Increasing Demand
The winter of 2009-2010 was defined by snowstorms of historic proportions and record-breaking low temperatures, as millions of Americans faced blistering cold, damaging flooding and/or white-out blizzard conditions. In part due to the weather and in part to the general economic recovery, residential electricity demand increased by more than seven percent relative to the first quarter of last year. And while the last two years witnessed the first negative demand growth in decades, the EIA projects that United States total electricity consumption will grow by 1.9 percent in 2010.

To put it in perspective, these same projections of 1.9% average annual electricity growth was the basis for a presentation made by the US DOE at NeuCo’s June 2007 Users Summit about the consequences of looming power shortages projected in this decade.  And think about how many planned new coal plants have been cancelled since then!  While power generators and fuel suppliers are still wringing their hands over the effects of the recent recession, I predict they will be back to worrying about how to meet growing electricity demand very soon.

The Coal-Gas Spread
Compounding the effect of resumed growth and tightening supply is the fact that natural gas prices are expected to level out at $8.00/mmBtu over the next few years, which is the price needed to make shale gas economically viable.  The difference between the $4.00/mmBtu experienced during the last year and the $8.00/mmBtu expected "equilibrium," is the difference between a 20% and a 200% "spark spread," which is essentially the profit margin for coal-fired generation. 

So the fundamentals of electricity supply and demand, combined with even moderately higher gas prices, mean that coal-fired power plants will once again become very profitable and thus increasingly crucial to the bottom-line portfolio financial performance of vertically integrated utilities (IOUs) and independent power producers (IPPs) alike.

Unit Reliability & Optimization
Since the commissioning of new coal plants has slowed to a trickle, there is a lot of pressure on the existing fleet of aging coal plants to maximize availability. This pressure will increase as electricity demand and gas prices increase.

NeuCo has begun to see the effects of these market changes through the increased interest in optimization and predictive analytics solutions. This is especially true for our reliability-focused products, such as:

1. MaintenanceOpt®, an equipment health detection and diagnostics system that warns users about equipment health issues before they become catastrophic and aids problem diagnosis; and

2. SootOpt®, a sootblowing optimization system that minimizes unnecessary boiler cleaning actions to reduce tube ruptures, and improves cleaning effectiveness to avoid plugging and fouling events.

While SootOpt helps to prevent the #1 cause of coal-fired plant forced outages, i.e. tube ruptures, MaintenanceOpt sets out to find and expedite the diagnosis and resolution of the broad range of other equipment-related issues than can cause forced outages and derates – for traditional coal, gas or combined cycle units.

Managing Tradeoffs while Enjoying the Co-Benefits
As with NeuCo's other optimizers, the benefits provided by SootOpt partly come from continuously managing tradeoffs between efficiency (as a function of better heat transfer, steam and gas temperatures, sprays, etc.), emissions (NOx and opacity), and availability (avoiding slagging, de-rates and tube leaks). While SootOpt is easily justified on the basis of the reliability benefit alone, it also consistently provides substantial heat rate and emissions control benefits.

And while maximizing reliability and commercial availability is MaintenanceOpt's main focus, it also detects and facilitates the diagnosis and resolution of problems with implications for efficiency and emissions control. It also exploits equipment health issues made evident through CombustionOpt, SootOpt, and PerformanceOpt.

Apology for Shameless Self Promotion
I now see that this blog is not only getting long but lapsing into a NeuCo infomercial, which I normally try and avoid. I just can’t help but get excited about the value of our newer optimizers at a time when reliability is becoming more critical than ever. Can you really blame a guy for sharing his excitement?  

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