Defining the Future of Generation

 

WHEN GULF POWER IN PENSACOLA, FLA., began making plans in 2008 for a new power plant, things looked different than they do now.

"Load projections were much more optimistic than they are today," said the utility's public affairs manager, Sandy Sims. "We've slowed down our planning."

But the Southern Company subsidiary has been buying up land about 35 miles north of Pensacola and so far has assembled 2,200 of the 4,000 acres it wants for the new plant, which won't start construction anytime before 2015.

Between now and then, Gulf Power faces the same decision as most of the nation's electricity utilities contemplating an expansion of capacity - what type of fuel will the new power generators use?

In a debate that so far has been largely couched as coal versus natural gas, the eventual choice for the new Gulf Power plant may be a third option - nuclear power.

"We're not thinking in any specific direction," said Sims. "The site would afford us the availability of that option."

It is an option that other utilities may also be taking a closer look at, said Revis James, an analyst at the Electric Power Research Institute in Washington.

While the near-term emphasis in plant construction is on gas and combined cycles, coal is destined to remain part of the mix in the long term, he said, while nuclear will also be used to provide the reliable baseload generation needed in any future scenario.

Coal has the problem of high carbon dioxide emissions, which have led many utilities to delay or abandon plans for new coal-fired generators, even as older plants are shut down or switched to natural gas.

But the promised boom in natural gas from the exploitation of shale gas reserves has its own set of uncertainties.

"Production can't keep up with demand," James noted, ticking off the problems with relying too much on natural gas as a solution. "There are environmental concerns about hydraulic fracturing," he said, referring to technology for extracting shale gas.

There is also an issue with siting gas turbines because of the need to build additional pipeline infrastructure to deliver the gas. In the Gulf Power case, for instance, it would require construction of hundreds of miles of new pipeline to connect to existing major pipelines.

"It's recognized that there is a potential exposure here," said James. "The question is what do you do to hedge."

For this reason, most utilities are keeping coal-fired capacity in their planning, pending emission restrictions from the Environmental Protection Agency or any further legislative efforts to limit carbon emissions.

Some are shifting coal-fired plants from baseload use to load following capacity, James said, so that even though the role of coal is gradually diminishing, it will continue to remain high.

Nor have people given up on the prospect of clean coal. The FutureGen project in the United States for carbon capture and storage suffered another setback in November when Ameren announced it was shutting down the coal plant that is supposed to function as a pilot for the technology.

The other partners are now negotiating to lease the plant to continue the project, and James is optimistic that further progress will be made. "We get a lot of money for CCS," he said. "There are tens of millions going into it every year."

In the long term, by 2050, according to EPRI's scenarios, clean coal and nuclear will probably account for 45 percent to 60 percent of U.S. generating capacity, James said.

So, what will Gulf Power do with its new plant? Coal, natural gas, or nuclear?

 The utility's parent is actually in the vanguard of building new nuclear capacity. Southern Company has started work on the first new U.S. nuclear power plant in three decades with two new units at Vogtle, its existing nuclear station outside of Wayne, Ga.

"In today's world, we're the leader in the country in nuclear experience," said Gulf Power's Sims. Susan Story, the former CEO of the Pensacola utility, is a nuclear engineer who is now a member of the parent company's management council.

David Goetsch, an economic development expert at Northwest Florida State College, is an enthusiastic supporter of the nuclear option for the new Gulf Power plant.

"Any kind of fossil fuel is going to present you with some kind of issue," he said. "Nuclear is a viable solution - the most viable solution."

While the Chernobyl nuclear accident was a genuine disaster due to Soviet negligence, the biggest U.S. accident, Three Mile Island, resulted in little actual harm, he noted. "It was a victory, not a disaster," said Goetsch, since the first layer of protection actually stopped the radiation leak before the other two layers were even needed.

As for the Fukushima incident in Japan, he said it may be impossible to fully shield a nuclear power plant from earthquake damage, and the leakage was in fact quickly contained.

The bottom line for nuclear power in the United States, Goetsch said, is that it can provide power reliably, at low cost, and with virtually no emissions. The public will come to accept nuclear power when it emerges as the best way to achieve these objectives.

"What people want is for that light to go on when they flip the switch and go off when they turn it off," Goetsch said. "And they don't want to pay much for it."