Saturday, July 11, 2009

Can coal power plants compete with natural gas?

In the construction industry a Greenfield is a site that has never had any construction upon it. The word in this context is a wide open space to construct the new project without any demolition or possible hidden underground structures. Engineers love to have Greenfield sites as opposed to Brownfield sites where all sorts of hidden obstacles can add complexities and costs to projects. Greenfield is also a city in Wisconsin that is a suburb of Milwaukee. Very close to Greenfield is another suburb named Oak Creek. On Elm Road in Oak Creek, Wisconsin Energy Corporation (WEC), the local utility decided to build the world’s showcase coal fired power plant on a Greenfield site. They hired Bechtel and convinced their public utilities commission this mega sized coal power generation station would provide “cheap” electricity for the residents of Southern Wisconsin for many years to come.

Local folks put up quite a fight to stop the construction of the power plant and even though they proved that copious quantities of mercury from the coal would wind up in Lake Michigan, the project was permitted and began construction in 2005. Bechtel felt so confident of their capabilities that they offered WEC a lump sum fixed price contract for the power plant at a price of $2.2 billion. Bechtel set about to design and build a flagship power plant with two 615 megawatt identical units that employed “ultrasupercritical” steam technology. In layperson’s terms this means the steam boilers produce very high pressure and high temperature steam that improves the overall thermal efficiency of the electric power generation. The station also did not include cooling towers that are normally used in power plants. Instead cooling water was drawn directly from Lake Michigan and the warmed water is returned directly to the lake. Here is the link on Bechtel’s web site regarding the project Bechtel was so proud of this project that a senior executive exclaimed “As Elm Road goes, so will go Bechtel’s U.S. fossil power business,” says Project Director George Conniff. “The whole industry is watching to see how we perform.”

Fast forward to 2009 and the project is a disaster. Bechtel is claiming an additional $485 million for cost over-runs. Coal is an expensive method to generate power compared with natural gas that is now much more abundant. Coal generation even with the “ultrasupercritical” technology is much more carbon intensive than natural gas with as much a one pound extra of carbon dioxide emissions per kilowatt hour of electricity generated when compared with natural gas. The 38,000 citizens of Greenfield Wisconsin will be paying a carbon tax on this project for the next thirty years. The fish in Lake Michigan will be paying a mercury tax for the next hundred years. Bechtel and WEC will argue the legalities of the claims for the over-runs and who knows if the claims are valid but the Green Machine would like both the constructer and the owner of the failed facility to be taken to the Green Court that is the Supreme Court for those who disobey the Laws Of Thermodynamics. The project was a dumb idea in 2005 even when natural gas was more expensive. Now that natural gas is much less expensive the project is plain idiotic. Perhaps citizens will be better served if the management of utilities were smarter, the contractors were more in tune with being green, and the public utilities commissioners were “ultrasupercritical” of stupid ideas. Can Bechtel please tell George Conniff that the whole world not just the whole industry is watching to see how the project performed. No doubt this project gets a F.