manager with Korea South-East Power Co.
(KOSEP) at its 3,340-MW Yeongheung power plant, said that as the
use of subbituminous coal has increased, boiler combustion envi-
ronments have grown worse. It is very important that power plant
companies develop a coal management program for operation and
maintenance cost reduction and increased efficiency. He said that
for economical coal purchases, three cost factors should be consid-
ered: fuel cost, the operational cost for coal supply and flue gas draft
systems, and maintenance costs for equipment malfunctions and re-
placement. Economical coal management means coal selection and
mixing to satisfy these three factors, he said.
He said that around 40 coals arrived at the Yeongheung sta-
tion during 2011 from sources that included the United States,
Canada, Colombia, Russia, Indonesia, and Australia. A maximum
of four different coals may be burned each day with caloric values
that range from 3,760 to 6,600 kcal/kg, moisture content that
ranges from 6% to 41% and sulfur content that varies between
0.1% and 1.2%. Use of the fuel led to several problems, including
pulverized coal deposition on the coal pipe due to condensation,
coal feeder outlet clogs also due to moisture, and excessive soot
production. Broadly speaking, the plant faced challenges due to
the variety of coals, their diverse characteristics, the frequency
with which they were changed, and the possibility of receiving
coal whose properties violated design parameters.
To help mitigate the problems, manage the coal diversity, and help
the plant achieve steadily tightening environmental restrictions, an
E-Coal Operation Management System (E-COMS) was devised. E-COMS
focuses on coal sampling, coal unloading, coal handling, managing
short-term and long-term coal stockpile trends, and coal yard inven-
tory control. The approach considers at least 10 variablessuch as
coal rank, coal blending, boiler efficiency, maintenance costs, and
auxiliary loadand seeks a balance among optimized coal blending,
predictive combustion, and economic value.
In order to improve the accuracy for the program, we made
use of operation data in real time, Ha said. With this predictive
data, coal blending can be made economical and eco-friendly.
He said E-COMS will be upgraded continuously so that it becomes
even more of a more reliable and user-friendly program as it in-
terfaces with other programs.
Richard P. Storm, president of Innovative Combustion Technologies
Inc., said the pulverizer mills in a coal-fired power plant condition
coal for proper combustion and deliver all of the fuel to the boiler.
Because of this, the pulverizers are among the most important group
of auxiliary equipment that affect unit reliability, performance, and
capacity, as well as the ability to generate power economically.
The pulverizers also present a constant risk to safety, which is
especially true when firing highmoisture content and highly reactive
subbituminous coals. He said these coals are more prone to mill fires
and puffs, largely due to the high heat required to dry subbituminous
coal prior to combustion. The heat that is required is a product of the
temperature and quantity of airflow at the mill inlet. Because sub-
bituminous coal is 15% to 30% moisture, very hot mill inlet tempera-
tures are required to dry the coal and achieve mill outlet temperature.
In particular, temperatures can be hot under the yoke, but are quickly
reduced once mixed with the coal moisture after passing through the
|
January 2013 16
throat. The temperature below the yoke is close to many subbitumi-
nous coals auto-ignition temperatures, Storm said. As a result, coal
spillage into the wind belt under the yoke is a common cause of mill
fires. Rejected coal quickly dries and ignites in the high-temperature,
oxygen-rich environment.
Coal feed interruptions also are a potential source of fires,
Storm said. In this case, raw coal supply is interrupted due to im-
precise feeder control and stoppages above and below the feeder.
With no supply of moist coal, the higher temperatures and air-
to-fuel ratios present under the yoke migrate upwards into the
grinding zone. This is also a risk in the case of mill trips or shut-
down. Accumulations of debris or coal anywhere in the pulverizer
also will increase the chance of a mill fire because accumulation
and settling in the pulverizer components allow coal to dry and
may lead to spontaneous ignition.
Storm said excessive airflow to the pulverizer provides an
abundant source of air to combust ignition sources, including
smoldering coal in the classifier, pulverizer, or raw coal under the
yoke. Smoldering coal from the bunker reaches a point of defla-
gration as it travels through the feeder and moves into the mill.
Smoldering coal, which has no access to oxygen in the tightly
packed bunker, will suddenly be exposed to oxygen as it breaks
apart in transit. That, coupled with a decrease in particle size,
can compound the danger of a fire.
Storm said fundamental precautionary methods to reduce the
chance of a pulverizer puff include the following:
Ensuring that pulverizer airflow is adequate to facilitate stable
transport of coal without settling in the burner but not exces-
sively high to provide an abundant source of air for combus-
tion in the presence of an ignition source.
Taking all measures to prevent coal from accumulating or set-
tling in any of the pulverizer components.
Ensuring that raw coal to the pulverizer remains uninterrupted
and controllable. This can be done through precise feeder con-
trol and minimizing stoppages above and below the feeder.
Ensuring that no hot smoldering or burning raw fuel is any-
where in the pulverizer system. It is imperative that raw coal
spillage into the under bowl area be prevented.
For more information on the Asian Sub-bituminous Coal Users
Group, visit www.asiansbcusers.org. More information on the Powder
River Basin Coal Users Group may be found at www.prbcoals.com.
David Wagman is executive editor of POWER.
Controlling Fugitive Combustible Coal Dust
Regardless of how much prevention is employed to mitigate combus-
tible dust in coal-fired power plants, fugitive coal dust is pervasive
and can be dangerous. In coal-fired power plants, mechanical trans-
fer points are leading sources for airborne fugitive dust. However, be-
cause coal dust travels quickly over large areas with minimal airflow,
fugitive combustible dust settles in many areas.
Primary dust explosions occur when combustible dust is pres-
ent, forms a dust cloud (in sufficient amounts) in an enclosed
environment with an ignition source and oxygen (Figure 3). If
one were to put a flame to a layer of combustible dust on a desk,
the dust would burn, but not explode. Fanning the dust with
a piece of paper to make the dust particles airborne, however,
would create a dust cloud that could blow up.
Catastrophic secondary explosions occur when the force from
the primary explosion dislodges fugitive dust that has been al-
lowed to accumulate on walls, floors, and other horizontal sur-
faces such as equipment ledges, above suspended ceilings, and
on other concealed surfaces, producing more dust clouds and
creating a domino effect that causes further explosions.
Preventing Explosions by Using Appropriate Vacuum
Cleaners
Bill Bobbitt of Bobbitt Associates Environmental Systems, whos
been working in the safety field for more than 25 years, said, I
always tell my clients, it not a matter of if, but when. Conditions
have to be perfect and that when can be 30 years from now, or
it could be next week. But if you eliminate the fugitive dust, it
cannot create a secondary dust explosion.
The National Electrical Code (NEC) defines hazardous locations
as those areas where fire or explosion hazards may exist due to
flammable gases or vapors, flammable liquids, combustible dust,
or ignitable fibers or flyings. Hazardous locations are classi-
fied in three ways by the NEC: type, condition, and nature. Class
II locations are those areas made hazardous by the presence of
combustible dust. Finely pulverized material, suspended in the
atmosphere, can cause powerful explosions.
The NEC also specifies that hazardous material may exist in several
different kinds of conditions, which, for simplicity, can be described
as normal conditions (Division 1) and abnormal conditions (Division
2). In the normal condition, the hazard would be expected to be
present in everyday production operations or during frequent repair
and maintenance activity. When the hazardous material is expected
to be confined within closed containers or closed systems and will be
present only through accidental rupture, breakage, or unusual faulty
operation, the situation would be called abnormal.
As the first line of defense in housekeeping routines to prevent
catastrophic explosions caused by combustible dust and comply with
regulatory agencies, plant personnel need to employ industrial vacu-
um cleaners that are built from the bottom up to be used in a variety
of Class II, Division 2 areas (Figure 4). Redundantly grounded indus-
Dispersion of dust particles
Ignition
Combustible dust Oxygen in air
Confinement of dust cloud
3. Explosive situation. Primary dust explosions occur when
combustible dust such as coal dust is present, forms a dust cloud (in
sufficient amounts) in an enclosed environment with an ignition source
and oxygen. If any one of these elements is missing, there can be no
explosion. Source: National Fire Protection Association
4. Housekeeping helper. Cleaning up the abundant dust around
the boot seals in this cement plant is more effective with the VAC-
U-MAX air-operated industrial vacuum cleaner than with shovels and
wheel barrows. Courtesy: VAC-U-MAX
January 2013
|
trial vacuum cleaners are designed to shield
workers and property from catastrophic sec-
ondary coal dust explosions.
Perils of Standard Shop-Type
Vacuums
Any time there is powder flowing in one di-
rection through a plastic vacuum-cleaning
hose, it can create a significant static electric
charge. In addition, there may be static elec-
tricity buildup on individual dust particles. If
a charged, ungrounded hose used to vacuum
combustible dust were to contact an object
that was grounded, the static electricity
could then arc and trigger a violent explo-
sion. This is why the U.S. Occupational Safety
and Health Administration (OSHA) has issued
numerous citations for plant personnel using
standard vacuum cleaners where Class II, Di-
vision 2 equipment is required under the law.
Bobbitt sees a number of standard shop-
type vacuums in plants. There are so many
problems with them. They themselves are
hazards in an industrial environment, he
said. First and foremost, they are not ground-
ed or classified for Class II, Division 2 ar-
eas. In addition, they can shock workers and
they clog easily. Not surprisingly, the workers
dont want to use them, and if workers dont
use them, fugitive dust continues to accu-
mulate in the plant.
Recently, Bobbitt discussed challenges
with using Class II, Division 2 electric vacu-
ums at a meeting of the Kansas City Power
& Light (KCP&L) Coal Handling Group, where
safety professionals from each of the KCP&L
power stations came together to discuss
proactive solutions to safety challenges.
He described a recent incident in which he
was shown five different expensive Class
II, Division 2 electric vacuums sitting in a
warehouse at a power plant not being used.
Plant personnel told him that they did not
want to utilize the equipment because after
20 minutes of use, the filters would bind. In
addition, they were reluctant to use them
because they continually had to lift the head
from the vacuum cleaners and tap the cake
off before they could achieve the appropriate
suction levels.
This same power plant, and its five sis-
ter facilities, now use a Class II, Division
2 air-powered VAC-U-MAX model with a
pulse-cleaning system on the filters, that
with the push of a button releases the
dust from the filter and allows the user to
resume cleaning, Bobbitt said.
The VAC-U-MAX company developed the
first air-operated industrial vacuum in
1954 and has been the pioneer in solving
vacuum-related challenges in a wide range
of manufacturing and industrial settings
(Figures 5 and 6).
Advantages of Redundantly Ground-
ed Industrial Vacuum Cleaners
Employing an industrial vacuum cleaner that
is redundantly grounded in five different
ways eliminates the possibility of any kind
of explosion from the vacuum, Bobbitt ex-
plained. Although VAC-U-MAX does produce
electric vacuums designed for Class II, Divi-
sion 2 environments, the most economical
solution for cleaning combustible fugitive
coal dust is the companys air-operated vacu-
ums. This type of vacuum is safer in terms of
grounding, and it also works more efficiently
in the industrial environment.
Beyond the fact that VAC-U-MAX air-oper-
ated vacuums use no electricity and have no
moving parts, the first of the five ways that
these vacuums are grounded begins with the
air line that supplies compressed air to the
units. Because most plants have compressed
air lines made from iron that conduct electric-
ity, the companys air-operated vacuums use
static conductive high-pressure compressed
air lines. In addition to the static conduc-
tive air lines, static conductive hoses, filters,
and casters are employed to further reduce
risk. Furthermore, a grounding lug and strap
that travels from the vacuum head down to
the 55-gallon drum is used to eliminate the
potential for arcing.
Bobbitt added that when you are dealing
with explosive dust, you may need a Class II,
Division 2 vacuum cleaner in a non-Class II,
Division 2 area. You might have small quan-
tities of explosive dust, and it might take a
very hot and prolonged source of ignition,
but with OSHAs Combustible Dust National
Emphasis Program (NEP), facilities need to
be very careful that they comply because
there are a lot of questions as to what com-
pliance means, he said.
Housekeeping violations ranked second
in citations under the NEP with respect
to combustible dust related hazards, ac-
cording to recent OSHA statistics. In ad-
dition, the agency issued citations for
General Duty Clause violations involv-
ing the practice of blowing dust with an
air compressor and not using electrical
equipment that was designed for hazard-
ous (classified) locations. In fact, in the
Electric Services Industry Group from Oc-
tober 2010 through September 2011, the
General Duty Clause violation category
was one of the top 10 violation categories
most frequently cited by OSHA.
Although the regulations for combus-
tible dust arent real clear, I find that a lot
of companies are trying to get better at
general housecleaning, Bobbitt said.
Contributed by Doan Pendleton (info@
vac-u-max.com), vice president of market-
ing and sales at VAC-U-MAX.
5. Intrinsically safe systems. The VAC-
U-MAX compressed airpowered vacuums
meet regulatory requirements for grounding
and bonding. Employing this type of industrial
vacuum cleaner that is redundantly grounded
eliminates the possibility of any kind of explo-
sion from the vacuum. Courtesy: VAC-U-MAX
6. Modularity maximizes usage.
Like the VAC-U-MAX central vacuum system
shown in Figure 5 that has an explosion vent,
most vacuums are modular in nature. Stan-
dard equipment with additional capabilities
can be added to the vacuums for specific ap-
plications. Courtesy: VAC-U-MAX
|
January 2013 18
Allison Davis Kerry Shea
Calif. Cap-and-Trade:
Bull or Bear Market?
By Allison Davis and Kerry Shea
T
he California Air Resources Board (CARB) recently kicked off
a new era in its cap-and-trade program designed to reduce
greenhouse gases (GHG) when it held its first GHG emissions
allowance auction on November 14. While CARB pronounced the
auction a success, the low price and lukewarm demand for allow-
ances evidences market reticence to fully embrace the program.
As a procedural matter, the auction was a success. It had no
electronic glitches, and there was no evidence of tampering or
interfering with the market. A brief analysis of the results, how-
ever, shows that the auction did not generate the enthusiasm
that CARB expected.
Wide Participation But at a Low Price
As a key part of Californias Global Warming Act, or AB 32, the
cap-and-trade program relies on allowances as permission for en-
tities to emit CO
2
and other GHGs. The program sets a cap on
total emissions that reduces yearly. Emitters must surrender one
allowance per metric ton of CO
2
(or CO
2
equivalent). The program
anticipates a secondary market in which emitters and others can
buy and sell extra allowances. Those looking to trade in this sec-
ondary market will closely watch the allowance price from this
and future quarterly auctions.
The first auctions results indicate its success may be less
than suggested by CARBs press release. First, the sale price for
allowances was not as high as anticipated. While all of the avail-
able 2013 allowances (23,126,110) were sold, the sales price
was $10.09, barely above the $10 minimum reserve price. Many
expected the allowances to sell for $12 to $13 each. Second, the
auction also included 2015 vintage allowances, of which only
about 15% sold at the minimum reserve price of $10.
These results indicate that market participants are taking seri-
ously the obligation to obtain allowances but are uncertain of the
programs future. The low prices and the minimal number of 2015 al-
lowances purchased may indicate wariness. In essence, participants
seem to be dipping their toes in the water, but they are not ready to
take the plunge by purchasing large quantities of allowances.
Challenges to the Cap-and-Trade Program
Market participants cautious responses may be motivated by on-
going uncertainties caused by various court challenges to the
cap-and-trade program. Todays prices for 2015 allowances may
be inexpensive, but if the courts delay, narrow, or totally reject
CARBs cap-and-trade program, todays bargain price could be to-
morrows regulatory lemon.
Most recently, the California Chamber of Commerce filed suit
in state court to enjoin CARB from allocating to itself GHG al-
lowances and then selling them through an auction process to
raise revenue. This auction earned the state over $230 million.
CARB has reserved for sale approximately 10% of GHG emission
allowances. The Chamber asserted that CARB should allocate all
GHG emission allowances to business at no cost, and companies
exceeding their allowance should be able to purchase GHG emis-
sion allowances from other companies. The Chamber concluded
that this interpretation of AB 32 would fulfill the states goal of
reducing emissions while keeping GHG compliance costs low for
businesses and consumers.
The Chambers complaint characterizes CARBs allowance auc-
tion as both an unconstitutional tax and a violation of AB 32.
The complaint alleges that AB 32 only authorized CARB to impose
a minor administrative fee but did not authorize CARB to raise
revenue by selling GHG emission allowances. Because a two-thirds
majority of the California legislature is needed to increase taxes,
the Chamber contends that requiring businesses to purchase GHG
emission allowances sold by CARB imposes an unconstitutional
tax. The Chamber did not seek to enjoin this first auction, but its
suit threatens future auctions. CARB must respond to the Cham-
bers allegations prior to the next auction in February 2013.
In addition to the Chambers lawsuit, other pending litiga-
tion may potentially delay or restrict Californias climate change
initiatives:
Environmental groups filed a state suit in 2012 challenging
the use of offsets (GHG emissions reductions in certain areas
that can be used as allowances) for compliance under the cap-
and-trade program.
Environmental groups also filed a complaint last year at the
Environmental Protection Agency, asserting that CARBs AB 32
regulatory program violates the federal Civil Rights Act of 1964
by not focusing on emissions reduction from specific local emis-
sion sources to the detriment of disadvantaged communities.
An appeal is pending before the Ninth Circuit of an injunc-
tion issued against CARBs enforcement of the Low Carbon Fuel
Standard (LCFS) regulations. So far, the LCFS litigation is the
only challenge based on the Interstate Commerce Clause in the
U.S. Constitution. The Ninth Circuit has suspended the injunc-
tion pending its decision.
So although CARBs claimed success of its first auction can
be construed as a positive first step in Californias GHG regulation
through cap and trade, the auction results suggest reluctance by
market participants, who remain unconvinced of its regulatory fu-
ture. California must battle the lawsuits challenging the use of the
auction proceeds, the application of offsets, and the viability of the
program as a whole. The participation levels and prices associated
with the next auction scheduled for February 2013 will provide more
evidence as to market participants confidence that California will
proceed with a robust cap-and-trade GHG regulation.
Allison Davis (allisondavis@dwt.com) and Kerry Shea
(kerryshea@dwt.com) are partners in Davis Wright
Tremaines Energy Practice Group.
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histories in pursuit of a bold visionto help
companies around the world contribute to
healthier, safer environments.
Building on the achievements of Pentair and Tycos Flow Control
businesses, comprised of Valves & Controls, Thermal Controls
and Water & Environmental Systems, the new Pentair delivers
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January 2013 20
RESEARCH & DEVELOPMENT
Emerging Technologies Enable
No Regrets Energy Strategy
Achieving a balance between affordable and sustainable electricity while im-
proving reliability is a challenge unlike any the electricity sector has faced
since its inception. Technology innovations in key areas such as energy ef-
ficiency, smart grid, renewable energy resources, hardened transmission
systems, and long-term operation of the existing nuclear and fossil fleets
are essential to shaping the future of electricity supplies.
By Arshad Mansoor, EPRI
N
othing in human history has been
more transformative than electricity.
Thomas Edison patented the light-
bulb in 1879. Just a half-century later, Presi-
dent Franklin Roosevelt declared electricity
a necessity, not a luxury. And in 2012, the
National Academy of Engineering named
electrification the greatest engineering
achievement of the 20th century.
Since its inception, the electricity sector
has developed many innovative technologies
to improve affordability, reliability, safety,
and environmental sustainability. Over the
last six decades, even as the power grid has
grown dramatically in size and complexity,
the price of electricity has remained rela-
tively flat. The average cost of electricity is
roughly the same today as it was in the late
1960s, when adjusted for inflation. And the
industry has reduced its overall emissions
while increasing fossil generation by more
than 160% since 1970.
But the industry cannot rest on its laurels
today in the face of so much uncertainty and
so many challenges. It needs to continue to
innovate, to adapt to the changing markets
and demands of consumers. At the Electric
Power Research Institute (EPRI), we foresee
unprecedented change in the industry over
the next 10 to 20 yearsmore change than in
the previous 100 years. The drivers are famil-
iar to industry observers:
The availability of natural gas and its
increasing role in power generation. For
some months in 2012, gas for the first
time matched or exceeded coal for U.S.
power generation. And according to the
U.S. Energy Information Administration
(EIA) Annual Energy Outlook 2012,
natural gasfired plants will account for
60% of U.S. capacity additions between
2011 and 2035.
The expanding role of renewable gen-
eration. The EIA Outlook projects that
the aggregate fossil fuel share of U.S.
total energy use will fall from 83% in
2010 to 77% in 2035, while over the
same period generation from renewable
sources will grow by 77%, raising their
share of total generation from 10% in
2010 to 15% in 2035.
Technology challenges to reducing carbon
dioxide, mercury, and other emissions. A
recent EPRI summary report, Prism 2.0:
The Value of Innovation in Environmen-
tal Controls, projects the U.S. electricity
industry will spend $140 billion to $220
billion for emissions control retrofits,
new capacity, and fuel plus operation and
maintenance between 2010 and 2035, with
more than half of the expenditures occur-
ring by 2020.
EPRI is collaborating with its members,
national labs, universities, and other stake-
holders to address all of these challenges
and continue to provide the power quality
and affordability consumers expect. But the
projected costs are high. Thats why EPRI is
focused on a no-regrets portfolio of tech-
nologies that would allow utilities to main-
tain a reliable, environmentally sound, and
reasonably priced electricity supply even un-
der the uncertainty of fluctuating natural gas
prices, unpredictable electricity supply from
grid resources, and potentially increasing en-
vironmental regulations (Figure 1).
Today, these no regrets technologies fall
into three broad categories:
Flexible resources and operations. This
category includes the ability to cycle
potentially all generation assets, includ-
ing coal, fossil, nuclear, and renewable
generation technologies. It also includes
energy storage, demand response, and
other technologies located on consumer
premises. Employing flexible investment
strategies for securing all assets, including
an array of alternative supply and demand
resources, is another piece of this vision.
Fuel flexibility is another component, in-
cluding the ability to mix fuels for some
technologies (for example, biomass cofir-
1. Balance dispatchable generation with forecastable demand-side re-
sources. The supply side of todays power system consists of baseload generation plus load-
following generation, plus or minus bulk energy storage (left side). All those sources must be
continuously balanced to meet customer demand minus interruptible load demand response
(right side). The cover photo illustrates a vision of a fully integrated electricity system, where
supply and demand are not exclusively on opposite ends of the grid. Source: EPRI
|
January 2013 22
ing with coal) or combine technologies,
such as solar and coal.
Long-term operations. In the U.S. alone,
the industry has an estimated $1.2 trillion
invested in assets. As these assets age,
significant investment will be required to
maintain or replace them and sustain high
levels of reliability. The challenge, as it
is in the everyday operation and mainte-
nance of assets, is to do the right repair/
upgrade/replacement at the right time.
That requires a wealth of data provided
and analyzed using new technologies.
An interconnected and flexible delivery
system. The first energy management
system (EMS) was used to balance gen-
eration and demand in 1882, when the
first of the Pearl Street Station generators
was placed in service in New Yorks low-
er Manhattan. Later, the first Supervisory
Control and Data Acquisition (SCADA)
systems were deployed in the 1950s
and evolved into todays power system,
which delivers 3,900 TWh of electricity,
generated from approximately 1,000,000
MW of capacity. This electricity is deliv-
ered over 2.4 million miles (equivalent to
circling Earth 650 times), which includes
200,000 miles of transmission and 2.2
million miles of distribution.
Now EPRI is developing what we call
Energy Management System 3.0a highly
interconnected, complex, and interactive
network of power systems, telecommuni-
cations, the Internet, and electronic com-
merce applications that can seamlessly and
efficiently accommodate variable genera-
tion, demand response, electric vehicles,
smart meters, distributed generation from
thousands or even millions of nodes, pha-
sor measurement units, and electronic
communications. It includes:
Smart energy. Smart energy is more than
just the smart gridan intelligent distri-
bution system, connected at the consumer
level in a way that enables seamless in-
tegration of resources. Smart energy also
includes big data, sophisticated analyt-
ics to interpret and maximize the value
of the tremendous volumes of new data.
And it includes beneficial electrifica-
tion, exploring better end uses of energy
to improve efficiency beyond kilowatt-
hours saved.
Grid resilience. As Superstorm Sandy
demonstrated last November, we have to
be prepared for the unexpected. Improved
resilience includes not only power genera-
tion resource and grid hardening but also
new/improved recovery and consumer
survival technologies.
Consumer-focused technologies. We are
seeing unprecedented changes in the ways
consumers access and use information.
Smart devices and the new controls they
provide to consumers will profoundly
impact industry and require fundamental
changes in the way we provide services
and interact with end users.
Flexible Resources and Operations
New tools now under development are ex-
pected to lead to better integration of variable
generation. Power system flexibilitythe
ability of the system to respond to changes
in demand or variable generationis crucial
to better integrating significant amounts of
variable generation. The system will need to
manage increased variability and uncertainty
over multiple time scales, from seconds and
minutes to hours and days. New resources
such as battery storage, compressed air en-
ergy storage, or demand response enabled
by smart grid technologies will also be
important sources of flexibility in regions
with high variable generation penetration.
Additionally, improved variable generation
forecasting, new probabilistic operational
planning tools, transmission technologies
such as high-voltage direct current (HVDC)
and flexible alternating current transmission
systems (FACTS), and greater coordination
among balancing areas can enable smoother
integration of variable generation by allow-
ing the system to manage variability and un-
certainty more efficiently and reliably.
EPRI is developing processes, with a focus
on tools and long-term algorithms, for consid-
ering flexibility in resource expansion. Tools
will be provided that allow system planners
to consider the flexibility needs of the system
with high variable generation. They are being
designed to enable better planning decisions
to maximize the value of flexible resources
on the grid. For example, this could lead to
metrics to determine the flexibility needs and
resources in a system, considering new and
existing resources as well as the transmission
network in a system.
Changes in demand and increased deploy-
ment of renewable generation are forcing
coal and combined cycle plants to provide
system load-balancing service. Specific op-
erational changes expected for coal and gas
plants include two-shifting, high ramp rates,
high unit turndown, and reserve shutdown
(Figure 2). Guidelines for flexible operations
that detail best practices for limiting damage
from cycling are under development.
Owners and operators of fossil power
plants need to consider a range of strategies
for managing the increasing need for flex-
ible operation. The biggest challenge to mit-
igating the impacts of power plant cycling
is the lack of available data on the impact
Reduce NOx/CO emissions at low load,
install inlet dampers, and isolation/
venting of fuel headers
Improved drains and
attemperator sprays, new
alloys for thinner walled
headers, improved tube-
to-header connections,
and better-sealing stack
damper
Improved drains
and steam
bypass systems
Improved casing
design to reduce
distortion and
improved thermal
insulation
Automated startups
and improved operator
displays and alarm
management
Accommodate
winding thermal
growth
2. Equipment life extension. Cycling the typical combined cycle plant accelerates dam-
age mechanisms such as creep fatigue, thermal fatigue, and corrosion, thereby increasing the
rate of component life consumption. This wear and tear increases the overall costs of genera-
tion, including direct costs such as fuel, water treatment, and maintenance. EPRI is studying
component and operational changes that will reduce the impact of cycling. Source: EPRI
January 2013
|
of flexible operations on plant equipment,
damage mechanisms, costs, and mitigation
strategies.
An EPRI project is using existing research
results of component-level cycling impacts
and mitigation, combined with collaborative
sharing of lessons learned and strategies used
by organizations worldwide, to develop a
comprehensive knowledge resource that can
guide a successful transition to flexible oper-
ation. These Guidelines for Managing Flex-
ible Operations (EPRI document 1023539)
are scheduled to be released in DVD format
in March and will contain 80-plus EPRI re-
ports plus non-EPRI cycling-related reports.
EPRI also is conducting ongoing flexible
operations research and development (R&D)
focused on:
Pulverized coal boiler impacts.
Improved plant layup practices.
Selective catalytic reduction and flue gas
desulfurization cycling impacts and miti-
gation.
Designs for increased flexibility in ad-
vanced coal plants.
Instrumentation and controls to address
cycling and turndown.
Preventive maintenance for combined cy-
cle plants.
Improving power plant operator situation-
al awareness.
An upcoming EPRI report, Plant Op-
erational Flexibility: Emerging Industry
Needs and Research Priorities, will docu-
ment key cycling challenges and R&D
needs for the industry.
Long-Term Operations
The use of robotics to improve asset manage-
ment is a key technology development area
for EPRI. Three autonomous robotic applica-
tions deserve recognition: one for concrete,
one for underwater component inspection,
and one for transmission line inspection (Fig-
ure 3).
Concrete Crawler Allows Real-Time
Asset Condition Monitoring. Long-term
operation of steam-electric power plants and
hydropower facilities requires demonstra-
tion of the safety and reliability of concrete
cooling, containment, and impoundment
structures. Manual inspection is costly and
time-consuming, and it exposes personnel to
potentially hazardous working conditions. In-
spection depth and accuracy are constrained
by the capabilities of todays portable nonde-
structive evaluation (NDE) systems.
Robots with the ability to climb and navi-
gate irregular, vertical, and curved surfaces
of large concrete structures are commercially
available. In 2011, EPRI conceptualized a
novel application of this technology: as a
platform for automated inspection and ad-
vanced NDE of major concrete structures at
power plants. This concrete crawler employs
a commercially available robotic platform
to climb the surface of large power industry
structures. It applies on-board systems
including simultaneous localization and
mapping (SLAM) technology and advanced
NDE instrumentation developed for concrete
applicationsto conduct automated, high-
precision inspections and to capture comput-
er-encoded data and images for maintenance
decision-making.
The concrete crawler will support long-
term operation of generating assets by en-
abling fast, safe, and in-depth inspection of
structures such as cooling towers, hydroelec-
tric dams, and nuclear reactor containments.
It will obviate the need to use scaffolding or
rappelling for routine structural evaluations,
eliminating the associated setup challenges,
time requirements, costs, and safety hazards.
Its payload of advanced NDE instrumenta-
tion will provide unprecedented abilities to
examine the interior of concrete structures
and locate and characterize voids, rebar cor-
rosion, and other internal defects.
Proof-of-concept testing of a concrete
crawler with SLAM capabilities is planned
for 2012/2013 at a host site. Follow-on en-
hancements to the navigation system are
anticipated, and the crawlers desired NDE
functionalities and requisite power supply,
data collection and processing, communica-
tions, and other capabilities will be defined.
A fully functional first-generation prototype
will be constructed and evaluated in diverse
industry settings during 2014, with further
refinements and field tests leading to the de-
velopment of specifications for a commercial
inspection robot.
Submersible Mini-Robot Targets In-
spection of Nuclear Reactor Internals.
Remote-operated vehicles developed for
marine applications have proven successful
for the visual inspection of submerged com-
ponents in nuclear reactor vessels and spent
fuel pools, but commercially available tech-
nologies have several key limitations. EPRI
is working with researchers at the Massachu-
setts Institute of Technology (MIT) to create a
purpose-built robot delivering a step-change
improvement in the nuclear power industrys
underwater inspection capabilities.
The new robot is being designed to allow
safe, reliable, and non-intrusive operation
while providing high-fidelity visual inspec-
tion across a broad range of components,
configurations, and locations. The initial
prototype built and tested by MIT features
a compact and appendage-free design, a
high degree of maneuverability, and wire-
less operation. Its ovoid form measures
about 4 inches by 6 inches, allowing it to
nestle comfortably in the palm of a hand. Its
innovative propulsion and navigation sys-
tem applies centrifugal pumps, high-speed
valves, and maneuvering jets for precisely
controlled motion.
The robots shape and umbilical-free op-
eration are critical for successful in-plant
applications. Many existing technologies
employ propellers, rudders, and other ap-
pendages and attachments that limit access
to some component locations and preclude
certain types of motion. These appendages
also may break off during collisions or snag
on obstacles, creating the potential for con-
tamination of carefully controlled reactor
environments or other operational issues.
In prototype testing, the omni-directional
robot has demonstrated abilities to navigate
through intricate and tight geometries and to
conduct inspection-type passes over surfaces.
Under joystick control, it can dive and rise,
3. Robotic assistants. The concrete crawler (left) can climb structures and perform non-
destructive tests, avoiding the need for a human to be present in a hazardous location or the
necessity of erecting costly support structures. The submersible robotic vehicle (right) is being
developed to inspect reactor vessels and spent fuel ponds. Courtesy: Climbing Machines; MIT
|
January 2013 24
turn in place, and move forward, backward,
and sideways.
Ongoing technology development fo-
cuses on the mini-robots payload and
wireless communications system. The
payload is expected to include two cam-
eras. The first will support real-time navi-
gation and visual examination by the robot
operator; the second will capture higher-
resolution imaging data for subsequent
inspection, nondestructive evaluation, and
asset management applications.
Optimizing wireless communications
for submersed use poses challenges. Water
attenuates most frequencies, and systems
and components pose complex configura-
tions. A novel system is being explored
that combines optical communication ca-
pable of high data rates at a distance with
radio communication capable of two-way
data exchange when line of sight is lost be-
tween the mini-robot and its controller.
A next-generation prototype is under
development, and experimental testing of
its improved visual inspection capabilities
is scheduled to begin in late 2013. A fully
functional mini-robot could be available
by 2015 for in-plant demonstration.
Autonomous Transmission Line In-
spection Robot. Managing overhead
transmission linesincluding towers,
conductors, and insulators, as well as cor-
ridorsis a costly and challenging propo-
sition. Utilities must meet increasingly
stringent reliability and vegetation man-
agement standards, but many circuits are
approaching the end of their design life-
times and are located in remote and rugged
environments. Fly-by and ground inspec-
tions have limitations, and some equip-
ment is extremely difficult to inspect. The
autonomous transmission line inspection
robot integrates mobility, sensing, imag-
ing, power harvesting, communications,
and other innovations to generate the com-
prehensive, high-fidelity data required for
condition-based maintenance. It is capable
of crawling over conductor shield wires
and carrying a payload to allow autono-
mous inspection of transmission corridor
segments up to 80 miles long at least twice
annually (Figure 4).
In 2010, EPRI initiated conceptual
development of the transmission line in-
spection robot, designed to run largely on
power harvested from shield wires. High-
definition cameras and LIDAR (light de-
tection and ranging) sensors will assess
component condition, identify trees that
could pose a risk to wires, and measure
conductor clearance by comparing images
taken over time. Electromagnetic inter-
ference detectors will identify discharge
activity and other indicators of faulty
equipment.
The robot also will be equipped to
collect data as it passes instrumentation
deployed on towers and wires, such as
EPRI-developed radio-frequency sensors
for monitoring vibration, lightning strikes,
wind-related damage, and corrosive condi-
tions. Data processing, global positioning,
and communications systems will analyze
and deliver time- and location-stamped
data and images to maintenance person-
nel. High-risk issues and potential prob-
lems that require further investigation or
immediate action will be flagged, guiding
condition-based intervention.
A first-generation technology demon-
stration platform has been undergoing
refinement on a test loop at EPRIs labo-
ratory in Lenox, Mass., and individual
subsystems have been advanced in the
field and experimental settings. These
activitiesconducted in close collabora-
tion with a commercial vendor and mem-
ber utilitieshave informed design and
construction of a next-generation robot
offering mobility, energy management,
imaging, sensing, data management, anal-
ysis, alarming, and communications capa-
bilities. A real-world demonstration on a
line segment made robot-ready by a host
utility is planned for this year. Field trial
experiences will inform full-scale com-
mercial demonstration on a 40-mile-long
transmission circuit.
The transmission line inspection robot
is expected to revolutionize transmission
asset management by expanding cover-
age and delivering actionable information
while reducing or eliminating the need for
helicopter overflights and ground patrols.
On-board systems will collect, analyze,
and deliver data to enhance compliance
with reliability and vegetation manage-
ment standards and support just-in-time
intervention. This technology is expected
to improve inspection and monitoring
capabilities and worker safety relative to
hovering helicopters at cost savings ex-
pected to be at least 30%. More impor-
tantly, the robot will enable proactive,
condition-based maintenance of high-val-
ue transmission assets, a smart grid capa-
bility supporting long-term operations and
leading to significant cost reductions and
reliability improvements.
Smart Energy
Residential consumption typically repre-
sents a significant portion of peak electric
loads, but incorporating major end-use
technologies such as space conditioning
and water heating in demand-response
(DR) programs has proven challenging for
a variety of reasons. Consumer inconve-
nience and cost, the diversity of end uses
and utility systems, and the incompatibili-
ties between them are among the most sig-
nificant barriers to DR participation.
Building on years of work to advance
interoperability standards across transmis-
sion and distribution systems, an EPRI-led
initiative launched in 2008 engaged more
than 100 product manufacturers, utilities,
and other organizations in documenting
the need and developing early specifica-
tions for a smart grid interface for resi-
dential loads. EPRI built the modular DR
connector to specification, developed a
plug-in communications module with DR
capabilities, and integrated them with end-
use device controls in coordination with
selected manufacturers. Interoperability
tests were conducted on space condition-
ing, water heating, and other modified
products, and findings were submitted
to the Consumer Electronics Association
(CEA) for standardization of a communi-
cations interface designed for smart grid
integration of residential loads.
As a port incorporated in end-use tech-
nologies, the modular DR connector is
designed to facilitate a plug-and-play
approach for direct information exchange
and interoperability among utility com-
munications systems and the wide array
of consumer devices sold in retail outlets.
It could enable low-cost engagement of
residential consumers in load manage-
ment programs across a range of end uses.
Manufacturers may be able to add grid-in-
teractive features and the communications
port to their product lines without being
constrained by compatibility concerns.
DR-ready devices will be available off the
shelf, enabling consumers to enroll simply
by inserting a utility-compliant communi-
4. High wire act. The inspection robot
is capable of crawling over conductor shield
wires and carrying a payload to allow auton-
omous inspection of transmission corridor
segments up to 80 miles long at least twice
annually. Courtesy: EPRI
*As of Oct ober 2012, accordi ng t o Ener gy I nf r ast r uct ure Updat e repor t f rom t he Feder al Ener gy Regul at or y Commi ssi ons Of f i ce of Ener gy Proj ect s
The proof i s t he number s - 46% of new el ect r i cal gener at i ng
capaci t y i n t he U. S. i s f rom renewabl e sources.
Pl an now to attend the onl y al l -renewabl es event RETECH.
www. RETECH2013.com
*As of Oct ober 2012, accordi ng t o Ener gy I nf r ast r uct ure Updat e repor t f rom t he Feder al Ener gy Regul at or y Commi ssi ons Of f i ce of Ener gy Proj ect s
The proof i s t he number s - 46% of new el ect r i cal gener at i ng
capaci t y i n t he U. S. i s f rom renewabl e sources.
Pl an now to attend the onl y al l -renewabl es event RETECH.
www. RETECH2013.com
5
2012 Renewable Energy Projects On-Line*:
September 9 - 11, 2013
Marriott Wardman Park, Washington, DC
- 167 Solar - 92 Wind - 79 Biomass - 9 Water Power - 7 Geothermal
|
January 2013 26
cations module, with no need for an elec-
trician or utility service call. Utilities will
be free to develop customized modules or
approve third-party products to enjoy both
full interoperability with and clear demar-
cation from customer equipment.
Electricity providers are expected to
have the real-time ability to manage resi-
dential consumption in a cost-effective
manner while offering customers intel-
ligent and flexible approaches for mod-
erating energy use in response to price
or other signals. The cost of integrating
residential loads with the grid with use of
the DR connector is anticipated to be as
much as 80% to 90% lower than todays
approaches. As electric vehicles gain mar-
ket share, the modular DR connector also
represents a key enabling technology for
transforming batteries into distributed en-
ergy resources.
To accelerate adoption of the new stan-
dard (CEA-2045), an ongoing EPRI proj-
ect engages manufacturers, utilities, and
their communications technology and load
management partners in field deployment
and testing of retail products incorporat-
ing the modular DR connector. In addition
to examining interoperability and efficacy,
these studies will address consumer ex-
periences with installing plug-in modules
and participating in DR programs.
Common Protocol for Inverters for
Grid Integration. In any photovoltaic
(PV) and energy storage systems, inverters
convert the DC energy output from the PV
module or battery cell into AC energy. In
addition, inverters ensure that power qual-
ity and safety regulations are followed.
However, with the increase of distributed
energy resources (DER) on the electric
grid, especially on distribution circuits, it
is expected that inverters will have a more
active role in supporting grid stability.
Power electronics incorporated in most
inverters are capable of providing reac-
tive power, which can be utilized for volt-
age regulation and volt-VAR optimization.
The voltage fault ride-through capability
of inverters allows PV plants to stay online
during momentary grid disturbances. Com-
munication-connected inverters, acting on
utility commands, can change their operat-
ing mode (for example, power factor, active
power generation, grid-tied vs. islanded) to
match seasonal or load variation needs.
Most of the commercial inverters today,
especially the larger utility-scale units,
can provide smart grid functionality. The
challenge is to integrate hundreds of them
from different manufacturers, each with
proprietary communication protocols, in
the same utility network and operate them
in a harmonized manner. Ongoing EPRI
research is developing common functions
and standard communication protocol
mapping for smart inverters.
Another key challenge is to coordinate
the operation of these smart DER resources
with existing distribution circuit resources
like load-tap changing transformers, line
regulators, or capacitor banks to optimize
grid performance and reliability. Recently,
EPRI, working with the U.S. Department
of Energy (DOE) and National Institute
of Standards and Technology (NIST),
launched a new initiative specifically to
address the need for utility enterprise in-
tegration of DER.
Big Data Challenge. As electric utili-
ties are implementing advanced distribu-
tion applications to improve distribution
system efficiency, reliability, and per-
formance, a vast amount of data is be-
ing generated from sensors, devices, and
systems. Utilities are now responsible for
data management and analytics to support
distribution operations, planning, and as-
set management For example, going from
one meter read per month to hourly reads
(720 per month) is a 71,900% increase in
kWh data, in addition to potential for volts
and VAR data (Figure 5).
When standardized analytical methods
and tools are developed collaboratively,
it helps reduce the total cost to procure,
implement, and sustain advanced distri-
bution applications. The development of
common analytical methods that can be
applied across the utility industry can ac-
celerate the ability to process large data
sets and translate them into actionable
information for common distribution ap-
plications. EPRIs Distribution Modern-
ization Demonstration is addressing these
R&D challenges, identified by more than
1,400 industry and public advisors.
The project will employ learning by
doing in developing and demonstrating
data management and analytics. It will
explore new and existing distribution ap-
plications that have value to utility mem-
bers for uses such as early identification
of incipient faults, increased accuracy of
outage location, and online validation of
geographical information system (GIS)
maps. It is expected to define the detailed
functional requirements for each applica-
tion, along with the associated data man-
agement and integration requirements.
And it will demonstrate these applications
in a practical approach, preserving legacy
systems, as appropriate, while developing
an architecture that leverages emerging
standards such as the Common Informa-
tion Model.
Electrification to Enhance Produc-
tivity. Businesses are facing intense eco-
nomic pressures to improve productivity,
enhance quality, and lower costs to remain
competitive. Utilities are seeking to add
value for their customers and promote lo-
cal economic development. And society
seeks to curb emissions to improve quality
of life while growing jobs and stimulating
the economy. Electrification through the
application of novel, efficient electrotech-
nologies can address all of these needs.
Electricity offers inherent advantages of
controllability, precision, versatility, and ef-
ficiency compared to fossil-fueled alterna-
tives in many applications. However, a lack
of familiarity and experience with emerging
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Distribution
automation
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sensors
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management
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management
5. Data explosion. The amount of data collected by utilities will continue to increase as
more advanced technologies are deployed. Fully taking advantage of this new data by turning it
into actionable information with industry standard methods and tools is a significant challenge
for utility companies. Source: EPRI
January 2013
|
technologies impedes many enterprises, par-
ticularly small- to medium-sized businesses
and civil institutions, from pursuing electrifi-
cation measures that improve productivity and
efficiency of operations. Utilities also must
reconcile electrification strategies with man-
dated energy efficiency goals that are usually
narrowly defined in terms of kilowatt-hour
reductions. Moreover, the lack of an analyti-
cal framework to quantify the net benefits of
electrification strategiesfrom the customer,
utility, and societal perspectiveshinders
development of utility-business partnerships
to facilitate beneficial electrification.
A new EPRI project is exploring ben-
eficial electrification by working with the
industry; leading industrial collaborative
organizations such as the American Iron
& Steel Institute, Water Research Foun-
dation, and the Institute of Paper Science
and Technology; and with the DOEs Ad-
vanced Manufacturing Office and NISTs
Advanced Manufacturing Partnership. The
project will develop an analytical frame-
work to quantify electrification potential
in a given region or service territory, es-
tablish a valuation framework to enable
business case analysis of electrification
programs, and identify the most suitable
and highest impact electrification applica-
tions for each utilitys unique service ter-
ritory and customer composition. Special
consideration will be afforded to applica-
tions ubiquitous to most service territories,
including community infrastructure, such
water/wastewater treatment plants and
transportation ports.
Grid Resilience
EPRI is developing innovative technolo-
gies to enable grid damage prevention,
recovery, and customer survivability
during and after major emergencies.
On average, U.S. electricity consum-
ers can expect to lose power for more
than 100 minutes annually due to outages
from major storms. The majority of out-
ages result from damage to the millions of
miles of distribution lines. According to a
2008 Edison Electric Institute Reliability
Report, 67% of electrical outage minutes
were weather-related, typically due to
wind, ice, or snow either directly affecting
distribution assets or bringing vegetation
into contact with utility lines, poles, and
transformers. And restoring service after
storms can be costly. A survey of 14 U.S.
electric utilities identified 81 major storms
between 1994 and 2004, costing those
utilities more than $2.7 billion. These di-
rect costs represent only a fraction of a
regions wider economic losses resulting
from extended outages.
Natural disasters are not the only out-
age threat. Increased use of computers
and wireless communications also means
heightened concerns about cybersecuri-
tyan added complication in the resil-
iency equation. Distribution systems may
be particularly vulnerable to cyber attack
with the increased role of automation, as
automation is one of the strategies to re-
duce the impact of outages resulting from
other causes.
As storms and cybersecurity threats in-
crease, so do customers expectations of
service reliability with the evolution of
the 24/7, digitally connected society. Even
with enhanced response and heroic efforts
by crews, restoration that stretches to days,
and in some cases weeks, is no longer ac-
ceptable. At the same time, consumers ex-
pect electricity to be affordable.
EPRI and electricity sector stakeholders
are developing innovative technologies to
address these challenges and make the dis-
tribution system more resilient to storms
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January 2013 28
and terrorist attacks. Its a multi-pronged
approach: prevention, recovery, and sur-
vivability. Damage prevention refers to
the application of engineering designs
and advanced technologies that harden the
distribution system to limit damage. Sys-
tem recovery refers to the use of tools and
techniques to quickly restore service to as
many affected customers as practical. Sur-
vivability refers to the use of innovative
technologies to aid consumers, communi-
ties, and institutions in continuing some
level of normal function without complete
access to the grid.
Prevention: Hydrophobic Coatings.
New advances in material science have
resulted in the development of a family
of nanostructured polymer coatings that
can be engineered to provide surfaces
with specific desirable properties. These
so-called nanocoatings have found appli-
cation in the aerospace industry to keep
surfaces ice free and in architecture to pro-
vide self-cleaning properties for windows.
Nanocoatings can provide scratch, corro-
sion, and chemical resistance, as well as
super hydrophobicity.
The self-cleaning and super hydropho-
bicity properties are particularly attractive
for application on insulators in contami-
nated environments, and coatings with ice-
repelling qualities may reduce the risk for
flashovers in winter storms. Ice-repelling
coatings also may have applications in
conductors in areas where there is a risk
for mechanical overload due to ice accre-
tion in winter months.
An EPRI project is working to develop
performance requirements and potential deg-
radation modes and determine if there are any
fatal flaws that may prevent the applica-
tion of these new technologies. It also seeks
to gain experience and identify appropriate
test methods that can be used to evaluate and
specify nanocoatings for use on electrical in-
sulators and conductors.
Recovery: Airborne Damage Assess-
ment. EPRI recently completed pre-
liminary tests showing that both small
piloted aircraft and unmanned aerial vehi-
cles (UAV) or drones equipped with high-
resolution cameras, global positioning
systems (GPS), and sensors can be valu-
able tools for damage assessment. UAVs
equipped with EPRIs Airborne Dam-
age Assessment Module (ADAM) can be
small and light enough to be handled by
a technician and can quickly survey dev-
astated areas that are difficult to reach by
roads blocked by downed trees or other
obstacles. The use of ADAM-equipped air-
craft could substantially reduce costs and
cut response time by hours, if not days. It
could also aid in assessing system condi-
tions in normal situations. EPRI research
will also assess the accuracy of the sensors
and cameras to determine if it is sufficient
to assess equipment such as insulators.
EPRI is working with utilities to con-
duct test flights with manned and un-
manned aircraft to clarify how the module
should be configured and deployed to
handle different terrains and weather con-
ditions as well as meet other requirements.
This project will also look at different cost
models to determine the level of value for
investment in ADAM and aircraft.
Survivability: Using PEVs as a Power
Source. Plug-in electric vehicles (PEVs),
both all-electric and hybrid, could be used to
supply energy to a home during an outage.
Hybrid electric vehicles also could operate
as a gasoline-fueled generator to provide ad-
ditional standby power. Automakers are in-
terested in the concept, but the technologies
require further development.
Nissan Motor Co., Ltd. recently unveiled
a system that enables the Nissan Leaf to con-
nect with a residential distribution panel to
supply residences with electricity from its
lithium-ion batteries. The batteries can pro-
vide up to 24 kWh of electricity, sufficient
to power a households critical needs for up
to two days. EPRI is investigating potential
uses for both gas-powered and electric auto-
mobiles as a power resource during extended
outages (Figure 6).
New Materials for Safer Nuclear
Fuel. Improved grid resilience includes
innovations in power generation. The 2011
accident at the Fukushima Daiichi nuclear
plant in Japan illustrated the operational
and safety challenges associated with a
loss of cooling capability, which can lead
to a nuclear fuel meltdown. Current light
water reactor fuel designs and materials
have limitations that constrain their abil-
ity to maintain integrity under accident
conditions. EPRI is investigating a variety
of alternative fuel design concepts aimed
at making fuel safer and increasing op-
erational flexibility and reliability. While
complete mitigation of fuel degradation in
a severe accident may not be possible, im-
proved materials that can withstand higher
temperatures in these scenarios could give
operators more time to act before signifi-
cant damage occurs.
Existing light water reactors rely on zir-
conium-based alloys for fuel cladding and
channel materials. These alloys perform well
under normal operating conditions, but when
the temperature spikes during a loss-of-cool-
ant accident, they can weaken, corrode, and
generate hydrogen. The hydrogen buildup
can reach combustible levels, where an ex-
plosion is possible, which is what happened
at the Fukushima plant.
The technologies EPRI has examined
include:
Cladding made from refractory metals,
such as molybdenum and niobium
Cladding and fuel channels made from
silicon carbide
Cladding made from iron-chromium-
aluminum
Fully ceramic micro-encapsulated fuel
pellets
To date, EPRI has focused most of its
efforts on molybdenum cladding and sili-
con carbide channels. Molybdenum alloys
have a higher melting temperature than
zirconium-based alloys, so they retain their
2,000
400
100
50
0
E
n
e
r
g
y

d
e
n
s
i
t
y

(
W
h
/
k
g
)
1860 1910 1960 2010 2020 2030
Lead-acid
2545
Nickel-iron
3040
Nickel-cadmium
3560
Nickel-metal hydride
5075
Lithium ion
110140
Lithium ion w/ Si
nanowire 400
Li-air
Now
~2,000 Wh/kg
6. Rolling electricity storage. EPRI is investigating how plug-in electric vehicles may be
used to supply electricity during a system outage or emergency. This graphic shows the evolu-
tion of battery storage technologies. Source: EPRI
January 2013
|
shape even at high temperatures. Molyb-
denum also exhibits high wear resistance,
high dimensional stability, low thermal
expansion, and high thermal conductivity.
The metal is chemically stable up to 2,000
degrees Celsius. EPRI research suggests a
duplex or triplex fabrication approach to
make the cladding compatible with current
light water reactor coolants. Duplex clad-
ding would have a thin layer of zirconium
or other alloy on the outside of the molyb-
denum tube, while triplex cladding would
have thin layers on both the inside and
outside. Such fabrication techniques are
challenging, but the industry already has
experience fabricating duplex and triplex
zirconium cladding.
As a ceramic material, silicon carbide
has favorable high-temperature charac-
teristics as a potential cladding material,
but it also faces significant technical ob-
stacles, such as fabrication. A more fea-
sible goal may involve the use of silicon
carbide to fabricate channels, the enclo-
sures found between each fuel assembly
in boiling water reactors. In 2008, EPRI
began investigating the use of silicon car-
bide as a replacement for zirconium alloys
to prevent channel deformation, a problem
called bowing. By replacing zirconium in
the channels with silicon carbide, less hy-
drogen would be produced in an accident,
thereby increasing safety. Channels repre-
sent about 40% of the zirconium mass in
a boiling water reactor core. EPRI has de-
veloped silicon carbide channels and has
begun testing their viability.
Implementing nuclear fuel cladding at
commercial nuclear power plants will re-
quire an extensive testing and evaluation
program involving the fuel vendors, nucle-
ar plant owners, research entities such as
EPRI and the DOE, and other international
organizations such as the International
Atomic Energy Agency and the Nuclear
Energy Agency. Given the resource com-
mitment required and high-risk nature of
this research, no single entity or group can
succeed alone. Collaboration will be criti-
cal in conducting the necessary laboratory
and field testing, and in assessing whether
these new technologies are commercially
viable.
Leveraging Consumer Technologies
Consumers are using smart devices
primarily phones and tabletsin ways
that are profoundly impacting society and
the electric industry. Consider the smart
phone, which was introduced in 2007.
In 2011, manufacturers shipped 500 mil-
lion of them. Apple introduced the iPad in
April 2011 and built more than 100 million
of them last year. This profusion of devic-
es has fueled an explosion in the develop-
ment of applications and uses. In 2007, a
little-known network called Twitter carried
340 tweets a day. By 2012, the volume
had increased a million-fold, and many of
Twitters users also were among the 900
million active Facebook users. On an aver-
age day, more than 200 billion e-mails are
sent worldwide.
EPRI is developing a variety of apps,
primarily for utility staff, that enable use
of smart devices for tasks that include op-
erating valves, navigating robots, provid-
ing field force data visualization for utility
engineering and operations professionals,
finding and analyzing stray voltage, ana-
lyzing power quality, and finding the loca-
tions of electric vehicle charging stations.
The data visualization technology com-
bines tablet and smart phone technologies,
real-time data from the internal magne-
tometer, and 3-axis gyroscopic to stabilize
and provide a more accurate compass
when a user points the mobile device at
a distribution pole or at transmission and
distribution conductors. GPS and Com-
mon Information Model messages serve
to locate and retrieve segmented GIS data
from a utility GIS database, and the device
renders the GIS data segments on screen as
a map information overlay from the cam-
era image. An example of this would be
seeing a pole structure symbol through the
camera while the screen displays the cam-
era image with the one-line circuit draw-
ing overlaid.
EPRIs iCV Analyzer Application is a
contact voltage detector app that is used
in concert with a commercially available
probe (antenna) and amplifier (wand) that
allows users to identify metal objects that
may have become inadvertently energized.
The iCV Analyzer app can be downloaded
from iTunes. There is now interest from
commercial manufacturers to manufacture
and sell the add-on wand device for con-
tact voltage detection. E-mailing datasets,
user site info, and GPS location features
are included capabilities of this app.
Utility companies are finding more
and more ways to enhance their points of
contact with consumers. Of the compa-
nies responding to a recent buildnetwork
.com survey, 40% said smart devices have
changed how they communicate/connect
with their customers, and 24% said they
have impacted their products and services
and how they are delivered.
EPRI recently surveyed a number of its
utility members to find out how they are
using mobile platforms, both internally
to support transmission and distribution
(T&D) operations and to provide services
to end-use customers. Of the 24 companies
that had responded as of this writing, two-
thirds currently are using mobile devices
for utility operations (not including mo-
bile terminals used by utility crews). The
main uses are inspection and assessment,
followed by work order management and
workforce deployment (Figure 7).
On the consumer side, 63% of the re-
sponding utilities are sending text messag-
es to customers and 38% are connecting
via downloadable apps. For both T&D and
consumer purposes, cyber security con-
cerns and support costs were listed among
the top barriers.
Arshad Mansoor is senior vice
president, research & development for the
Electric Power Research Institute.
7. Want to get closer to utility customers? There are apps for that, and the industry
is using them. In a survey of 24 major utilities, 67% said that the company is currently deploying
and using mobile devices in its T&D operations, but often in different ways. Source: EPRI
100
90
80
70
60
50
40
30
20
10
0
Inspection &
assessment
Work order
management
Workforce
deployment
Switching
orders
Surveying Vegetation
management
Training
Aggregate results: distribution, substations, transmission
P
e
r
c
e
n
t
a
g
e
Not implementing & not planning to Planning to in the future Implementing now
|
January 2013 30
Slow Growth Aheadwith
Unexpected Flares of Activity
T
he prospects for the U.S. power generat-
ing industry in 2013 arent exciting, but
they are intriguing. Though familiar chal-
lenges remaineconomic pain, regulatory rum-
bles, and legislative inactionthe natural gas
and coal markets continue to defy year-ahead
predictions, forcing everyone from generators
to dispatchers to fuel suppliers to rethink their
assumptions with now-predictable regularity.
Before looking ahead to 2013, consider what
has set the stage for the new year.
Reading between the lines of the U.S. Ener-
gy Information Administrations (EIAs) Annual
Energy Review 2012, there is much good news
thoroughly mixed with much unmentioned bad
news. Consider the following energy milestones
that should be cause for celebration:
The most hydroelectric power produced
(in 2011) since 1999 (up 25% from a rela-
tively dry 20072010).
The most renewable energy (wind, solar,
geothermal, and biomass) ever produced.
The most natural gas produced in his-
tory. Dramatic increases from state and
private lands made 2010 the year with
the lowest volume of natural gas im-
ports since 1992, principally due to hy-
draulic fracturing. The trend continued
in 2012.
U.S. CO
2
emissions are expected to stay
below 2005 levels through 2035, princi-
pally due to coal-to-gas fuel switching and
a moribund economy. The low price of
natural gas has also moderated or flattened
electricity price increases in many parts of
the country.
A federal court determined that the En-
vironmental Protection Agencys (EPAs)
Cross State Air Pollution Rule (CSAPR)
did not comply with the Clean Air Act. An
EPA appeal is expected.
The often-overlooked industry low-
lightsas we categorize themare equally
profound:
The only new hydroelectric projects per-
mitted were upgrades of existing plants
and minuscule hydrokinetic and run-of-
river projects. The last major hydroelectric
plant built in the U.S. was almost 40 years
ago, and none are planned for the future.
In fact, many activist organizations are ac-
tively campaigning for removal of existing
hydroelectric dams.
The cost of renewable energy mandates
was the primary cause of a 2.3% increase
in the national average cost of residential
electricity.
The lowest amount of natural gas since
1993 was produced from public lands.
The EPA is proposing additional gas well
fracking rules that are predicted to drive
Courtesy: Tennessee Valley Authority
North American shale gas was supposed to realign the generation fleet here and
abroad (thanks to anticipated exports) far into the future. Turns out, thats not ex-
actly how the near term is shaping up. Despite stagnant (and even putrid) econo-
mies and legislative bodies in the U.S. and EU, there promises to be sufficient
market volatility to keep everyone alert.
By Dr. Robert Peltier, PE; David Wagman; Thomas W. Overton, JD; Kennedy Maize; and Charles Butcher
rosemont, IL
may 14-16
2013
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Challenges of Cycling Baseload Coal Plants
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Plus - get exclusive updates from the POWER magazine Editorial Team!
|
January 2013 32
up the production cost of natural gas. New
offshore gas leases were suspended in ear-
ly 2009 and have yet to be reinstated.
The Sierra Club has announced a plan it
calls Beyond Natural Gas. With its un-
veiling came the statement, Were going
to be preventing new gas plants from be-
ing built wherever we can. Unmentioned
in that press release was the groups long-
held view that natural gas is a bridge
fuel; now it is vilified as a barrier to
the groups goal of an economy devoid of
fossil fuels.
The EPAs greenhouse gas rule complies
with the Clean Air Act, according to
the same federal court that struck down
CSAPR. Industry appeals are pending.
The contrasting successes and failures am-
ply illustrate there is no safe, middle ground
when it comes to selecting the technologies
for producing electricity. The middle ground
has become the equivalent of an energy pol-
icy no mans land, where Congress steps
lightly, if at all.
The nations patchwork energy policy has
devolved into what is in practice a winner
takes all contest between regulators and fuel
developers, rather than a consensus strategy
that guides development. The imperfect En-
ergy Policy Act of 2005 (remember Corridors
of National Interest, and when regulating
natural gas wells was delegated to individual
states?) would be impossible to pass today
because it represented compromise.
Despite the policy vacuum, developers
of new gas fields have, through private in-
vestment, produced enormous quantities of
low-priced natural gas thats now available
from private and state lands. Siding with
them are proponents of an energy indepen-
dence scenario in which fossil fuels figure
prominently. We learned the valuable lesson
that fossil fuels are finite, but in terms of
centuries not years.
On the opposing side is the administration,
often supported by environmental activist or-
ganizations, which has shown little support
for expansion of the natural gas industry or
domestic coal production but has for the past
four years been preoccupied with distributing
massive government subsidies for renewable
technologies, continuing the decade-long
trend of slowing the extraction of fossil fu-
els from public lands, and using the EPAs
regulatory authority to attack coal-fired gen-
eration. There is little if any common ground
between the belligerents.
The rate of gross domestic product (GDP)
growth isnt expected to return to 2007 lev-
els for several more years, according to the
Congressional Budget Office. Worse yet,
some economists are predicting a double-dip
recession early in 2013, so its hard to imag-
ine a quick economic rebound during the
New Year. More likely, the November elec-
tion results cemented another four-year en-
ergy policy vacuum, precisely what natural
gas developers and federal regulators dream
aboutin chaos there is opportunity. All the
while, a divided Congress is content to sit on
the sidelines as mere spectator to the melee,
abdicating its legislative responsibility for
determining energy policy.
Has Washington Become Tokyo?
Early in the 1990s, the booming economy in
the Land of the Rising Sunthe envy of the
rest of the world throughout the 1980swent
bust. Built on a real estate bubble and gov-
ernment management of manufacturing and
exports, Japans economic balloon quickly
deflated and was followed by years of flat
or anemic growth and entrenched unemploy-
ment. The worlds third-largest economy had
an aging and dispirited population. After 20
years of economic doldrums, Japans econo-
my has still not fully recovered.
Some experts, looking at the performance
of the U.S. economy over the past four years,
fear that the Japanese disease may have in-
fected the U.S., although the consensus is
that the U.S. has tools and talents to avoid
the worst of the Japanese economic malady.
How the U.S. economy in 2013 either deals
with or avoids the doldrums has important
implications for the way the nation uses elec-
tricity in the coming year (Figure 1).
Much of the rhetoric in recent U.S. nation-
al elections, including the one just passed,
hinged on competing claims of which can-
didate and which party could energize the
economy. But history seems to demonstrate
that fundamental economic forces are far
stronger than political posturing and policy.
Thats particularly true in the short run.
The International Monetary Fund (IMF),
which has a pretty good forecasting record,
predicts that 2013 will see the U.S. economy
grow by a modest 2.1%. The IMF says Ja-
pans economy should grow by an even less-
sparkling 1.2%. Says IMF Chief Economist
Olivier Blanchard, In advanced economies,
growth is now too low to make a substantial
dent in unemployment, and in major emerg-
ing markets, growth, which had been strong
earlier, has also decreased.
If the U.S. economy continues its current
grinding path upward, rather than soaring
as the politicians promised, the results for
the power business are likely to be more of
the same: low demand growth, little new
construction, and reliance on strategies
built around hedging against the future and
playing it safe. Thats largely the scenario
portrayed in the EIAs Annual Energy Out-
look 2012, released last summer, projecting
energy demand growth from 2012 to 2035.
Overall, says the EIA, U.S. energy con-
sumption grows at an average annual rate of
0.3 percent from 2010 through 2035 in the
AEO2012 Reference case. The U.S. does
not return to the levels of energy demand
growth experienced in the 20 years prior to
the 20082009 recession, because of more
moderate projected economic growth and
population growth, coupled with increasing
levels of energy efficiency and rising energy
prices (Figure 2).
Gas Grabs Second Place
Over the past four years, one new force has
appeared in energy markets, with revolution-
ary results. Thats the rapid and growing
impact of natural gas liberated from tight
1. New normal. Residential demand dropped in 2012 while other sectors showed small
gains. The increase in demand for electricity is projected to be small in 2013. According to the
Energy Information Administration (EIA), The U.S. does not return to the levels of energy de-
mand growth experienced in the 20 years prior to the 20082009 recession, because of more
moderate projected economic growth and population growth, coupled with increasing levels of
energy efficiency. Source: EIA, Annual Energy Outlook 2012
14
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8
6
4
2
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2010 2011 2012 2013
0.5
0.4
0.3
0.2
0.1
0.0
0.1
0.2
Right Axis: Residential Comm. and trans. Industrial Direct use
T
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January 2013
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Devonian shale rock formations by horizon-
tal well drilling and hydraulic fracturing.
With prices in the range of $3/MMBtu, gas
has galloped across the U.S. energy land-
scape with astonishing speed. According to
the EIA, shale gas production in the U.S.
increased from negligible amounts in 2000
to 5 trillion cubic feet (tcf), or 23% of U.S.
production, by 2010. The EIA predicts that
shale gas production will climb to 13.6 tcf by
2035, constituting half of total U.S. produc-
tion (see Natural GasFired Plants Continue
Rollercoaster Ride, p. 42).
Energy guru Daniel Yergin, founder of
consulting firm IHS CERA, recently wrote,
Shale gas alone is now 10% of the overall
U.S. energy supply. And similar technolo-
gies to recover so-called tight oil trapped in
rock formations are largely responsible for
boosting U.S. oil production by 25% since
2008the highest growth in oil output of any
country in the world over that time period.
As EIA data demonstrate, gas has be-
come the fuel of choice for new, central-sta-
tion electric generation, while King Coal is
gradually retiring from the throne. Over the
past 15 years, says the Department of Energy
statistical agency, most new generation has
been gas or wind. The EIA notes, In par-
ticular, efficient combined-cycle natural gas
generators are competitive with coal genera-
tors over a large swath of the country. And, in
the first half of 2012, these combined-cycle
generators were added in states that tradition-
ally burn mostly coal (with the exception of
Idaho, which has significant hydroelectric
resources).
Illustrating its rise to royalty, gas stole sec-
ond place from nuclear in the generating mix,
as atomic energy in the U.S. dropped to 19%
of capacity. In its September Short-Term
Energy Analysis, the EIA reported, The
share of total generation fueled by natural
gas during the first half of 2012 averaged
30.4 percent compared with 22.3 percent
during the same period last year. That was
driven by gas prices that were lower than
coal. Will that price differential in favor of
gas continue? EIA figures are ambiguous.
The statistical agency in the same report said,
However, in June, the average Henry Hub
natural gas spot price surpassed the average
spot price for Central Appalachian coal for
the first time since October 2011, indicating
that the recent trend of substituting coalfired
generation with naturalgasfired generation
may be slowing and will likely reverse.
A Question of Supply
Of course, new natural gasfired generation
depends on market dynamics five and 10
years in the future, not just in 2013. Research
firm Bentek Energy in a note published in
November said it expects the North Ameri-
can gas market to undergo unprecedented
changes over the next five years. For one
thing, it expects traditional supply regions
in the South to become net demand regions.
For another, it expects the continents largest
demand region, the Northeast, to become a
major source of supply.
Overall, Bentek expects total U.S. and
Canadian natural gas production to grow
by about 11 Bcf/d (14%) between 2012 and
2017. More than 80% of that growth is ex-
pected to take place in the Northeast as shale
gas production from the Marcellus basin
continues to grow. This surge of supply is ex-
pected to shift gas pipeline flows across the
continent, provide support for power sector
demand growth, and allow liquefied natural
gas (LNG) exports to occur from the North-
east and Southeast regions. (As this issue was
going into production the EIA published its
Annual Energy Outlook 2013 Early Release
Reference Case, which projects the U.S. will
become a net LNG exporter starting in 2016,
as it did in the AEO2012 Reference case, and
an overall net exporter of natural gas in 2020,
two years earlier than in AEO2012.)
Production growth in the Northeast is ex-
pected to far exceed that regions demand
growth over the next five years. By 2017,
Bentek expects the Northeast region will
be net long 5.3 Bcf/d compared to expected
supply and demand in 2013. By comparison,
Southeast production is expected to decline
0.9 Bcf/d between 2013 and 2017. Mean-
while, Southeast gas demand from power
generation, industrial plants, the residential
and commercial sector, and from LNG ex-
ports is expected to grow by more than 2.5
Bcf/d.
Bentek reports that Southeast gas demand
for electric power generation has increased
130% since 2005 as power generators took
advantage of falling gas prices. More than
30% of total U.S. power generation growth
over the next five years is expected to take
place in the Southeast. A nearly equal amount
is expected in the Northeast.
Coal Leads But Is Losing Ground
During 2012, only one new coal-fired gen-
erating plant, the 800-MW Prairie State
station in Illinois, came online in the U.S.
According to The Brattle Groups analysis
last year, about 30 GW of coal-fired gener-
ating capacity, representing around 10% of
the U.S. coal fleet, was announced for shut-
down by 2016 (see Coal Battered Early,
Later Rebounds, p. 40).
The economic consultants estimated that
another 59 to 75 GW of coal capacity would
eventually be added to that list of retirements.
Though there was considerable noise during
the election campaign about the Obama ad-
ministrations putative war on coal, The
Brattle Group analysis points to the rise of
shale gas as the greatest cause of coals loss
of power, concluding that gas prices are a
12
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1950 1970 1990 2010

Trendline

3-year moving average
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g
r
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(
%
)
2020 2035
History 2010 Projections
2. Electricity demand rises. This chart illustrates U.S. electricity demand growth based
on a three-year moving average. Electricity demand (including retail sales and direct use) growth
has slowed in each decade since the 1950s, from a 9.8% annual rate of growth from 1949 to
1959 to only 0.7% per year in the first decade of the 21st century, the same as the predicted
annual growth of electricity demand from 2012 through 2035, according to the EIAs base case
scenario. Source: EIA, Annual Energy Outlook 2012
|
January 2013 34
much more significant influence on retire-
ments than pending environmental rules.
The analysis doesnt address whether the ben-
efits of the regulation outweigh the costsa
different, and bigger, question (Figure 3).
But the Brattle analysis does not entirely
dismiss the impact of new rules on coaland
on electric reliability. The regulatory hammer
could be the rule that imposes a cost on car-
bon dioxide emissions from power plants.
Brattles study examined the impact of a
carbon equivalent price of $30/ton hitting in
2020. That regulatory initiative, says Brattle,
could mean coal plant retirements would
jump from the current projection of 59 to 75
GW to 127 to 149 GW (Figure 4).
Thanks largely to natural gas, coals posi-
tion in the mix of fuels used to generate elec-
tricity has eroded, although the losses appear
to have hit bottom in 2012. In 2005, coal
accounted for 50% of electric generation;
it declined to 42.3% in 2011 and 37.3% in
2012. Gas generation climbed to an expected
30.6% in 2012, up from 18% in 2004. The
good news for coal unit owners is that, as
natural gas prices rise, coal-fired generation
economics improve. In 2013, coal is expect-
ed to produce about 40.1% of the nations
electricity.
As former Exelon CEO John Rowe fa-
mously observed, Coal will remain King.
Gas will be Queen.
Market Ignores Nuclear
For the nuclear power industry, 2012 was a
year of marginal activity, and 2013 promises
to be a rerun.
Again, John Rowe, who ran the nations
largest nuclear fleet, has a clear-headed take
on the future of nuclear power. Speaking to
an American Nuclear Society meeting in
2011, Rowe recalled that 20 years ago he laid
out conditions necessary for nuclear renais-
sance. Among them, high and stable natural
gas prices. Today, he said, This condition
cannot be met due to the influx of shale gas
into the market. Shale is good for the country,
bad for new nuclear development.
Writing in the Winter 2012 issue of the
Journal of Economic Perspectives, Law-
rence Davis of the University of California,
Berkeley, concluded, In 1942, with a shoe-
string budget in an abandoned squash court
at the University of Chicago, Enrico Fermi
demonstrated that electricity could be gener-
ated using a self-sustaining nuclear reaction.
Seventy years later the industry is still try-
ing to demonstrate how this can be scaled
up cheaply enough to compete with coal and
natural gas.
For nuclear power, as for every technology
competing in the electric marketplace, its a
matter of economics, said Exelons Rowe, and
nothing else. Nuclear needs to be looked at in
the Age of Reason and not the Age of Faith,
he said. It is a business and not a religion.
Illustrating the economic fundamentals for
nuclear, in late October, Dominion announced
it would shut down its 556-MW Kewaunee
unit (vintage 1973) in Wisconsin, taking a $280
million write-down. The plant was a victim of
3. Coal remains king. Despite the dire predictions of coals demise, coal-fired plants
continue to provide the largest share of electricity, and will continue to do so through 2035 (the
last year of the EIA analysis). Shown is electricity generated by fuel in 2010, and projections for
2020 and 2035. Source: EIA, Annual Energy Outlook 2012
4. Down but not out. Additions to the coal fleet are small in the coming years; new gen-
erating capacity will consist mostly of natural gasfired plants. A construction boom in the early
2000s saw capacity additions averaging 35 GW a year from 2000 to 2005, much higher than
had been seen before. Since then, average annual builds have dropped to 17 GW per year. Ac-
cording to EIA projections, between 2011 and 2035, a total of 235 GW will be constructed, with
relatively high annual additions in 2011 and 2012 of an average of 24 GW; about 40% are renew-
able plants. After 2012, the added capacity drops below 9 GW each year until 2025. Source: EIA,
Annual Energy Outlook 2012
Coal
2010 2020 2035
2,000
1,500
1,000
500
0
Natural gas Nuclear Renewables
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History 2010 Projections
G
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January 2013
|
weak wholesale power prices and low natural
gas prices. What had some industry observers
wondering was why Dominion was unable to
find a buyer for the plant.
Renewable Subsidies Set to Expire
The same observation about the primacy of
economics is true for renewable energy gen-
eration, although many environmentalists
and the Obama administration seem to view
renewables as sacred icons. Much of the ad-
ministrations direct largess to renewables in
the form of loans and grants, including large
amounts of economic stimulus funds provid-
ed in 2009, unfortunately has gone into finan-
cial black holes, not green power (see table).
The government has demonstrated that it is,
in the words of former Obama economic ad-
visor Lawrence Summers, a crappy venture
capitalist.
Thanks to governments other, and thor-
oughly bipartisan, offerings on the green
altarin the forms of production tax cred-
its, cash grants in advance of tax credits (the
Treasurys infamous 1603 program), and
state purchase mandates and market incen-
tiveswind and solar have held their own in
the generating mix in recent years, increas-
ing generation market share from a barely
noticeable 0.5% in 2005 to a still small but
growing 2.4% in 2010. Almost all of that has
been wind, which grew from 0.44% to 2.3%
in that period (Figure 5).
According to the American Wind En-
ergy Association (AWEA), the lobbying
group for wind power, wind installations
in 2012 were on pace to almost match
2011s performance, when 6,816 MW of
new nameplate capacity went online. For
the first half of 2012, said AWEA, 2,869
MW of wind went online. By contrast, the
wind industry put up 10,000 MW of new
capacity in 2009. AWEAs figures show
that another 10,312 MW of wind was in the
construction pipeline at mid-year 2012, at-
tempting to get built before production tax
credits expired at the end of 2012.
Not all of the wind projects AWEA lists as
under construction are likely to be complet-
ed. A recent headline in the Yakima Herald-
Republic in eastern Washington, where wind
has been a booming business, captures the
prospects for wind in the year ahead: Eco-
nomic uncertainty puts the brakes on North-
west wind power industry. The article notes
that at least seven wind projects are up in the
air in Kittias and Klickitat Counties, facing
a shortage of electric transmission to markets
in California and competition from low-cost
natural gas.
The wind industry began a strong lob-
bying campaign in mid-2012 aimed at re-
storing the production tax credit. AWEA
has been working with the Boston-based
advocacy group Ceres to push the produc-
tion credit. Ceres last fall arranged for a
business group, Business for Innovative
Climate and Energy Policy, to write con-
gressional leaders urging extension of the
tax credit. That effort failed, but wind sup-
porters hope to bring the topic up again
during the coming debate over federal fis-
Company Rating at time of investment Taxpayer exposure (millions) Status today
A123 Systems $249.00 Bankrupt
Abound Solar Junk (B) $400.00 Bankrupt
Amonix $21.60 Bankrupt
Babcock & Brown $178.00 Bankrupt
Beacon Power Junk (CCC+) $43.00 Bankrupt
BrightSource Energy $1,600.00 Distress
Ecotality Inc. $126.00 Distress
Ener1 $118.50 Bankrupt
Evergreen Solar $5.30 Bankrupt
First Solar $3,100.00 Distress
Fisker Automotive $529.00 Distress
Mountain Plaza Inc. $0.42 Bankrupt
Nevada Geothermal Speculative (BB+) $98.50 Failing
Raser Technologies $33.00 Bankrupt
Solar Trust for America
a
$2,100.00 Bankrupt
Solyndra Inc. Junk (BB-) $535.00 Bankrupt
SpectraWatt $0.54 Bankrupt
SunPower $1,200.00 Distress
U.S. Geothermal Junk (BB) $97.00 Distress
Note: a. Loan never closed because the company declared bankruptcy.
Poor investment track record. The failing or bankrupt financial status of many renew-
ables-related companies after receiving economic stimulus funds shows that the government
did a poor job in picking marketable technologies. Taxpayers did not get their moneys worth.
Source: Institute for Energy Research
5. Stable portfolio. The amount of renewable generation available each year is most de-
pendent on the rainfall that produces hydroelectric power. Rainfall was down in 2010 but re-
bounded in 2011. Average hydroelectric generation is predicted in 2013. The EIA reference case,
shown in this chart, assumes the federal production tax credit expired on December 31, 2012.
Source: EIA, Annual Energy Outlook 2012
Solar Geothermal Other biomass Wind power Liquid biofuels Wood biomass Hydropower
10
9
8
7
6
5
4
3
2
1
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Forecast
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January 2013 36
cal and tax policy. Given Republican op-
position to subsidies for renewable energy,
the prospects for extending the production
tax credit appear slim (see Grading My
2012 Industry Projections, a web exclu-
sive associated with this issue). The 30%
investment tax credit for wind projects
also died on December 31.
Even if Congress were to restore the
wind subsidies for another year, that might
not have an impact in 2013. According to
George Nall, an executive with wind turbine
maker Gamesa Energy USA, it takes at least
12 months for a new project to move from
planning to construction, so another year of
the tax credit wont help projects that arent
already in the pipeline.
For solar, the market for photovoltaic
(PV) panels largely collapsed in 2012 amid a
worldwide glut; there is nothing on the hori-
zon to suggest a turnaround, according to the
Solar Buzz market research firm. Thats good
news for consumers who want to equip their
homes with sun power, and those who in-
stall the panels, but bad news for companies
making panels. A market shakeout, already
under way, is likely to accelerate. Last fall,
GTM Research predicted that 180 solar panel
manufacturers around the world are likely to
vanish by 2015, with 88 of those in the U.S.,
Europe, and Canada. By the end of 2013, cell
and panel manufacturing in the U.S. could
disappear completely.
As an indication of the weakness of the
PV market, in mid-October, Satcon, a large
manufacturer of solar inverters, filed for
Chapter 11 bankruptcy protection, citing $93
million in assets and $121 million in debt. Its
stock was trading at under a dime a share.
Greentech Media Editor-in-Chief Eric We-
soff commented, Clearly troubles in solar
are not limited to module suppliers or thin-
film CIGS startups.
While the PV business was getting clob-
bered, 2012 was a solid year for utility-
scale solar, still tiny by any measure. That
market may continue to remain healthy in
2013, driven by state renewable energy
purchase mandates. According to the Solar
Energy Industries Association (SEIA), the
Washington lobby for the solar business,
the second quarter of 2012 saw a record
477 MW of utility solar capacity come into
service. Utility solar represented well over
half of the total of 742 MW of solar ca-
pacity added in the second quarter. More
solar was installed in the U.S. this quarter
than in all of 2009, led for the first time by
record-setting utility-scale projects, said
SEIA President and CEO Rhone Resch.
Solar technologies have seen a dramatic
reduction in costs, notes investment banker
Stuart Bernstein of Goldman Sachs. Once in
the range of $90/W, solar is now available at
$1/W (PV panels only). That, he predicts, will
drive the solar market around the globe in the
years ahead. But solar in 2013 will remain a
barely perceptible portion of the U.S. electric
generating mix, according to the EIA.
Texas Market Reform
A region worth watching in 2013 is Texas,
where regulators are working to adjust mar-
ket mechanisms to entice new generation
capacity additions to meet demand in what
is perhaps the countrys most economically
robust region. Rising petroleum production
not only is driving refinery expansions but
also fueling chemical plant expansions and
exports. Calpine said that load growth in
Texas is north of 3% a year and that more
than three dozen new commercial high-rises
are planned for Texas, plus an expansion for
the Port of Houston.
Although Texas is reaching a point where
new investment in generation is required to
protect electric reliability, the needed invest-
ment to meet this demand has not yet begun
to materialize. Independent power producer
(IPP) Calpine said in November that 2015
on-peak spark spreads were sufficient to
support investment at $500 to $600/kW. But
the states grid, ERCOT, needs new invest-
ment that is expected to cost around $1,000/
kW at full replacement cost. Consequently, a
gap exists between where forward prices are
currently trading (at the $500 to $600/kW
level) and where they need to be to incentiv-
ize new investment. Rational, economic in-
vestors would not invest at full replacement
cost based simply upon todays forward en-
ergy curves, the IPP said. In Texas, this is
called the missing money problem, said
Thad Hill, Calpines executive vice presi-
dent and chief operating officer. There are
overwhelming indicators that the market
must change.
Texas regulators have been working to
raise systemwide offer caps in an effort to in-
centivize new generation development. The
systemwide offer cap was raised on August
1 from $3,000 to $4,500/MWh. Regulators
approved a further price cap increase in late
October, to $9,000/MWh by 2015.
Besides raising the price caps, Texas
regulators will focus their attention this year
on market reform proposals to further en-
courage new generation. One option under
consideration is a forward capacity market
similar to PJM, but with some Texas twists.
For example, there would be a single zone,
and there would be no need for a minimum
offer price rule. An analysis by The Brattle
Group said the three-year forward period
contemplated by the proposal would be suf-
ficient to include new builds in the supply
curve without creating risks of long-term
forward commitments.
Brattle also pointed to several risks with
the proposal. First, the firm said it suspects
that investors will start responding right away
in anticipation of a capacity payment upon
delivery. The danger in setting a 2015/16
price floor in early 2013 is that it will strongly
mitigate the risk of capacity shortfall in 2015.
Second, multiple administrative rules would
need to be created related to load forecast,
reserve margin requirement, demand curve
shape, and resource adequacy qualification
rules. Ongoing litigation over parameters and
rules can create market uncertainty, the con-
sultants said. Third, sticker shock could result
and lead consumers to blame the new capac-
ity product. This could be mitigated some-
what by high load growth and a three-year
forward period, which likely would produce
what economists refer to as an elastic supply
curve. Sticker shock also could be eased by
demand response programs, which would be
allowed to enter and exit at a range of prices.
A second market reform option under con-
sideration by regulators is an energy-only
market in which price caps are raised, reserve
requirements are raised, and demand response
is implemented. A concern is whether or not
sufficient demand response growth will occur to
maintain the target reserve margin. The Brattle
Group said that by 2015, a significant shortfall
could occur relative to the current 13.75% re-
serve margin target. By 2016 and beyond, more
than 3,500 MW of additional demand response
may be needed in ERCOT to meet the target.
The European Outlook
Europe had another interesting year in 2012.
As economic woes continue to squeeze the
27 European Union (EU) states (Greece,
Spain, and Italy in particular), the future of
the single currency is rarely out of the news,
and half a century of political union is un-
der real strain. In Germany, the engine of
Europes manufacturing economy, 1/10th of
all adults are reported to be unable to pay all
their bills. Half of all British people would
vote to leave the EU, a recent poll found.
Europes generally high energy costs
might be eased by the planned single internal
energy market, not due until 2014, despite the
fact that other services, goods, and labor have
flowed freely within the EU for 25 years. The
European Commission recently let slip, how-
ever, that it is unhappy with progress toward
the single energy market: Subsidies are too
dominant in investment decisions, the gener-
ating market in many countries is still highly
concentrated, and new entrants struggle to
access the transmission grid.
Still, the Commission is standing firm on
its 20-20-20 targets for 2020: compared to
January 2013
|
1990 levels, a 20% improvement in energy
efficiency and a 20% cut in CO
2
emissions,
plus 20% of total energy supply (generally
taken to mean 30% of electricity generation)
from renewables. Falling energy demand
during the recession has cut the annual cost
of the 20-20-20 plan to 48 billion (0.32%
of Europes GDP in 2020), the Commission
says, compared to 70 billion previously.
As a result, the EU is now wondering
whether to raise the 2020 carbon target from
20% to 30% if it signs up to Kyoto 2 at the
UN COP-18 climate change summit in Doha,
Qatar, at the end of November. This would
cost rather more80 billion a year (0.54%
of GDP)but would take Europe closer to
its target of 95% decarbonization by 2050.
Coal Upsets the Carbon Cart
Although progress toward the 20-20-20 tar-
gets has been on track so far, a renaissance
of coal in power generation will offset some
of the carbon cuts gained through Europes
heavy investment in wind and solar power.
(See THE BIG PICTURE: The Coal Pile,
p. 10 in this issue, which shows three Euro-
pean nations among the top 10 countries with
proposed coal capacity.) In September, Swiss
bank UBS AG forecast that seven European
countries will build 10 GW of new coal plants
in the next four years, compared to 1.6 GW
of gas-fired capacity.
The favorable economics of coal compared
to gas have been aided by a slump in carbon
permit prices to below 10 per metric ton (mt)
under the pioneering European Emissions
Trading Scheme (ETS). Rather than letting
the carbon market take its course, however, the
Commission wants to boost prices by delaying
some of the permits due to be auctioned in the
20132020 trading round of the ETS, sched-
uled to begin in January. Arguments continue
over whether the Commission has the legal
authority to do this. In any case, raising the
carbon price to 40 to 50/mta level that
might stem the dash for coalwould almost
certainly require the quota of permits to be cut
rather than simply delayed.
The fall in the carbon permit price has
also hurt plans for carbon capture and stor-
age (CCS), because the ETS is supposed to
provide a large chunk of the EUs budget for
demonstration projects. With CCS driven by
the climate agenda rather than enhanced oil
recovery, Europe has fallen behind the U.S.
on this front. At the moment the credible coal
CCS projects remaining in the EU are Don
Valley (UK), ROAD and Green Hydrogen
(Netherlands), and Getica (Romania), while
the UKs Peterhead project is a leader in CCS
for natural gas.
Coal is also behind the collapse in Octo-
ber of the EUs planning talks in the run-up
to the Doha summit, and a potential east-
west split. Poland, which depends heavily
on coal, says it has met its CO
2
reduction
targets and so should be allowed to keep
spare emissions permits from the quota as-
signed to former Communist countries under
the original Kyoto Protocol. Poland gained
support from seven other east European and
Baltic states, and the EUs Doha proposals
have been watered down accordingly.
Germany Feels the Squeeze
Enthusiasm for coal is not confined to
eastern Europe. Germany gets more than
40% of its power from coal and is plan-
ning several new coal-fired plants to help
fill the gap left by closing over 12 GW of
nuclear capacity.
Germanys nuclear exit, though rapid, was
not as careless as some commentators have
assumed. There was always a plan to make
up the shortfall through renewables and to
decarbonize the energy system completely
by 2050. This has worked well in the sense
that wind, solar PV, and biomass now pro-
vide 25% of Germanys electricity.
But the transformation has not come
cheaply: Costs associated with renewable
energy now account for around 20% of Ger-
man household electricity bills, and the pro-
portion is rising. Against this, the German
Institute for Economic Research points out
that renewables, with their zero fuel cost,
are already reducing inflation in wholesale
power costs.
With or without renewables, however,
German power is expensive (consumers
pay 0.25/kWh and industry around half
that). EU Energy Commissioner Gnther
Oettinger, a member of Chancellor Angela
Merkels ruling CDU party, has spoken of
runaway power prices and fears that de-
carbonization could lead to de-industrial-
ization. CDU Environment Minister Peter
Altmaier recently said that he was skep-
tical about parts of Germanys energy
transformation.
The rapid growth in renewables has
brought technical issues too, such as the dif-
ficulty of connecting wind farms in the north
of the country with industry in the south.
Neighboring countries, including the Czech
Republic and Poland, are complaining that
high levels of German wind power put their
grids under strain.
Energy minister Altmaier has admit-
ted Germanys lack of consultation with its
neighbors during the transition period. He
suggested future cooperation based on the
Nordic model where, for instance, Denmark
exports surplus wind power to Norway and
imports Norwegian hydro power when wind
speeds are low.
European Nuclear Divisions
Reinforced
Progress toward a single energy market and
the spread of transmission grids across na-
tional borders highlight the sharp differences
between the nuclear policies of different Eu-
ropean nations.
The Czechs, for instance, frustrated at
what they see as unfair use of their national
grid to transport German power, are getting
their own back by planning two new reactors
at the existing Temeln nuclear plant in Bo-
hemia. The site is just 70 kilometers from the
borders of both Germany and (non-nuclear)
Austria, and protesters from both countries
joined Czechs opposed to completion of the
original two modified Soviet VVER reactors
in 20002002. With Germany now nuclear-
free, the Temeln expansion plan looks set to
cause deep divisions.
Even France looks poised to reduce its
dependence on nuclear power from 75% to
50% following the election of Socialist Pres-
ident Franois Hollande in 2012. Environ-
ment and Energy Minister Delphine Batho is
currently gathering information and opinion
with a view to launching a new national en-
ergy policy in 2013.
The UK, meanwhile, would like more nu-
clear plants to replace its aging fleet, though it
has had a hard time finding anyone willing to
build them. Frances EDF put on hold its plan
to build a new reactor at the Hinkley Point
site in southwest England, and although the
firm says it remains committed to the project,
a decline in French enthusiasm for nuclear
power could yield a different result.
As seemed likely a year ago, Germanys
RWE and E.ON decided not to go ahead with
UK nuclear projects at Wylfa (north Wales)
and Oldbury-on-Severn (western England).
In November the firms sold their stake to
Hitachi, which will build two or three of its
Generation III+ Advanced Boiling Water Re-
actors in collaboration with Babcock Interna-
tional and Rolls-Royce.
A stable, low-risk investment climate is as
important to nuclear as it is to wind projects,
so to get its nuclear new build, the British
government has had to pay up. As POWER
went to press, a new UK energy bill was
believed to be within days of publication to
parliament, having first seen the light of day
in May 2012 as a draft. Pillars of the new
energy bill are contracts for difference
subsidies for nuclear and other low-carbon
generation technologiesand a capacity
market that will reward investment in gas-
fired plants as a backup to intermittent re-
newables. Critic Dieter Helm, professor of
energy policy at Oxford University, says the
proposals are too complex, bureaucratic,
and top-down.
|
January 2013 38
One type of nuclear construction seems a
sure thing. In October, it emerged that neces-
sary safety upgrades to the EUs 132 nuclear
reactors are likely to cost 10 billion to 25
billion. The upgrades are required following
stringent stress tests in the wake of the Fu-
kushima nuclear accident.
Europe Still Waits for Cheap Gas
European industrial gas prices in the range
of 0.03 to 0.06/kWh (equivalent) and lower
wholesale power prices as a result of the re-
cession have cut margins for older gas plants
and led to the mothballing or closure of sev-
eral comparatively modern combined cycle
gas turbine plants. In the medium term this
situation could change if cheaper gas arrives
by pipeline from the Caucasus and central
Asia, as LNG from the U.S., or in the form of
European shale gas.
Poland still aims to be the European shale
gas leader, though its reserves estimates fell
by around 90% in the past year. The UK too
continues to look promising, though com-
mercial extraction is not expected to start for
another five years. France has significant re-
serves but maintains its opposition to shale
gas. In September, the Netherlands delayed a
decision on shale gas until 2013 because the
necessary risk assessment was taking longer
than expected.
In September, a trio of studies by the Eu-
ropean Commission found that, compared to
conventional gas, extraction of shale gas gen-
erally has a larger environmental footprint.
It also generates more greenhouse gas emis-
sions than domestic conventional gas, the
study said, but could be less environmentally
damaging than long-distance gas imports by
pipeline or as LNG.
Although German operators such as RWE
stress the ability of new coal-fired plants to
respond quickly to varying production from
wind and solar plants, it is, of course, gas tur-
bines that have traditionally been seen as the
natural partners of intermittent renewables.
Worried about Europes falling use of gas for
generation, Shell has joined forces with Dan-
ish offshore wind specialist Dong Energy,
GE, Alpine Energie, and First Solar to create
a lobbying group known as the Energy Part-
nership, described as the European coalition
for renewable energy and gas.
Optimism Amid Turbulence for
European Renewables
As 2020 approaches, some observers believe
that the EUs 20% renewables target should
not be replaced, and that further decarbon-
ization should be driven purely by setting
limits on CO
2
emissions. At the launch of the
Energy Partnership on October 31, however,
Commissioner Oettinger said he supported a
binding target for the percentage of renew-
able energy by 2030.
In solar PV, Europe gained 18.5 GW of ca-
pacity in 2011two-thirds of the global total
of new installations, according to the EUs
Joint Research Centre. The largest gains
were in Germany and Italy.
A group of manufacturers calling them-
selves EU ProSun have complained that
China is dumping cheap solar panels onto
Europe, prompting a Commission inquiry
that may lead Europe to impose import du-
ties, as the U.S. has done. But, again mir-
roring the U.S. experience, representatives
from a counter-coalition representing the
wider European solar industry, the Alli-
ance for Affordable Solar Energy, say that
free trade has helped to create 300,000 Eu-
ropean jobs that would be put at risk by a
trade war.
At the end of September, the European
Wind Energy Association (EWEA) an-
nounced that the EU had passed the 100-
GW milestone for installed wind power
capacity, though high costs, permitting de-
lays, and shortage of transmission capacity
were delaying progress on large offshore
wind projects.
Danish wind turbine manufacturer Vestas
had a terrible year in 2012, losing its entire
board, with the exception of embattled CEO
Ditlev Engel. Now the Danish firm is seek-
ing a 20% equity investment; Mitsubishi has
been mentioned after previous rumors of a
Chinese buyer evaporated. Long the biggest
name offshore, Vestas has now lost its lead
to Siemens, which, according to Bloomberg
New Energy Finance, was set to account for
about 57% of Europes 4.5 GW of offshore
wind capacity by year-end 2012.
Following an initiative originally kicked
off by UK Prime Minister David Cameron,
Vestas, Siemens, and 42 other companies
have joined Norstec, an alliance to cut the
cost of offshore wind power. The British
government wants to see a cost of 100/
MWh ($161/MWh) by 2020; according to
Bloomberg New Energy Finance, the pres-
ent cost is around $226/MWh, compared
to $85 for onshore wind, $82 for coal, and
$71 for natural gas.
And there it is againnatural gas with the
price to beat.
Dr. Robert Peltier, PE is editor-in-
chief, David Wagman is executive
editor, Kennedy Maize is a contributing
editor, and Charles Butcher is European
reporter for POWER.
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January 2013 40
Coal Battered Early, Later Rebounds
T
he U.S. coal-fired power generation
industry is facing formidable obstacles
to growthsomething it has long taken
for granted.
Most frequently cited is the Environmen-
tal Protection Agency (EPA) promulgating
regulations that require expensive capital
improvements that make the economics of
continued operation of existing plants prob-
lematic and make the building of new plants
unlikely for the foreseeable future. Another
formidable opponent is historically low natu-
ral gas prices that have pushed coal-fired
generation lower in dispatch order in some
regions. As a consequence of those low gas
prices, reduced coal plant operating hours
and unit cycling drive up the cost of electric-
ity production from coalhitting it where
it has historically been strong. In response,
some coal-based utilities are searching for
that operating sweet spot that is a mix of
coal- and gas-fired plants (in unique propor-
tions), while others have decided to perma-
nently make the switch from coal to gas.
Musical Chairs for Dispatch Orders
Natural gasfired generation set the dis-
patch order on its head starting a year ago,
when winter failed to arrive and gas prices
plunged. But gas began giving up market
share to coal during the third quarter, as
rising prices and summer demand eroded
at least some of the economic case for
coal-to-gas switching.
Natural gas, meanwhile, increased its
market share from 21.4% in 2008 to 30.6%
last year. The data make clear that the larg-
est shift in market share took place last
year, though the EIA anticipates coal will
regain in 2013 some of the market share it
lost in 2012.
Whats more, coal-to-gas switching ap-
pears to have limits. For example, genera-
tion from natural gas at American Electric
Power rose around 50% year-to-date, said
CFO Brian X. Tierney during the compa-
nys third-quarter earnings conference call.
But Tierney said that with year-to-date ca-
pacity factors for many of the gas-fired
plants in its eastern sector approaching
70%, and with the recent increases in
forward natural gas prices, the ability for
more coal-to-gas switching is minimal.
Switching for Profit
Coal-to-gas switching in 2013 seems un-
likely to hit levels reached last spring when
a warmer-than-normal winter led to a mas-
sive overhang of natural gas supply as record
natural gas production pumped more supply
into the market. Prices plunged as a result,
making it economical for power plants from
the East Coast to the Deep South to switch
from coal to natural gas for power genera-
tion. Even coal produced from the historical-
ly low-cost Powder River Basin in Wyoming
was displaced as far west as Wisconsin and
Minnesota. In response, natural gas produc-
ers exercised market discipline and slowed
development and production.
The Energy Information Administration
(EIA) projected in November that higher
natural gas prices will contribute to an 11.2%
Courtesy: TVA
For the first time, U.S. generation
from coal and natural gas was equal
in 2012, although just momentarily.
Gas dominated early in the year, but
as gas prices rose in response to sup-
ply and demand forces, coal use re-
bounded. Expect more of the same
give-and-take in 2013.
By David Wagman
January 2013
|
decline in natural gas consumption in the
electric power sector for 2013. Even so,
power sector consumption this year is still
expected to be about 1.8 Bcf/d higher than
in 2011. And new fossil-fired power genera-
tion assetswhere they are being proposed
at allare almost exclusively designed to
burn natural gas.
Each utility with significant coal-fired
generation is looking for the most econom-
ic generation balance between coal and gas.
For example, Michigan-based CMS Energy
said that with seven of its coal plants moth-
balled in 2015 or 2016, and with MISO
possibly increasing its reserve capacity
requirement to 18%, the utilitys capacity
shortfall could be as high as 1,500 MW. Its
CEO, John G. Russell, said that natural gas
likely will be the fuel of choice for the new
capacity and that the company will decide
this year whether or not to move forward
on an $800 million capital investment for
new capacity.
FirstEnergy also said it entered into a non-
binding memorandum of understanding with
American Municipal Power (AMP) to devel-
op 873 MW of peaking capacity at its East-
lake plant in Ohio. AMP would provide all
of the construction financing and own 75%.
FirstEnergy would buy the remaining 25%
and would manage the project and operate
the units. The facility would be operational
in early 2016, and FirstEnergy would be bid
into the 20162017 PJM-RPM (Reliability
Pricing Model) auction scheduled for this
coming May.
Independent power producers arent
immune to unpredictable natural gas pric-
es. Jack A. Fusco, CEO and president of
Calpine, said that 2013 gas futures pric-
es suggest some continued coal-to-gas
switching in the East, but probably none at
all in Texas. As a result, the strong show-
ing by the companys natural gasfired
generating assets in 2012 seems unlikely
to be repeated this year.
Coal Markets Poised for
Improvement
All totaled, coal use for power generation
was on track to fall by around 120 million
tons in 2012, according to Peabody En-
ergy. Most of that declinesome 100 mil-
lion tonstook place during the first half
of the year, when natural gas enjoyed its
greatest price competitiveness. Since then,
natural gas prices have shown robust
price increases, said Gregory Boyce, Pea-
body CEO. Whats more, below-average
weekly gas storage injections, prompt gas
prices above $3.50/MMBtu, and forward
strip prices above $4 all were favorable
for demand for Powder River Basin and Il-
linois Basin coal, he said (Figure 2).
John Eaves, president and CEO of Arch
Coal, said a near-normal 20122013 win-
ter could lead to a sizable step down in
coal stockpiles and meaningful gas-to-
coal switching. The St. Louisbased com-
pany remained cautious early in the fourth
quarter, however, and planned to manage
through a potentially challenging 2013.
Next year and beyond, Arch expects an im-
provement in domestic coal markets. For
one thing, Arch estimates that 45 GW of
coal generating capacity could be retired
by 2018. Much of that capacity represents
the coal fleets smallest and least efficient
units, which are already running at low lev-
els. Eaves said those plants were on track
to burn 40 million tons of coal in 2012,
down from 75 million tons in 2010. Any
incremental negative impact from these
potential coal plant retirements is likely to
be modest, he said.
Eaves said the lost consumption could
be offset by rising utilization at the re-
maining 280 GW of installed coal-fueled
capacity. Collectively, the remaining
coal plants are running below a 60% uti-
lization rate, he said in late October. As
U.S. power load grows, its reasonable to
assume that the underutilized coal units
could pick up that incremental burn lost
from the retired plants.
David Wagman is executive editor
of POWER.
1. Coal has competition. Coal for electric power generation is expected to regain some
of the market share it gave up to natural gas in 2012. Its clear, however, that for much of the past
decade, natural gas has been clawing away at coals market dominance. Source: EIA, Short-
Term Energy Outlook, November 2012.
2. Coal consumption rises. Domestic coal consumption used for power generation is
expected to rebound in 2013, regaining almost half of the production lost in 2012. Source: EIA
Short Term Energy Outlook, November 2012
110
100
90
80
70
60
50
40
30
20
10
0
2010 2011 2012 2013
180
150
120
90
60
30
0
30
60
90
120
150
Right axis: Electric power Retail and general industry Coke plants
T
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c
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17.9% 18.8% 20.1% 21.6% 21.4% 23.3% 23.9% 24.7% 30.5% 27.2%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Coal Natural gas Petroleum Nuclear Hydropower Renewables Other sources
Forecast
|
January 2013 42
Natural GasFired Plants Continue
Rollercoaster Ride
A
n unexpected boom in gas produc-
tion as a result of advances in hy-
draulic fracturing, combined with
an unusually mild 20112012 winter, sent
gas inventories spiraling to record high
levels. The traditional withdrawal season
ended two weeks early, with storage lev-
els touching bottom at an all-time high of
2,369 Bcf. The result was a crash in gas
prices, which spent most of April 2012
below $2.00/MMBtu. Henry Hub spot
prices finally hit a floor of $1.82/MMBtu
on April 20.
Awash in a sea of cheap gaswhich
was now substantially cheaper on a MWh
basis than coalplant owners across the
country threw standard dispatch plans out
the window and pushed open the throttles
on their gas turbines. Coal-fired gen-
eration collapsed, while gas-fired power
surged. In May, for the first time ever, gas
power reached parity with coal power at
about 32% each. Coal plants that had long
been dispatched first as the core of basel-
oad capacity saw themselves sidelined as
peakers or idled altogether. Meanwhile,
many combined cycle plants that had seen
capacity factors around 30% were running
at 80% or higher.
What Goes Up Must Come Down
The U.S. Energy Information Administra-
tion (EIA) projects that gas prices will av-
erage $3.49/MMBtu in 2013, which means
they likely will spend some time above
$4.00. Many analysts project even higher
prices. Speaking at the LDC Canada Gas
Forum in Toronto in November, Scott
Speaker of J.P. Morgan projected an aver-
age price of $4.25/MMBtu for 2013, with
continued growth beyond that. I see rela-
tively good production, but high demand
going forward, he said.
The $4 threshold is more than just psy-
chological, as it represents the general
point at whichwith the higher transport
costs for coal factored incoal regains a
cost advantage over gas. The EIA projects
gas power burn to fall 11.2% during 2013,
and some industry sources report that the
gas-to-coal switchback has already begun.
The drop in power burn is not expected
to reduce pressure on gas prices, however,
as residential, commercial, and industrial
demand is projected to surge, leaving over-
all demand essentially unchanged for 2013.
The availability and low price of natural gas
enticed many U.S. utilities to fuel switch on
a grand scale in 2012. Increased demand has
put upward pressure on prices, moving coal
back to the top of the dispatch order in some
regions. Expect the price momentum to shift
often in 2013.
By Thomas W. Overton, JD
Courtesy: iStockphoto
100
90
80
70
60
50
40
30
20
10
0
7
6
5
4
3
2
1
0
1
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3 T
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(
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2010 2011 2012 2013
Electric power Residential and commercial Industrial Other
1. Give and take. Natural gas consumption for electric power generation is expected to fall
this year, giving up some of the gains achieved in 2012, when historically low prices drove coal-
to-gas switching across much of the Eastern Interconnect. Source: EIA, Short-Term Energy
Outlook, November 2012.
January 2013
|
Heating demand as a result of more normal
winter weather, combined with growth in
industrial consumption, should make up
for the decreased power burn (Figure 2).
Between early, thus far, sustained cold-
er-than-normal temperatures and nuclear
outrages and maintenance, gas market
analyst Jay Levine told POWER in Novem-
ber, natural gas continues to remain buoy-
ant and stronger than many anticipated.
The fracking rush, like most booms,
badly overshot its target in 20112012,
leaving thousands of drilled but uncom-
pleted gas wells waiting for a resurgence
in prices. Gas at $2/MMBtu is a money-
loser for the drillers, but should prices be-
gin edging above $4/MMBtu, returns on
investment become attractive enough that
it is likely some of these wells will return
to production.
In addition, the shale oil boom con-
tinues unabated, with associated gas ac-
counting for an increasing percentage of
the current production. While a shocking
amount of this gas is being flared because
of a lack of gathering infrastructurein
North Dakota, almost 30% of it was flared
last yearthis will change as several key
pipelines in shale fields come online. Like-
wise, continued strong demand for natural
gas liquids has kept production levels high
despite a big drop in the gas rig count.
Finally, despite the record power burn,
gas inventories remain at record levels,
having ended the 2012 injection season
just below 4,000 Bcfan unthinkable
amount not so long ago.
Political Uncertainties Remain
The first political uncertainty is a series
of proposed rules on hydraulic fracturing
and gas production. In April, the Environ-
mental Protection Agency (EPA) issued its
final rule on emissions from fracked wells.
While the rule is fairly clear, the level of
enforcement, and the commensurate costs,
are not. Estimates have ranged from essen-
tially negligible to hundreds of thousands
of dollars per well. If the higher estimates
prove correct, this could put a brake on fu-
ture production.
Another set of rules covering the entire
fracking process on federal lands is cur-
rently pending from the Bureau of Land
Management. With the final form uncer-
tain, the impact is as well, but these too
are likely to increase production costs to
some degree.
The other major political uncertainty
concerns liquefied natural gas (LNG)
exports. In mid-2012, shortly after Che-
nieres Sabine Pass export project received
Department of Energy (DOE) approval,
the Obama administration put all other
applications on hold until after the No-
vember elections, ostensibly to allow fur-
ther study of the effects on the domestic
energy market.
LNG exports are facing substantial op-
position from a variety of quarters, creat-
ing some odd bedfellows: Environmental
groups such as the Sierra Club are joining
forces with petrochemical companies and
several natural gas advocacy groups in an
attempt to block exports.
With upwards of 20 Bcf/day of pro-
posed projects currently awaiting DOE ap-
proval or in the process of application, a
few observers have taken a sky is falling
view of the market, seeing huge amounts
of domestic gas heading overseas. More
levelheaded analysts have noted that, no
matter the political outcome, the U.S. is
unlikely to see much beyond 6 Bcf/day of
exports, particularly given the cost to build
LNG export facilities.
Waiting for Demand Growth
Another big uncertainty is demand for
electricity generation. In 2012, shares of
total U.S. electricity generation averaged
30.6% for gas and 37.2% for coal. High-
er gas priceswhile coal prices remain
flatare projected by the EIA to reset
that breakdown to more traditional levels
in 2013, back to 27.2% for gas and 40.1%
for coal.
But there are signs that any such re-
bound is likely to be temporary. With esti-
mates of impending coal plant retirements
ranging anywhere from 40 GW to over 80
GW by 2015, the ability of the coal fleet to
shoulder significant price-induced gas-to-
coal switching may be limited. This range
of retirements equates to around 4 to 8
Bcf/day in gas demand.
Spurred by lower prices, the need for
greater dispatch flexibility, and favorable
regulatory treatment, strong development
of gas-fired generation is likely to con-
tinue. Meanwhile, even advanced clean
coal plants face significant developmen-
tal roadblocks.
Finally, the pace of the current economic
recovery remains unclear. While the U.S.
is seeing modest growth, there are clouds
over Europe and Asia. Another downturn
would limit electricity demand and likely
keep gas power burn below 2012 levels for
some time. Stronger growth, on the other
hand, may exert upward pressure on gas
prices.
Scenario Options for 2013
The first possible scenario takes the
Obama administration at its all-of-the-
above word and assumes the regulatory
impact on gas remains light, while the
U.S. economy continues its slow recovery.
In this case, the large supply overhang is
able to meet increased demand outside
the power sector, keeping prices steady at
around $3.50 to $4.00, in line with cur-
rent projections. In the event gas demand
exceeds projections, producers will have
sufficient time to resume exploration.
If, on the other hand, President Obamas
reelection heralds new regulatory pressure
on fossil fuelsboth gas and coalgas
production may be handicapped just as
significant coal generation begins to go
offline. This would mean higher-than-
expected demand, possibly more than the
current supply overhang can meet, leading
to short-term supply constraints and con-
sequent price spikes.
Thomas W. Overton, JD is POWERs
gas technology editor. Follow Tom on
Twitter @thomas_overton.
2. Prices expected to rise. Natural gas demand may remain flat for 2013, but price
forecasts agree (the blue and green lines bracket the 95% confidence zone) that the price
is moving up. The only question is how fast. Source: EIA, Short-Term Energy Outlook,
November 2012.
10
8
6
4
2
0
$
/
M
M
B
t
u
Jan.2011

Historical spot price

STEO forecast price

NYMEX futures price

95% NYMEX futures upper confidence interval

95% NYMEX futures lower confidence interval
Jul.2011 Jan.2012 Jul.2012 Jan.2013 Jul.2013
Projections
|
January 2013 44
POWER IN RUSSIA
The Russian Power Revolution
Exports of natural resources have given Russia increased global political and
economic clout. But domestically, the worlds fourth-largest generator of
electricity has had to embark on the most ambitious reforms ever under-
taken to modernize dilapidated Soviet-era power infrastructure and incen-
tivize a massive capacity expansion to support a revived economy.
By Sonal Patel
I
n recent years, while Europe and the
U.S. grappled with the problem of secur-
ing future environmentally sound energy
supplies, the booming economies of China,
India, and Brazil stole the global power spot-
light with frenzied activity to expand their
power infrastructures to meet exploding de-
mand. Meanwhile, the Russian Federation
shares the predicaments of all these regions.
Comprising much of eastern Europe and
northern Asia, its 17.1 million square kilo-
meters (km) make the Russian Federation
the worlds largest country in total area, and
within that diverse enormity in the northern
and middle latitudes of the Northern Hemi-
sphere, it harbors the worlds largest natural
gas reserves, the second-largest coal reserves,
and the eighth-largest oil reserves.
Russias population of 143.2 million pales
in comparison with Chinas 1.3 billion. Even
Indonesia, Pakistan, Bangladesh, and Nigeria
have more citizens. But with the ninth-largest
economy in the world by nominal value, it is
home to the fourth-largest electricity market
globally (after the U.S., China, and Japan), a
massive network that includes 118,045 km of
transmission lines, and more than 600 power
plants with a capacity of over 5 MW each.
Russias power story, always molded by
the countrys political condition, formally
began just after the genesis of the Soviet
socialist republic in 1918 and grew after the
countrys brutal civil war that culminated in
Russias union with five other republics to
form the Union of Soviet Socialist Repub-
lics (USSR). Communism is Soviet power
plus electrification of the whole country was
iconic revolutionary Vladimir Illyich Lenins
famous formula. It was first declared in 1920
as the newly formed State Electrification
Commission (or GOELRO, as it is abbrevi-
ated in Russian) presented the first 10-year
plan to electrify the country via construction
of a network of regional thermal, hydropower
power, and combined heat and power stations
to the Eighth Congress of Soviets in Moscow
(see sidebar Illyichs Lamp).
Fulfilled by 1931, the GOELRO plan
which became a prototype for subsequent
five-year planskicked off rapid progress for
Russias electricity sector over the first half of
the 20th century. Local, regional, and interre-
gional electricity networks were unified into
the Soviet energy system, and major intercon-
nections were established with socialist Cen-
tral and Eastern European countries.
In the late 1920s, the success of the cen-
tral statesponsored electrification plan
reportedly prompted Joseph Stalin to aban-
don Lenins New Economic Policy, which
advocated some private enterprise, in favor
of a highly centralized command economy,
implemented through a series of five-year
plans. By 1935, dominated by a vertically in-
tegrated, state-controlled monopoly, produc-
tion of electricity had increased by a factor of
nearly 7, compared to the 1913 level (instead
of a factor of 4.5, as planned), from 2 bil-
lion kWh to 13.5 billion kWh, and the Soviet
Union had already established industries to
furnish power plants with domestically engi-
neered power equipment.
After World War II, the Soviet Union be-
came the second-largest electricity generator in
Illyich s Lamp
Vladimir Illyich Lenin, who led the Soviet
Union until his death in 1924, championed
a countrywide electrification campaign pro-
posed by the State Electrification Commis-
sion (GOELRO) in 1920. He supervised the
plan himself and frequently intoned that it
would be critical to transforming Russia from
a small-peasant basis into a large-scale in-
dustrial basis. It would, literally, bring en-
lightenment to the proletariat, he claimed.
The plan arguably laid the foundation for
industrialization in Russia during the 1920s
and 1930s. It became such a basic part of
daily domestic life in Russia that a phrase
that translates as Illyichs lamp was ad-
opted as the colloquial name for household
incandescent lightbulbs whose sockets
were suspended from the ceiling by a wire.
Among Lenins last letters are correspon-
dence with engineer P.A. Kozmin in which
the feasibility of using wind turbines for
the electrification of villages is discussed.
1. Communism is Electrification. The first plan approved by the Congress of
Soviets in 1920 for the electrification of Russia by the State Electrification Commission
(GOELRO) was lauded by revolutionary leaders of the young union as integral to commu-
nism and key to transforming Russia into an industrial powerhouse. Propaganda posters
like the left one that reads The Soviets and electrification make up the base of the new
world (from 1924) and the right one titled The Red Leaders (from 1955)frequently
cited or referred to Lenins famous formula: Communism is Soviet power plus electrifica-
tion for the whole country. Source: Russian Archives Online
January 2013
|
POWER IN RUSSIA
the world, behind the U.S., and in the 1950s, it
pioneered the worlds very first nuclear power
plant (the 5-MWe Obninsk reactor) and then
two commercial-scale nuclear power plants. It
also began building what was then the worlds
largest hydroelectric plant, in Krasnoyasrsk.
By the 1960s, as power output soared to
290 billion kWh, national electrification had
reached 80%. Yet, even as economic growth
slowed and power output increased from 741
billion kWh in 1970 to 1,728 billion kWh in
1990 (or about 17% of global generation), ca-
pacity failed to keep pace with the gargantuan
needs of the Soviet Unions energy-hungry
industry. The 1970s were marked by an am-
bitious Soviet program to expand nuclear
power, and the country had already put into
operation 25 reactors by 1986, the year that
the Chernobyl disaster in the Ukraine punc-
tured Russiasand the worldsenthusiasm
for nuclear energy expansion.
The sector saw an even more climactic turn-
ing point in 1992, in connection with the col-
lapse of the Soviet Union, as some republics
declared independence from the union, and
eventual bankruptcy, as a weakened central
government saw profits from state-owned enter-
prises evaporate after mass, rapid privatization.
During this chapter of the industrys history,
the Ministry of Electric Power was dissolved,
and the Unified Energy System (RAO-UES)
which had been established in 1956 as the
Soviet Unions single energy distributorwas
reborn as a state-controlled holding company
that assumed control of 72 vertically integrated
local power companies (oblenergos) accounting
for 70% of Russias electricity generation.
The remaining share was divided between
another state monopoly, Rosatom, responsible
for nuclear power, and a few small, inde-
pendent power companies. Blocks of UESs
shares (the entity still owns practically all of
the nations transmission and distribution net-
works) were then sold to workers (numbering
600,000 at the time) and the public and, later,
to domestic and foreign investors, leaving the
government with a 53% controlling stake.
As the country sank into a severe post-Sovi-
et depression, while electricity prices were
continually suppressed by the government to
subsidize its highenergy intensity industries,
economic reforms created an acute shortage
of funds and stalled a number of power proj-
ects. UES was effectively crippled, running at
a deficit of $1 billion on annual revenues of $7
billion, unable to invest in new capacity, grid
improvements, or plant modernization efforts.
Russias once-bright electricity future
dimmed.
A Revolutionary Reform
Then in 1998, Russias slumbering economy
awoke and began growing at an unprecedented
annual gross domestic product (GDP) rate of
6% over the next decade. Soaring electricity
consumption soon highlighted the countrys di-
lapidated power infrastructure. Due to neglect
and outright theft, transmission and distribu-
tion losses in some regions, notably in North
Caucasus, were reportedly more than 30%.
Conceding that the state alone could not
bear the costs required to maintain and up-
grade its power infrastructure, the Russian
government finally agreed to a proposal by
newly installed UES head Anatoly Chubais,
who had previously led privatization efforts
of state properties as a minister in Boris
Yeltsins administration in 1991, in the im-
mediate aftermath of the Soviet collapse.
Chubais argued that, if unreformed, the Rus-
sian power sector would not support future
economic development, and that if the still-
massive UES were reformed, it would need
to be designed to attract private investment.
After much discussion and scrutiny of doz-
ens of models presented between 1999 and
2000, the Russian Duma (consisting of its
parliament and upper house) in 2001 finally
approved a reform plan that called for an un-
bundling of the incumbent monopoly, creating
an independent regulator, privatizing genera-
tion, and liberalizing electricity prices.
In March 2003, the Duma set the legal
basis for the reform while approving an En-
ergy Strategy spanning from 2003 to 2020
(though a newer, adjusted one was later ad-
opted in 2009) that provided state consensus
on the countrys energy future. And, despite a
few hiccups, reform has sped ahead, fired by
broad-based political support.
Russia Transformed
In 2008, UESs holdings were unbundled:
Generation, transmission, and distribution are
today structurally divided and managed by
companies with diversified ownership. Gen-
eration is produced by 14 territorial power
and heating companies (indicated by the Rus-
sian abbreviation TGK) and seven wholesale
power-generating companies (OGK). An an-
timonopoly service prohibits a single private
owner from controlling more than 20% of
generating capacity in one of eight defined re-
gional zones. The state retains 100% interest
in nuclearthrough the State Atomic Energy
Corp. (Rosatom)as well as most hydropow-
er and major transmission facilities.
Among the sectors major players are Gaz-
promwhich evolved from dissolution of the
Soviet-era Ministry of Gas Industry and con-
tinues to be 50.1% owned by the Russian gov-
ernmentand a handful of foreign companies,
including E.ON, Enel, RWE, and Fortum.
The Ministry of Industry and Energy has
primary responsibility for the power sector,
while the System Operator (or Centralized
Dispatching Administration), a 100% state-
owned open joint-stock company, has been
set up to ensure the dispatch of electricity
and stable functioning of the nations unified
grid. The wholesale market is supervised by
the Market Council, a noncommercial part-
nership that is governed by a supervisory
board comprising representative market par-
ticipants, the Russian government, and other
market infrastructure bodies.
Russia has also begun the formation of a
competitive wholesale market, and prices in
the power market have been gradually liber-
alized in recent years. About 80% of electric
power is traded at nonregulated market prices.
While the portion of state-regulated prices is
expected to diminish, as required by the re-
forms, some state control is expected to con-
tinue throughout Russia (with the exception
of certain geographically isolated regions, in-
cluding the Russian Far East, Kaliningrad, and
the Arkhangelsk regions) until at least 2014.
Participants in the wholesale market also
trade in capacity (on the basis of up to 10-year
capacity supply contracts concluded at com-
petitive prices), obligating generating compa-
nies to maintain a certain level of generating
capacity and sometimes involving obligations
to maintain or repair existing generation facili-
ties as well as to build new ones.
The Power Sector Today
Russia is today one of the worlds top pro-
ducers and consumers of electric power, with
more than 220 GW of installed capacity (for
comparison, U.S. installed capacity is ap-
proximately 1,000 GW). In 2009, the country
consumed 849 TWh, a number that has been
forecast to increase to 946 TWh by 2014 to
accommodate plans for export to countries
like China, Finland, Turkey, and Poland and,
later, possibly to Pakistan and Afghanistan.
Its fleet primarily consists of about 440
thermal plants, mostly fired by natural gas;
only about 77 are coal plants. Thermal gen-
erators account for roughly 68% of total ca-
pacity, followed by hydropower (at 21%),
and nuclear power (11%), according to sta-
tistics from the Russian Ministry of Energy
(Figure 2). For details about Russias current
power profile and plans to expand it, see the
web supplement associated with this issue on
www.powermag.com, Russias Power.
Thermal Power. In Russia, geothermal
and solar are considered thermal generation,
but the bulk, 154.7 GW, is fueled by gas and
coal. The country has some behemoth plants
like the oil- and natural gasfired 5.6-GW
Surgut GRES (Figure 3, GRES is an abbrevi-
ation from the Soviet era that denotes a state
district power station), and among its larger
coal-fired plants is the 3.8-GW Reft Power
Plant. A common priority for wholesale gen-
|
January 2013 46
POWER IN RUSSIA
erating companies and territorial generation
companies is to modernize their existing
power plants and build new ones using ad-
vanced technologies.
Hydropower. Russia harbors 9% of the
worlds freshwater resources, and as a result,
an immense hydropower potential. Yet, as the
government acknowledges, only 20% of this
potential is currently utilized, by 102 hydro-
power facilities, each of more than 100 MW,
and one pumped storage plant (Figure 4).
The largest of the countrys 46-GW hydro-
power fleet was for a long time the Sayano-
Shushenskaya power plant in Khakassia, but
that plant suffered a devastating explosion in
August 2009 that killed 75 people and put
several units out of service (Figure 5). (See
Investigating the Sayano-Shushenskaya
Hydro Power Plant Disaster, in the Decem-
ber 2010 issue of POWER, available in the
archives at www.powermag.com.)
The federation continues to hold a 60%
stake in RusHydro, owner of 35.3 GW of
generation capacity and the countrys largest
hydropower firm, which evolved as a gener-
ating company after dissolution of the UES
in 2008. With strong government backing,
several initiatives are under way to develop
the potential of rivers of the North Caucasus,
in the Volga regions, and in Siberia.
Nuclear Power. The countrys nuclear sec-
tor is wholly controlled by Rosenergoatom, a
subsidiary of state corporation Rosatom. That
firm operates 32 reactors in 10 nuclear power
plants with a total capacity of 23.2 GW. These
comprise six early VVER design pressurized
water reactors, 11 current-generation VVERs,
and 13 light water graphite reactors. Between
the 1986 Chernobyl accident and the mid-
1990s, only one nuclear power station was
commissioned in Russia (the four-unit Bala-
kovo plant). Further development was re-
strained by an acute shortage of funds after
the collapse of the Soviet bloc. Work is cur-
rently under way on 10 other reactors as well
as on projects to increase the load factors at
existing plants by 4.5 GW. Rosatoms interna-
tional arm, Atomstroyexport, meanwhile, has
three reactor construction projects abroad, all
involving VVER-1000 units.
Recognizing the strategic and economic
significance of nuclear power, Russia last No-
vember reaffirmed priorities to modernize and
expand its nuclear fleet and announced plans to
invest $1.3 billion annually in nuclear research
and development by 2020 (a 10-fold increase
from figures proposed in 2007). Specific goals
include demonstration of a full range of fast-
reactor technology by 2020, first by installing
the pilot BREST-300 lead-cooled fast reactor at
the Siberian Chemical Combine at Seversk in
the Tomsk region as a forerunner to a series of
1,200-MW versions planned nationally.
Rosatoms long-term strategy envisions
nuclear power making up a 45% to 50%
share of the nations total power profile by
2050, and up to 80% by the end of the cen-
tury. The plan, which calls for 43.4 GW of
new nuclear capacity, involves moving to
advanced fast reactors with a closed nuclear
cycle and mixed-oxide fuel (see Russias
Nuclear Mission, August 2010).
Alternative Energy. Renewables make
up a minuscule portion of Russias power
profile, their development hindered by a
lack of renewable energy subsidies, con-
cerns over the transparency of the tendering
process, and the level of market liberaliza-
tion. Yet, the countrys energy strategy calls
for a program from 2022 to 2030 that will
be marked by an expansion of nuclear, hy-
dropower, wind, and other renewables. The
plan declares that by the end of the forecast
period, renewables should account for 14%
of the countrys demand.
The Grid. Russias national grid is referred
to as the Unified National Electric Grid in
Russia because it consists of seven regional
power systems: North West, Central, Middle
2. Russias power profile. Russias cur-
rent 220 GW of installed capacity is mostly com-
posed of thermal plants, about 60% of which is
fired by natural gas and 40% by coal. Source:
Russian Ministry of Industry and Energy
Thermal 68%
Hydro 21%
Nuclear
11%
3. Behemoth gas. With a total generating capacity of 5,600 MW, Surgut-2, near Surgut in
Khanty-Mansi Autonomous Okrug is one of the largest natural gas thermal power plants in Europe.
It is also the largest Russian power station operated by energy supplier E.ON Russia, which is
majority-owned by E.ON. Startup of Unit 3 was planned for October 2012. The Surgut-2 station con-
tinuously provides Western Siberia and Ural with power and heat. Emerson Process Management is
the main automation contractor for Unit 3 of the Surgut-2 power station. Courtesy: Emerson
4. Water storage. RusHydros 1,200-
MW Zagorsk Pumped Storage Station
Russias only pumped storage plantnear
Sergiev Posad, was approved in 1974 and
became operational in 2000. Zagorsk-2,
with a future installed capacity of 840 MW,
is currently being constructed next to it.
Courtesy: RusHydro
5. In the aftermath. The catastrophe at
the 6,400-MW Sayano-Shushenskaya hydro-
electric plant that killed 75 workers in south-
ern Siberia on Aug. 17, 2009, had a number
of contributing causes, including design, op-
erational, and repair weaknesses. Reconstruc-
tion of the plant is under way and is expected
to be completed in full by 2014. Courtesy:
Ministry of the Russian Federation for Civil
Defense, Emergencies, and Elimination of
Consequences of Natural Disasters
January 2013
|
POWER IN RUSSIA
Volga, North Caucasus, Urals, Siberian, and
Far Easternwhich is not linked to an inte-
grated grid (Figure 6). The bulk is owned by
the state-controlled Federal Grid Co. (RAO
FGC), which oversees Russias 118,000-km
high-voltage transmission grid and plans to
invest $14.5 billion between 2010 and 2013
to modernize it. Projects under way include a
unification of the Russian and the West Euro-
pean transmission networks.
The grid companys profits have been
squeezed in recent years due to what it says
are rising costs and the governments reluc-
tance to raise regulated tariffs for myriad state-
regulated monopolies such as the railway.
A Further Overhaul Planned
Mired so deeply and for so long within the
government, Russias power sector has been
vulnerable to the political and economic vol-
atility affecting the country. Stricken first by
dissolution of the Soviet bloc, which emptied
state coffers, and then severely by the global
economic downturn, Russias existing power
fleet is in bad shape.
Most power stations, built between 1960
and 1970, are said to have low efficiency,
in the range of 33% to 35%, compared with
50% to 60% at modern gas-fired combined
cycle power stations. More than 50 GW of
generating capacity in the European part of
Russia has reached the end of its design life.
And, by some estimates, nearly 60% of all
electric infrastructure is plain worn out. The
grid, too, is aged: Of the 2.5 million km of
power lines in Russia, 1.5 million km have
reached the end of their economic life, ac-
cording to research by Renaissance Capital.
Recognizing the problem, the Duma in 2009
approved an updated Energy Strategy 2030
that calls for modernization measures valued
at $615 billion. Among its main features is the
replacement of old gas turbine units with com-
bined cycle gas turbines, increasing efficien-
cies of coal and nuclear plants, and replacing
obsolete analog technology with digital sys-
tems for reactor modernization.
In a measure backed strongly by then-
Prime Minister Vladimir Putin (now presi-
dent of the Russian Federation), the energy
strategy also calls for an expansion of power
capacity so that by 2030, Russia will have a
17% reserve margin, the difference between
available capacity and peak demand (the typ-
ical U.S. minimum reserve margin is 15%).
With demand projected at 1,533 billion kWh
by 2020, that feat will require the addition of
at least 78 GW by 2020 and 173 GW by 2030
at a cost of $360 billion.
Gazprom, the Siberian Coal Energy Co.,
and several other generating firms have signed
capacity supply agreements with the indus-
trys autonomous Market Council that involve
a 10-year guaranteed rate of return on power
produced at new plants. In return, the firms
are obligated to build a range of gas, oil, and
coal-fired power plants with fixed deadlines to
boost the nations generating capacity by 30
GW (Gazprom alone will take on 9 GW) by
2017. A total of 140 new power plant blocks
are already in the pipeline to be built between
now and 2017, many of which will be gas-
fired combined cycle power plants.
At the same time, the Federal Grid Co.,
owner of most of the countrys high-voltage
transmission grid, plans to invest $25 billion
between 2013 and 2017 to modernize its infra-
structure, a program that includes renovation
of the unified all-Russia energy grid and put-
ting 16,965 km of new lines into operation.
Yet, any progress on this front will depend
crucially on how Russia overcomes the chal-
lenging hurdle to attract investment. Some
industry observers are optimistic that it will
succeed. Several foreign investorssuch
as Finnish energy company Fortum, Italys
Enel, and Germanys E.ONhave already
entered the sector, enticed by liquidation of
the former power monopoly UES in 2008,
and many have reported profits from Russian
ventures. According to Prof. Rolf Langham-
mer of the Kiel Institute for the World Econo-
my, to attract an influx of foreign investment,
Russias entry into the World Trade Organi-
zation (WTO) in the fall of 2011 sent a sig-
nal that foreign investors can count on legal
guarantees and the protection of their intel-
lectual property rights in the country.
But others see continued problems with
reform efforts, specifically that the sector still
bears the legacy of the state-governed Soviet
era. Alexander Kornilov, a senior analyst
covering the electric power sector at Alfa-
Bank, told business journal Russian Ameri-
can Business in 2012 that foreign investors
were concerned about constant rule changes,
pointing to one incident during early 2011
as an example, when senior government of-
ficials ordered caps on power tariffs that were
deemed to be rising too rapidly.
Investment will likely also hinge on the de-
velopment of enough skilled labor. Qualified
staff left the sector during the slump in the
1990s, and the next-generation workforce is
critically lacking, with control unit engineers
and maintenance specialists particularly in
demand, industry experts report. Russia will
also need to float its once-buoyant domes-
tic power technology sector, which shrank
during the transition period after the fall of
the Soviet bloc and has been insufficient to
meet surging demand for equipment. Major
energy equipment firms like Siemens, GE,
Alstom, ABB, Skoda Power, Schneider Elec-
tric, Westinghouse, and Mitsubishi Heavy
Industries have already entered the fray and
established a firm footing.
By some reports, Russian technology
for heavy duty gas turbines, ultrasupercriti-
cal steam turbines, gasification, and process
control systems, as well as electro-technical
equipment, lags far behind global standards,
afflicted by limited funding for research
6. Russias energy regions. The Federal Grid Co., an entity 80% owned by the Russian
Federation, maintains more than 1.22 million kilometers of transmission lines and 854 substa-
tions (with a total installed capacity exceeding 322,500 MVA) in the Unified Energy Grid (UNEG).
The national grid comprises 73 Russian regions that are divided into zones, each falling under
the control of one of the companys backbone electric grid branches (designated as MES).
The sparsely populated Chukotka, Kamchatka, Taimyr, Yakutia, Magadan, and Sakhalin regions
in the Far Eastern zone are not yet covered by the UNEG for lack of economic conditions. The
national grid also includes about 137 inter-state electricity transmission lines with contiguous
countries for import and export. Source: Federal Grid Co.
|
January 2013 48
POWER IN RUSSIA
and outdated production facilities. The gov-
ernment has reportedly bought controlling
stakes in enterprises to optimize equipment
production for generation companies. In the
2011-issued Strategy for the Development
of the Electro Machine Building Sector till
2030, the Ministry of Industry and Trade
calls for high import taxes on equipment
manufactured abroad to reduce imported
products in new projects to 10% by 2025.
Fuel Woes
Russia may have some of the worlds largest
coal and gas reserves, but domestic generators
using these fuels are reportedly subjected to
higher prices and less flexibility in obtaining
them than might be expected. Russias recover-
able reserves of coal have been estimated at 173
billion short tonssmaller only than those of
the U.S., which holds roughly 263 billion short
tonsbut the country produced just 372 million
short tons in 2011 (76% of which is hard coal),
less than a third of U.S. coal production.
In 2011, Russia produced about 510 bil-
lion cubic meters of natural gasthe larg-
est by volume in the worldabout 60% of
which was sold on the domestic market. But
the countrys gas generators, which repre-
sent 60% of thermal generation capacity and
around 40% of domestic electricity produc-
tion, suffer a different ordeal: Stakeholders
routinely raise concerns about the competi-
tiveness of upstream fuel supply markets.
One issue is that Gazprom (whose control-
ling stake is held by the Russian government)
dominates the domestic gas market with a
75% market share. According to some, Gaz-
prom has cut back on the very high level of
natural gas supplies for electricity generation
because it can glean five times more money
by exporting the gas to the west (27% of Eu-
ropean Union gas comes from Russia).
But Gazprom is also the countrys largest
owner of power generating assets (Figure 7). Its
generating fleet totals 38 GW, or 17% of Rus-
sias installed capacity, which raises concerns
about the potential for the company to discrimi-
nate against competing thermal generators. It
should be noted, however, that independent
producers, such as Novatek and some Russian
oil companies, are beginning to build a notable
presence in the generation fuel supply market.
An interesting perspective offered by Aus-
tin-based global intelligence company Stratfor
suggests that Russias natural gas producers are
being forced to rely on revenues from gas ex-
ports and may be suffering financially because
government measures let domestic users pay a
fraction of the price paid by Russias foreign cus-
tomers. According to current Gazprom data, it
costs Gazprom approximately $132 to produce
or acquire and then distribute 1 tcm of natural
gas, but its revenue from the domestic market is
only $80 per tcm, which means Gazprom loses
7. Gas giant. Gazprom, owner of Russias
largest power generating assetsMosener-
go, TGC-1, and WGC-2has a total capacity
of 38 GW, or about 17% of Russias total in-
stalled capacity. The company, like others in
Russia, is building several combined cycle
power plants, seeking to boost its aggregate
capacity to 44.8 GW by 2020. Its newest addi-
tion is a 450-MW combined cycle gas turbine
that was commissioned at the Pravoberezh-
naya Combined Heat and Power Plant in St.
Petersburg on Nov. 23. Courtesy: Gazprom
Key features:
Conveniently broken down into 2 sections
Directory section
- Listings include:
Electric utilities, IPPs and other private power companies
Government and regulatory agencies
Over 3,000 individual power plants.
Country proile section
- Detailed coverage of hundreds of asset-speciic developments
including power plants and transmission system components. Each
proile also has a brief review of overall economic and energy devel
opment country-level power statistics and more.
INTERNATIONAL ELECTRIC POWER SOURCEBOOK
Over 10,000 contacts in every country and territory outside of North America
For more detailed information and a list of all available Platts data and directories,
please visit www.platts.com/UDIDataDirectories
This is a must for anyone conducting business in the international electric power sector. Save yourself
time and money with over 10,000 contacts in over 220 countries and territories all in one place.
Covering Europe, Africa, Latin America, the Middle East and Asia you can make informed decisions
based on the facts with a comprehensive overview of the electric power sector.
Edition: 2012
January 2013
|
POWER IN RUSSIA
more than $50 per tcm sold domestically. Con-
sidering that the domestic market makes up 60%
of sales, the loss is monumental, the group said
in an analysis published in 2012.
Gazprom has asked the government for a
45% increase in domestic natural gas prices by
the end of 2013 and an end to price restrictions
by 2014. If granted, Stratfor speculates, the in-
creases will undoubtedly resculpt the countrys
energy future and have major repercussions for
its myriad gas generators and energy-intensive
metals industries. If not, Gazpromwhich
alone contributes around 20% of the state budget
revenuescould find itself in trouble, given that
the countrys domestic natural gas consumption
is projected to increase, while sales to Europe
are projected to decrease.
Have the Reforms Worked?
Describing Russias electricity sector reforms
as the most ambitious ... ever undertaken,
the International Energy Agency (IEA) in an
April 2012 consultation paper calls the na-
tions achievements so far impressive. But it
warns that the reforms are still in their infancy,
and the outcome remains uncertain at this
stage. The 2008 privatization introduced sev-
eral new players, and it managed to diversify
generation ownership, yet government-owned
enterprises still own or control more than 60%
of total generation assets, the agency notes.
And perhaps more alarmingly, a trend is
emerging that points toward consolidation
into government ownership after unbundling
and privatization, which has implications for
competitive neutrality in the longer term.
The IEA has called for increased diversity of
ownership through further divestment, or ini-
tiatives such as virtual power or other mecha-
nisms to sell rights to the output of publicly
owned generators, which could provide a
practical option for assets, like hydro or nu-
clear facilities, that are difficult to privatize.
Pervading Politics
Russias power story has come a long way
from the campaign to install Illychs lamp in
every household to enlighten the masses,
and it continues to be shaped by political
and economic forces. Today, despite re-
forms to increase investment, the energy in-
dustrys biggest flaw continues to be that it
is dominated by monopolies controlled by a
government whose leadership hasnt really
changed over the last decade, some experts
say. International rankings point to Russias
propensity for deep-seated corruption, and
Putins return to the presidency in May sig-
naled that not much will change, some ob-
servers lament. Foreign investors are able
to operate in Russia only if they establish
good working relations with members of
the dominating clans. The quickest way to
be awarded projects and contracts in Russia
is to offer those clans stakes in respectable
international companies, as Mikhail Kru-
tikhin, an analyst and consultant for the oil
and gas industry and politics in Russia, said
in a fiery opinion for Euractiv.
But this could actually work to the benefit
of efforts to modernize Russia, as Vladislav
Inozemtsev, a much-cited economist and
founder and director of the Centre for Post-
Industrial Studies in Moscow, told German
publication Speigel Online in November. No
political or economic upheavals are expected
between now and 2018 because the eco-
nomic system is robust and flexible, he said,
[a]nd the majority of the population will re-
main content because they have never lived
as normally as they do now.
At a lecture in Vienna earlier that month,
Inozemtsev argued that corruption has
emerged as a necessary outcome of the col-
lective repression of Soviet times because
it gives individuals a sense of control.
The state, too, devalues collective action,
and a system has emerged where bribery
is the most effective means to reach any
goals and solve any existing problems.
Therefore, he says, state representatives
who get used to corruption are not seen as
foes, but as a systemic part of the regime.
Under such circumstances, public service
becomes business, corruption turns into a
form of rent, and the protest against the re-
gime diminishes.
Sonal Patel is POWERs senior writer.
Russias Gas Realm
Starting in the mid-1940s and continuing
through the 1960s, the Soviet Union pen-
etrated the Iron Curtain and developed a
network to deliver natural gas first to Po-
land, then to Czechoslovakia, and finally to
Western Europe, steeling a dependency
and interdependencywith more than 30
countries for decades (Figure 8). Gazprom
still exports a significant amount of gas
to those countries, and in recent years
it has (through its subsidiary Gazexport)
also begun exporting liquefied natural gas
(LNG) to serve the rising demand in Japan
and other Asian countries.
But in recent years, disputes between
Gazprom and neighboring Ukraine, through
which 80% of those exports travel via
pipeline (the remainder traverse primarily
through Belarus), have twice left parts of
Europe in the cold, with countries such as
Bulgaria, Germany, Greece, Hungary, Roma-
nia, and Slovakia enduring a total natural
gas shutoff from pipelines running from
Russia through Ukraine. In 2006, Russia
turned off all gas exports to Ukraine for
three days; in 2008, it cut shipments by
50%; and in 2009, a renewed debt spat led
to a total disruption of supply that lasted
more than 13 wintery days. Those incidents
have prompted some European countries to
seek out alternate sources of natural gas to
ensure security of natural gas supplies.
Meanwhile, Gazproms own iron grip on
the world natural gas market has been
enfeebled by the global shale gas boom,
which has faded prospects for exporting
gas to the U.S. and China. Breaking from
a reluctance to discuss how the Russian
Federation would approach that dilemma,
Energy Minister Alexander Novak in Au-
gust told Russian news agency Interfax
that the Russian government would adjust
its energy strategy for the period until
2030 to take into account the shale gas
revolution, the emergence of new shale
gas production technologies, and shale
oil. Russia is also reconsidering its strat-
egy because companies that previously
planned to supply liquefied natural gas
(LNG) to the U.S. have abandoned it for
the European market, where more LNG is
being received from the Middle East.
8. Blue fuel borders. Gazprom Group,
a company whose controlling stake (50.1%)
is owned by the Russian government, in
2011 supplied about 55%or 468.4 billion
cubic meters of natural gasto domestic
users. Russian gas accounted for about a
third of aggregate gas imports to Western
Europe, and the Commonwealth of Inde-
pendent States (CIS), former Soviet Union
Republics, took in another substantial share.
Courtesy: Gazprom
Russia 55%
CIS/
Baltic states
15%
Other Western
Europe
11%
Germany
7%
Turkey 5%
Italy 3%
Poland 2%
France 2%
ASSET MANAGEMENT
|
January 2013 50
The Electric Grid: Civilizations
Achilles Heel?
Solar flares have proven destructive effects on transmission grids, but there
are many other black swan events that threaten modern civilization. Ex-
perts disagree about which protective steps should be taken today.
By Kennedy Maize
I
n October 2011, a group of two dozen
energy graybeardsveterans of energy
policy discussions in the U.S. over the
past 40 years or soassembled in Oak
Ridge, Tenn., to think about what, to some,
might be unthinkable. For two days, the
group looked at the kinds of unanticipated
events that have brought down civiliza-
tions. They called these disturbing events
the Achilles Heels of Civilization.
Traditionally, we have thought of these
events in Biblical terms, as the white, red,
black, and pale horses of the apocalypse:
famine, pestilence, war, and death. A more
modern metaphor comes from the Leba-
nese-American scholar Nassim Nicholas
Taleb in his 2007 book Black Swans. In
that book, he defines a black swan event:
First, it is an outlier, as it lies outside the
realm of regular expectations, because
nothing in the past can convincingly point
to its possibility. Second, it carries an ex-
treme impact. Third, in spite of its outlier
status, human nature makes us concoct ex-
planations for its occurrence after the fact,
making it explainable and predictable.
Identify the Many Threats
The Oak Ridge group had assembled at the
behest of the U.S. governments National
Intelligence Council (see sidebar), the De-
partment of Energys (DOEs) Oak Ridge
National Laboratory, and the University of
Tennessee in nearby Knoxville. In an in-
terview, Alvin J. Sanders of the University
of Tennessee, one of the principals in the
Achilles Heels group, told POWER, We
were hunting Black Swans. Civilization-
threatening events, he said, are difficult
to identify, but we know there are only a
few, maybe a dozen. Otherwise, civiliza-
tions would fall far more rapidly than we
know they do.
In an unpublished paper he provided,
Sanders writes, Every past civilization
has been brought down by some event or
combination of events. Great powers typi-
cally endure only two or three centuries. It
is only realistic to assume that the United
States is no exception. It is even possible
that forces have already been set in mo-
tion which could devolve into a scenario
that would at least terminate our status as
a great power and perhaps lead to a far
worse fate.
Some of these rara avis outliers are
familiar, even obvious. Natural disas-
ters lead the list: widespread droughts,
earthquakes, tsunamis, infections that kill
millions, nuclear war. Others may come
to mind less easily. Sanders cites a slow
but highly sulfurous volcanic eruption in
Iceland in 17831784 that caused wide-
spread crop failures and mortality spikes
in Europe although it lasted only eight
months, and two much shorter eruptions
in 2010 [that] brought air travel to a halt
in northern Europe.
When the Oak Ridge energy gurus
looked at modern American life, they saw
an unexpected weak spot in our civiliza-
tion, an Achilles heel that is so ordinary
we largely take it for granted. Dr. Ben Mc-
Connell, a retired Oak Ridge lab scientist,
now a research scientist at the University
of Tennessee, where he studies transform-
ers and switchgear, was a participant in the
Achilles Heel project. He told a Federal
Energy Regulatory Commission (FERC)
technical conference last May that the
U.S. electric transmission and distribution
grid offers a clear path to destruction of
our way of life. When the Oak Ridge bof-
fins looked at the U.S., McConnell said,
they found that grid collapse came out
to be the most serious problem that would
have to be considered in the shortest time
frame.
Outside of the electricity industry, few
fully understand the centrality of the grid
to life in America today. The most graph-
ic realizations occur when the grid goes
1. Storm damage repairs. Tennessee Valley Authority (TVA) linemen begin to repair dam-
age to a high-voltage transmission tower caused by a recent storm. Courtesy: TVA
January 2013
|
ASSET MANAGEMENT
down. Its not just a matter of light and
comfort in our homes. Without electricity,
citizens may have no access to potable wa-
ter, sewage treatment, safe food, fuel sup-
plies, traffic control, or health care.
A large swath of the U.S. got a taste of
what happens when the grid goes down at
the end of June, when a heat wave led to a
super derecho that blacked out millions
of electric customers over a 10-state swath
from Illinois to the Atlantic and killed at
least 20 people. The outage began June 29
and lasted past the U.S. Independence Day
holiday for hundreds of thousands. By July
5, FirstEnergy was estimating that 250,000
customers (probably some 500,000 people)
in just its West Virginia service territory
were still without electricity (Figure 1).
As meteorologist Kristina Pydynowski
explains, a derecho is a widespread and
long-lived wind storm that accompanies
rapidly moving showers or thunderstorms.
The most severe derechos are given the ad-
jective super. Winds measured 91 mph
in eastern Illinois on Friday afternoon,
June 29, and 81 mph on the southern New
Jersey coast early Saturday morning as the
derecho screamed across the country.
Unlike typical summer thunderstorms
that take down distribution lines and local
transformers, the super derecho clobbered
high-voltage lines and major substations. The
windstorm took down 50 major transmission
lines and more than 70 substations in Ohio and
West Virginia. In the Washington, D.C., area,
the derecho shorted out the substation serving
the water treatment facilities of the Washing-
ton Suburban Sanitary Commission, depriving
much of the area of drinking water for more
than a day. Virginia Governor Bob McDonnell
proclaimed the event the worst non-hurricane
outage in the Old Dominions history.
Not only is the electrical grid central
to modern life, but the grid also has mul-
tiple vulnerabilities that make keeping it
safe a very difficult task. Weather outages
are common, although some, such as an
ice storm, can do enormous damage. A
January 1998 ice storm destroyed much
of Hydro-Qubecs massive 765-kV trans-
mission system, blacking out more than 3
million Canadians, causing 30 fatalities,
and leaving many customers in the dark
for weeks. Tropical storms, such as 2005s
Hurricane Katrina, can also cause long-
term and widespread destruction.
Human error can also take down the
grid in a hurry, as was the case with the
massive August 2003 blackout that turned
off power for 55 million people in the
Northeast, Midwest, and Canada. Ac-
cording to the official inquiry, the prime
mover in that event was a series of errors
by operators and managers at Ohio-based
FirstEnergy (FE). The DOE report on that
event concluded that the utility and the
reliability region staff failed to assess
and understand the inadequacies of FEs
system, particularly with respect to volt-
age instability and the vulnerability of the
Cleveland-Akron area, and FE did not op-
erate its system with appropriate voltage
criteria and remedial measures.
The 2003 blackout also highlighted an-
other chilling aspect of grid failure: the
propensity of the system to suffer from a
cascading failure. Because of the grids in-
terconnectedness, grid failures can spread
quickly, concatenating across the system.
This same effect occurred during the 1965
blackout that slammed most of the eastern
U.S., an event that began with a simple
hardware failure in Canada.
Human Interference
In addition to human error, the electric grid
is also quite vulnerable to intentional hu-
man intervention, from a mad person with
a charge of dynamite at a crucial transmis-
sion tower to a surreptitious cyber-attack
such as the U.S. and Israel created with
the Stuxnet virus, to a deliberate state-
ordered explosion of a nuclear weapon
to create an electrical and magnetic pulse
that brings down the grid. Following the
late-June Mid-Atlantic super derecho,
former House Speaker Newt Gingrich
tweeted that the event was a mild taste
of what an EMP (electro-magnetic pulse)
attack would do.
Cyber attacks have gained the most
attention recently, partly as a result of
publicity arising from the Stuxnet attack
on Irans nuclear program. As the grid
becomes more complex, sophisticated,
and computer-assistedsmart if you
willit becomes more vulnerable to code
hacking. Recent POWER articles (see the
archives at www.powermag.com) discuss
the growing areas of cyber vulnerabilities
(Guidance on Cybersecurity for the Elec-
tricity Sector, June 2012) and threats to
utility supervisory control and data acqui-
sition (SCADA) systems (see Ensuring
the Cybersecurity of Plant Industrial Con-
trol Systems, June 2012).
But there also is a positive side to the
increasing interconnectivity and intel-
ligence in the grid. Identifying specific
outages, down to the individual meter, be-
comes easier, as does measuring success
What Is the NIC?
The National Intelligence Council (NIC)
is a little-known, but increasingly impor-
tant, Washington think tank that reports
directly to the director of national intel-
ligence, who on the federal governments
organizational chart sits between the
president and the intelligence agencies,
including the Central Intelligence Agen-
cy, the Department of Homeland Security,
and the Federal Bureau of Investigation.
It describes itself as the intelligence
communitys center for midterm and
long-term strategic thinking. Originally
formed under the 1947 National Security
Act as the Board of National Estimates,
the organization was transformed into
the NIC in the 2004 Intelligence Reform
and Terrorism Prevention Act.
The NIC is the lead agency in producing
the National Intelligence Estimates. The
NIC says its goal is to provide policymak-
ers with the best, unvarnished, and unbi-
ased informationregardless of whether
analytic judgments conform to US policy.
The organization produces some reports
that are classified and some that are pub-
lic, including a series on the implications
of climate change for a number of foreign
countries. The group also supports research
into long-term trends and challenges.
Not only is the electrical grid central to
modern life, but the grid also has multiple
vulnerabilities that make keeping it safe a
very difficult task.
ASSET MANAGEMENT
|
January 2013 52
in restoring connections. Discovery News,
the online magazine that is a companion to
televisions Discovery Channel, reported
in July, In the outage this weekend in the
Mid-Atlantic states, smart meters provided
power companies data about which houses
are out without owners having to call in.
Many of these wireless smart meters have
been installed in just the past few months.
The story continued by quoting Matt
Wakefield, senior program manager of
smart grid systems for the Electric Power
Research Institute: They wont prevent an
outage, but they might allow you to restore
things more quickly.
The North American electrical grid also
faces threats from space (though not from
aliens). The problem is the sun (Figure
2). As a new period of solar flare activity
begins a predicted 11-year cycle, the grid
could face increasing disruption caused
by a deluge of geomagnetic particles and
pulses in the next couple of years. A 1989
solar storm caused a major Ontario black-
out and damaged large transformers as
far south as New Jersey. Far larger solar
storms have hit Earth in the past, before
development of the electric power grid,
including the legendary Carrington event
of 1859. That solar storm severely dam-
aged Englands telegraph system. Had the
Carrington storm struck 150 years later, it
could have led to enormous electric out-
ages for scores of millions of people last-
ing many months, according to the experts
(see The Great Solar Storm of 2012? in
the February 2011 issue).
Threat Disputed
A recent FERC technical conference re-
vealed a rift between federal regulators
and the North American Electric Reliabil-
ity Corp. (NERC), which reports to FERC
on reliability issues, over the threat of
geomagnetic disturbances from increased
solar flares. Whereas most assessments
have found that geomagnetic damage is
potentially catastrophic, NERC in a re-
port early this year downplayed the issue.
NERC said it recognizes that other stud-
ies have indicated a severe [geomagnetic
disturbance] event would result in the fail-
ure of a large number of [extra high volt-
age] transformers but added that the work
of its own task force does not support
this result. The NERC study said that the
transformer problem is more likely in old-
er transformers and clearly implied that a
voltage collapse would take the grid down
before transformers would be damaged by
the induced currents.
The NERC report, because it challeng-
es the mainstream, consensus view of the
threat of solar storms, caused consider-
able head-scratching at FERC. We read
the latest NERC report, a FERC staff
person reportedly said, and our reaction
was, What the heck is going on here. It
was very surprising. FERCs consterna-
tion led to the April 30, 2012, technical
conference. A webcast of that conference
is archived at http://bit.ly/10QQksb.
McConnell, who has been studying the
issue for decades, said in an interview that
NERCs analysis is flawed. NERC needs to
do more homework, he said. They dont un-
derstand the problems facing the transformers.
The transformer manufacturers are sweating
blood over this and backup systems put the
running costs of the system over the roof.
Peter Pry, a former CIA analyst and con-
gressional staffer who worked on a congres-
sionally mandated Electromagnetic Pulse
Commission, told the FERC meeting that he
believes NERC is low-balling the potential
impact of solar storms on the grid because
of the financial consequences for the electric-
ity industry. In an interview before the FERC
meeting, Pry told POWER, This is not hon-
est disagreement. Its not a legitimate dis-
agreement among scientists. It is an industry
attempt to cover up.
McConnell stunned the FERC commis-
sioners at the technical conference when he
described the civilization-threatening reach
of a massive grid failure. His suggestion for
the best ways to cope with a grid collapse
was equally stunning. One of the best ways
to protect the grid, he said, is to go into is-
landing mode, the deliberate disconnection
of sections of the grid to prevent cascading.
The idea is heretical, as it requires abandon-
ing economic dispatch for at least some pe-
riod of grid operation.
FERC Commissioner Cheryl LaFleur
was astonished at McConnells suggestion.
As a former acting CEO of National Grid
USA, LaFleur is the commissions transmis-
sion and distribution guru. The question is
whether inductive power released by a geo-
magnetic event will prevail over the reactive
power that will cause the system to break
apart, she said. Im struck by Dr. McCon-
nells comment that the best way to survive
would be the go back to more local geo-
graphic operation. Thats the exact opposite
of the direction the electric industry has gone
in the last 20 years. A lot of what we do at
this commission is to interest people to think
bigger and think across regions and do more
transmission.
McConnell nodded sagely. It might
not be economic and we might all pay
100% more per kilowatt-hour during two
or three days, he said. But the heck with
it. Thats the way it ought to go to save the
system. Because if we go down, if even a
third of the grid is out, a 10th of the trans-
formers in the base load structure went
down, we would be in a world of hurt.
Kennedy Maize is a POWER
contributing editor and executive editor
of MANAGING POWER.
2. Solar flares. Over a four-hour period on Nov. 16, 2012, two prominence eruptions oc-
curred. The action was captured in the 304 Angstrom wavelength of extreme ultraviolet light.
Similar solar eruptions have caused transmission system disruptions. Source: NASA
January 2013
|
FUTURE POWER
I
magine that youve spent several years
digging into Californias multi-faceted
clean energy policies. All the pieces of
the puzzle are in place. Suddenly, you real-
ize the finished puzzle looks a little different
than the one on the cover of the box.
When you sift through all the policy pa-
pers, presentations, and regulations, its clear
that California is pursuing what is arguably
the most ambitious clean energy strategy in
the country, perhaps the world. When you
read between the lines, its also clear that
the state is embracing a distributed power
paradigmsomething quite different from
the familiar central station generating para-
digm. Perhaps the scariest thing of all is that
no one entity is in charge of implementing
the strategy. According to a California En-
ergy Commission (CEC) presentation this
past summer, multiple agencies have inde-
pendent authority to act on portions of the
puzzle, but not the entirety of it.
If youre thinking this has nothing to do
with you, think again. It is striking to com-
pare Californias energy aspirations and the
energy strategy pursued by the Obama ad-
ministration, at least until the super major-
ity in the Senate got erased and the party in
power was humbled with a big loss in the
House of Representatives after the midterm
elections in 2010. In 2009 a national renew-
able portfolio standard (RPS) was a real
possibility, carbon cap and trade had even
won the backing of major utility executives
and passage in the Senate, a preference for
working the demand side rather than the sup-
ply side permeated the stimulus funding and
Department of Energy (DOE) programs, and
the gauntlet around coal was being tightened.
These are, coincidentally, all elements of the
California strategy.
It may seem like ancient history, but it
was less than three years ago. Today, with
a Democratic Party super-majority in both
houses of the California legislature support-
ing Democratic Governor Jerry Brown, im-
peding the ambitious clean energy agenda
is far less likely. And to be fair, many of the
programs and policies were also advanced
under Republican governors as well.
Chiseling at the Paradigm
First, a little history is in order. Since the
dawn of modern day electricity supply and
delivery, the prevailing paradigm has been
big iron, economies of scale from larger
and larger power stations, longer and lon-
ger transmission lines, a diversity of energy
sources, and in effect socializing the costs
among all ratepayers in a service territory un-
der a regulated rate of return business model.
The Public Utility Regulatory Policies Act
(PURPA) of 1978 was the first crack in that
paradigm. However, it did not break open the
big iron paradigm as much as it broke open
the regulated and vertically integrated elec-
tric utility business model.
Over the past decade and a half, there has
been a drive to lower the industrys carbon
footprint, displace coal with natural gas, add
renewable energy, and get more out of the ex-
isting nuclear fleet. But once again, solar and
wind energy facilities and gas-fired plants
got bigger and more centralized, not smaller
and more distributed. In the past five years,
thanks to massive government expenditures,
intelligent grid technologies have been de-
ployed as a propellant to make conservation,
energy efficiency, and demand side manage-
ment the equal of supply side options.
Since the 1970s, the industry has seen
small waves of distributed energy systems:
total energy systems (that is, cogeneration,
in the early 1970s), packaged cogeneration
units (early 1980s), microturbine generators
(late 1990s), and fuel cell units and rooftop
solar photovoltaic systems (the past decade).
With the exception of rooftop solar, whose
wave is still advancing, these waves hit shore
and quietly receded.
Ultimately, the centralized big iron par-
adigm prevailed.
California Is Different
A key element of Californias clean energy
strategy is a target of 12,000 MW of distrib-
uted generation (DG)localized generation
close to consumer loads (Figure 1)as part
of a 20,000-MW renewable energy buildout
included in the states 33% RPS law. Approx-
imately 3,000 MW of DG already exist in
California, and an additional 6,000 MW are
under development or authorized. The obvi-
ous regulatory preference for DG is indicated
by the fact that it is 60% of the total new re-
newable capacity expected to be added.
Interestingly, California includes individ-
ual system size up to 20 MW in its DG plan-
ning. Supporting the solar portion of DG are
the incentives provided in Senate Bill (SB)
1 and the feed-in tariffs in SB 32. Projects
based on gas-fired small turbines and engines
need not apply for those perks.
Large-scale renewable facilities represent
the other 8,000 MW in the RPS that is sup-
posed to be met by 2020. Geographic and
permitting realities in the state suggest that
the large-scale facilities must be accompa-
PacifiCorp
SPP
Mountain
Utilities
PG&E
SCE
Bear Valley
Electric
SDG&E
SMUD
LADWP
LADWP
IID
Anaheim PUD
Silicon
Valley
Power
DG projects (MW)
1173
174466
467948
9493006
IOUs
POUs
Counties
Distributed Generation:
Californias Future
Once you synthesize all the elements of the Golden States clean energy strategy
and extrapolate current trends, its easy to see that an impending break with
the traditional power generation paradigm is coming, intended or not.
By Jason Makansi, Pearl Street Inc.
1. Ambitious planning. Distributed
generation is planned for deployment based
on, among other things, unemployment
characteristics and where low- to moderate-
income households are located. Source: Cali-
fornia Energy Commission
|
January 2013 54
FUTURE POWER
nied by relatively long transmission lines if
the renewable-based electricity is going to
find customers. Thus, 13 critical transmis-
sion projects are contemplated along with the
wind and solar installations.
Taking reality into account, though, how
likely is it that the necessary transmission will
be built by 2020? Even in an infrastructure-
friendly state, transmission lines can take up
to 10 years to permit and build.
By state, California is one of the largest im-
porters of electricity in the country. Importing
renewable energy from the hydro- and wind-
rich Pacific Northwest and solar-rich Nevada
and Arizona seems at first blush a smart way to
meet the RPS. If you could get the transmission
built, Colorado and Wyoming also could send
California plenty of wind energy. Indeed, there
are plans to build massive wind energy facilities
in those states to serve the California market.
The recent Federal Energy Regulatory
Commission (FERC) Order 1000 supports
regional transmission planning and socializ-
ing the costs among ratepayers in the region.
Part, if not most, of the inspiration for FERC
1000 was to get renewable energy to mar-
kets. The Department of the Interior, DOE,
and other federal agencies are also support-
ing the development of big renewable energy
2. Water rules challenge power producers. Many of Californias fossil power sta-
tions rely on once-through cooling, now under threat by a bill pending in the California assembly.
Source: California Independent System Operator
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IN PRINT, IN PERSON, AND ONLINE
January 2013
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FUTURE POWER
zones in the western states through expedited
reviews and permitting.
Unfortunately, Californias RPS policy is
designed to discourage out-of-state renew-
able energy flows, although the restrictions
take effect in the latter years of the mandate.
As measured by energy (not capacity), 75%
of the mandated flows must be in-state bun-
dled transactions which caps the out-of-state
opportunity. Also, SB 2X (the formal name
of the RPS law) ensnares public utilities for
the first time in the RPS program.
Even if California did encourage out-of-
state flows, the regional strategy is question-
able for other reasons. FERC 1000 could be
challenged in the courts, and the means tests
for socializing the costs, which requires valu-
ing the benefits for specific classes of rate-
payers, might be too arduous. The problem
with regional development is that there is
no regional government. Finally, multi-state
transmission lines are more difficult to per-
mit than in-state ones.
Supply Destruction
It would be one thing if California were sim-
ply adding renewable energy and DG capac-
ity to meet future load growth. But thats
not the case. You may have heard the term
demand destructionwhat happens when
an economy tanks and demand for goods and
services is destroyed. Well, California is
practicing a version of supply destruction.
The state consumes very little coal for elec-
tricity production, although the Los Angeles
Department of Water & Power (LADWP)
gets electricity from the large coal-fired Inter-
mountain power station in Utah and the Na-
vajo station in Arizona. However, several oil/
gas-fired steam plants still operate along the
coast, primarily in southern California. They
depend on once-through cooling (Figure 2), a
practice that could be outlawed by the pending
Assembly Bill (AB) 1318. This bill, restrict-
ing thermal discharges, along with a new car-
bon emissions performance standard (1,100
pounds CO
2
/MWh), the strictest NO
x
emis-
sions in the country, and other collars on fossil
fuel in AB 32 (The Global Warming Solutions
Act), are all likely to force the retirement of
15,000 MW of fossil-fired generation.
Do the math: 15,000 MW of fossil-fuel
capacity is to be replaced with 20,000 MW
of renewable energy, 12,000 of which is DG.
This suggests that DG is no longer something
that is eating away at the edges. Its critical to
the supply side of the equation in California.
When you superimpose a map of where the
thermal plants are being retired, where the
population centers are, and where transmis-
sion is constrained, it becomes pretty clear
that DG will be replacing the existing supply,
not supplementing it (see sidebar).
A map showing transmission constraints in
Southern California Edisons territory also tells
an interesting story (Figure 3). The power plants
(not shown) are mostly along the coast, and the
planned centralized renewable capacity is in the
southwestern part of the state. According to the
utility, the transmission constrained areas have
little or no operational margin to handle any re-
Enterprise zones
Fresno
SCE transmission constrained counties
SCE transmission unconstrained counties
Sequoia Valley
Nevada
Arizona
Barstow
San Bernardino
Santa Ana
Long Beach
P
a
c
i
f
i
c

O
c
e
a
n
San Diego
Mexico
Coachella Valley
3. Moving power problems. Getting power from the southwestern part of the state
is constrained by transmission because so many power stations are located along the coast,
stations whose operation is threatened because of pending once-through cooling prohibitions.
Source: Southern California Edison
References
2012 Integrated Energy Policy Re-
port, Draft Lead Commissioner Re-
port, California Energy Commission,
October 2012.
Californias Clean Energy Future, Im-
plementation Plan, CEC, CPUC, Cali-
fornia Air Resources Board, CAISO,
California Environmental Protection
Agency, September 2010.
CPUC Energy Storage Proceed-
ing R. 10-12-007, Energy Storage
Framework Staff Proposal, Cali-
fornia Public Utilities Commission,
December 2011.
Energy Storage Phase 2 Work-
shop, Arthur ODonnell, Regulatory
Analyst, California Public Utilities
Commission.
Implications of Integrating Wind
at Scales That Matter for Climate
Policy, Victor Niemeyer, Electric
Power Research Institute, presented
at the CTOTF Workshop, Integrat-
ing Renewables into the Generat-
ing Mix: Challenges and Unknowns,
September 2010.
LADWP Status Report on AB 1318
on Capacity Requirements/Emissions
Implications, Mohammed Beshir,
Electricity Infrastructure Issues In
California Workshop, June 22, 2012.
Overview of Electricity Infrastruc-
ture Issues, Michael Jaske, Califor-
nia Energy Commission, 2012 IEPR
Update Workshop, Los Angeles,
June 22, 2012.
Prioritizing Geographical Areas for
Renewable Energy Development,
Southern California Edison, Lead CEC
Commissioner Workshop on Identi-
fying and Prioritizing Geographical
Areas for Renewable Energy Develop-
ment in California, May 10, 2012.
|
January 2013 56
FUTURE POWER
distribution of network power flows without po-
tentially adverse grid reliability impacts. What
this means is that even small changes to the
network flow patterns, such as from develop-
ing more renewable energy, may not be possible
without significant transmission upgrades.
According to the LADWP, the myriad
clean energy mandates require the public
utility to change 70% of its power system in
a relatively short period of time.
If power supply inside population areas is
being shut down and renewable power to the
west inside or outside the state cant get in, it
seems certain that new DG facilities have to
replace the older power station capacity.
Jobs, Jobs, Jobs
DG is also an important part of the states
economic development plan. A big motiva-
tion for the states clean energy strategy is to
have it serve as an engine for jobs creation
and as an export base for advanced electric-
ity infrastructure and electric vehicle systems
(another element of the California strategy).
Interestingly, the location of DG systems is
being allocated on the basis of electricity con-
sumption (weighted 40%), low- to moderate-in-
come households (20%), unemployed workers
(20%), and distribution system capacity (20%).
So, not only will the manufacturing of DG sys-
tems create jobs, installing them where the un-
employed live also will help put people to work,
so the theory goes. Estimates of the cumulative
number of jobs (20112020) that will be created
through the states clean energy strategy show
that demand-side activities will be responsible
for three to five times as many jobs as activi-
ties in renewable energy and five to 15 times as
many jobs as activities in transmission.
Its pretty clear where the state believes
the job creation engine lies.
Not surprisingly, while the rest of the coun-
try latches onto the shale gas revolution, the
West Coast has seen the largest reduction in
natural gas production of any region in the
country. Production has declined 33% there
while, for example, production more than
doubled in the eastern U.S., according to data
from the Energy Information Administration.
Its truly a fascinating dichotomy. Califor-
nia is driving its economy by reducing ener-
gy consumption, while one of the only jobs
engines in the eastern part of the U.S. during
the recession and prolonged weak recovery
has been the boom in oil and gas extraction
from shale plays.
No Coastal Supply
One things for sure: California isnt looking
offshore for any of its energy needs. As states
along the Eastern Seaboard and the Gulf Coast
eye offshore wind enthusiastically, the resource
isnt even mentioned in California planning ac-
tivities. Yet Northern California has some of the
best offshore wind resources (Figure 4) in the
country, and the offshore West Coast as a whole
has some of the best oil/gas resources (Figure
5) outside of the Gulf of Mexico.
Distributed Storage
California has been active in developing energy
storage technologies for many years; its one of
only two states with an active research, devel-
opment, and deployment program (New York
being the other). It is also the only state consid-
ering, through AB 2541, setting targets for how
much energy storage utilities should procure.
The California Public Utilities Commis-
sion (CPUC) is scheduled to make its recom-
mendation by October 2013 for a first energy
storage procurement target to be achieved by
affected load-serving entities by December
31, 2015. The recommendation, however,
can also be that no target should be set. The
CPUC is currently developing use cases to
determine commercial readiness of technolo-
gies, operational viability, benefit streams,
policy options, and deployment barriers.
Storage has also become a key element in
the states Integrated Energy Resource Plan.
However, relevant agencies (CPUC, CEC,
and the California Independent System Op-
erator) planning and policy documents and
presentations almost exclusively focus on
distributed storage.
Bulk storage solutions, like pumped hydro
storage (PHS) and compressed air energy
storage (CAES), are hardly mentioned, even
though at least a dozen PHS projects are in ac-
tive development in the state, and several others
in neighboring states could serve the California
market. Three CAES projects are also being
contemplated by utilities in the state; two re-
ceived stimulus funding. However, the CAES
projects are proceeding slowly, if at all.
Storage systems and natural gasfired plants,
in fact, now are considered mostly as support
for filling in around intermittently available re-
newable energy. Quoting from the latest version
of the CEC Integrated Energy Policy Report
(IEPR), Integrating [intermittent resources]
will require a combination of complementary
resources like energy storage, demand response,
smart grid technologies, and flexible natural gas
plants. In fact, every mention of energy stor-
age in the IEPR, except one, discusses storage in
connection with distributed resources.
Jason Makansi (jmakansi@ pearlstreetinc
.com) is president of Pearl Street Inc., a
technology deployment services firm. This
article is based on material taken from a
PGS Energy Training Seminar developed
and presented by the author in Sacramen-
to, April 2012, and Portland, Ore., October
2012: California Clean Energy and the
Rest of the West.
Wind
power
class
3 Fair
4 Good
5 Excellent
6 Outstanding
7 Superb
Resource
potential
4. Snubbing offshore wind. Offshore
wind is excellent in Northern California, but no
one talks about developing it. This map shows
the annual average wind power estimates at a
height of 50 meters and ignores environmen-
tally sensitive areas. Source: National Renew-
able Energy Laboratory
5. Ignoring other offshore resourc-
es. Offshore oil and gas resources that could
be leased from the federal government are
also not part of any California energy plan. This
map shows offshore undiscovered techni-
cally recoverable oil and natural gas reserves.
Source: Minerals Management Service, De-
partment of the Interior
Washington/
Oregon
Off Limits
Northern
California
Central
California
Southern
California
0.4 Bbl
2.28 Tcf
2.08 Bbl
3.58 Tcf
2.31 Bbl
2.41 Tcf
5.58 Bbl
9.75 Tcf
January 2013
|
NEW PRODUCTS
TO POWER YOUR BUSINESS
Rotary Peristaltic Pump
Vanton Pump and Equipment Corp.s portable, nonmetallic Flex-I-Liner rotary
peristaltic pump evacuates drums and totes containing acids, caustics, salts,
chlorides, and reagent grade chemicals, without corrosion of the pump or
contamination of the uid. The self-priming design has no seals to leak
or valves to clog, and the pump can run dry for extended periods without
damage. Compact in size with integral handle, it ts on drum lids without
protruding and has sufcient lift characteristics to operate from the oor,
skid, or stand. Only two nonmetallic parts contact uid: a thermoplastic body
block and an elastomeric exible liner that can be replaced in the eld without
special tools. A rotor mounted on an eccentric shaft oscillates within the
exible liner, imparting a progressive squeegee action on the uid trapped in
the channel between the liner and the body block. Flanges on the exible liner
are pressed to the side of the body block by concentric grooves on the bracket
assembly and the cover plate, isolating the uid to the channel. The pump is suitable for ows from 0.33 gallons per minute (gpm)
to 40 gpm (1.25 to 151 liters/hour) and pressures to 45 psig (310 kPa) at temperatures to 250F (121C). (www.vanton.com)
Handheld Laser Scanner
The NVision Handheld laser scanner is a
powerful portable scanning device that
is capable of capturing 3D geometry from
objects of almost any size or shape. The
scanner is attached to a mechanical arm
that moves about the object, freeing the
user to capture data rapidly with a high
degree of resolution and accuracy. As a
part is inspected, the scanner generates a
point cloud consisting of millions of points,
each with x, y, z coordinates and i, j, k
vectors. Integrated software converts the
point cloud to an STL polygon. An optional
tripod provides complete portability
in the eld. Intuitive software allows
real-time rendering, full model editing,
polygon reduction, and data output to
all standard 3D packages. The scanner
could substantially reduce the time to
reverse-engineer turbine blades and other
components, and its portability means parts
suppliers can use it at customer facilities to
reverse engineer parts that are too big to
ship. (nvision3d.com)
High-Speed Precision Rotation Stage
Newport Corp. introduced the compact and high-torque RGV100HL high-
speed precision rotation stage. Developed to accelerate loads having higher
rotational inertia, the new stage is compatible with Newports XPS-DRV02
driver. The RGV100HL provides the same high resolution and outstanding
positioning performance as Newports legacy RGV100BL precision
rotation stage while delivering three times the torque and ve times the
acceleration.
Direct-drive technology provides faster rotating speeds with superior
reliability and enhanced positioning sensitivity. By integrating the bearings
with the motor, the stages footprint is only 115 mm x 115 mm. A precision
glass scale encoder guarantees 0.0003 degrees repeatability and 0.0001
degree minimum incremental motion. The brushless DC torque motor with
rare earth magnets optimizes the available torque to deliver extremely rapid
point-to-point motions. The device is ideal for applications requiring fast
dynamic response and for tasks that require moving larger platens, such
as sensor calibration, laser micromachining, micro-robotics, and motion
simulators. (www.newport.com/RGV100HL)
|
January 2013 58
NEW PRODUCTS
Inclusion in New Products does not imply endorsement by POWER magazine.
Explosion-Proof Carted
LED Light
Larson Electronics Magnalight.com
unveiled a wheeled, cart-mounted
explosion-proof LED light with
swivel mounting. Designed for
versatility and easy light placement,
the EPLCD-48-100LED Explosion
Proof Low Prole LED Light provides
the convenience of a wheeled
car-mounted lighting system
combined with the versatility of
a swivel-mounted lamp. This LED
light provides high output and
the ability to easily maneuver
and angle the lamp assembly
for better illumination of areas
not easily reached with standard
cart lights. The system offers
operators in hazardous locations
a powerful lighting solution that
can be easily maneuvered around
the work area and positioned for
the best coverage possible. Its
swivel mounting bracket design
allows operators to roll the light
into position and then ip or
angle the lamp assembly for the
best coverage of the workspace.
The lamp assembly on this cart
is a 100-W LED design that
produces 7,000 lumens of high-
quality white light; it also has
100,000-hour rated service life.
(magnalight.com)
An Evolution in Bolt Security
Chicago-based Nord-Lock added a new dimension of safety to
bolt security with the launch of the Nord-Lock X-series washer,
which combines Nord-Locks wedge-locking protection against
spontaneous bolt loosening (due to vibration and dynamic loads)
with an exclusive spring effect that protects against slackening
due to settlement and relaxation. The principle of Nord-Lock
X-series washers includes multiple functions that act on the
bolted joint to maintain preload and prevent spontaneous bolt
loosening. As with Nord-Locks original washers, each washer
pair has cams on one side and radial teeth on the opposite side
to secure the bolted joint with tension instead of friction. The
Nord-Lock X-series washers conical shape also creates an elastic
reserve in the bolted joint to compensate for the loss of preload
and prevent slackening. (www.nord-lock.com)
Battery-Powered Electromagnetic Flowmeter for
Remote Sites
Endress+Hausers newly released Proline Promag L800 battery-powered
electromagnetic owmeter is an ideal ow measurement device for water and
wastewater systems located at remote sites. The owmeter has an integrated
Global System for Mobile Communications and General Packet Radio Services
(GSM/GPRS) cellphone system that allows data, such as alarms or totalizer
counts, to be transmitted as e-mail over the cellular network. All the owmeter
needs is a cellphone Subscriber Identity Card (SIM card) from the local
cellphone provider. The owmeter can then be congured as a point-to-point
connection, or as a modem that can be openly accessed via the Internet
or a company intranet. Once congured, an operator at a central control
room can receive alarms, query totalizer readings, and change the owmeter
conguration. The owmeters built-in data logger saves data on a 2 GB SD
card. The owmeter can be congured to send emails periodically (such as once
a day) with an attached CSV le. It can be programmed to generate an alarm
email only if ow deviates from setpoint, eliminating the need for continuous
monitoring, and reducing cellphone charges.
The Proline Promag L800 uses three sets of size D lithium-thionyl chloride high-
power batteries that last for 15 years. The owmeter is available in sizes from 2
inches to 24 inches, operates at pressures up to 232 psi, and works with liquids
having a minimum conductivity 50 S/cm and a maximum ow rate of 33 ft/
sec. (www.us.endress.com/promag-400-800)
This guidebook exclusively features coal combustion coring biomass articles,
including full charts, photographs, graphs and step-by-step instructions,
previously featured in POWER magazine.
Table of Contents:
How accurate primary airow measurements improve plant performance
Research and development for future coal generation
Coal-red generation cost and performance trends
Apply the fundamentals to improve emissions performance
Designing and upgrading plants to blend coal
To optimize performance, begin at the pulverizer
Dynamic classiers improve pulverizer performance and more
Managing air to improve combustion e cienty
Boiler optimization increases fuel exibility
Finesing fuel neness
Boiler tuning basics, part I
Boiler tuning basics, part II
Blueprint your pulberizer for improved performance
Measuring coal pipe ow
Air preheater eal upgrades renew plant e ciency
The better environmental option:
dry ash conversion technology
Long-term catalyst health care
Catalyst regeneration: The business case
Constructing Marylands rst permitted landll
for coal combustion byproducts
A burning concern: Combustible dust
Proactive strategies for dealing with combustible dust
Designing and maintaining steam coil air preheaters
for reliability and eectiveness
Biomass coring: another way to clean your coal
OPG Charts move from coal to biomass
Drax oers model for coring biomass
Designing fuel systems for large biomass plants
Biomass coring: A promising new generation option
Available in a PDF format. 128 pages.
Coal Combustion & Cofiring
Biomass Guidebook
21384
Order your copy online at
www.powermag.com/powerpress
or call 888-707-5808
|
January 2013
60
Opportunities in Operations and Maintenance,
Project Engineering and Project Management,
Business and Project Development,
First-line Supervision to Executive Level Positions.
Employer pays fee. Send resumes to:
POWER PROFESSIONALS
P.O. Box 87875
Vancouver, WA 98687-7875
email: dwood@powerindustrycareers.com
(360) 260-0979 l (360) 253-5292
www.powerindustrycareers.com
READER SERVICE NUMBER 205
George H. Bodman
Pres. / Technical Advisor
Offce 1-800-286-6069
Offce (281) 359-4006
PO Box 5758 E-mail: blrclgdr@aol.com
Kingwood, TX 77325-5758 Fax (281) 359-4225
GEORGE H. BODMAN, INC.
Chemical cleaning advisory services for
boilers and balance of plant systems
BoilerCleaningDoctor.com
POWER PLANT BUYERS MART
Turbine Controls
Woodward, GE, MHC
Parts and Service
TurboGen (610) 631-3480
info@turbogen.net
READER SERVICE NUMBER 201 READER SERVICE NUMBER 202
NEED CABLE? FROM STOCK
Copper Power to 69KV; Bare ACSR & AAC Conductor
Underground UD-P & URD, Substation Control Shielded
and Non-shielded, Interlock Armor to 35KV, Thermocouple
BASIC WIRE & CABLE
Fax (773) 539-3500 Ph. (800) 227-4292
E-Mail: basicwire@basicwire.com
WEB SITE: www.basicwire.com
CONDENSER OR GENERATOR AIR COOLER TUBE PLUGS
THE CONKLIN SHERMAN COMPANY, INC.
Easy to install, saves time and money.
ADJUSTABLE PLUGS- all rubber with brass insert. Expand it,
install it, reverse action for tight t.
PUSH PULL PLUGS-are all rubber, simply push it in.
Sizes 0.530 O.D. to 2.035 O.D.
Tel: (203) 881-0190 Fax:(203)881-0178
E-mail: Conklin59@aol.com www.conklin-sherman.com
OVER ONE MILLION PLUGS SOLD
Coal power plant technology reduces parasitic load.Creates additional
available power with no additional coal required.Proven in operating plant
conditions. Sound patent position. Interested parties reply to:

Global Licensing Opportunity
P.O. Box 621
West Chester, Ohio 45071 or
globallicensingopportunity@yahoo.com
CONTACT Diane Hammes
PHONE 713-444-9939 FAX 512-213-4855 dianeh@powermag.com
CLASSIFIEDS
POWER
To Advertise in
CAREERS IN POWER
NAES Corporation is a leading provider of
3rd party O&M services to the Independent
Power Industry. As we continue to grow, we
have constant needs for power professionals
across the nation.
For more info, log onto:
www.naes.com/careers
CONDENSER BRUSHES-PLUGS-SCRAPERS
IN STOCK-SHIP TODAY-MADE IN THE USA
JOHN R. ROBINSON INC. Since 1907
Condenser and Heat Exchanger Tools & Services
Ph. 718-786-6088 Fax: 718-786-6090
Email: jrrinc@earthlink.net
www.johnrrobinsoninc.com
24 / 7 EMERGENCY SERVICE
BOILERS
20,000 - 400,000 #/Hr.
DIESEL & TURBINE GENERATORS
50 - 25,000 KW
GEARS & TURBINES
25 - 4000 HP
WE STOCK LARGE INVENTORIES OF:
Air Pre-Heaters Economizers Deaerators
Pumps Motors Fuel Oil Heating & Pump Sets
Valves Tubes Controls Compressors
Pulverizers Rental Boilers & Generators
847-541-5600 FAX: 847-541-1279
WEB SITE: www.wabashpower.com
FOR SALE/RENT
444 Carpenter Avenue, Wheeling, IL 60090
POWER
EQUIPMENT CO. wabash
Regardless of the surface, MoleMaster
has a media blasting solution for:
From Abrasive Blasting using a wide variety
of media to low-abrasive Dry Ice Blasting,
MoleMaster does it all safely and eficiently!
www.molemaster.com
Toll Free: 800.322.6653 Fax: 740.374.5908
info@molemaster.com
Media Blasting Services
Cleaning surfaces
Sanitizing surfaces
Preparing surfaces for painting
Routine cleaning or to remove smoke
and other surface stains
January 2013
|
POWER www.powermag.com
61
PRODUCT Showcase
Model A100
Plug Resistant
Orifice for critical
drain lines
CU Services LLC
725 Parkview Cir,
Elk Grove Vlg, Il 60007
Phone 847-439-2303
rcronfel@cuservices.net
www.cuservices.net
When a plugged
drain line would
mean disaster...
GAS TURBINES FOR SALE
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installation and service available
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Tel: +1 281.227.5687
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John.clifford@woodgroup.com
BUYERS GUIDE LISTING:
Sound Technologies
310 Commerce Square, Michigan City, IN 46360 USA
Phone: 2198792600 x3409
E-mail: s_schreeg@soundtech.us
Website: http://www.soundtech.us
Acoustics, Enclosures, Gas Turbine Exhaust Systems, Silencers,
Silencers (heat recovery)
Steve Elonka began chronicling the exploits of Marmaduke
Surfaceblowa ctional six-foot-four marine engineer with a
steel brush mustache and a foghorn voicein POWER in 1948,
when he raised the wooden mast of the SS Asia Sun with the help
of two cobras and a case of Sandpaper Gin. Surfaceblows simple
solutions to seemingly intractable plant problems remain time-
less. This anthology, rst published in 1979, highlights many of
Marmadukes exploits that occurred during his early years (pre-
WW I) through the 1960s.
Surfaceblows knowledge comes from hands-on expe-
rience operating steam power plants and
all manner of machinery. Later in the series
a son, Guy Newcomen Surfaceblow, was
introduced. He is a university-trained engi-
neer who also has eld experience that gives
him credibility when working with hard-boiled
characters in the boonies. The characters name
was coined from Marmaduke, a Scottish name,
and Surfaceblow, which is the action of remov-
ing impurities from a steam boiler.
In this book, available in a PDF download, you will
nd all of Surfaceblows adventures
consolidated into a single volume. Many of the
stories were inspired by actual events.
Available in a PDF format, 321 pages long.
Marmaduke Surfaceblows
Salty Technical Romances
Order your copy online at
www.powermag.com/powerpress
or call 888-707-5808.
20954
Burns & McDonnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. . . . . . . . . . . . . . . . . . . .3
www.burnsmcd.com
Cutsforth Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. . . . . . . . . . . . . . . . . . . .9
www.cutsforth.com
Enercon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38. . . . . . . . . . . . . . . . . . .12
www.enercon.com
Fluor Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21. . . . . . . . . . . . . . . . . . .11
www.fluor.com
Hitachi Power Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover 3. . . . . . . . . . . . . . . . . . .13
www.hitachipowersystems.us
TIC / Kiewit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. . . . . . . . . . . . . . . . . . . .2
www.tic-inc.com
Metalfab. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. . . . . . . . . . . . . . . . . . . .5
www.metalfabinc.com
Nol-Tec Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. . . . . . . . . . . . . . . . . . . .7
www.nol-tec.com
Pentair Valves & Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. . . . . . . . . . . . . . . . . . .10
www.pentair.com
Rentech. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover 2. . . . . . . . . . . . . . . . . . . .1
www.rentechboilers.com
Shaw Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. . . . . . . . . . . . . . . . . . . .4
www.shawgrp.com
Westinghouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CV4. . . . . . . . . . . . . . . . . . .14
www.westinghousenuclear.com
ADVERTISERS INDEX
Enter reader service numbers on the FREE Product Information Source card in this issue.
Page
Reader
Service
Number
CLASSIFIED ADVERTISING
Pages 60-61. To place a classified ad, contact Diane Hammes, 512-250-9555, dianeh@powermag.com
Technol ogi es f or coal - f i r ed power pl ant s ar e evol vi ng rapi dl y, and
COAL POWER has evol ved t oo. I n i t s l at est onl i ne f or mat you get
ever yt hi ng you val ued i n pr i nt and so much mor e:
Access t o COAL POWER wher ever you can use a br owser.
Techni cal ar t i cl es, coal power news, bl ogs, opi ni on, and i nf or mat i on.
Easy r et r i eval of ar chi ved COAL POWER f eat ur es.
I nst ant access t o our adver t i ser s f or mor e i nf or mat i on about t hei r pr oduct s.
The abi l i t y t o comment on st or i es and shar e your knowl edge wi t h t he
coal - bur ni ng power pl ant communi t y.
J ob boar d.
Subscr i be t oday f or e- mai l al er t s when each new i ssue i s post ed.
e- mai l : subscr i be@coal power mag. com
Then vi si t t he onl i ne home of COAL POWERwww. coal power mag. com
From the edi tors of POWER: The onl i ne magazi ne devoted to
the coal -fi red power generati on i ndustry
POWER
CP ad_7x4.875.indd 1 5/13/10 2:00:00 PM
January 2013
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15_PWR_010113_Classified_p60-63.indd 63 12/14/12 12:05:40 PM
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January 2013 64
COMMENTARY
The Electric Power Industry:
A Post-Election Assessment
By H. Sterling Burnett, PhD
W
ith the passing of the 2012 election, one is reminded
of the saying, The more things change, the more they
stay the same. This, of course, stems from the fact
that President Obama was reelected and both the Senate and
the House remain in control of the same parties that held power,
Democrats and Republicans respectively, before the election. For
at least the next two years, expect more of the same.
Nuclear
Nuclear power will see some modest growth in the medium
term. Even with no new reactors being built during the past 20
years in the U.S., the nuclear power industry has a great deal
to brag about. In 1980, the average nuclear plant operated
at 58.5% of its rated capacity. Todays nuclear plants average
more than 90% of capacity. Indeed, the increased electricity
produced by existing nuclear plants since 1990 could power 26
cities the size of Boston.
Nuclears improved performance, combined with a new genera-
tion of purportedly less-expensive reactors and renewed concerns
about Americas energy security has brought nuclear power con-
struction out of the postThree Mile Island mothballs. Still, the
industry is only likely to grow as long as the federal government
offers loan guarantees to back the construction of new reactors.
At the moment, four new reactors at two existing sites are in
various stages of construction and a fifth reactor that had been
mothballed during construction in 1985 is being finished out.
Twenty-two more are in various stages of the proposal and/or
planning processes. Many of these, however, wont be built for
two primary reasons: relatively high construction costs and low
natural gas prices that have undermined the push for new nuclear
power plants for the near future. In the push to fund core pro-
grams to reduce the deficit, loan guarantees, and other programs
that have helped restart the industry will likely be reducedif
theyre not zeroed out of the federal budget.
Coal
For coal, expect the bad news to keep on coming. In swing states
where the war on coal directly competed for votes with the
auto bailout, auto workers beat coal miners. The administra-
tions take-away message is likely to be that there are no seri-
ous repercussions for continuing to wage an assault on the coal
industry from mine mouth to power plant to port.
There were few bright spots for the coal power industry during
the Obama administrations first term. Every clean air regulation
that was made stricter had a disproportionate impact on coal
plants. These regulations combined with low natural gas prices
have made new coal plants undesirable from a cost perspective.
Both trends also have made a number of existing coal plants
unprofitable to operate and, in light of natural gas as an alterna-
tive, too expensive to upgrade to meet stricter air standards.
On the other end of the coal front, federal, state, and local
governments are actively working to block ports expansion that
would allow increased coal exports, while the Obama administra-
tion has taken steps to restrict mountaintop mining. New regu-
lations are in the pipeline that will make coal plants even less
viable.
Natural Gas
Although with little encouragement from the Obama administra-
tion, the natural gas industry has boomed over the past six years
as a result of the fracking revolution. This trend is likely to con-
tinue. President Obama needs the gas boom to continue because
its key to the administrations claims that the U.S. is on the road
to energy independence.
Despite his need for the natural gas boom to continue,
the president seems committed to making public lands less
accessible for oil and gas development. In addition, the
administration is threatening to raise costs to producers
by instituting nationwide fracking disclosure regulations.
States that desired more drilling transparency have shown
themselves more than capable of instituting disclosure regu-
lations. Federal regulations would be duplicative and unnec-
essarily reduce new production. Most fracking is carried out
by relatively small independent operators. While the largest
producers can afford the costs of the new regulations, many
smaller operators cannot. As a result, less gas will be pro-
duced, and the president will strike the very segment of the
economy that he has consistently claimed is the backbone of
economic recoverysmall businesses.
Having said this, the biggest threat to the fracking revolu-
tion is its own success. Large production increases have resulted
in extremely low pricesgood for consumers, not so much for
producers who are struggling to produce natural gas at a profit.
If this continues, more and more gas wells will be shuttered and
fewer new wells drilled until prices allow operators to cover the
costs of construction and continuing operations with a profit
thrown in.
Congress
In the end, although Senate Republicans are likely to offer a
number of bills to expand off-shore drilling and expedite domes-
tic production, few if any of these initiatives are likely to make
it out of the Senate. And unless some Republicans cross party
lines and support Senate Democratic energy legislation, gridlock
will continue. This is bad news because it will leave energy policy
to the whims of federal regulatory agencies. Legislation through
regulation is almost always bad for the energy industry, but es-
pecially so under the current regime.
H. Sterling Burnett, PhD (sterling.burnett@ncpa.org) is a
senior fellow at the National Center for Policy Analysis in Dallas.
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Vol. 157 No.

Achieving Zero Liquid Discharge

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