Steven M. Brown, editor in chief
A slight dip in nuclear generation, the effects of environmental controls on coal-fired generation and a continuing increase in combined cycle capacity are among the trends of note in EL&P's most recent operating performance rankings. Click here to view tables.
For the third straight year, EL&P collaborated with Energy Ventures Analysis (EVA) out of Arlington, Va., for what has become perhaps our most popular industry report. EVA provided the rankings for this report and Tom Hewson, EVA principal, shared his analysis of the numbers. Readers can compare this year's rankings with those published in the November 2002 EL&P and November 2003 EL&P (we have now been ranking plants by the same criteria since 2002) by going to www.elp.com and selecting "issue archive" from the left-hand navigation menu.
nuclear generation dips slightly, but set to rebound
According to the latest data from the U.S. Energy Information Administration, nuclear generation currently contributes to 20.3 percent of the electric power generated in the United States. Table 1 ranks nuclear plants by generation. Of the top 20 plants listed here, 19 are carryovers from our 2002 rankings, and 18 of the 20 were also ranked in the 2001 top 20. Dominion Resources' Millstone plant made it back into this year's top 20 after a one-year hiatus. Progress Energy's Brunswick plant is the one plant in the 2003 ranking that was not present in either the 2001 or 2002 top 20 lists.
Hewson noted that these plants represent the biggest of the big. The 20 plants listed here account for just under half (48 percent) of all nuclear generation in the United States (out of the 66 plants that report net generation).
In 2002, U.S. nuclear power plants generated a record 780.2 million MWh of electricity, according to the Energy Information Administration. In fact, starting in 1998, new records in net nuclear generation were set each year, culminating with the 780.2 million MWh generated in 2002. EVA reported that total nuclear generation was down slightly in 2003 at 763.7 million MWh. Despite the drop-off when compared with 2002, which Hewson attributed to a handful of nuclear plants running into difficulties, the 763.7 million MWh generated in 2003 still ranks as the third-highest total in U.S. history.
Hewson said that the record-setting nuclear generation numbers we've seen in recent years is attributable in large part to the uprating of units.
"We had 1,964 MW of uprates between 2001 and 2002," Hewson said, shedding light on the record-breaking 2002 numbers. He noted that the industry saw 686 MW of uprates in 2003.
"We are spending money on these nuclear plants to improve output," Hewson said. "We're not building new nuclear plants, but we are investing money in our existing plants to increase output through re-rating of the units."
Table 2 ranks nuclear plants by their capacity factor. Only six of the plants listed in this year's top 20 were present in last year's. Hewson noted that plants generally fall out of the top 20 as a result of scheduled outages. The plants that didn't have a scheduled outage in 2002 may have ended up having them in 2003, and, thus, would not be present in the 2003 top 20.
Average capacity factor for nuclear power was 87.8 percent in 2003, according to EVA. Down from approximately 90.2 percent in 2002. This industry-wide decline in capacity factor is evident in the top 20 presented here. To be in last year's top 20, a plant had to have a capacity factor of at least 94 percent. This year, the cutoff is 91.8 percent.
Hewson said he expects we will see a continuation of the uprating trend in nuclear power and that capacity factor will be back up closer to 90 percent when we publish the 2004 numbers. It appears that net nuclear generation also will rebound from the slight dip experienced in 2003. The latest data from the Energy Information Administration shows that generation at nuclear power plants increased 4.4 percent for the period of January through June 2004 when compared with the same time period in 2003.
coal numbers up, but affected by environmental controls
Table 3 ranks coal-fired power plants by their 2003 net generation. The top four plants in this 2003 top 20 were also rated in the top four in 2001 and 2002; only their positions have changed.
To be in last year's top 20, a plant needed to have generation of at least 14.5 billion MWh. This year, the cutoff is 15.1 billion MWh, which reflects a continued reliance on coal due to several factors: high natural gas costs, a continued decline in hydroelectric generation and nuclear generation being down slightly.
Hewson said that out of the 536 entities that report numbers, coal plants generated 1,969 terawatt hours of power in 2003, compared with 1,922 terawatt hours in 2002.
"Poor hydro performance and the dip in nuclear generation have helped coal," Hewson said. "Plus, it's a lot lower cost than natural gas, so it continues to have an incredible capacity factor."
New in this year's top 20 are Ameren's Labadie plant at No. 12, Pinnacle West's Four Corner plant at No. 16, and two Progress Energy plants: Crystal River at No. 18 and Roxboro at No. 19.
Hewson noted that the most significant drop out of the 2003 top 20 was Duke's Belew's Creek plant. Belew's Creek was ranked No. 8 in 2002, but fell to 53 in 2003. Hewson said that the drop is attributable to environmental control projects at the plant. He noted that the passage of a clean smokestack law in North Carolina resulted in both Progress Energy and Duke Power retrofitting a lot of controls. Hewson said he believes similar projects will continue to affect these coal-fired generation rankings for several years to come.
"We're going to see a lot of this control work done over the next 8 years," he said. "We'll see an incredible increase in retrofit control projects. We've seen it as we've been trying to reduce NOX emissions, and this trend will continue under the Clean Air Interstate Rule (CARE)."
Just as net coal generation was up in 2003, coal's capacity factor also improved to 71.9 percent in 2003 (compared with 69.9 percent in 2001 and 70.6 percent in 2002). Table 4 ranks coal-fired power plants by capacity factor.
The most obvious observation one can make about the highest-utilized plants on this list is that location plays a major role. Nine of the top 10 coal-fired plants ranked here are located in the West, where steady coal prices make it cost-effective to run a plant flat-out.
"These Western coal units are run at incredibly high capacity factors," Hewson confirmed. "They're generating and selling power into California and other high-priced markets. These units have an incredibly low incremental cost, so they work them as hard as they can."
Hewson also noted that many of the plants that made it into the top 20 are minemouth plants, which can benefit even more from low-cost coal. Qualifying facilities also have a distinct advantage when it comes to making it into this top 20 as they are guaranteed a rate for all the power they can produce.
Table 5, which ranks coal-fired plants by their SO2 emission rates, is one of the more intriguing rankings in this year's report. Salt River Project's Navajo Generating Station maintained its No. 1 spot for the third-straight time since EL&P began publishing this particular ranking with an SO2 rate of 0.037 lbs./MMBtu, improving on the numbers it posted in 2002 (0.040 lbs./MMBtu) and 2001 (0.042 lbs./MMBtu). The plants that were rated Nos. 2 through 6 in last year's report also made it back into this year's rankings, but after that, only last year's No. 14 makes a reappearance this year. Twelve new plants are included in the top 20 this year.
Again, a location in the West, where the largest reserves of low-sulfur coal are located, puts a plant at a decided advantage.
Hewson notes that it took a much lower SO2 rate to get into this year's top 20 when compared with the rankings from last year. Last year, it took an SO2 rate of 0.167 lbs./MMBtu to get into the top 20. This year, the highest rate is 0.113.
"A plant with that SO2 rate would have been No. 9 last year," Hewson noted. "Our plants have gotten cleaner."
Hewson attributes this increased emphasis on cleanliness to several factors: improving technology, increasing value of SO2 allowances and stricter environmental regulations. He expects we'll continue to see a SO2 rates drop in the future.
"The average is going to drop," Hewson said, noting that, in 2003, the average SO2 rate was about .99. "The average has to get down to around .3 to be in accordance with the acid rain law, the clean air interstate rule and the fine particulate limit. We're going to see over the next two or three years, people with existing scrubbers operating them better, and we'll see a lot more people in contention for this particular top 20 than we've had before. It's going to be harder to get on this list."
The impact of environmental controls is once again evident in Table 6, which ranks the efficiency of coal-fired plants by heat rate. When asked what it takes to get on and stay on this list of plants, Hewson joked, "Few (environmental) controls."
"When we put on a scrubber or selective catalytic reduction, the net effect is that you lose power to operate that equipment. Your parasitic load increases," he said. "It's very difficult to achieve the type of heat rates (represented in the top 20 list) when you apply environmental controls."
While the application of environmental controls may have a deleterious effect on a plant's efficiency, Hewson did note that some of the ranked plants-for instance, this year's No. 3 (SCANA Corp.'s Cope plant) and No. 12 (AES Corp.'s Somerset plant)-have been able to achieve high efficiency even after implementing scrubbers and/or selective catalytic reduction. However he does note one likely trend going forward as a result of post-combustion controls:
"We're going to see drops in efficiency."
combined cycle capacity continues to grow
Table 7 ranks combined cycle plants by generation. Fifteen of the plants in this year's report were also present last year. Last year's No. 3 plant, Florida Power & Light's Fort Myers plant, ascended to No. 1 in the rankings this year as the result of a 3.4 million MWh increase in generation. But after the No. 1 spot, the numbers are generally lower when compared with last years. For instance, this year's No. 2 plant would have ranked No. 7 last year.
"What's incredible in the combined cycle arena is the expansion of capacity. We added more than 37 GW last year," Hewson said, noting that the 2003 increase in capacity came on top of a 47 percent increase in capacity between 2001 and 2002.
Table 8 ranks utilization of combined cycle plants by capacity factor. Overall, these numbers are down from those published last year. Last year, a plant had to have a capacity factor of 93 percent or higher to make the top 20; this year, the cutoff is 85.6 percent. To further illustrate the year-to-year change, the capacity factor of this year's No. 7 plant would not have been high enough to break into last year's top 20. However, given that the average capacity factor percentage for all combined cycle plants is in the high 30s, the plants listed in this top 20 are extremely highly utilized.
As was the case with the coal-fired capacity factor rankings, Hewson noted that co-generators and qualifying facilities have a decided advantage in making this particular top 20.
Table 9 ranks combined cycle plant efficiency by heat rate. Operating at a low altitude and high capacity factor can help a plant's positioning on this list.
Only four plants from last year's top 20 (No. 2 Odessa-Ector, No. 4 Maine Independence, No. 8 Bosque County and No. 18 Barry) made it into this year's top 20. However, when comparing the heat rate numbers in this year's top 20 against last year's, one notices remarkable consistency. Last year's No. 1 plant had a heat rate of 6,758 Btu/kWh; this year's No. 1 has a heat rate of 6,778 Btu/kWh. Last year's No. 20 plant had a heat rate of 7,150 Btu/kWh; this year's No. 20 is 7,149 Btu/kWh. This illustrates that the plants represented on this list are running at a remarkably high efficiency level, just as was the case last year.
To drive that point home, Hewson noted that the average of the 427 combined cycle facilities that report heat rate is 10,456 Btu/kWh.
"It's very hard to get on this list," Hewson said.
For more information about Energy Ventures Analysis, visit www.evainc.com or call 703-276-8900.