Not quite a "smoking gun" – Coal plant versus nuclear or alternatives

American Municipal Power-Ohio, a nonprofit wholesale power
supplier and services provider, is planning to build American Municipal Power Generating Station (AMPGS), a 1000 MWe coal fired power plant in Meigs County, Ohio. The organization’s members are interested in building a plant that gives them more control over the cost of the electricity that they provide to their members. AMP-Ohio currently buys much of the power that it sells on the wholesale open market. For the past several years, that has been an expensive source of power that has experienced wide fluctuations depending on world energy markets, weather, and seasonal variations in consumption from major customers.

The list of generation assets owned by AMP-Ohio is pretty limited and consists of a 1950s vintage 213 MWe coal fired steam plant, a couple of diesel and gas turbine projects, a small hydro plant, and 75 distributed generators with a total capacity of 330 MWe. I would bet that most of those burn either diesel fuel or natural gas. With current gas prices, the fuel cost for gas fired generation is approaching 8 cents per kilowatt-hour. With diesel, it is closer to 18-20 cents just for the fuel.

The new coal project requires each of the member distribution utilities – there are apparently 124 different cities, towns and villages located mainly in Ohio, but also in Pennsylvania, Kentucky, Virginia, West Virginia, and Michigan – to make a decision by March 1 about whether or not they want to participate. If they agree to participate, they will invest in the plant and agree to purchase power from the plant for the next 50 years.

If you live in one of the towns, cities or villages, you might want to take quick action if you have an opinion about the plant’s value or hazards over the next 50 years.

According to a Houston Chronicle article titled Ohio Coal-Fired Plant Planned there are plenty of people who are opposed to the plant and want the company to consider conservation and alternatives, notably including nuclear power. The article also mentions that Ohio’s governor is working on a new energy plan that sees a large role for emission free generation like nuclear power.

In another example of the fact that increases in the estimates of eventual plant costs are not limited to nuclear power, here is what the article said about the cost trend for this new coal plant, which is apparently using well established pulverized coal technology with a few sophisticated improvements.

Construction of the plant, to be built in Letart Falls, about 38 miles south of Athens along the Ohio River, originally was projected to cost $1.3 billion. However, increases in construction costs and other factors have ballooned the price to an estimated $2.9 billion, with warnings from AMP-Ohio that cost could go still higher.

One of the sophisticated features of the new plant, is an ammonia based scrubber system that yields a by-product that is expected to have use as a fertilizer instead of the gypsum product that comes out of most scrubber systems. According to the company literature, the system may even offer the potential for CO2 separation – that application of the technology is due to enter into a test phase this year.

This scrubber system will allow the plant to burn a coal blend that includes high sulfur, Ohio sourced coal. Since the passage of the Clean Air Act of 1990, that coal has been underutilized as many customers opted to use low sulfur coal rather than install scrubber systems in order to meet the emission requirements. (See, for example The Effects of Title IV of the Clean Air Act Amendments of 1990)

I put this project into the “almost smoking gun” category because of the direct competition aspect – AMP-Ohio needs baseload capacity in order to provide more predictable pricing for electricity, a vital commodity important to the economic vitality of its member cities, towns and villages. Despite all suggestions to the contrary, the only real choices are coal, natural gas and nuclear power. If nuclear is chosen, a fifty year long future demand for about 5 million tons of coal per year disappears. At a long term average price of $40 per ton (ignoring the effects of inflation and the time value of money), that would mean an economic shift of $10 BILLION from coal sales to the nuclear power industry.

Of course, one of the sales points for the coal project is its impact on jobs and economic development. Here is a quote from the press release in 2005 that announced the project

The approximately $1.2 billion project will bring 600-800 construction jobs to the region and once completed will employ approximately 150 people to operate the facility. It is projected that the American Municipal Power Generating Station will bring more than $20 million into the area economy annually. AMP-Ohio anticipates the facility being on-line by 2012.

Darn, that gets my competitive juices flowing – modern nuclear plants can beat those employment and economic development numbers hands down!