My colleague Ray Johnson summarizes his experience at the recent EPRI & Reinhold Conference:

I have attended both the EPRI Heat Rate Conference and the Reinhold NOx Conference for the past several years. I have delivered presentations at both those conferences concerning the improvements NeuCo has made for customers applying optimization technology, talked with many customers and suppliers, and attended presentations focused on a variety of projects from both suppliers and utility personnel. The contrast this year with previous years was telling. While there were some definite and interesting advances in both topic areas, the overwhelming theme was our industry's state of confusion. People are concerned, management is frustrated, and the path forward is not clear.

EPRI Heat Rate Conference The Heat Rate Conference previously had a solid focus on applying engineering principles to drive operational improvements on the units. Many presentations were made showing methods to investigate and solve complex problems on turbines, air heaters, condensers, boilers, and balance of plant equipment that affected heat rate. While those presentations were evident at the conference, many more projects were discussed that had a focus more on operational excellence for heat rate improvements. This focus was driven by the continuing debate about global warming and the green house gas emissions from fossil fueled boilers. One presenter made the point that while long-term development work was underway to deal with the emissions, the only thing the existing plants could do now is improve heat rate. Utilities are moving to address these issues in the most cost effective means possible.

Reinhold Environmental NOx Roundtable At the NOx conference the focus also changed. At the conference in 2008, the total focus was what needed to be done to allow year-round SCR operations. That has now been achieved with almost everyone running their SCRs continuously. Companies such as Dominion, Duke, Southern, AEP, and others made presentations and held discussions about the procedures currently implemented to test, maintain, clean, and operate the units under the current scheme. Functions, such as catalyst sampling and testing which were easy when the units were only run for five months, are now much harder. Most companies are using forced outages to do this type of work, but others have implemented yearly outage schedules specifically for the SCR work and have found this to be a valuable approach. In addition to this year's focus on what has been done to enable year-round operations, there was also a stronger focus on what can be done to reduce the costs associated with such operations – such as reducing the amount of NOx inlet to the SCRs. This shift is a definite sign of progress.

A Coming Train Wreck? Despite the advances, the most significant thing I observed across the two conferences was the uncertainty attendees were feeling about regulations facing the industry. A term I heard several times was the "train wreck" that is going to occur by 2015. There is not enough time to achieve the objectives of the proposed regulations and many if not most of the details have not yet been finalized. You could sense that everyone felt there was no way the utilities could supply the electrical needs of the country without running the coal-fired units for the foreseeable future and the costs of some of the proposals were so big that they were impractical. The best example of that is the carbon capture and sequestration (CCS) project currently underway at AEP Mountaineer. The pilot project has been running for over a year with good results. AEP in a joint project with the DOE is currently planning a commercial scale project that will process approximately 20% of the flue gas from the plant. The estimated cost of this project is $686 million with DOE funding half. While there are probably some economies of scale and other cost reductions possible, for just Mountaineer to process 100% of the CO2 from the plant would cost around $3 billion. That is not viable for the coal fleet.

Longer-Term View How do you summarize the current plans? The keynote address at the NOx Conference was given by Mr. Chris Hobson, Chief Environmental Officer at Southern Company. Southern has several projects underway including building an IGCC plant and two new nuclear units, implementing a CCS project, and replacing two coal units with new combined cycle plants. Mr. Hobson was asked after his talk if 2015 was such a mess, what about 2030 or 2040. He said he would give the easy answer first: build more nukes and gas-fired plants to serve the needs. He then stated that the problem with this approach was no one knew really what the long-term costs of gas would be. The difficult answer he gave was to do whatever was needed to make the coal units viable. This, he thought, was the best approach since using a diversity of fuels was critical to providing flexibility as changes occur.

While most people in the US are not thinking now about implications of these decisions, I suggest we are involved in the most critical industry for our continued well being. I am sitting in a warm office at this moment. The outside temperature is about 10ºF and I can afford to run my heat pump and the power is available to run the unit. Will all those things always be true? Time will tell.

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