Transcript Winter Outlook

CHALLENGES FOR COAL POWER PLANTS
Kentucky Member Services Association Meeting
October 14, 2009
Presented by Jacky Preslar
General Manager, Fuel Supply
Tennessee Valley Authority
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Background – Coal Power Plants
Source: DOE – Energy Information Agency
Number of U.S. Coal Units
1,458 Units
(located at approximately 600 plant sites)
Average Age of the U.S. Fleet
36 Years (as of 2009)
U.S. Coal Plant Capacity
312 Gig watts
Percent of U.S. Electricity Supply
31% of Total U.S. Capacity
49% of Total Supply
Number of KY Coal Units
KY Coal Plant Capacity
54 units
(@ 20 plant sites)
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16.5 Gig watts
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The Big Picture
The Reality:
Coal Fired Electricity Generation Can Not and Will Not Be Displaced Near Term
How Long Before It Gets Displaced?
It Depends:
Could be - in next 20 to 40 years
or
If managed properly - will not be in the foreseeable future
Depends On What?
It Depends, Upon How
Long It Can Remain Economically Viable
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Challenges To Economic Viability
1. Utility Regulatory Compliance Costs
•
•
•
Air Emissions
•
SO2 & NOx – Current understanding is good – Technology proven & available
•
Mercury – Original regulation rejected July 2008/pending – Technology available/not fully
proven
•
CO2 - Legislation pending/expected in next 12 months – To scale technology not proven
Water Emissions
•
Hydro Thermal – Legislation possible forcing closed loop cooling system – Technology
proven and available
Coal Combustion By-Products
•
Disposal – Legislation possible forcing by-products to be classified as hazardous/expect in
next 2 to 3 months
2. Coal Mining Industry
•
•
Regulatory Compliance Cost
•
Mine Safety (post Sago/Crandall Canyon) – Implementation underway – some technology
still not proven – additional legislation expected
•
Mountain Top Removal - Legislation likely – impacting up to 40% of Central Appalachian
production
•
Permitting – Regulatory environment uncertain – additional requirements expected
Financial Health •
Industry Consolidations – Driven by ability to find money and ability to make money
3. Remaining Competitive With Alternative Fuel Supply
Combined cycle combustion turbine plants will displace coal when natural gas drop to prices that are
less than $5 to $6 per million btu.
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Other Challenges
1. Renewable Portfolio Standard (RPS)
•
Mandated Renewables – Legislation possible forcing a percent of utilities generation provided by
renewable resources / expected in new 12 to 24 months -
2. Global Demand for U.S. Coal Supplies
•
Coal has become a global commodity – weak U.S. Dollar and quality of U.S. coal makes it
attractive
3. Public Perception
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Considerations – Things To Do
Navigating The Uncertainties Will Require:
1. Proactively engage the regulators
2. Develop strategic relationships between generation companies and
coal suppliers
3. Coal generation companies must make strategic investments in
order to create competitive leverage with coal and transportation
suppliers
4. Educate the public – communicate, communicate, communicate
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APPENDIX
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Appendix – Coal Units in Kentucky
Nameplate
Capacity
(Megawatt
State Plant Name
s)
Company
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
Elmer Smith
Elmer Smith
East Bend
Cooper
Cooper
Dale
Dale
Dale
Dale
H L Spurlock
H L Spurlock
H L Spurlock
Big Sandy
Big Sandy
282.1 City of Owensboro
163.2 City of Owensboro
669.3 Duke Energy Kentucky Inc
230.4 East Kentucky Power Coop,
113.6 East Kentucky Power Coop,
81 East Kentucky Power Coop,
27 East Kentucky Power Coop,
27 East Kentucky Power Coop,
81 East Kentucky Power Coop,
357.6 East Kentucky Power Coop,
592.1 East Kentucky Power Coop,
329.4 East Kentucky Power Coop,
280.5 Kentucky Power Co
816.3 Kentucky Power Co
KY
E W Brown
446.3 Kentucky Utilities Co
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
E W Brown
E W Brown
Ghent
Ghent
Ghent
Ghent
Green River
Green River
Tyrone
Cane Run
Cane Run
Cane Run
Mill Creek
Mill Creek
Mill Creek
Mill Creek
Trimble County
County
Inc
Inc
Inc
Inc
Inc
Inc
Inc
Inc
Inc
179.5 Kentucky Utilities Co
113.6 Kentucky Utilities Co
556.3 Kentucky Utilities Co
556.9 Kentucky Utilities Co
556.5 Kentucky Utilities Co
556.2 Kentucky Utilities Co
75 Kentucky Utilities Co
113.6 Kentucky Utilities Co
75 Kentucky Utilities Co
272 Louisville Gas & Electric Co
209.4 Louisville Gas & Electric Co
163.2 Louisville Gas & Electric Co
355.5 Louisville Gas & Electric Co
355.5 Louisville Gas & Electric Co
543.6 Louisville Gas & Electric Co
462.6 Louisville Gas & Electric Co
566.1 Louisville Gas & Electric Co
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State
Nameplate
Capacity
(Megawatt
Plant Name
s)
Company
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
KY
Paradise
Paradise
Paradise
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
Shawnee
D B Wilson
Mercer
KY
HMP&L Station
Two Henderson
185 Western Kentucky Energy Corp Henderson
KY
HMP&L Station
Two Henderson
180 Western Kentucky Energy Corp Henderson
KY
Kenneth C
Coleman
172.8 Western Kentucky Energy Corp Hancock
KY
Kenneth C
Coleman
174.2 Western Kentucky Energy Corp Hancock
KY
KY
KY
KY
Kenneth C
Coleman
R D Green
R D Green
Robert A Reid
174.2 Western Kentucky Energy Corp
264 Western Kentucky Energy Corp
264 Western Kentucky Energy Corp
96 Western Kentucky Energy Corp
Mercer
Mercer
Carroll
Carroll
Carroll
Carroll
Muhlenberg
Muhlenberg
Woodford
Jefferson
Jefferson
Jefferson
Jefferson
Jefferson
Jefferson
Jefferson
Trimble
Power Supply &Fuels
1150.2 Tennessee Valley Authority
704 Tennessee Valley Authority
704 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
175 Tennessee Valley Authority
440 Western Kentucky Energy Corp
County
Daviess
Daviess
Boone
Pulaski
Pulaski
Clark
Clark
Clark
Clark
Mason
Mason
Mason
Lawrence
Lawrence
Muhlenberg
Muhlenberg
Muhlenberg
McCracken
McCracken
McCracken
McCracken
McCracken
McCracken
McCracken
McCracken
McCracken
McCracken
Ohio
Hancock
Webster
Webster
Webster
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