Wednesday, October 26, 2005

New (old) power options: Coal, nuclear

New (old) power options: Coal, nuclear - 2005-10-24 - Orlando Business Journal

Florida utilities feel pinch from rising fuel prices, surging population.
Jill Krueger
Staff Writer
Electrical power companies operating in Central Florida are discussing something they haven't considered seriously in 30 years: new nuclear power plants.

With natural gas and petroleum prices soaring and the supply of coal still abundant, utilities officials say they are exploring alternative fuels, including nuclear power, and new methods to run the mega-power plants they will need in the coming decades to keep pace with demand brought on by Florida's population explosion.

Consider: Progress Energy Florida is looking to add another nuclear plant in its southern service area and may locate it at its Crystal River nuclear facility. Juno Beach-based Florida Power & Light is part of a group of utilities that wants to put a new nuclear power plant in the Southeast. And Orlando Utilities Commission intends to add a coal gasification unit, which turns coal into gas, at its Stanton Energy Plant in east Orange County.

"What you're doing is planning for the next base load plant ... and are looking at the history of fuel prices and what they are going to be," says Rick Kimble, spokesman for Raleigh, N.C.-based Progress Energy Inc., parent company of Progress Energy Florida.

But such alternatives as increased coal use or the return of nuclear power are stirring concerns among those who fear safety and environmental issues.

"I'm hearing concerns from residents regarding new coal-fired plants," says Holly Binns, field director for the Florida Public Interest Research Group, a Tallahassee-based environmental consumer advocacy group. But, she adds, "That's nothing compared to when they hear that they (utilities) want to build a new nuclear plant."

Alternative fuels, methods
Utility officials insist there's a great need to explore alternative fuels and power-generation methods, especially since oil and natural gas costs have risen sharply in recent years.

The price of crude oil shot up to $69.81 per barrel on Aug. 30, up from $28.98 a barrel on Aug. 30, 2002, and the highest since the early 1980s when adjusted for inflation, according to the American Petroleum Institute.

And the price that utilities pay for natural gas under a 12-month contract has risen from $3.33 per million British Thermal Units (BTUs) on Aug. 7, 2002, to $11.83 per million BTUs in the wake of Hurricane Katrina.

At the same time, Florida's population is projected to swell to 18.87 million by 2009, and utilities operating in Central Florida and other parts of the state say they are already planning to add new mega-plants to keep up with electric demand.

Further, industry officials say the state's power plants are aging. Some of them are 50 years old, Kimble points out.

Unfortunately, utility officials say the same fuel options that were available half a century ago -- oil, natural gas, coal and nuclear energy -- are what they now have to work with.

That's because in Florida, certain alternate power sources won't run the new mega-watt plants that will be required, utilities experts say. For instance, the state doesn't have enough wind power. And even though Florida is the Sunshine State, its cloud cover doesn't make solar power a cost-effective alternative, officials say.

"What are the alternatives?" asks Kevin Bloom, spokesman for the Florida Public Service Commission.

Looking to nuclear, coal
Utilities are leaning toward nuclear energy and coal because they don't have any other options, they say.

Progress Energy Florida, which serves 1.5 million state customers, wants to build a nuclear power plant somewhere within its Florida, North Carolina or South Carolina service area.

If a Florida site is selected, it would be the first nuclear reactor in the state since 1983 when FPL added to its plant on Hutchinson Island near Port St. Lucie.

"We have notified the Nuclear Regulatory Commission that we plan to submit an application for construction and an operating license of a nuclear power plant by 2008," Progress Energy's Kimble says.

"And we've also said that we will have a location and which type of reactor would power that nuclear plant identified by end of this calendar year."

At this point, he says, Progress Energy is considering Crystal River, where it already operates a nuclear plant.

FPL, with more than 4 million statewide customers, has two nuclear power plants in Florida and is participating in an effort to create new nuclear reactors in Alabama, Louisiana and Mississippi.

Planning for new plants
"We are looking at trying to expand and further diversify our fuel supplies," says FPL spokesman Bill Swank.

Besides proposing new nuclear plants, utilities are exploring more efficient ways of powering coal plants and alternative fuel delivery methods.

For instance, Swank says FPL is considering adding a coal-fired plant in St. Lucie County. Kissimmee Utility Authority and 14 other city utilities that belong to the Florida Municipal Power Agency in Orlando plan to build a coal plant in Perry.

In addition, the Orlando Utilities Commission is looking to break ground on a $557 million coal gasification unit at the Stanton Energy Plant in east Orange County in 2007. The unit will convert coal to a synthetic gas that will burn like natural gas. The combined-cycle unit will be able to use either gas or coal.

Industry officials say many utilities are equipping their units to take more than one type of fuel so they can use whatever is less costly at the time.

OUC, which provides electric and water services to more than 196,000 customers in Orlando, is seeking a $235 million grant to help pay for it.

"When it's complete, it will be the most advanced coal-burning technology in the world," says OUC spokesman Grant Heston.

FPL, in the meantime, is looking at better ways of delivering liquified natural gas. Under a new process, natural gas is frozen and turned into a liquid that is more easily transportable, then re-gasified at the destination facility, says Swank, explaining that this makes it easier to import natural gas from other countries.

"FPL is not an R&D company," Swank says. "We really have to rely on what's happening in the industry."

Money, approval drawbacks
Nuclear and coal plants, however, raise significant safety and environmental concerns. Nuclear reactors require safety backup systems that must function properly to cool down the nuclear reactors in the event of an accident. Today, when safety equipment isn't functioning properly, which recently happened at Palo Verde Nuclear Generating Station outside of downtown Phoenix, Ariz., it is shut down and customers are left in the dark.

In addition, a utility must securely transport and properly store the spent fuel. And then there's the cost for a new nuclear plant -- tens of billions of dollars. On top of all this, getting a nuclear plant approved is hardly a snap.

At the federal level alone, the approval process takes a minimum of 2 1?2 years, explains Roger Hannah, public affairs officer for the U.S. Nuclear Regulatory Commission, which must make environmental, safety and financial antitrust reviews of each application for a new nuclear plant.

Coal, meanwhile, has drawbacks as well: Mainly, it requires costly scrubbers to reduce air emissions, says Binns with the Tallahassee consumer watchdog group. Further, she says, a byproduct of coal plants is mercury, which can kill fish in nearby bodies of water and cause learning disabilities in children.

Utility officials argue, though, that their goal is to make future power plants less vulnerable to fuel-price fluctuations, whether using a different fuel, or fuel-burning or delivery method.

"As we see the natural gas supply start to dwindle, we have to look at other alternatives," KUA spokesman Chris Gent says.

Binns' group believes other steps should be taken before Florida starts building a host of new power plants.

"The bottom line is that in Florida we shouldn't be building new coal and nuclear power plants until we've done everything feasible on energy efficiency and conservation programs," she says.


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