Released December 11, 2013 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Jim Rogers, chairman of Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), has long counseled the North American Electric Power Industry against over-reliance on gas-powered generation. He knows how tough it can be to convince utility regulators to approve riskier and more expensive generation projects, like coal or nuclear, but that doesn't mean utilities should stop having those conversations.
Duke has built plenty of natural gas generation in the last few years, and its gas build-out is continuing with recent plans to add plants in Florida and South Carolina. In October, Duke's Florida unit released a request for proposal (RFP) for approximately 1,640 megawatts (MW) of natural gas combined cycle (NGCC) generation in Citrus County, Florida. Separately, its South Carolina unit sought permission from utility regulators in that state to site a 750-MW, gas-fired generator in Anderson County, South Carolina.
Both steps were taken as part of Duke's ongoing effort to increase the amount of gas-fired power in its portfolio as it closes older, less-efficient coal plants. In North Carolina, Duke has announced the closure of numerous older, less-efficient coal plants and replaced them with high-efficiency gas generation. Since 2011, Duke has brought four new gas-fired generators online, totaling 2,760 MW. A fifth, sized at 625 MW, is scheduled to begin operating by the end of this year.
In its Florida RFP, released in October, Duke is seeking bids to build gas-fired generation that will be brought online in 2018. The new generation is being sought to replace lost generation from the shuttered Crystal River nuclear generator, as well as two coal-fired units at Crystal River that will be closed.
"We have a need for significant generating capacity in 2018 and through the RFP process, we will be able to identify the most cost-effective, safe and reliable generation source for our customers," said Alex Glenn, Duke Energy state president for Florida, in a statement announcing the RFP. Bids are due this month. Duke expects to announce a short list of qualified firms next March, and announce the winning bidder by next August. The RFP required at least 820 MW of the new generation to be in service by May 1, 2018, with the remaining 820 MW operating by December 1, 2018.
The new generation in Florida will be sited in Citrus County "because we have an existing transmission infrastructure there that can accommodate new generation," Duke Energy Florida spokesman Sterling Ivey told Industrial Info. "Plus, we have closed our nuclear plant in that county and will be closing two coal units at Crystal River."
In a separate step, Duke Energy-Carolinas asked South Carolina regulators for permission to build a 750-MW NGCC at the site of its W.S. Lee Power Station in Anderson County, South Carolina, a site that already hosts Duke generating units. It has not committed to constructing the new generator, but took the step as part of its effort to meet future electric demand and modernize its fleet. If South Carolina regulators support the application, the new plant could be operating by mid-2017.
"The energy needs of our customers are significant over the next 15 years," said Clark Gillespy, Duke Energy state president for South Carolina. "Our commitment is to meet our customers' needs in a way that balances affordable, reliable and increasingly clean electricity, and this project will help us satisfy that need."
Duke, which last year merged with Progress Energy, serves about 7.1 million electric customers in the Carolinas, Florida, Indiana, Ohio and Kentucky. The company is several years into a multibillion-dollar plan to modernize its generation fleet by closing older coal plants and replacing them with a combination of gas, advanced coal and nuclear generation. Ultimately, Duke plans to close about 6,200 MW of coal generation in its fleet.
Duke has relied on gas heavily, but not exclusively, to replace that shuttered coal generation. Over the last year, Duke brought two advanced coal plants online: Cliffside Unit 6, an 825-MW plant, in North Carolina, and Edwardsport, a 618-MW integrated gasification combined cycle (GCC) unit in Indiana.
While Duke is investing heavily in fossil-fuel generation, it sees nuclear power as having an important place in its power portfolio. Duke, which operates six nuclear plants totaling more than 10,000 MW of capacity, is keeping alive plans to build a new nuclear plant, the William States Lee Nuclear Power Station in Cherokee County, South Carolina, though construction of that plant is far out in the future. Duke also is seeking to acquire a 5% to 10% stake in the two-unit addition being constructed at the Virgil C. Summer Nuclear Power Station in South Carolina.
Earlier this year, Duke cancelled plans to build the two-unit, grassroot Levy County Nuclear Power Station in Florida, and delayed plans to add new nuclear units at the Shearon Harris Nuclear Power Station in North Carolina. For more on those plants, see August 5, 2013, article - Duke Cancels Levy Nuclear Project after Delaying Harris Nuclear Project.
Over 2013-15, Duke plans to invest $1.63 billion in nuclear generation projects, which is more than its planned investment in environmental projects ($1.38 billion), natural gas generation ($950 million) or grid modernization ($625 million). The utility also plans heavy outlays to expand its transmission network.
Beyond thermal generation, over the next 15 years Duke also plans to meet about 30% of electric demand growth through energy-efficiency programs and renewable generation, the company has said.
"Duke Energy is also committed to producing and delivering electricity in an environmentally responsible, cost efficient and reliable manner," Paul Newton, Duke's State President for North Carolina, wrote in a recent op-ed article in the Raleigh News & Observer. "Due to changing fuel prices, we also try to avoid relying too much on any single type of power plant or fuel. Duke Energy is generating electricity more cleanly and delivering it to customers more reliably, and efficiently, than ever before."
"Within the utility industry, there is wide recognition of the benefits of fuel diversity. But not all those benefits can be quantified in advance," said Brock Ramey, North American Power Research manager for Industrial Info. "That, plus the cost-consciousness of utility regulators, has pushed utilities to sharply increase their reliance on gas generation in recent years. Duke is no exception to this rule.
"But by spreading its generation dollars between advanced fossil, nuclear, and renewables, while also investing in customer efficiency programs and grid modernization, Duke is practicing sound risk management. Fuel diversity is a hedge against a potential spike in gas prices or a collapse of the gas build-out taking place across the industry. Gas prices have a history of volatility, and although gas prices today are low and are predicted to remain stable, you never know what the future will bring."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Duke has built plenty of natural gas generation in the last few years, and its gas build-out is continuing with recent plans to add plants in Florida and South Carolina. In October, Duke's Florida unit released a request for proposal (RFP) for approximately 1,640 megawatts (MW) of natural gas combined cycle (NGCC) generation in Citrus County, Florida. Separately, its South Carolina unit sought permission from utility regulators in that state to site a 750-MW, gas-fired generator in Anderson County, South Carolina.
Both steps were taken as part of Duke's ongoing effort to increase the amount of gas-fired power in its portfolio as it closes older, less-efficient coal plants. In North Carolina, Duke has announced the closure of numerous older, less-efficient coal plants and replaced them with high-efficiency gas generation. Since 2011, Duke has brought four new gas-fired generators online, totaling 2,760 MW. A fifth, sized at 625 MW, is scheduled to begin operating by the end of this year.
In its Florida RFP, released in October, Duke is seeking bids to build gas-fired generation that will be brought online in 2018. The new generation is being sought to replace lost generation from the shuttered Crystal River nuclear generator, as well as two coal-fired units at Crystal River that will be closed.
"We have a need for significant generating capacity in 2018 and through the RFP process, we will be able to identify the most cost-effective, safe and reliable generation source for our customers," said Alex Glenn, Duke Energy state president for Florida, in a statement announcing the RFP. Bids are due this month. Duke expects to announce a short list of qualified firms next March, and announce the winning bidder by next August. The RFP required at least 820 MW of the new generation to be in service by May 1, 2018, with the remaining 820 MW operating by December 1, 2018.
The new generation in Florida will be sited in Citrus County "because we have an existing transmission infrastructure there that can accommodate new generation," Duke Energy Florida spokesman Sterling Ivey told Industrial Info. "Plus, we have closed our nuclear plant in that county and will be closing two coal units at Crystal River."
In a separate step, Duke Energy-Carolinas asked South Carolina regulators for permission to build a 750-MW NGCC at the site of its W.S. Lee Power Station in Anderson County, South Carolina, a site that already hosts Duke generating units. It has not committed to constructing the new generator, but took the step as part of its effort to meet future electric demand and modernize its fleet. If South Carolina regulators support the application, the new plant could be operating by mid-2017.
"The energy needs of our customers are significant over the next 15 years," said Clark Gillespy, Duke Energy state president for South Carolina. "Our commitment is to meet our customers' needs in a way that balances affordable, reliable and increasingly clean electricity, and this project will help us satisfy that need."
Duke, which last year merged with Progress Energy, serves about 7.1 million electric customers in the Carolinas, Florida, Indiana, Ohio and Kentucky. The company is several years into a multibillion-dollar plan to modernize its generation fleet by closing older coal plants and replacing them with a combination of gas, advanced coal and nuclear generation. Ultimately, Duke plans to close about 6,200 MW of coal generation in its fleet.
Duke has relied on gas heavily, but not exclusively, to replace that shuttered coal generation. Over the last year, Duke brought two advanced coal plants online: Cliffside Unit 6, an 825-MW plant, in North Carolina, and Edwardsport, a 618-MW integrated gasification combined cycle (GCC) unit in Indiana.
While Duke is investing heavily in fossil-fuel generation, it sees nuclear power as having an important place in its power portfolio. Duke, which operates six nuclear plants totaling more than 10,000 MW of capacity, is keeping alive plans to build a new nuclear plant, the William States Lee Nuclear Power Station in Cherokee County, South Carolina, though construction of that plant is far out in the future. Duke also is seeking to acquire a 5% to 10% stake in the two-unit addition being constructed at the Virgil C. Summer Nuclear Power Station in South Carolina.
Earlier this year, Duke cancelled plans to build the two-unit, grassroot Levy County Nuclear Power Station in Florida, and delayed plans to add new nuclear units at the Shearon Harris Nuclear Power Station in North Carolina. For more on those plants, see August 5, 2013, article - Duke Cancels Levy Nuclear Project after Delaying Harris Nuclear Project.
Over 2013-15, Duke plans to invest $1.63 billion in nuclear generation projects, which is more than its planned investment in environmental projects ($1.38 billion), natural gas generation ($950 million) or grid modernization ($625 million). The utility also plans heavy outlays to expand its transmission network.
Beyond thermal generation, over the next 15 years Duke also plans to meet about 30% of electric demand growth through energy-efficiency programs and renewable generation, the company has said.
"Duke Energy is also committed to producing and delivering electricity in an environmentally responsible, cost efficient and reliable manner," Paul Newton, Duke's State President for North Carolina, wrote in a recent op-ed article in the Raleigh News & Observer. "Due to changing fuel prices, we also try to avoid relying too much on any single type of power plant or fuel. Duke Energy is generating electricity more cleanly and delivering it to customers more reliably, and efficiently, than ever before."
"Within the utility industry, there is wide recognition of the benefits of fuel diversity. But not all those benefits can be quantified in advance," said Brock Ramey, North American Power Research manager for Industrial Info. "That, plus the cost-consciousness of utility regulators, has pushed utilities to sharply increase their reliance on gas generation in recent years. Duke is no exception to this rule.
"But by spreading its generation dollars between advanced fossil, nuclear, and renewables, while also investing in customer efficiency programs and grid modernization, Duke is practicing sound risk management. Fuel diversity is a hedge against a potential spike in gas prices or a collapse of the gas build-out taking place across the industry. Gas prices have a history of volatility, and although gas prices today are low and are predicted to remain stable, you never know what the future will bring."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
