Friday, Apr 27, 2018
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Energy

Natural-gas industry gains steam

Coal, nuclear plants are no longer competitive in Ohio

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    The Oregon Clean Energy Plant on North Lallendorf Road has been approved but is not yet operating as a natural-gas fired power plant. It is set to open in May.

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    FirstEnergy sold its 707-megawatt Fremont Energy Center in Sandusky Township near Fremont to American Municipal Power, a nonprofit municipal utilities group.

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During his address to Congress last week, President Trump repeated his campaign promises about restoring the U.S. coal industry to its former prominence.

But an electronic map that can pinpoint every Ohio power plant fueled by either natural gas or coal makes it clear that the future of coal is dim and the future of natural gas is bright.

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FirstEnergy sold its 707-megawatt Fremont Energy Center in Sandusky Township near Fremont to American Municipal Power, a nonprofit municipal utilities group.

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Ohio has 15 coal plants capable of producing 15,322 megawatts of electricity, according to the map on the website of the U.S. Energy Information Administration. There are 33 plants in Ohio using natural gas-fired plants producing electricity. They produce 9,449 megawatts, as many were built to serve limited areas or used only at times of peak demand.

The Public Utilities Commission of Ohio approved in the past two years five more gas-fired plants that can produce 4,115 megawatts and is about to receive plans for five more plants that could produce 5,545 megawatts of power. One such plant to be in operation in May is the 800-megawatt Oregon Energy Center plant, developed by Massachusetts-based Clean Energy Future LLC at a cost of $860 million. And announced last month was an adjacent Clean Energy Future plant to cost $900 million and generate 955 megawatts.

Natural-gas fired plants are sprouting and are helping to render traditional coal and nuclear power plants noncompetitive. Their growing presence was cited last month by top officials of Toledo Edison’s parent company, FirstEnergy Corp., of Akron, as part of the reason they plant to sell or close some of their traditional power plants.

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The gas-fueled plants are changing the electricity grid landscape.

The cost of producing power explains why. A conventional coal plant spends $95.10 to produce a megawatt-hour of power — which can power 1,000 homes. A conventional natural gas plant with combined cycle turbines can do it for $75.20, according to a government analysis. A nuclear plant spends $95.20, a hydroelectric plant $83.50.

When extensive environmental controls are added the gap is wider. A coal plant with carbon capture and storage features spends $144.40 to make a megawatt-hour, a gas-fired plant with such carbon capture features $100.20.

In just a few years, the generation capacity of gas-fired plants in Ohio will total 19,109 megawatts.

The explanation for the switch to gas from coal is simple: natural gas is cleaner than coal, it has fewer emissions problems, and the fuel has become abundant and is cheaper to use than coal, said Thad Huetteman, leader of the Electricity Analysis Team at the Energy Information Administration.

Massive natural gas deposits were identified in the Marcellus and Utica shale regions of eastern Ohio, southern Pennsylvania, and northern West Virginia and fracking technology has allowed access to those deposits since the mid-2000s.

Less than 10 years ago, coal power plants generated about half of the electricity in the United States, but now they are closer to a third, Mr. Huetteman said. Natural gas surpassed coal as the main fuel for producing power in 2015, federal data show.

Natural gas was estimated to have provided 34 percent of the U.S. electricity generation in 2016, coal 30 percent, nuclear 19, and renewables 15 percent.

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The Oregon Clean Energy Plant on North Lallendorf Road has been approved but is not yet operating as a natural-gas fired power plant. It is set to open in May.

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While the abundance of natural gas — some estimates say the Marcellus and Utica shale supplies could last up to 90 years — and environmental regulations have made the resource a primary choice for power generation, said Chris Pilong, manager of dispatch for Valley Forge, Pa.-based PJM Interconnection, the independent operator that controls the electrical grid for much of the eastern United States, including Ohio.

Coal plants have faced tough emissions regulations, prompted expensive retrofitting or closure of the plants, he said. Since 2011, nearly 200 coal-fired plants nationwide have been closed or were slated for closure, according to the Sierra Club.

No coal plants on tap

In 2011, FirstEnergy closed its 568-megawatt R.E. Burger coal-fueled electricity plant at Shadyside, Ohio. The next year it closed six coal plants, including two units of its Bay Shore plant in the Toledo suburb of Oregon. FirstEnergy attributed its decision to environmental regulations that had made the plants too costly to operate.

The last coal plant to begin operating in Ohio, the William H. Zimmer plant near Cincinnati, opened in 1991. No new applications are pending before the PUCO for a coal plant and, Mr. Pilong said, none are within PJM’s 13-state, 62,000-mile regional transmission territory.

“Natural gas, on the other hand, is really popping up all over the place,” he said.

That change is also affecting jobs, as many fewer are needed to run a gas-fired power plant than a coal or nuclear plant.

A typical gas-fired power plant looks something like a missile complex. It can have two or more giant gas-fed turbines that suck in air, compress it, mix it with the gas, then ignite it. 

The mixture heats and expands, forcing the super-heated air through sets of large turbine blades that generate current. Older “simple-cycle” plants allow the escaping heated air to vent into the atmosphere through a large exhaust tower. Newer “combined-cycle” units use that hot air to boil water into steam and generate additional power.

A large gas-fired power plant needs only about four workers to operate most of the time. By contrast, a coal-fired steam plant might need up to 150 workers and a nuclear plant with one reactor might need up to 400 people.

FirstEnergy, which bet heavily on coal and nuclear power, owned three gas-fired plants in northwest Ohio. But in 2011 it sold its 707-megawatt Fremont Energy Center in Sandusky Township near Fremont to American Municipal Power Inc. of Ohio, a nonprofit municipal utilities group. That same year it sold its 444-megawatt Richland plant near Defiance and its 20-megawatt Stryker plant in Stryker to Quintana Capital Group LP.

Last month, FirstEnergy said it may leave the competitive generation business in Ohio by mid-2018 by selling or closing its two nuclear plants in Ohio, including the Davis-Besse nuclear power plant near Oak Harbor, because they no longer can compete in the power marketplace. It means the utility also would sell or close its 58-year-old Bay Shore power plant in Oregon, which has one remaining unit in operation that runs on petroleum coke, and its massive 2,233-megawatt W.H. Sammis coal-fired plant in eastern Ohio.

The utility said its power plants are no longer as profitable as they once were back when utilities’ power prices were regulated and before the fracking boom fueled a wave of new gas-fired power plants.

The future for generating electricity does not seem to be nuclear. Building nuclear power plants, which run even cleaner than gas plants, is not an option. A nuclear plant spends more than a gas-fired plant — though not more than coal — to generate a megawatt of power. Construction is cost-prohibitive — between 2002 and 2008 the cost estimates for new nuclear plant construction rose from between $2 billion and $4 billion per unit to $9 billion per unit — according to a 2009 report by the Union of Concerned Scientists.

Coal under fire

This isn’t the first time natural gas threatened to relegate coal to the sidelines.

In 1999, natural gas prices tumbled significantly, prompting a large investment in gas-fired plants to provide some regular or “baseload” power but mainly to serve as supplementary or “peaking” power.

At one time, 16 such plants were built in Ohio, fed by natural gas supplies from the Gulf of Mexico region in the United States. Subsequently, natural gas prices spiked, which had a chilling effect on gas-fired plant construction and usage. Then, fracking and the Marcellus and Utica discoveries changed that.

Mr. Huetteman said that even when coal and natural gas prices are comparable, gas-fired plants run more efficiently and thus are preferred.

Gas and coal generation are roughly equal in PJM’s territory now, about 60,000 megawatts each, Mr. Pilong said.

As for stemming the tide of coal plant closings by eased regulations, as President Trump has promised, Mr. Pilong said he doesn’t see coal plants making much of a comeback.

“There would have to be some huge subsidies to make coal competitive again. It seems like from public opinion everyone wants things to be clean. They want clean energy,” Mr. Pilong said. 

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.

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