NEWS RELEASE                                                                                        SEPTEMBER 2014

U.S. Market for Gas Turbine System Components Shaped By Regulations and Economics

Some utilities will have to build new gas turbine plants and retire coal-fired power plants just to meet the new CO₂ limits. Some new gas turbine plants will not include major components because they will be constructed at existing coal-fired power plants which will be retired.  New components will be sold to existing gas turbine plants which were formerly operated just for peaking purposes and will now be operated under base load conditions.  These activities are chronicled in Gas Turbine Combined Cycle Supplier Program published by the McIlvaine Company.

Ameren says it will need to add 1,200 MW of combined cycle natural gas generation by 2020 in order to comply with the Environmental Protection Agency’s proposal to reduce carbon dioxide emissions linked to climate change. While the utility says its internal plans already called for more natural gas, it said the EPA proposal’s timeline would require more new power plants sooner than necessary and lead to rate hikes of 10 to 15 percent by 2020.

The new gas-fired power plants would come online around the same time Ameren plans to retire its coal-fired 840-MW Meramec power plant in south St. Louis County. But that retirement wouldn’t reduce the utility’s rate of carbon emissions without new, lower-carbon generation offsetting it. Building that amount of new capacity would cost roughly $2 billion and require at least four combined cycle gas-fired power plants.

The decision to build gas turbine plants at existing coal sites to some extent is influenced by alternative choices. The Xcel Black Dog Minnesota plant is an example. Calpine is countering the proposal to replace 235 MW of coal capacity at this plant with gas turbines by proposing to expand the Mankato plant by 350 MW.

Kentucky Cane Run 7 coal-fired power plant will be replaced by Siemens SGT5-5000F turbines which will generate 660 MW in a Black & Veatch design and build project. With more than 100 coal-fired power plants scheduled for retirement, the question arises as to how much of the existing plant can continue to be used with the switch to gas. In some cases there is just a fuel switch and no change to the balance of plant. Where a new turbine is installed, the existing cooling, boiler feed water and wastewater systems are often more than adequate for the new conditions.

The Florida Power Crystal River coal plants 1&2 will be retired when the first 820 MW of the 1640 MW combined cycle plant comes on line in 2018.

Coal is not the only fuel being replaced with GTCC.  Some oil-fired plants are being retired. There is even a biomass plant considering a switch to gas.

Southern Power's biomass plant in Sacul, Texas was no sooner in operation in 2012 that competition from natural gas surfaced. A guaranteed 20-year contract with the City of Austin keeps the plant open even though the city is buying primarily cheaper natural gas. Southern Power wants to remain competitive, potentially at the Sacul site. “So ultimately we'll build for our customers needs, but the applications speak to a gas-fired facility because there's piping in that area available,” said Jeannice Hall, the senior media relations strategist with Southern Company.

For more information on the Gas Turbine and Combined Cycle Supplier Program, click on: http://home.mcilvainecompany.com/index.php/markets/28-energy/610-59ei