Gas breathes new life into aging coal plants
Coal-to-gas conversions (CTG) at the Keephills and Sundance power plants, located in Alberta, Canada, are the latest signs of a beneficial shift towards cleaner energy generation, even for existing assets.
Owned by TransAlta Corporation, the conversions are part of a CND$2 billion (($1.53 billion) Clean Energy Investment Plan that will help to substantially reduce emissions while still providing firm power to Alberta, the company says. TransAlta’s Clean Energy Investment Plan includes coal to gas conversions, cogeneration and new renewables investments.
As part of the company’s strategy to become Canada’s leading clean electricity company by 2025, TransAlta is planning to convert two coal fired units at its Sundance facility and three units at Keephills.
Both Keephills and Sundance power plants are located around 70 km west of Edmonton near Wabamun Lake, Alberta. Keephills comprises three units and first power began flowing from the site in 1983. Keephills 1 and 2 are 395 MW each while the more modern Keephills 3 is 463 MW. Commercial operations at Keephills 3 began in September 2011. The high-efficiency plant uses supercritical steam and is one of the most modern coal fired facilities in the province. It is already equipped with advanced emissions control technologies, including flue gas desulphurization, low-NOx staged burners and activated carbon injection mercury emission control.
The 2141 MW Sundance power plant had six units. TransAlta retired the two oldest and smaller units, Sundance unit 1 and unit 2 in 2018. Sundance unit 3 and unit 5, both approximately 400 MW units were mothballed in April 2018. Sundance unit 4 and unit 6 (again both around 400 MW) remain in operation.
Temporarily mothballing a combination of Sundance units ensures that the two operating Sundance coal units can operate at higher capacity utilizations, with lower costs through the period to 2020 when additional power that is both affordable and reliable will be needed in the Alberta market, the company says. In the meantime, several units are scheduled to be retrofitted to burn natural gas.
Brett Gellner, Chief Business Development Officer at TransAlta, explains: “Our plan is to convert one unit at Sundance at the tail end of 2020 then we’re going to do two more in early 2021 (Keephills 2 and Keephills 3).”
Each of these projects are similar boiler conversions, in which the pulverized coal burners are replaced with gas burners. Aside from the new burners and the appropriate controls the existing boiler and steam turbine equipment will remain largely unchanged. “Just swapping out the burners and modifying the boiler controls is a very low cost and relatively quick turnaround, just a couple of months,” says Gellner.
However, although simple, cheap and quick, there are no improvements in heat rate or efficiency with this coal to gas conversion. CO2 emissions will be reduced by approximately 40% because of the different chemical reaction that occurs when burning gas versus coal.
TransAlta is planning more significant conversions of at least one and possibly more of the Sundance and Keephills units. “We’ve purchased two Siemens F-Class gas-turbines, so we will repower Sundance 5 into a combined cycle unit. This will be achieved by installing the gas turbines and heat recovery steam generators and a new electrical grid interconnection for the gas turbine generator output. This equipment will produce steam, which will then be passed through the existing steam turbine/generator to produce power. That power will be exported through the existing grid interconnection for Sundance 5. By utilizing a bunch of the existing infrastructure the capital costs are substantially lower than those for an equivalent new greenfield combined cycle gas turbine (CCGT),” said Gellner.
“We will achieve plant efficiencies in-line with a new CCGT,” he adds, noting that regulatory applications were filed in late 2019 and that TransAlta will be selecting an EPC contractor this year. This project is targeted for commercial operation in the 2023 timeframe.
The unit conversions are scheduled to start in 2020, continuing to the end of 2025, though this program may be completed ahead of time, if the company sees the right market drivers. The first unit for conversion is Sundance unit 6. In July 2019, TransAlta issued Final Notice to Proceed and the conversion outage will occur in the second half of 2020.
In December 2018, the Alberta Utilities Commission (AUC) issued approvals for the basic coal to gas conversions of the Sundance (units 3 – 6) and Keephills (units 1-2) power plants. In February 2019, this was followed by a further AUC approval for the basic conversion of Keephills 3.
There are question marks on some of the planned coal to gas conversions, though. As Gellner observes: “For the Sundance 3-4 and Keephills 1 units we’re still evaluating what to do with those. It’s highly likely that for Keephills 1, which is one of the newer and more efficient units compared with some of the others, we will either convert by the simple boiler gas conversion method or also install gas turbines and convert it to a combined cycle.”
He continues: “Decisions on conversion of Sundance unit 3 and Sundance unit 4 will depend on the market fundamentals as we get further along. If there’s lots of supply coming into the market then we may not see the opportunity to convert those units, but we have some time to decide.”
Two other coal units on the east side of the province at Sheerness power plant, which are partly owned (25%) by TransAlta, are also undergoing basic boiler conversion to gas firing.
Coal to gas conversions
To convert the units to operate solely on natural gas, existing equipment will be modified, such as the boilers, fans and control systems. In addition, new equipment will be installed including natural gas burners, igniters, scanners, piping and valves. Meanwhile coal handling equipment will be retired, cleaned and stored in place.
“We won’t remove it; just decommission it, leaving most equipment in place. At Sundance there are six units under one roof so if it is ever necessary to resume coal firing, the systems will be in place and available,” says Gellner.
Emerson was selected as the main automation contractor for the natural gas conversions. The project is the latest in a string of 25 coal to gas conversion projects that Emerson has completed in North America alone over the last five years.
Jason Blackburn, Director of Global Product Marketing at Emerson, said: “The CTG project scope includes an upgrade to the burner controls. You’re going to see some benefits from using more modern control technology and up-to-date best practice. The burner management system must be completely reconfigured. Because you do see a different heat rate with gas, as well as some differences in boiler performance, this means you have to do some things differently to attain the required efficiencies.”
Emerson will supply the new burner management system and replace outdated controls with its OvationTM automation technology. So far Emerson has been awarded contracts for four units, the first of which is Sundance unit 6. Development of the Keephills unit 2 system has just commenced. Further projects will follow based on the CTG conversions and have yet to be confirmed.
As plants are converted, Emerson will also provide its digital twin simulator, which will be used as a training tool for operators, allowing them to explore and optimize multiple operating scenarios in a safe environment before implementation.
Bob Yeager, president of Emerson’s power and water business, observed: “Conversion to natural gas is breathing new life into aging coal plants.”
Building the gas network
Natural gas is already used to start up the units at Keephills and Sundance and can be used to produce up to approximately 30% of the generation at each facility by co-firing with gas. However, the gas conversion strategy at Keephills and Sundance is centered on a new gas supply project that kicked off in late 2017 with the signing of a letter of intent between TransAlta and Tidewater Midstream and Infrastructure Ltd.
Under the deal Tidewater has constructed a 120 km natural gas pipeline from its Brazeau River Complex (BRC) to the generation units at Sundance and Keephills. West of Drayton Valley, Alberta, the BRC is a 10,000 barrel per day fractionation facility. First gas was transported through the line in late May 2019.
This pipeline provides an initial capacity of 130 MMcf/d, and has an expansion capability to reach 400 MMcf/d. This is equivalent to around half of TransAlta’s total gas requirements at full capacity.
Tidewater and TransAlta each own a 50% interest in the Pioneer Pipeline, which is backstopped by a 15-year takeor-pay agreement from TransAlta at market rate tolls.
Dawn Farrell, TransAlta’s President and Chief Executive Officer, said in a statement: “Construction of the natural gas pipeline supports our strategy of being a low-cost provider of firm, clean and reliable energy. In addition, having greater access to natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage of low natural gas prices and reduce our carbon costs.”
The long-term deal with TransAlta is supported by a 15-year take or pay agreement and enables Tidewater to transport gas production direct from the wellhead, through its natural gas processing and storage infrastructure network, direct to an end market. TransAlta is a 50% shareholder in the CDN$200 million ($153 million) pipeline project. Nonetheless, TransAlta remains of the view that having at least two pipelines supplying natural gas would reduce operational risks. According to the company it continues to advance discussions with other parties to construct additional pipelines to meet the remaining gas supply requirements for the facilities.
Gas conversion benefits
Converting to gas is expected to significantly lower operating costs for coalfired plants in Canada. “We do have a carbon levy here in Canada. Right now, it’s CDN$30 per tonne of carbon. It’s based on the performance standard of a CCGT. If you’re generating 1 tonne of CO2 per MWh on coal and the standard is 0.37 tonnes per MWh, you pay the carbon levy on the difference 0.63 tonnes per MWh,” says Gellner. “By converting to gas, even on the simple boiler conversions, that carbon cost drops dramatically. Obviously when you get to the Sundance 5 repowering as a combined cycle we’re much closer to paying virtually no carbon levy.”
The cost savings are impressive: “Those savings alone almost pay in one year the costs of the boiler conversion and carbon savings is a huge part of why we are doing this,” says Gellner.
Gas pricing varies but can see reasonably sustained lower prices over the medium term. But it is also clear that policy is playing a big part in the conversion decision: “We did see some very low prices last summer and we’ll probably see those again; the price of gas is competitive,” says Gellner. “Coal is pretty cheap here in Alberta and we’re located adjacent to the Highvale mine site but with the competitive cost of gas and the carbon levy, gas conversion is a very rational response.”
He lists environmental benefits as a big draw. “Particulate mercury and Sox emissions are reduced to negligible levels and NOx and CO2 are reduced significantly. Once you no longer have ash to dispose of, your operations and maintenance costs are lower. When you have no ash entrained in the flue gas, there is less wear on the boiler tubes and so there are some benefits in terms of lower costs to maintain the boilers as well as increased reliability.”
There are also gains from simpler operations. With the mine no longer needed, all the coal and ash handling and storage facilities are redundant. There is also no need for much of the air quality control systems as well. Operating costs will be lower as fewer people will be needed to operate the units, and capital costs to maintain them go down significantly as well.
“When you look at it as a package, life extension, lower carbon, reduced operating and capital costs, it all results in a very good returning project for us,” says Gellner.
Steve Graf, the project manager at Emerson, explains that there is also expected to be an improvement in flexibility associated with the switch to gas. “The biggest benefit of flexibility is being able to have a lower minimum load on the unit. You don’t have to run pulverizers at a minimum of 40%, you can run the gas lower.”
This is a point echoed by Gellner, who said: “The units are more flexible on gas, we can ramp up and down a little easier as well as achieve lower minimum stable generation.” Conversion of its large coal fleet will also allow TransAlta to run its existing assets longer than the current federally mandated coal retirement schedule.
“In Canada, both federally and provincially, the government has legislation that says coal cannot be burned past 2030. TransAlta worked with the government to allow these gas converted plants to continue to run past the date they would have had to close if they remained on coal. For example, if a coal-only unit had a hard closure date of 2029, then we were able to get eight more years beyond that if we do the simple conversion and just run on gas,” says Gellner.
Once converted to gas, the coal fired units are anticipated to run through to between 2034 and 2039 depending on the original coal-only closure date. This represents a significant extension of their asset lives. The CTG conversion rules would see the life of TransAlta’s coal-fired fleet extended by an aggregate of approximately 75 years. Indeed, given the clarity provided by the Government of Canada, TransAlta is determined to accelerate the conversions from coal fired generation to gas fired into the 2021 to 2022 timeframe, a year earlier than originally planned.
Operating more than 70 power generation facilities across Canada, the United States and Australia, the conversions are part of TransAlta’s ongoing efforts to increasingly develop wind and natural gas generation capacity. Indeed, TransAlta has stated that it intends to have all of its generation capacity coming from gas and renewables by 2025, largely through growth of its 2265 MW renewable energy portfolio and natural gas capacity whilst simultaneously retiring or converting existing coal fired assets.
TransAlta’s corporate goal is to reduce GHG emissions by 19.7 million tonnes by 2030 or 60% below 2015 levels. According to the company’s own modeling, this aligns it with prevention of 2°C of global warming as modeled against the Science Based Targets Initiative (SBTi), Sectoral Decarbonization Approach. SBTi is a partnership between the Carbon Disclosure Project, UN Global Compact, World Resources Institute and the World Wildlife Fund.
In 2018, TransAlta estimated that its fleet had produced 20.8 million tonnes of CO2 and other greenhouse gases with an intensity of 0.77 tonnes per MWh. This already compares favourably with the 2017 figures of 29.9 million tonnes at 0.86 tonnes per MWh and is around two-thirds of the 2016 figure. This impressive result was achieved largely through coal closures and reduced generation from Sundance, as well as increased co-firing with gas at the company’s merchant coal facilities.
In July 2018, for example, the company announced the retirement of the mothballed Sundance Unit 2. It said this was due to its shorter useful life relative to other units, its age, size, and the capital requirements needed to return it to service. The retirement is consistent with its transition strategy to clean power by 2025.
In May last year, TransAlta received system operator approval to extend the mothballing of Sundance Units 3 and 5. Under the approval granted by the Alberta Electric System Operator (AESO), the units will now remain mothballed until November 2021. Both had previously been approved for mothballing until April this year.
With tough environmental rules cracking down on coal, a gas conversion strategy can clearly offer significant economic benefits in Canada by providing life extension to recover residual value from existing assets. The savings on carbon costs and other environmental benefits, lower CapEx and OpEx, and much improved operational flexibility, make a strong case for coal to gas conversions in many other parts of the world too.
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