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    Vol. 156 No. 1 January 2012

    Closing Power andPipeline Gaps

    EPRIs R&D Plans

    China Sets Lofty Energy Goals

    New Tech for Job Safety

    Muscatine Wins PRBCUG Award

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    3/76January 2012 |POWER www.powermag.com 1

    ON THE COVERThe U.S. has plenty of fuel, but the infrastructure needed to deliver it to power plants andelectricity users is often absent or gappy. Renewables, including wind and solar, are abun-dant, but transmission lines dont always exist to carry renewable power to load centers.Estimated reserves of natural gas have increased, fueling hopes of a cleaner alternativeto coal, but getting that gas to processors and plants will require new pipelines. Fillingthese infrastructure gaps is expensivebut could be necessary. Cover art by Elizabeth C.Johnston, Lizzardbrand Inc.

    COVER STORY: 2012 INDUSTRY FORECAST26 U.S. Confronts Pipeline Gaps While Europe Juggles Renewables and Debt

    Hugely increased estimates of shale gas reserves and new federal pollution controlregulations have made gas the front-runner for new generation in the U.S., butgas will only win in the long run if new pipeline infrastructure can be put in place.Across the pond, renewables still shine brightly, but economic woes are puttinga strain on all new build plans. Its going to be an interesting year as potentialmeets practicality.

    SPECIAL REPORTS

    RESEARCH & DEVELOPMENT40 EPRI Bridges Industry R&D Gaps

    The senior VP for research and development at the Electric Power Research Insti-tute (EPRI) maps out six key innovation and research paths that his organizationis pursuing to help the electricity industry meet the challenges ahead. EPRI callsthem Long-Term Operations, Near-Zero Emissions, Renewable Resources andIntegration, Water Resource Management, Energy Efficiency (End-to-End), andSmart Grid.

    POWER IN CHINA

    50 Chinas 12th Five-Year Plan Pushes Power Industry in New DirectionsContributors from North China Electric Power University in Beijing provide in-sights into the power industry requirements of their countrys current Five-YearPlan: develop clean energy, optimize the production of coal-fired electricity,

    rationally allocate peaking power, develop distributed energy, and construct astrong and smart grid.

    Established 1882 Vol. 156 No. 1 January 2012

    Connect with POWERIf you like POWERmagazine, follow us

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    Web Exclusive: U.S. Military Smart Grid ActivitiesDont miss our coverage of one important agent in smart grid development: the U.S. military.

    If Pentagon spokespersons and the smart grid media are to be believed, we may see some of

    the most significant smart grid/electricity system developments come from the military in the

    next few years. Youll find The U.S. Military Gets Smart Grid associated with this issues

    features in our archives and on our home page in January at www.powermag.com.

    Looking for a fast way to access all of our smart grid coverage? Click the SmartGrid hot button at the top of the home page.

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    FEATURES

    PowdER RivER bASin coAl

    56 PRbcUG Sma Pat f the Year: Musate Per & waterA 293-MW municipal utility plant won the 2011 Small Plant Award from the PowderRiver Basin Coal Users Group (PRBCUG). Learn how an explosion shortly after con-verting to this volatile, low-sulfur coal prompted plant staff to join and learn fromthe PRBCUG how to successfully operate a plant that was not originally designedto handle PRB coal.

    PlAnT o&M

    60 navgat Aues ca-Fre Geerat operata Exeee AarsWant to make your coal-fired plant award-worthy? Check out previous award win-ners and learn about the criteria that one major consulting company uses to deter-mine whos a winner.

    woRKSiTE SAFETY

    62 Rea-tme Pratve Safety cstrutCollisions involving moving vehicles and equipment are the primary cause of con-struction injuries and deaths. In this article, the Construction Industry Institute in-troduces remote sensing and visualization technology that promises to improveworker situational awareness and save lives.

    dEPARTMEnTS

    SPEAKinG oF PowER

    6 My Tp 10 Prets fr 2012

    GlobAl MoniToR

    8 wr Eergy outk Freasts Great Reeaes Grth10 Austraa leves lamark car Tax10 nRc t impemet lesss leare frm Fukushma11 GE Uses Stee M Gases t Per Ture12 THE biG PicTURE: Gas Taxes

    14 PJM cmpetes Uque dua-Prmary ctr ceters14 PowER dgest

    FocUS on o&M

    16 leve Sthes Keep Eetrstat Preptatrs oe18 Asa Su-btumus ca Users Grup Frme20 ceser lfe cye Semar20 Marmauke Aar Trphy Presete23 crret

    lEGAl & REGUlAToRY

    24 Gree Tehgy = Gree Js?By Steven F. Greenwald and Jeffrey P. Gray, Davis Wright Tremaine LLP

    66 nEw PRodUcTS

    coMMEnTARY

    72 Uprag the Uttes By Dr. Paul M. Grant, IBM research staff member emeritus

    On the Web: International Solar Trade DisputeIts complicated. U.S.-China Solar Trade Dispute Gets Thornier in the Web Exclusives

    section of our home page at www.powermag.com helps you understand the myriad aspectsof this important issue. The story will also be associated with this issues Global Monitor.

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    EDITORIAL & PRODUCTIONEditor-in-Chief: Dr. Robert Peltier, PE

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    SPEAKING OF POWER

    My Top 10 Predictions for 2012T

    he New Year will be pivotal for thepower generation industry, as youwill read in our 2012 Industry Fore-

    cast (p. 26) and my list of predictionsbelow. Looking back over the past year, Iagain gave myself a B+ on my 2011 pre-dictions (see p. 33 for a rundown of myindividual scores).

    10. The Kyoto Protocol Dies. The KyotoProtocol will expire on December 31, 2012.

    Canada, Japan, and Russia have said theywill not participate in a renewed agree-ment; the U.S. never signed on to Kyotoin the first place; and India is preoccupiedwith growing its economy. The chance fora new multilateral agreement is nil.

    9. Fracking Regulations Increase. TheEnvironmental Protection Agency (EPA)and Department of Energy (DOE) will pro-duce a series of rules that will tangibly re-duce the number of natural gas wells thatuse fracking technology to reach naturalgas resources located deep underground.

    8. Coal Combustion Residuals RuleDelayed, Again. The EPAs proposed rule,first published in June 2010, describes tworegulatory options: classify ash as a nonhaz-ardous or as a hazardous waste. A final rule,delayed multiple times, is now predicted for amid-2012 release. Insiders say the EPA wantsto make a hazardous determination, butothers in the Obama administration recog-nize that such a determination is politicallyintemperate before the November election.Like the unpopular ozone rule, the EPA willkick the decision into 2013.

    7. Cooling Water Intake Structure RuleGoes Live. This rule, affecting the coolingwater systems of 670 power plants, effec-tively eliminates the use of once-throughcooling for any new plant additions andrequires current users to make modifica-tions to existing systems to reduce thenumber of aquatic organisms enteringthe cooling water system. The rule will befinalized mid-year, forcing some existingplants to install cooling towers.

    6. Grid Reliability Trumps EPA AirQuality Rules. The North American Electric

    Reliability Councils recent grid reliabilityreport determined that the EPAs new airquality rules may significantly affect bulk

    power system reliability depending on thescope and timing of the rule implementa-tion and the mechanisms in place to pre-serve reliability. The EPA denies the ruleswill have any effect on system reliability.I predict this standoff will continue untilan independent analysis, perhaps by theFederal Energy Regulatory Commission

    (definitely not the DOE, which has sidedwith the EPA on this issue). That analysiswill conclude that the impact of new EPArules has a significant impact on systemreliability in regions with large amounts ofcoal-fired generation or excessive trans-mission congestion.

    5. 1603 Treasury Grant Program Will NotBe Renewed. The popularity of a programthat writes a check for 30% of the cost of aproject and has disbursed $9.8 billion to dateto mostly wind and solar project developersis obvious: It is always better to get yourmoney up front. In a recent press release,the Spanish company Iberdrola Renewablesnoted its unprecedented success in obtain-ing these cash grantsover $1 billion sinceSeptember 2009. Congress will not renew theprogram when it expires on December 31,2011, or at any time during 2012.

    4. More Companies with DOE LoanGuarantees Will Fail. On the heels of the$500 million loss incurred by taxpayerswhen Solyndra failed, expect additionalbankruptcies by companies that receivedDOE-approved loan guarantees. A recentGovernment Accountability Office auditfound that 50% of the loan guarantees itexamined were issued before full reviewswere conducted, just as with Solyndra.When the losses reach several billion dol-lars, DOE Secretary Steven Chu will becomethe administrations scapegoat, leaving

    his job before the November elections.3. Production Tax Credits Will Not Be Re-

    newed. Developers are racing to complete a

    record number of projects before December31, 2012, when the production tax credit(PTC) expires. However, the project queuefor 2013 and beyond is empty. If the windindustry cant survive with the current levelof subsidies and volume of production, thenwhen? After 20 years, it is time for the windindustry to wean itself from government sub-

    sidies and accept the fact that Congress willnot renew the PTC in 2012.

    2. MACT Rules Will Be Delayed andRewritten. The proposed utility MACT rulewas released in April 2010 and made finalin February 2011. A largely revised rulethat corrected known flaws was re-re-

    leased on December 2. Unfortunately, thenew rule still requires compliance whencompliance is largely impossible by mostcoal-fired utilities. I predict that becausethis rule is said to eliminate between200,000 and 400,000 jobs or more, if youbelieve the more dire predictions, therewill be sufficient congressional biparti-san support for a rewrite that will achievesimilar results while providing a realisticcompliance schedule.

    1. GHG Lawsuits Prevail. Two days oforal arguments are scheduled to begin on

    February 28 before the U.S. Court of Ap-peals for the D.C. Circuit in response tothe lawsuits filed by Texas on May 24, andjoined by 14 states, challenging the EPAsgreenhouse gas (GHG) endangerment find-ing and tailoring rule. I predict the plain-tiffs will prevail in these lawsuits againstthe EPA, although a final resolution willsurely rest with the Supreme Court, per-haps in 2013.

    I dont expect everyone to agree witheach of my predictions. If you have strongfeelings, aye or nay, let me know at editor@

    powermag.com. Dr. Robert Peltier, PEis POWERs

    editor-in-chief

    Expect additional bankruptcies by companiesthat received DOE-approved loan guarantees.

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    World Energy OutlookForecasts GreatRenewables Growth

    Driven by policies to limit carbon emissions, as well as govern-ment subsidies, the share of worldwide nonhydro renewable poweris set to grow from just 3% in 2009 to 15% in 2035, the Interna-tional Energy Agency (IEA) forecasts in its recently released WorldEnergy Outlook 2011. Under the same scenariowhich assumesthat carbon pricing, explicit or implicit, is adopted in developedcountries as well as Chinacoal will continue to reign as theworlds largest source of power globally in 2035, but to a muchlesser extent, falling from 41% to 33% (Figure 1). Power fromoil will become a rarity, as it drops from 5% in 2009 to 1.5% in2035, and the percentage of power from natural gas, hydro, andnuclear will remain relatively constant throughout the period, at22%, 16%, and 13% respectively, the report says.

    Demand for power is forecast to continue its upward trend,

    even though in 2009 demand fell by an unprecedented 0.7%in response to the global economic slowdown. In the New Poli-cies Scenario, which assumes carbon pricing in only developedcountries and China, demand will grow by four-fifths, at 2.4%to over 31,700 TWh in 2035. If current policies are continued,as assumed in the Current Policies scenario, demand will double,and under the 450 Scenario, which assumes carbon policies areimplemented in every country, it will increase by almost two-thirds. Nearly 80% of demand growth will occur in developingcountries, with China and India representing two-thirds of thatgrowth. Industry will remain the largest power-consuming sector,with residential use following close behind. Even with widespreaduse of electric vehicles, as is envisioned by 2035, transportation

    will only account for about 2% of total demand.Coal power will double in developing countriesfar outweigh-ing a fall in developed countries, particularly in the EuropeanUnion (EU), where it plunges by two-thirds as a result of the EUscarbon emissions trading program. (See The Big Picture on p.12 for more on carbon taxes.) In the U.S., even under the NewPolicies Scenario, coal will remain comparatively stable, dropping

    just 3% between 2009 and 2035. Chinas share of coal power isalso expected to drop from 79% in 2009 to 56% in 2020, but inIndia, coal use is projected to almost triple.

    The IEA projects that more-efficient coal-fired plants will be builtthrough 2035, including ultrasupercritical designs and integratedgasification combined cycle plants, driven by increases in coal pricesand reductions in the capital costs of advanced coal technologies. Asa result, the average global thermal efficiency of coal plants increasesby four percentage points, from 38% in 2009 to 42% in 2035, thereport says. By 2035, 65 GW of coal capacity will be equipped withcarbon capture and storage, though related technologies only be-come competitive with other generation technologies closer to 2035,and only in regions that have adopted a carbon price.

    Natural gasfired generation will grow from 4,300 TWh in 2009to a little over 7,900 TWh in 2035 under the New Policies Sce-nario, with much of that growth occurring in China (one-fifth),

    the Middle East (one-fifth), and India (one-tenth). Gas generationwill also grow in developed countries, spurred by efficiency im-provements and carbon pricing that will make gas power competi-tive with coal. Combined cycle gas turbines (CCGT) will remain thedominant gas-fired generation technology (over 60% of growth ingas-fired generation will be produced by CCGT plants), but use ofopen-cycle gas turbines is also forecast to more than double.

    The nuclear accident in Japan resulted in retirement plans forall nuclear plants in Germany by the end of 2022, no lifetime ex-tensions or new plants in Switzerland, decommissioning of Units1 to 4 and no construction of new units at the Fukushima Daiichisite, and delays in capacity additions in China. In the wake of theJapanese disaster, financing may become more difficult to secure

    for nuclear projects worldwide, leading to an increased cost ofcapital, the IEA forecasts. Compared to figures published in the2010 Outlook, expected construction costs have risen by 5% to10%. Even so, many countries will press ahead with plans for newnuclear, though short-term delays are expected. Globally, nuclearpower capacity is projected to rise in the New Policies Scenariofrom 393 GW in 2009 to 630 GW in 2035just some 20 GW lowerthan projected in the previous years Outlook.

    Renewables expand significantly in all three scenariosand

    10,000

    8,000

    6,000

    4,000

    2,000

    0

    GW

    2010 2015 2020 2025 2030 2035

    Total installed capacity Existing 2010 capacity

    Capacity additions:

    Renewables Nuclear Oil Gas Coal

    1. Policies prime renewable pump. According the Interna-tional Energy Agencys (IEAs) World Energy Outlook 2011 the share of

    renewables in global installed power generation capacity and additions

    in the New Policies Scenario is poised to surge to 15% in 2035, from

    3% in 2009. Courtesy: IEA

    2. Continued support. Global subsidies to renewables-basedelectricity and biofuels by region in the New Policies Scenario are set to

    increase, with renewable subsidies increasing from $66 billion in 2010

    (compared with $409 billion for fossil fuels) to $250 billion in 2035, theInternational Energy Agency says. Courtesy: IEA

    250

    200

    150

    100

    50

    0

    Billiondollars(2010)

    2015 2020 2025 2030 20352007 2008 2009 2010

    Rest of world India China United States European Union

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    especially in the New Policies Scenario, where they triple, from3,900 TWh in 2009 to 11,100 TWh in 2035, driven by governmentpolicies, including subsidies (Figure 2). The bulk of this growthcomes from wind and hydro (about 33% each); biomass accountsfor about 17% and solar photovoltaic (PV) for about 10% of allrenewable generation.

    The U.S., China, EU, and India will see the most wind growth(almost 75%) and about 70% of solar PV growth. Ultimately,China will be the worlds leading onshore wind power producer.The IEA suggests that solar PV is also set to grow tremendously,at a rate of 15% per year until 2035. The EU currently accountsfor about 75% of global solar PV generation. Europe will continueto see strong growth over the next few years, but between 2020and 2035, the increases in solar PV generation in China, the U.S.,and India will each be larger than in the EU.

    Hydropower has already been developed extensively in manydeveloping countries, and there is limited remaining potential,given the costs and environmental constraints, the report says.Developing countries will see 85% of new hydro capacity addi-tions, with China, India, and Brazil making more than half ofthose additions. Biomass power plants grow at an average annual

    rate of 6.5%, which results in a five-fold growth in output overthe Outlookperiod, from 288 TWh in 2009 to 1,500 TWh in 2035.Again, the bulk of that growth will come from developing coun-tries, with China and India leading the pack.

    Australia Levies Landmark Carbon TaxAfter more than a decade debating whether to pass a carbon-limitinglaw, Australias Senate in November voted in a landmark bill that willimpose a price on carbon emissions. The country, which accounts forjust 1.5% of global carbon emissions, but which is the worlds highestemitter per capita because 80% of its power comes from coal-firedgeneration, has become the second major economy behind the Euro-

    pean Union to pass such a measure. (See The Big Picture on p. 12for other countries with carbon taxes.)The legislation sets a fixed carbon tax of A$23 (US$23.78) per

    metric ton on the top 500 polluters beginning July 2012. Increas-ing 2.5% annually, the tax will then move to an emissions tradingscheme with a floating-rate price from July 2015. Government is ex-pected to limit or increase the amount of tradable permits releasedevery year, and companies could then be able to trade carbon creditswith similar systems in New Zealand and Europe. Europe currentlytrades carbon emissions from between $8.70 and $12.60 a metricton, a price significantly lowered by the ailing global economy.

    Spurred by a further A$10 billion funding in clean energy, theprogram is expected to spark multi-billion-dollar investments in

    natural gas and renewable power (though not, pointedly, in car-bon capture and storage plants) to replace Australias coal plants.According to the Australian Coal Associationwhich said the taxpackage had fatal flawsthe nation relies heavily on brown

    (soft lignite) and black (lower sulfur and ash) coal for electricpower. Large black coal plants, which fire 57% of Australias gen-eration, are located near extensive black coalfields in both NewSouth Wales and Queensland as well as in Western Australia. Browncoalfired baseload power stations are located in Victorias LatrobeValley. South Australia also relies heavily on subbituminous coalmined at Leigh Creek in the north of that state.

    The country is the worlds largest exporter of coal: In 2010, blackcoal bought by countries including Japan, China, South Korea, andIndia brought in A$43 billion (US $43.96 billion)or 15% of Austra-lias exports of goods and services, second only to iron ore.

    Because coal forms such a major part of Australias economic back-bone, government regulation of emitted carbon has been a hotlycontentious issue. The unpopularity and eventual fall in 2007 offormer Prime Minister John Howard, a conservative, and the LaborPartys Kevin Rudd in 2010 have both been imputed to dissentionover the tax. Current Prime Minister Julia Gillard hailed the taxs pas-sage, which followed 37 parliamentary inquiries, and years of bitterdebate and division, she told reporters in November.

    The Senate passed the tax by 36 to 32 votes after the Austra-lian Greens Party supported the Gillard-led minority Labor gov-

    ernment. The measure was part of an 18-bill package, which hadpassed the lower house of Parliament by a narrow margin of justtwo votes. Opposition leader Tony Abbott has pledged to repealthe law if he wins the prime ministerial post in late 2013.

    NRC to Implement Lessons Learnedfrom FukushimaThe U.S. Nuclear Regulatory Commission (NRC) in October direct-ed staff to begin implementing seven safety recommendationsput forth by the federal bodys Near-Term Task Force on lessonslearned from the nuclear accident at Tokyo Electric Power Co.sDaiichi power plant in Japans Fukushima prefecture last March.

    The recommendations affecting all 104 nuclear reactors (Figure3) in the U.S. could be in place by April 2014, but experts haveurged that implementation of the rules be expedited.

    The Task Force released its recommendations in July last year, pro-viding a proposal to the NRC, which selected the seven recommenda-tions that could be immediately implemented. According to the NRC,the mitigation strategy requirements could use performance-basedstandards in any new or revised regulations when possible.

    The seven recommendations cover loss of all AC power at areactor that could prompt a station blackout, reviews of seis-mic and flooding hazards, emergency equipment, and plant staff

    Online: The Latest in theInternational Solar Trade DisputeIf you think the main reasons the U.S. is lagging in photovolta-

    ics manufacturing are labor costs and Chinese subsidies, youre

    missing a big part of the picture. See U.S.-China Solar Trade

    Dispute Gets Thornier in the Web Exclusives section of our

    home page at www.powermag.com. The story will also be asso-ciated with this issues Global Monitor in the archives.

    3. Lessons learned.The Nuclear Regulatory Commission (NRC)

    will begin implementing at all 104 U.S. reactors recommendations made

    by a task force that was commissioned to identify lessons learned from

    the Fukushima nuclear accident in Japan. The accident has renewed

    NRC scrutiny and public pushback against older plants like Indian Point

    (shown here) in Winchester County, N.Y. Courtesy: Entergy

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    training. They prescribe that:

    The NRC require licensees to reevaluate and upgrade as neces-sary design-basis seismic and flooding protection of structure,systems, and components for each reactor in operation.

    The NRC require licensees to perform seismic and flood pro-tection walkdowns to identify and address plant-specific vul-nerabilities and adequacy of monitoring and maintenance forprotection features. These include watertight barriers and sealsin the interim.

    The NRC order licensees to provide reasonable protectionfor equipment from effects of design-basis external events.It could also require licensees to add equipment to addressmulti-unit events.

    The NRC strengthen station blackout mitigation capability atall operating and new reactors for design-basis and beyond-design-basis external events.

    The NRC order licensees to include reliable hardened wetwellvents in BWR Mark I and Mark II containments.

    The NRC strengthen and integrate onsite emergency responsecapabilities such as emergency operating procedures and se-

    vere accident management guidelines. The NRC require facility emergency plans to address prolonged

    station blackout and multiunit events.

    The measures are critical even though a similar sequence ofevents in the U.S. is unlikely because existing mitigation mea-sures could reduce the likelihood of core damage and radiologicalreleases, NRC Commissioner George Apostolakis told attendeesat a recent Eurosafe conference in November.

    The Great East Japan Earthquakea 3-minute, magnitude 9.0temblorgenerated a series of tsunami waves as tall as 38.9meters (130 feet), killed more than 25,000 people, and set offthe worst nuclear disaster in 25 years. At Daiichi, a 15-meter

    (49-foot) tsunami inundated and disabled the offsite power sup-ply (12 of 13 backup generators located in the basements ofthe turbine buildings) of three units, interrupting critical coolingfunctions. The tsunami also disabled their heat exchangers andelectrical switchgear. All three units consequently saw explosionsthat damaged their reactor buildings. It was also later estab-lished that the cores of Daiichi 1, 2, and 3 had largely meltedwithin the first three days of the crisis.

    The accident was not of extremely low probabilitythatis, it was not unthinkable, Apostolakis told attendees. Thetsunami hazard was underestimated, critical equipmentwas located in lower plant elevations, and a flooding riskcould have identified existing vulnerabilities, he said. But,

    he added, Rather than spending resources on analyzing ex-tremely rare events, we should focus on ensuring the correct-ness of the design basis.

    GE Uses Steel Mill Gases to Power Turbine

    The worlds steel industry is power-hungry. Using energy bothto supply heat and power for plant operations and as a rawmaterial for the production of blast furnace coke, the sectoruses a major fraction of the worlds total energy consump-tion. Chinas steel and iron sectors have been mushroomingon the back of skyrocketing demand, fed by an economy thathas been growing at 9% annually for 10 years.

    According to Chinese academics, the nations steel and ironmanufacturers energy demand reached more than 490 milliontons of coal equivalentor more than 17% of the total national

    energy consumption in 2008. Chinas iron and steel industry pro-duces 11% of its total carbon dioxide emissions (compared to 5%worldwide). They also suggest that 95% of these emissions arecaused by combustion of fossil fuels.

    Enter engineers at GE Energy in November, who said theyhad found a way to turn some of steels biggest liabili-ties into assets. The solution involves an improvisation onan old method to convert carbon- and hydrogen-rich wastegreenhouse gases into electricity. And they plan to put itinto effect in a newly ordered project at the 170-MW power

    plant at Handan Iron & Steels mill in Handan City, China.GE says that the project will capture, clean, and compressthe blast furnace and coke oven gases generated during thesteel-making process and feed it to GEs giant 9E Heavy-DutyGas Turbine (Figure 4)a technology that will reportedlyproduce enough electricity to potentially turn an average-size steel mill into a net power generator.

    The plant can go from being a parasitic facility to essentiallya utility, says GE Energys Ryan Derouin. If they are in thatutility-island mode, they can start selling power back to the gridor send it to other parts of the plant. It gives the owner op-tions. The technology also has the potential to nearly halve theelectricity cost for Handan, from the market rate of $100/MW

    to as low as $60/MW, Derouin says. It could also allow the millto lower costs, boost profitability, and gain a competitive edge,especially in a market with low grid reliability.

    The project has been challenging. One issue encountered wasthat waste gases at Handan vary in quality and contain too littleof the heat-packing hydrogen to make the gases burn effectivelyby themselves. Instead of redesigning the plant, engineers optedto redesign the fuel, finding a clever way to clean, compress, andmix gases to power the huge turbine. This is the lowest qualityfuel weve ever even considered burning, said Keiran Coulton,president of GE Energy, Global Industries.

    The Handan project is not unique: In 2010, GE rolled outtwo GE 9E turbines at Wuhan Iron & Steel, and it claims that

    so far, the turbines have increased Wuhans energy efficiencyby 25% to 40% on average and lowered carbon dioxide emis-sions by about 2 million tons.

    4. From parasitic facility to utility. A GE project at the 170-MW power plant at Handan Iron & Steels mill in Handan City, China,

    promises to capture blast furnace and coke oven gases generated dur-

    ing steel manufacture and convert them into power. This image shows

    assembly of the massive GE 9E gas turbine. Courtesy: GE

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    THE BIG PICTURE: Gas TaxesAfter years of political wrangling, coal-rich Australia in November passed legislation that will require thenations top 500 polluters, starting in July 2012, to pay a tax at a fixed price of A$23 (US$23.50) per tonof carbon. The tax increases 2.5% annually until 2015, when an emissions trading program will begin. Withthe Kyoto Treaty set to expire at the end of this year, several governments have in recent years implement-

    ed similar measures on manufacturers and power companies. Otherslike South Africa, China, South Korea,Taiwan, and Francehave proposed or are considering taxes on carbon emissions. See the web exclusivestory associated with this issue at www.powermag.com for an in-depth look at the worlds carbon taxes.

    Finland:The worlds first carbon/energy tax (1990).

    Sweden:A tax on carbon emissions (1991). Tax does notapply to fuels used for power generation.

    Norway:A 1991 tax on hydrocarbon fuels (petroleum, diesel, and gas).

    The Netherlands:A general fuel taxon fossil fuels (1992).

    Costa Rica:A 1997 carbon tax on hydrocarbon fuels. Somerevenues used for environmental restoration efforts.

    UK:A climate change levy in 2001 on the use of energyin the industry, commerce, and public sectors.

    U.S.:Colorados City of Boulder (April 2007), Californias Bay Area AirQuality Management District (May 2008), and Montgomery County,Md. (May 2010) have imposed a tax on carbon emissions.

    Canada:Quebec began collecting a tax on hydrocarbons in Oct. 2007. British Colum-bia implemented a revenue-neutral carbon tax in 2008. Albertas July 2007 levy taxescompanies that emit more than 100,000 metric tons of greenhouse gases annually.

    India:Levy on produced and imported coal (2010).

    Australia:Carbon tax on major polluters

    to take effect in July 2012.

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    PJM Completes UniqueDual-Primary ControlCentersSwift technology developments in thepower sector and increasingly sophis-ticated security threats have promptedregional transmission organization PJMInterconnection to switch from its agingcentrally dispatched legacy system totwo state-of-the-art primary controlcenters as part of its $200 million Ad-vanced Control Center (AC2) program.

    The grid operator that serves parts ofthe Eastern Interconnection and admin-isters a $35 billion wholesale electricitymarket said in November, when the swi-tchover was completed, that the pro-gram was developed through more thanfive years of design, development, andtesting. It was initiated in 2006 withSiemens Power Transmission & Distribu-

    tion to define and develop a secure ar-chitecture and open messaging platformfor modern, large-scale energy manage-ment and market management systems.

    Primary reasons PJM opted to sailahead with the initiative were to reducetotal cost of ownership by technologystandardization and to upgrade its sys-tems to new standards for security andresiliency because PJMs membershiphad more than doubled since its legacysystems were installed. Another reasonwas that the grid entity realized inno-

    vations beyond marginal improvementsin existing control systems would benecessary to maintain power reliability,it said.

    Essentially, the AC2program reducesrisk because the two fully staffed pri-mary control centers better ensure un-interrupted operation of markets andgrid control if functionality were lost at

    either center, PJM said (Figure 5). Thescalable, service-oriented architecture(SOA) for large energy management/market management systems promotesinteroperability that cannot be foundin proprietary, legacy systems, it said.The SOA-based system provides a com-mon approach for software applicationsand computer-based infrastructure toexchange data and information. It alsoallows technology from other vendors tocommunicate and interoperate withoutspecial adaptation.

    PJM said it is the only grid opera-tor in the U.S.and only one of threeworldwide, including the British ColumbiaTransmission Corp. and Transpower in NewZealandto have or have considered dualprimary control centers. The uniquenessof this PJM implementation is found intwo elementsthe scale across the busi-

    ness enterprise and, most importantly, itsuse in real-time monitoring and controlsystems. While SOA has a proven history inother industries as the backbone of trans-action-based software applications, to ourknowledge, this is the first demonstrateddeployment for real-time electric and mar-ket systems, PJM spokesperson PaulaDuPont-Kidd told POWER in November.

    Fran Barret, director of the AC2 pro-gram, explained that this approach isan enterprise solution with a strategictechnological direction: management

    of data and smart grid integration. Theprogram has enabled PJM to deploy anddemonstrate the approach across its En-ergy Management & Market ManagementSystems and its Innovation platform.PJMs customer-facing applications areexpected to follow this direction as partof natural enhancement and replace-ment programs.

    POWER DigestSouth Korea, China Poised to Make

    Colossal Investments in Wind Pow-er. South Korea, a nation that recentlyannounced it would spend 1 trillionwon ($884 million) on feed-in tariffsfor wind and solar projects, on Nov. 10said it planned to invest 10.2 trillionwon ($9 billion) in a 2.5-GW offshorewind farm that could come online by2019. The government-led project willbe led by Korea Electric Power Corp.,which will procure turbines from eightlocal suppliers, the Ministry of Knowl-edge Economy said. The project could

    be located off the southwest coast ofthe Korean peninsula in Jeollabukdoand Jeollanamdo provinces. It will in-

    clude construction of 100-MW and 400-MW demonstration farms by 2014 and2016 respectively, where eight Koreansuppliersincluding Doosan Heavy In-dustries and Construction Co., DaewooShipbuilding & Marine EngineeringCo., and Hyundai Heavy Industrieswill test 3-MW to 7-MW turbines.

    Also in November, Chinas NationalDevelopment Reform Energy ResearchInstitute published its 2050 wind pow-er plan, a report that predicts totalinstalled wind capacity in the countrywill hit 400 GW by 2030 and 1,000 GWby 2050. China intends to back its windindustry with investments of up to $12trillion yuan ($1.8 trillion) to supply17% of domestic demand with wind by2050. China, which offers a fixed pric-ing mechanism for wind power and of-fers subsidies, has already become the

    worlds biggest wind power market. Itinstalled nearly 19 GW of new capac-ity in 2010, bringing total capacity to44.7 GW.

    GE, MetCap to Build New GasPlant, Extend Novel Integrated Re-newables Gas Project.GE and Turk-ish energy company MetCap EnergyInvestments on Nov. 18 announcedtheir investment in the 878-MW Eurostarproject, a gas-fired plant that will help,starting in 2014, to power Istanbul,supporting Turkeys efforts to modernize

    its aging energy infrastructure and meetits growing electricity requirements.MetCap also announced approval

    from the Turkish government to nearlydouble the output of what it calls theworlds first integrated renewables com-bined-cycle (IRCC) plant by 2016. Theinitial phase of the Dervish IRCC plantin Karaman, Turkey, was announced inJune and is based on GEs breakthroughFlexEfficiency 50 combined cycle tech-nology (see our Dec. 2011 feature storyon this turbine). The license extension

    allows energy output to be increasedfrom 570 MW to 1,080 MW. GEs Flex-Efficiency IRCC plant includes a next-generation 50-hertz 9FB gas turbine, asteam turbine, a generator, 22 MW ofGE wind turbines, and 50 MW of eSolarconcentrated solar thermal tower tech-nology. The Dervish license extensionalso paves the way for a second plantusing GEs FlexEfficiency technologyand eSolars concentrated solar powertechnologies.

    UK Opens Largest CCS Pilot. The

    UK formally opened its largest carboncapture and storage (CCS) project onNov. 30 at the Ferrybridge Power Station

    5. Two ways about it. PJM completed a$200 million program that essentially replaces

    an aging centrally dispatched legacy systemwith two state-of-the-art primary control cen-

    ters. Courtesy: PJM

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    in West Yorkshire. The 21 million ($33million) project was built by SwedensVattenfall, technology supplier Doo-san Power Systems, and UK utility SSE,which is also owner and operator of theFerrybridge coal-fired power plant. Thepilot uses an amine solvent to captureabout 100 metric tons of carbon dioxideper day from a flue gas slipstream cor-responding to 5 MWe. This makes thescale of the project ideal for bridgingthe gap between the various laborato-ry-scale trials that are under way andlarger-scale demonstration projects,Vattenfall said.

    NTPC Puts Second of Three 500-MW Coal Units Online. Indias state-owned NTPC groupalso the countryslargest power companyon Nov. 5 in-augurated Unit 2 of the 500-MW IndiraGandhi Super Thermal Project at Jhajjar

    and said its capacity has now risen to35,354 MW. The Indira Gandhi projectis a 1,500-MW coal-fired plant underdevelopment in Haryana State and com-prises three units. Unit 1 came onlinein November 2010; Unit 3 is scheduledto be completed in January 2012. NTPC,set up in 1975, now has 15 coal-fired,

    seven gas-fired, and six shared projectsacross India. Though recently strickenby a critical coal shortage, NTPC saidit is working on projects to boost itscapacity to 128,000 MW by 2032.

    Siemens Hands Over 870-MWDutch Gas Plant. After a constructionperiod of only 30 monthsand 20 daysahead of scheduleSiemens Energy onOct. 21 officially handed over the 870-MW Enecogen combined cycle powerplant in the Netherlands to a joint ven-ture company created by Dutch utilityEneco and the Danish company DONGEnergy. The plant is located in the in-dustrial zone in the port of Rotterdam.It consists of two single-shaft unitsand attains an efficiency significantlyabove 59.5%, Siemens claimed.

    Siemens erected the plant as a turn-key project and supplied two SGT5-

    4000F gas turbines, two SST5-5000steam turbines, two hydrogen-cooledgenerators, and the entire electricaland SPPA-T3000 instrumentation andcontrol equipment. The plants unitsare designed for 290 starts per year andreach full load after approximately 50minutes. In tandem with CO2-free wind

    turbines, whose feed-in fluctuates withwind availability, the plant can quicklycompensate the required capacity, thecompany said.

    Mongstad CCS Technology Bid-ders Chosen. Norwegian companiesGassnova and Statoil in Novemberrevived the full-scale carbon captureproject at the existing Mongstad com-bined heat and power plant in Norway.Companies selected to participate inthe technology qualification programinclude: Mitsubishi Heavy Indus-tries, Alstom Carbon Capture GmbH,Siemens AG, Aker Clean Carbon, andHuaneng-CERI Powerspan Joint Ven-ture. The purpose of the technologyqualification program is to qualify atleast one technology and demonstratethat it can be scaled up. The qualifica-tion program will be divided into three

    phases: a feasibility study, demonstra-tion, and a concept phase for design offull-scale capture. Selection of the finaltechnology could be made as soon as2014. Norways parliament is expectedto review and approve a final invest-ment decision in 2016.

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    Level SwitchesKeep ElectrostaticPrecipitators Online

    Measuring the level of dust and fly ash col-lected in electrostatic precipitators (ESPs)is a very difficult technical problem. At oneutility, level switches were so unreliablethat operators could not trust their readingsbecause failures were so frequent. When aswitch did fail, the precipitator would oftenclog up, costing the utility up to $100,000in downtime and repair costs.

    Recycling Coal Combustion ProductsElectric power is the primary industry thatburns coal. Coal combustion to produce elec-tricity usually yields quantities of noncom-

    bustible minerals that require disposal. Thecoal combustion products that remain aftercombustion, such as fly ash, bottom ash, andflue gas desulfurization gypsum, have provento be economical, high-quality raw materialfeedstock for several other industries.

    Fly ash is a good example of a poten-tially valuable and profitable by-product.Fly ash is a powdery material that wouldfly out of power plant stacks if it werenot captured. Today, most modern powerplants collect their fly ash to meet en-vironmental regulations, but that fly ash

    can be profitably recycled.Fly ash is composed primarily of inor-ganic noncombustible minerals such as

    alumina, silica, and iron. It exists as avery finely divided, silt-sized particulatethat is removed from combustion gases byusing various types of collection equip-ment, such as ESPs and baghouses. Flyash is also very abrasive. Bottom ash hasa similar chemical composition to fly ash,although the bottom ash is larger, gener-ally ranging in size from sand to gravel.

    Fly ash can be recycled to producemany materials. For example, it can beused in structural fill and in land devel-opment, building materials, and highwayconstruction. Fly ash is also used in met-als recovery, the manufacture of agricul-tural fertilizers, and as plastics filler. Manycoal-fired power plants find it profitable

    to sell coal combustion products to othercompanies, as it adds to their bottom line,and ESPs are the best way to capture andcollect fly ash and related products.

    Precipitators Remove Fly AshAn ESP is a large, industrial emission con-trol unit that collects and removes dustparticles from the exhaust gas stream of apower plant. Cleaned gas then passes outof the ESP and through the stack to theatmosphere. ESPs typically collect 99.9%or more of the dust or fly ash from the gas

    stream (Figure 1).The ESP functions by placing a positivecharge on a system of collecting plates

    that are placed directly in the exhaustgas stream. A discharge electrode placedat the inlet of the ESP places a nega-tive charge on the particulates in the gasstream as the gas enters the device. Theopposite charge polarity acts like a mag-net that pulls the particulates from thegas to the collecting plates. Rappers dis-lodge the ash from the collecting plates,causing the ash to fall into hoppers below.The dust is removed by a conveyor systemfor disposal or recycling (Figure 2).

    Automating the operation of an ESP is acomplex but necessary requirement for theentire air quality control system to oper-ate efficiently. For the ESP, an essentialcontrol element is measuring the level of

    fly ash collected in the hoppers. The se-lection of the right level switch is critical,especially if the precipitator has multiplehoppers.

    Level Measurement ProblemsAt one coal-fired power plant in the Mid-west, the failure of an older-design pointlevel device resulted in damage to a pre-cipitator that cost $100,000 to repairnot counting lost electricity production,which is often worth several times thecost of repairs. The plant had been using

    old and unreliable capacitance probes thatoften produced nuisance trips. Plant op-erators soon did not trust the level controlinformation the devices were supposed tobe providing.

    The low reliability of these older technol-ogy devices was probably a result of hightemperatures, insufficient surface area on

    1. Dust collection device. The electrostatic precipitator (ESP) removes dust and ashfrom the exhaust products of a coal combustion process and drops the material into hoppers

    below. One of the challenges in operating an ESP is measuring the level of fly ash in the hot

    collection hoppers. Source: Endress+Hauser

    DeNox system

    Electrostatic precipitator

    Flue gas desulfurization

    2. Many ESP options. There are manysizes, types, and designs of ESP. Selection

    of the right device is determined by the ash

    and dust characteristics and the gas volume

    treated, among the many other design require-ments. Very large power plants may have mul-

    tiple ESPs for each unit or may use a single

    ESP for two units. Courtesy: Endress+Hauser

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    the probe for the low dielectric constant,inability of the devices to withstand thephysical rigors of the application, or somecombination of these reasons. After con-sidering its control device options, theutility installed an Endress+Hauser FTI77level switch (Figure 3) on the precipitatorto replace the failed capacitance sensor.The installation was so successful thatthe utility is planning to install two FTI77switches on all 16 of its precipitators.

    For this application, a level switch thatis designed for point level detection athigh temperatures in bulk solids, similarto that found in the ESP hoppers, is thebest choice. Another good feature is theswitchs active buildup compensation thatdetects and compensates when fly ash

    accumulates around the probe, facilitat-ing safe switching. This level switch canalso withstand a maximum load or lateralstress of up to 590 ft-lb, making it suit-able for fly ash hopper applications. Italso has a sword probe instead of a roundprobe, which increases the surface areaof capacitance, improving performance inlow dielectric applications, such as fly ashlevel measurement. Additionally, the de-sign prohibits fly ash from entering theelectronics housing should probe damage

    occur, eliminating the possibility of anystatic electricity discharges.

    When installing point level sensors,users must be concerned about spacelimitations. Most precipitator hoppersare grouped tightly together with limitedclearance. This switch requires that probesbe a minimum of 20 inches apart. Thethreaded coupling should be as short aspossible, because condensation or productbuild-up can adversely affect operation ina long-threaded coupling (Figure 4).

    3. Well-designed switch. The FTI77level switch is ideal for precipitators, because

    it works in high temperatures and has a com-pensation circuit for ash buildup on the sen-

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    High temperatures can occur in a flyash hopper, so users must insulate theexternal wall to prevent exceeding themaximum temperature of the sensorhousing. Heat insulation also preventscondensation from forming. The sensorshould not be placed directly under the

    filling point; instead, it should be in-stalled to the side, where it will not besubject to direct impacts.

    In July 2011, the U.S. EnvironmentalProtection Agency announced the Cross-State Air Pollution Rule, which requires27 states to significantly improve airquality by reducing power plant emis-sions that contribute to particle pol-lution in other states. This new rulewill require many existing coal-burningpower plants to upgrade their air qual-ity control systems. Many plants willadd an ESP to improve fly ash collectionand reduce particulate emissions. Thoseprecipitators will work well, providedthe hoppers dont clog up because thewrong level sensor was installed.

    Ravi Jethra([email protected]) is power and energy business

    manager andKeith Rileyis level product

    manager for Endress+Hauser Inc.

    Asian Sub-Bituminous CoalUsers Group FormedOver the past 11 years, the Powder Riv-er Basin Coal Users Group (PRBCUG)has grown to become the voice of NorthAmerican generating companies that are

    dedicated to the safe and efficient use ofPRB coal. POWER, the groups media spon-sor, has reported on the PRBCUGs annualmeetings, which are colocated with theELECTRIC POWER Conference & Exhibitioneach year. POWER also reports annually onthe groups coal plant of the year award.For 2011, in the large plant category theaward went to Kansas City Power & LightsIatan Unit 2 (see our August 2011 issue);the small plant category winner, Musca-tine Power & Water, is profiled in this is-sue, beginning on page 56.

    Members discuss and trade insightsconcerning the safe and efficient han-dling and burning of PRB coal during theirthree-and-a-half-day annual meeting. An-other goal of the group is to educate fu-ture users about the peculiarities of PRBcoal. The multi-day forum is highly inter-active and designed to network peers so

    that industry lessons learned are shared.Today, the typical PRBCUG annual meetingwill have about 400 attendees.

    Linking SBC UsersNorth America is not the only region wheresubbituminous coal (SBC) is available. Infact, many coal-fired power plants in Asia

    4. Level switch installed. A typical in-stallation of a solids level switch in a fly ash

    hopper. Courtesy: Endress+Hauser

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    are or wish to become users of SBC, suchas that found in Indonesia, for the same

    reasons as North American users: lowerNOx and SO2 emissions levels.To begin a discussion of how to han-

    dle SBC coals in other parts of the world,POWER and the PRBCUG, acting as thelead conference organizers, cooperatedto bring more than 200 Asian SBC userstogether for two days in early November

    at Hong Kongs Harbour Grand Hotel forthe inaugural meeting of the Asian Sub-

    Bituminous Coal Users Group (ASBC, Fig-ure 5).The founding members of the ASBC are

    the major users of SBC in Asia: CLP Group(a Hong Kong electric company with plantsin Asia and Australia); Hong Kong ElectricCo., Ltd. (HK Electric); Taiwan Power Co.;Korea South-East Power Co., Ltd.; and

    Tenaga Nasional Berhad (TNB, the larg-est electric utility in Malaysia). A Steering

    Council, represented by senior manage-ment of the ASBC founding members andone representative from the PRBCUG ex-ecutive committee, is providing leadershipand direction for the group.

    S.S. Yuen, director of operations forHK Electric (ASBC co-host with CLP Pow-er) called the first meeting a landmark

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    5. ASBC inaugural meeting. The first annual meeting of the Asian Sub-Bituminous Coal Users Group was held November 1 and 2, 2011,in Hong Kong. For more information on the next meeting, visit www.asiansbcusers.com. Source: POWER

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    event for Asian companies that use SBCcoal to produce electricity. In Asia, wenotice that a number of coal-fired powerstations, like the founding members ofthis Asian SBC Users Group, have beenincreasing their consumption of subbi-tuminous coals due to its low sulfur andlow ash content properties, which havepositive impacts on emissions, Yuensaid in his opening comments to theconference. However, there are someconcerns over the operational risks ofusing SBC. Being responsible operators,we shall all look for best practices inthe industry and keep pace with the lat-est technology development in the usesof SBC.

    In this context, we fully support thatan SBC users group should be formed inthe Asia region to promote the safe, ef-ficient, and economic use of subbitumi-

    nous coals. The Asian SBC Users Groupwill definitely be an excellent forum for allAsian operators to learn from each otherthrough a web-based forum and annualmeetings.

    Yuen then identified the decade ofwork by the PRBCUG to develop proce-dures for ensuring safe and efficient useof SBC, and the groups willingness toshare lessons learned, as key reasonsthe ASBC was formed. I was told by mycolleagues who had participated in thelast two conference meetings in Balti-

    more and Chicago that the conferencemeetings were very good and useful. Ourcolleagues were very impressed with thepresentations made by the participantswho selflessly shared their experiencesin handling subbituminous coals, es-pecially during the session for teach-able moments. Most of the participantswould agree that they were not alonein having bitter experiences in handlingsubbituminous coal, and they couldlearn from other generating companieswhich had taken preventive measures

    proactively to tackle the problems. I amsure that the good tradition of PRB CoalUsers Group will be passed on to theAsian SBC Users Group, and the Asianexperiences would also be beneficial tothe PRB Coal Users Group in the yearsto come.

    Paul Poon, chief operating officer ofconference cosponsor CLP Power, also ex-pressed his great interest in forming theASBC because there are many users locat-ed across the Pacific Rim that fire the low-sulfur coal. The group was formed this

    year with the aim of providing a forum forsharing technical and operational experi-ence amongst Asian power utilities, he

    said. Currently, we have major subbitumi-nous coal users from Hong Kong, Taiwan,Korea, Thailand, Philippines, and Malay-

    sia. The group serves as a platform topromote safe handling, storage, and useof subbituminous coal, which is becomingmore popular because of environmentalconcerns.

    Poon also noted the technical chal-lenges facing CLP Power and the othercompanies represented at the confer-ence when making a switch to SBC.When switching to subbituminous coalat a plant not originally designed for it,enhancement or retrofits may be need-ed. The first thing is to improve the

    coal-handling system because subbi-tuminous coal is prone to spontaneouscombustion and is dusty. Preventively,we can provide more fire and coal dustcontrol equipment in our system. Pro-actively, we can strengthen the coalplant housekeeping and use fuel addi-tives to suppress the spontaneous com-bustion.

    Good Technical ContentPresenters at the inaugural ASBC meet-ing included members of the PRBCUG

    and those working with SBC in Asia. Forexample, Jasper Tan, manager of coalstorage and supply for Taiwan Power Co.,presented The Role of Sub-BituminousCoal in the Operation of Taichung PowerPlant. He discussed the fuel supply sys-tem for his 10-unit coal-fired plant witha nameplate of 5,500 MW that suppliesabout 20% of TPCs total generation.The 2.3 million metric ton coal pile isalso large scale, covering 170 acres. Theplant has been slowly ramping up itsuse of SBC over the past few years. Tan

    discussed both challenges (such as airheater plugging) and successes (includ-ing lower NOx and SO2 emissions) experi-

    enced during the plants long-term fuelupgrade program.

    Other presentations included Lamma

    Power Station Units 4 & 5 Improve-ment of Boiler Performance and Emis-sion in 2010 by Hong Kong ElectricCo., Ltd. and Experience in Retrofit-ting Fire and Dust Control Equipmentfor Coal Unloading Equipment by CLP.The former presentation discussed thelow-NOx burners, mills, and boiler con-trol upgrades added to the plant inorder to burn SBC. CLPs presentationincluded two detailed case studies thatdescribed the utilitys extensive coal-handling system upgrades made to ac-

    commodate SBC.

    Second Meeting PlannedThe ASBC Steering Council is now settingthe date and location for the secondannual ASBC meeting. Meeting informa-tion will soon be posted on the groupswebsite, www.asiansbcusers.com.

    Contributed by Vice President andPOWER PublisherBrian Nessen.

    Marmaduke Award TrophyPresented

    The 2011 Marmaduke Award winner wasCTG Universidad, a two-unit combustionturbine plant built in the early 1970s inMonterrey, Mexico. The award was madeto the plant in recognition of its upgradeof one 14-MW unit to operate as a syn-chronous condenser, thus relaxing powerrestrictions caused by a lack of sufficientreactive power production in the north ofthe city. More reactive power productionby this urban plant also allows deliveryof more power produced by efficient com-bined cycle plants located outside the city,

    because it reduces the amount of reactivepower that must be moved over transmis-sion lines.

    Condenser Life Cycle Seminar

    The November issue of POWER featured

    a special section titled Condenser Life

    Cycle. That set of four articles covered

    topics including condenser performance,

    operation and maintenance (O&M), fail-

    ure mechanisms, and retubingtopicsyou will surely find useful at some time in

    your career. The authors of those four ar-

    ticles work for companies that are part of

    a coalition that sponsors the annual Con-

    denser Life Cycle Seminar. Unfortunately,

    a notice about the next seminar was omit-

    ted from the first article.

    If you are interested in details about

    the selection or O&M of steam surface

    condensers, then the 2012 Condenser

    Life Cycle Seminar is for you. The confer-

    encescheduled for Feb. 1315, 2012, atthe Hilton Palacio del Rio in San Antonio,

    Texasis the place to meet and interact

    with condenser specialists and get real-

    world answers to your tough condenser

    questions. For more information, visit

    www.condenserseminar.com.

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    Details of how the combustion tur-bine was repurposed and saved fromshutdown and can be found in CFE Ex-

    tends CTG Universidad Unit 2s Life withConversion to Synchronous Condenser,in our August 2011 issue or the archivesat www.powermag.com.

    Editor-in-Chief Dr. Robert Peltier andVice President and POWER PublisherBrian Nessen visited CTG Universidadon November 5 to present the Marma-

    duke Award trophy to the plant staff(Figure 6) and to Comisin Federal deElectricidad executives who supportedthe project (Figure 7). Our thanks toCFE for their hospitality and for mak-ing our visit to their plant a memorableexperience.

    Correction

    In Siemens Releases ShapingPower Op-tion for Renewables Integration (Decem-ber 2011), the Figure 3 callouts for windand solar were reversed. POWERregrets theerror. A corrected version can be found inthe online version of the article.

    7. Trophy presentation. At the trophy presentation (left to right): CFE executives Eu-genio Garca Macas, Lino Crdenas Villarreal, Alejandro Salazar Abraham, and Luis Alberto Rojo

    Garca; Vice President and POWERPublisher Brian Nessen and Editor-in-Chief Robert Peltier;

    and CFEs Luis Gonzalo Murrietta Rivera. Courtesy: SSSClutch Co., Inc.

    6. Talented and dedicated staff. Thestaff of CTG Universidad and other CFE em-

    ployees who were responsible for the suc-

    cess of the project pose on the plants Unit

    1 combustion turbine floor with POWERs

    editor-in-chief and publisher. Courtesy: CFE

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    Steven F. Greenwald Jeffrey P. Gray

    Green Technology =Green Jobs?By Steven F. Greenwald and Jeff rey P. Gray

    In discussing implementation by the California Public UtilitiesCommission (CPUC) of Californias new renewable energy law,CPUC Commissioner Timothy Alan Simon urged consideration

    of the economic, technical, and political consequences of theCPUCs actions: Renewable energy is a fuel sourceits not areligion. The promotion of renewable energy remains critical,but as Commissioner Simon admonishes, public policy and in-vestments advancing renewable energy must be based on soundeconomics and physics rather than religious incantations.

    Searching for solutions to our nations persistent and unacceptablelevels of unemployment, political, labor, and environmental leadershave religiously embraced the easily accepted, but unproven, asser-tion that taxpayer investments in a green economy create green jobs.President Barack Obama emphasized the creation of green jobs inexecuting the American Recovery and Reinvestment Act (ARRA).Governor Jerry Brown similarly promised that the California renew-able legislation mandate for green technologies would create tensof thousands of new jobs. California regulators have discriminatedagainst out-of-state renewable resources, rationalizing that such ex-clusionary practices will promote in-state green jobs. The BlueGreenAlliance, a partnership of labor unions and environmental organi-zations dedicated to expanding . . . jobs in the green economy,

    reported that ARRAs green investments as of year-end 2010 hadcreated or saved nearly 1 million jobs.

    The Energy Industry Is Capital IntensivePromises and claims of green job creation ignore the fundamentaleconomics of the energy industry. Regardless of the fuel selectedto generate power, energy production is capital, not labor, inten-sive. The fuel choice has negligible impact on the employmentconsequences of a new power plant. Construction of a renewablepower plant creates construction jobs and the associated mul-tiplier effects in the local economy. However, these benefitsare transitory and largely undistinguishable from the short-termstimulus any large-scale infrastructure project, such as restoration

    of highway bridges or the strengthening of levees, provides.Moreover, green power plants offer only a minute number of

    long-term employment opportunities. Modern generating facilities,particularly those using renewable resources, can exploit the mostadvanced technologies with the intent to lower costs by reducingthe number of operators. Wind and solar projects can essentiallyeliminate any labor requirements related to fuel supply. If the ob-jective of energy policy is job creation, we should prioritize newoil and natural gas pipelines, whose construction lasts many years,and nuclear power plants, where safety concerns and associatedregulations dictate certain levels of redundant employees.

    The Green Economy Will Promote Technology Jobs

    The commercial growth of renewable power will serve as a cata-lyst for employment in the development and manufacturing of thetechnological and physical components of generating facilities.

    However, there is no reason that these employment gains will be ingeographic areas proximate to the renewable generation. Nothingunique about the production of components for renewable powerfacilities dictates that they be produced within our shores.

    The U.S. will attract and retain jobs for producing wind turbinesand solar panels based on the same economically competitive cir-cumstances that make the country attractive or unattractive forthe production of silicon chips and cell phones. The fact that a

    job is created by the green economy will not, by itself, overcome

    the cost, educational, and regulatory impediments that are in-hibiting domestic employment in other technological areas.Sound energy policy is critical to enhancing employment op-

    portunities. Production facilities are increasingly energy-inten-sive and ever-more dependent on enhanced electric reliability.Our ability to provide reliable energy at competitive prices mustbe a critical component of any jobs policy. While ideally, in thelong term, renewable energy will be a positive contributor tothese necessary goals, in the short term, the transition to renew-able energy is likely to increase prices and present system opera-tors with unprecedented challenges to maintaining reliability.

    In 1973, President Richard Nixon launched Project Indepen-dence with the objective that, by 1980, the nation could meet

    Americas energy needs from Americas own energy resources.However, the ensuing decades have demonstrated that achievingsuch energy objectives demands difficult trade-offs among cost,reliability, environmental, and safety objectives. These dynamicshave frustrated our governmental entities in their efforts to im-plement sustained, integrated, and consistent energy initiatives.Adding jobs promotion as another piece of the energy policy puz-zle injects a largely irrelevant, but highly political, distraction.

    Renewable energy must remain an indispensable element of ournations energy policy and future. We should not expose futuregenerations to the long-term geopolitical and environmental costsof remaining a fossil fueldependent society. Green economy pro-ponents, however, should understand that promoting renewable

    energy as an effective means to combat double-digit unemploy-mentwhile politically expedient to enact legislation and winelectionsis a risky and inherently short-term strategy. Any in-ability of renewable power to generate the promised employmentgrowth will be seized by competing politicians to challenge theentire concept of renewable power. Renewable energy is simply tooimportant to be reduced to just another vacuous political slogan.

    Renewable power advocates would do better to rememberCommissioner Simons teaching: Renewable energy is not a re-ligion. The multiplicity of economic and environmental benefitsthat renewable power offers as a fuel choice, independent ofillusory promises of green jobs, warrant that it remain the criti-cal building block of our nations energy future.

    Steven F. Greenwald([email protected]) andJeffrey P. Gray([email protected]) are partners in the Davis

    Wright Tremaine LLP Energy Practice Group.

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  • 8/3/2019 International January 2012

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    2012 INDUSTRY FORECAST

    U.S. Confronts Pipeline Gaps WhileEurope Juggles Renewables and DebtU.S. optimism has been restored by reports of abundant, reasonably priced nat-

    ural gas to fuel most new generation; however, huge gaps in the fuel deliv-ery system (thousands of miles of pipelines are needed) will soon challengegas plant development. Meanwhile, the cloud of sovereign debt hangs overall major capital projects in Europe, where the UK moves ahead with newnuclear projects while many of its neighbors shut the door on nuclear andstruggle to finance their commitment to renewables.

    By Kennedy Maize, Charles Butcher, and Dr. Robert Peltier, PE

    Its the economy, stupid. That pun-

    gent phrase coined by legendarypolitico James Carville guided the

    successful 1992 presidential campaign of

    Bill Clinton. Today, 20 years later, Carvilles

    dictum might well serve as the guidepost for

    another presidential campaign and for the na-

    tions energy future.

    In the past four years, the U.S. has seen an

    uneven recovery from a deep recession to no

    or extremely slow growth, with 2011 shap-

    ing up as a disappointing year, but one with

    real economic growth. Goldman Sachs Inc.

    has estimated 2011s gross domestic product

    (GDP) growth at a rather anemic 1.5%. Third-quarter GDP growth was just 1%, and Gold-

    man predicted the final quarter will be only

    slightly higher. Electricity production growth

    for the year looks to be a meager 0.3%.

    The shape of the economy for 2012 is

    unclear, although few economists predict

    boom times. Last summer, the great fear was

    a steep decline in the economy, a double-

    dip recession, with a return to the economic

    downturn of 20072008. Wall Street odds

    makers were pegging the chances of a double

    dipper at about 35%. However, that has not

    happened, and anxiety about a return to re-cession has receded. In November 2011, the

    U.S. Federal Reserve Bank lowered its fore-

    cast for economic growth through 2013 but

    did not predict economic decline ahead, only

    more slow growth. As a result, the Fed said it

    would take no new steps to stimulate growth

    in the worlds largest economy. The U.S. cen-

    tral bank predicted economic growth of 2.5%

    to 2.9% in 2012, considerably below its 3.3%

    to 3.7% forecast in June last year.

    Private forecasters are also predicting slow

    but positive economic growth for the U.S.

    economy. JP Morgan is pegging growth at0.5% for the first quarter of 2012. Citigroup is

    projecting 2012 GDP will increase by 2.1%.

    Defining Our Times

    The National Bureau of Economic Research,the recorder of U.S. economic growth, defines

    a recession as a significant decline in economic

    activity spread across the economy, lasting more

    than a few months, normally visible in real

    GDP, real income, employment, industrial pro-

    duction, and wholesale-retail sales. In concrete

    terms, the generally accepted rule of thumb for a

    recession is two consecutive quarters of declin-

    ing GDP. In a recent survey of 39 economists by

    USA Today, only one predicted a drop in GDP

    in any of the coming five quarters. Recession is

    not our base case, but you have to consider other

    outcomes, investment analyst Janney Mont-gomery Scott told the newspaper.

    Last April, in its Annual Energy Outlook,

    the Department of Energys Energy Informa-

    tion Administration (DOEs IEA) noted that

    2010 economic growth partially offset the

    decline in 2009. The EIAs best estimate of

    2011 economic growth was 2.7%; its low

    estimate was just over 2%, and its high case

    was over 3.0%. Since then, the EIA has scaled

    back its growth assumptions even further. In its

    September short-term outlook, the statistical

    agency said it is now assuming that U.S. real

    gross domestic product grows by 1.5 percentthis year [2011] and 1.9 percent next year.

    The EIA notes that the economy drives

    energy use: Energy consumption per capita

    declined from 337 million Btu in 2007 to 308

    million Btu in 2009, the lowest level since

    1967. In the [ Annual En