power - may 2014
TRANSCRIPT
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May 2014 Vol. 158 No. 5
Vol. 158 No. 5 May 2014
Using Storage to Address Multiple Grid Challenges
Best Practices in Outage Management
CFB Boilers Enable Fuel Diversity
Low-Carbon Efforts in the UK and India
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May 2014 | POWER www.powermag.com 1
ON THE COVERThe 64-MW AES Laurel Mountain Storage Array in West Virginia competitively provides reliability services to utilities across 13 states and the District of Columbia. Courtesy: Brent Kepner/AES
COVER STORY: ENERGY STORAGE24 The Year Energy Storage Hit Its Stride
Technology innovations, market need, policy support, and lower prices are all teeing up energy storage to become a familiar part of grids worldwide. The implications for variable renewable generation should be obvious, but more extensive use of grid-tied storage could also affect fossil units. For example, certain storage technologies sited with gas-fired units could improve start-up times, efficiencies, and heat rates.
34 Balancing Renewables with Li-ion Energy StorageLithium-ion (Li-ion) remains the predominant battery technology for grid applica-tions, as it can be scaled for specific uses and deployed in a modular way. Case stud-ies from three countries demonstrate how Li-ion installations can make the most of variable renewable generation.
SPECIAL REPORT: OUTAGE MANAGEMENT38 Critical Path: Getting Your Outage Ducks in a Row
Every power plant experiences routine and unscheduled outages, but not every plant employs the best planning and execution practices. Especially with leaner, less-experienced staffs, you cant afford to leave outage success to chance.
FEATURES
FUELS
44 Fuel-Flexible CFBs Add Flexibility to Resource PlansFuel quality, fuel availability, and fuel usability (in response to ever-changing regula-tions) can vary significantly over the life of a thermal power plant. Those variables are providing generators around the world with a rationale for using circulating flu-idized bed (CFB) boilers.
RENEWABLES
50 Utility Biomass Use: Turning Over a New Leaf?The use of biomass has a checkered past, but understanding the challenges and con-trolling for them can make biomass use a good move in many scenarios, especially when cheaper fuels are unavailable or low-carbon generation is a priority.
54 Despite Challenges, India Banks on Renewable EnergyIndia may be the only country with a ministry for renewable power, but coal still accounts for 59% of installed capacity. However, unreliable fossil fuel supplies are keeping the country focused on ever-bigger solar and wind installations.
Established 1882 Vol. 158 No. 5 May 2014
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Expanding Talent and
Technology into ONEThe global merger of Mitsubishi Heavy Industries and Hitachi Thermal Power Generation
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www.powermag.com POWER | May 20144
DISTRIBUTED GENERATION
59 David Crane and the Coming Electric Utility ApocalypseDavid Crane, CEO of NRG Energy, one of the earliest and biggest non-utility genera-tors, has long been predicting that the days of conventional utilities are numbered because of the threat posed by distributed solar generation. Some in the industry are starting to take him seriously.
POWER POLICY
63 UK Struggles to Attract Low-Carbon InvestmentUnlike the U.S., the UK actually passed an energy bill at the end of last year, but that may not be sufficient to solve short-term price and capacity challenges while ensur-ing a lower-carbon future.
DEPARTMENTS
SPEAKING OF POWER8 Disruptions vs. Status Quo
GLOBAL MONITOR10 Are Large Dams Unviable?10 Indias Nuclear Liability Law: Breakthrough for Russia, Stalemate Endures for
U.S.12 THE BIG PICTURE: Storage Snapshot14 59-MW Fuel Cell Park Opening Heralds Robust Global Technology Future15 POWER Digest
FOCUS ON O&M18 Himalayan Run-of-River Project Depends on New Component Types
LEGAL & REGULATORY 22 What to Watch for in EPA Carbon Regulations for Existing Plants
By Mark Perlis, Davis Wright Tremaine LLP
COMMENTARY72 Greenhouse Gas Emissions Are Not Our Only Problem
By Marilu Hastings, Cynthia and George Mitchell Foundation
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63
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In this web exclusive, listed online at powermag.com with the features for this issue,
Editor Gail Reitenbach provides some observations of and observations made at the an-
nual Platts event for those involved in project development, financing, and litigation.
Coal and Nuclear Nearly Invisible at Platts Global Power Markets
Connect with POWERIf you like POWER magazine, follow us online for timely industry news and comments.
Become our fan at facebook.com/POWERmagazine
Follow us on Twitter @POWERmagazine
Join the LinkedIn POWER magazine Group
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www.powermag.com POWER | May 20148
SPEAKING OF POWER
Theres been a lot of talk in the past couple of years about disruption to the long-established status quo in
the electric utility and power generation sector. But I would argue that both terms in this latest battle are inflated.
Whether the issue is central station versus distributed generation (DG) or re-newables versus fossil fuels, the future likely wont declare clear winners and losers but something closer to frenemies (Google it).
The Status Quo Is Short-LivedEven in the traditional utility industry, business and technology have seen major shifts over the past century. Technology and fuel availability are often the disrup-tive forces, as they are today with new and cheaper sources of both natural gas and renewable generationplus all the digital tools that enable smarter grids and microgrids. But overall, on a capacity basis, nuclear energy was the most mo-mentous fuel/technology change in the past 100 years.
Policy can also change how and where power is generated. The deluge of new and pending federal environmental regu-lations may seem unprecedented, but previous policies also had notable, some-times widely swinging, consequences: The 1920 Federal Water Power Act en-couraged hydropower development, while the 1978 Power Plant and Industrial Fuel Act (repealed in 1987) put restrictions on new plants fueled by oil or natural gas (because of concerns about national energy security) and encouraged those fueled by coal, nuclear, and alternative fuels. Today we take for granted that the U.S. is fully electrified, but thats only because of the 1936 Rural Electrifica-tion Act, which provided federal loans (yes, theyve been around that long) to encourage the building of distribution systems in rural areas.
Disruption Will Be Less Dramatic Than BilledIndustry outsiders (entrepreneurs and their venture capitalist pals) and minor-
ity players (including renewable energy developers) have reason to claim that their technologies and business mod-els will end the stranglehold of familiar generation behemoths and distribution companies. Its how they get attention for their ideas. Similarly, media and con-sulting companies promote in-person and virtual events to discuss disruption in the industry. Is all the noise about the D word just marketing hype? No.
Though knowledgeable people may disagree about the degree and speed of change ahead, theres no question that the industry is already changing, so if it takes a bit of hyperbole to get everyone focused on what their future roles might be, thats a good thing.
This issue of POWER has multiple ar-ticles on technologies, including new and cheaper modes of energy storage, that promise to change how electricity is gen-erated and delivered. Also in this issue, Contributing Editor Kennedy Maize offers an article titled David Crane and the Com-ing Utility Apocalypse that looks at the hype and reality of increasing amounts of DG. As I was preparing that piece for pro-duction, I was struck by an irony buried in the now-familiar story of DG overtaking the traditional utility.
DG is typically thought of as small-scale, usually renewable generation that is under the control of the owner of a residential, commercial, or industrial site oras is becoming more commonan aggregator or lessor of that generation. NRG CEO Da-vid Crane predicts a future in which these distributed energy resources (DER) partner with onsite natural gaspowered fuel cells for greater customer independence. How-ever, he also envisions a super-utilitynot a traditional utility, but nevertheless, one that he controls. Unlike most current scenarios that frame DG as something the utility doesnt own, Crane wants NRG to own and control this DG. So, ultimately, he isnt anti-utility; he has his eyes set on creating a new-fangled monster utilityalbeit a distributed one.
To control DER, NRG (or like-minded utilities) would still need access to some
sort of communications linethe gas pipeline wont sufficeso a smart grid, or at least microgrid, infrastructure will still be essential.
In the meantime, NRG is building scale the old-fashioned way: On Apr. 1, with the acquisition of Edison Mission Energy and Dominions competitive retail electricity business, NRG became not only the largest U.S. independent power producer but also the second-largest generator overall, with a total of 53,000 MW of capacity. (That same week, other NRG executives were speaking at the ELECTRIC POWER Confer-ence in New Orleans. See our coverage of that event in the next issue.)
Slow-Motion DisruptionAs the articles on efforts in the United Kingdom and India to advance a low-car-bon economy demonstrate, achieving that goal isnt easy or fast, even with the lat-est technology innovations and aggressive policy support. Consequently, industry leaders globally agree that fossil fuels will continue to play a critical role in deliv-ering reliable, affordable electrons for at least the next few decades.
Nevertheless, the nature and extent of change on both business model and gen-eration source fronts is likely to be great-er than what you might call incremental. And really, if you dont expect your in-dustryany industryto be affected by the larger shifts in technology and culture, youre in denial. Google seems to announce some new digital device or service nearly every month, and in the space of a decade, Elon Musk (cofounder of the ambitious all-electric car maverick Tesla) has taken SpaceX from fantasy to reality and is now the only U.S. entity to send rockets into space (NASA is using SpaceX rockets to send astronauts to the International Space Station).
The question is whether todays utili-ties and regulators will be sufficiently proactive to avoid being largely overtak-en by young upstarts. It may be time to embrace the concept of frenemies.
Gail Reitenbach, PhD is POWERs editor (@GailReit, @POWERmagazine).
Disruptions vs. Status Quo
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www.powermag.com POWER | May 201410
Are Large Dams Unviable?After a lull that spanned nearly two de-cades, a hoard of new massive hydropower projects are being developed around the world. Some, like the 11.2-GW Belo Monte dam in Brazil, the 4.5-GW Diamer-Bhasha project in Pakistan, the Jinsha River dams in China, the 6-GW Myitsone dam in Myan-mar, and the 1.8-GW Gilgel Gibe III dam in Ethiopia are controversial for their sup-posed environmental and social impacts, but they are also unprecedented in scale and cost. Nonetheless, according to re-searchers from the University of Oxford, in the vast majority of cases such large dams are not economically viable, and policymak-ers in developing countries should instead seek out more prudent alternatives that can be built over shorter time horizons.
Basing their data on 245 large dams in 65 different countries, Professor Bent Fly-vbjerg of the University of Oxfords Said Business School and Dr. Atif Ansar, lectur-er at the University of Oxfords Blavatnik School of Government, posit in a recent study published in the journal Energy Poli-cy that three out of every four large dams suffer a cost overrun in constant local currency terms and that the construction costs of large dams are on average 96% higher than original budgets.
By the same token, forecasts of costs of large dams today are likely to be as wrong as they were between 1934 and 2007, they say. The researchers suggest that the Itaipu Dam, which straddles a
border and provides 72% of Paraguays power and 17% of Brazils, suffered a 240% cost overrun. China (Figure 1), In-donesia, Pakistan, and other nations show similar amnesic behavior regarding the building of dams, they say.
At the same time, an overwhelming eight of 10 large dams also suffered sched-ule overruns, the study shows. Large dams take an average of 8.2 years to buildand often extend more than 10 years. The re-searchers concluded that these long time horizons leave dam projects particularly ineffective in resolving urgent energy cri-ses and are especially vulnerable to cur-rency volatility, hyperinflation, political tensions, and swings in water availability and electricity prices. The systematically poor outcomes of large dams suggest that fools and liars have been at the helm, said Professor Flyvbjerg in a statement.
But for the International Hydropower Association (IHA), which rebutted a num-ber of claims made by the authors, the question that should be asked is: Is the project a good investment? not Does the project overrun? When all things are considered, hydropower can make a pow-erful case as a long-term investment, by delivering sustainable energy and water services for multiple generations. Unfortu-nately, the reports authors seem to have completely ignored the multiple benefits of hydropower, and so [present] an un-balanced picture of the economic value versus the investment risks, says the
group, whose platinum members include companies that build mega-dams, among them, China Power Investment Corp., Chi-na Three Gorges Corp., Itaipu Binacional, RusHydro, and SinHydro.
Only about 20% of the worlds dams actually have any hydropower associated with their reservoirs and yet hydropower produces 76% of the worlds renewable power according to the IHA. It is unaf-fected by volatile and rising fuel prices, which can have dramatic impacts on the viability of fossil power technologies, not to mention the avoided pollution. The organization admits that hydropower proj-ects do have high upfront outlays during the construction phase, but also very low running costs and [they] operate for many decades. Not to mention, modern hydro-power operating efficiencies can reach 95% and turbine availability for opera-tion can exceed this percentage, it says. This is unmatched by any other source of power generation.
On the whole, the worlds largest hydro-power projects are worth their while, the IHA concludes. Itaipu indeed saw a cost overrun during construction, but all debts will be paid by 2023 according to the 1973 binational Treaty that created the project, it says. The primary purpose of the Three Gorges dam in China is for flood controlnot power generationand since the proj-ect was commissioned in 2007 (one year ahead of schedule and RMB30 billion under budget), it has significantly attenuated peak flow and averted economic impacts from floods, as well as increased naviga-tion by more than four times.
Because the technology is reliable, the scale is considerable, and the resulting pow-er prices are economical and predictable, At a time when energy and water services are at the forefront of policy agendas around the world, hydropower is an investment that makes a lot of sense, the IHA says.
Indias Nuclear Liability Law: Breakthrough for Russia, Stalemate Endures for U.S.India and Russia on Apr. 1 said they had devised a significant deal that will allow the first import of nuclear reactors in In-dia, despite Indias 2010-passed nuclear liability law that allows nuclear power plant operators to hold a supplier respon-sible for an accident if the cause is blamed
1. Worth a dam? Chinas 12th Five-Year Plan (20112015) foresees 285 GW of new hydro capacity, including 41 GW of pumped storage, to boost its share of renewable power. That
means construction is ongoing at an estimated 60 projects to exploit 71% of the countrys hydro
potential, many of which are large dams. In 2012, as well as installing the worlds largest hydro-
power generating turbine at the 6.4-GW Xiangjiaba station, the 22.5-GW Three Gorges complex
(shown here) entered full operation, generating an estimated 14% of the countrys total hydro
power. Projects under construction include the 13.9-GW Xiluodu and the 5.8-GW Nuozhadu
projects. Courtesy: Harvey Barrison/Flickr
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May 2014 | POWER www.powermag.com 11
on equipment defects.The law has stalled the implementation of deals for new reac-
tors that India signed with the U.S., Russia, and France in 2008, when the Nuclear Suppliers Group (NSG) allowed India to import nuclear fuel technology without being a member of the multina-tional body concerned with reducing nuclear proliferation. India said the breakthrough deal with Russia reached this April after four years of negotiations takes into account the liability law when pricing four more Russian reactors meant for Indias Kun-dankulam plant in Tamil Nadu (each of which is valued at $2.5 billion) as well as four or six other VVER-1200 units planned for Haripur, West Bengal. The deal essentially calls for Indias public sector General Insurance Co. to evaluate each component of the Russian reactors and prescribe a 20-year insurance premium it will charge to cover Russias liability for an accident.
Russias state-owned nuclear firm Rosatom reportedly has indemnity from any liability arising from an accident at the VVER-1000s at Kundankulam Unit 1 (Figure 2), which attained criticality in July 2013 and is expected to come online later this year, and Unit 2, expected to be operational in October 2014. Observers note that contracts for those plants were signed in 1998, before Indias domestic liability legislation had even been contemplated.
Before Indian legislation on civil nuclear liabilityThe Civil Liability for Nuclear Damage Billfinally passed both houses of parliament in August 2010, exempting suppliers from all liability had been Indias typical practice, starting in 1962, when India signed its first nuclear cooperation agreement with the U.S. to allow General Electric to supply two 200-MW reactors to Indias Tarapur site. The practice of liability exemption was modeled on Americas own 1957-passed nuclear liability law, the Price Ander-son Act, and went on to extend indemnity protection to Atomic Energy of Canada Ltd. for two reactors in Rajasthan in 1965, and later to Russia.
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2. The early bird and Indias nuclear worm. The first of two VVER-1000 reactors at the Kundankulam nuclear power plant in
the Indian state of Tamil Nadu attained criticality in July 2013 and is
expected to come online later this year, more than a decade after con-
struction began within implementation of an intergovernmental agree-
ment between Russia and India signed in 1988 and supplemented
in 1998. A memorandum of mutual understanding between the two
countries calls for at least two more units at the Kundankulam site and
the construction of at least 16 nuclear power plants of Russian design
in India. Courtesy: Rosatom
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www.powermag.com POWER | May 201412
QATAR
DENMARK
S.KOREA
NETHERLANDS
SAUDIARABIA
UAE
COUNTRIES WITH EXISTING ENERGY STORAGE
ASIA: 64.6 GW(150 projects)
EUROPE: 52.7 GW(225 projects)
N. AMERICA: 21.3 GW(237 projects)
AFRICA/MIDDLE EAST: 3 GW(10 projects)
S. AMERICA: 1 GW(7 projects)
AUSTRALASIA: 2.5 GW(20 projects)
TOTAL: 145.3 GW 649 projects*
The worlds energy storage efforts have experienced a tremendous boost in recent years, as this April 2014 U.S. Energy Department snapshot (of verified
projects and projects whose verification is in process) shows. The fledgling grid storage market is expected to transform into a $10.4 billion business by
2017, compared to just $200 million in 2012. Storage capacity is rated here in wattsas opposed to watt-hours, energys true measure, because most
storage projects are pumped hydro (some of them seasonal) or projects that have no clear indication of duration. Sources: Sandia National Laboratories, DOE
Global Energy Storage Database Copy and artwork by Sonal Patel, a POWER associate editor.
181 GW
Total storage projects that are operational,
under construction, or have been announced
worldwide
ASIA EUROPE N. AMERICA S. AMERICAAFRICA/
MIDDLE EAST
AUSTRALASIA
NO STORAGE DEVELOPING
STORAGE
*Denotes only energy storage projects that are operational worldwide; includes 26 MW of projects that are less than 500 kW.
BREAKDOWN BY STORAGE TECHNOLOGY
PUMPED HYDRO
97.8%142,078 MW
2.2%
HYDROGEN
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www.powermag.com POWER | May 201414
Ironically, India only passed its 2010 nuclear liability law to boost its credibility and as a last step to activate the 2008 In-do-U.S. civilian nuclear agreement, because U.S. nuclear reactor manufacturing companies require a liability bill to get insurance at home. In return for Washingtons help in persuading the NSG to create an exemption that allowed its members to engage in nuclear trade with India (even though the country is not a sig-natory to the nonproliferation treaty), per the 2008 agreement, India committed to buy U.S. reactors worth 10 GWroughly $50 billion or more in reactor sales.
And in fact, the final Indian liability law actually quashes an absolute liability mandate established by the Indian Supreme Court in the aftermath of the 1984 Bhopal disaster, in which 15,000 people died after methyl isocyanate leaked from a plant run by U.S. company Union Carbide and whose cause was pinned to corporate negligence. It caps the liability of the Nuclear Power Corporation of India Ltd., Indias state-owned nuclear firm that owns all of the countrys commercially operating reactors, at about $250 million. But though the government stealthily at-tempted to prevent it, the final law also contains a clausea right to recoursethat allows the public sector company to reclaim some of those funds from a supplier.
Significantly, the April-drafted India-Russia liability deal could serve as a template for a similar government-to-government pact with France, whose state-owned nuclear firm AREVA has proposed to build two EPR reactors in Maharashtra, India said. But for the U.S., the right to recourse clause remains a major deterrent.
Though U.S. Energy Secretary Ernest Moniz met with Indian officials March 1112 for an ongoing India-U.S. energy dia-logue, the two countries are reportedly no closer to resolving
their stalemate over the nuclear liability law. For U.S. suppliers like Westinghousethe American unit of Japans Toshiba Corp. that has proposed to build an AP1000 reactor in Gujaratand for GE-Hitachi, which has been in talks with India for years for six proposed ESBWR units in Andhra Pradesh, efforts to develop nuclear projects in India have been frustrating, despite the 2008 Indo-U.S. civil nuclear agreement.
The companies contend that specific sections of the nuclear li-ability act violate the International Atomic Energy Agencys Inter-national Convention on Supplementary Compensation for Nuclear Damage (CSC). Though the 1997-adopted CSC has 17 country sig-natories, only four countries have ratified it, and until five signa-tory countries with a minimum of 400 GWth of installed nuclear capacity (a third of all the worlds currently operable reactors) ratify it, the convention cannot pass into force. Last December, Canada signed the CSC, and Japan announced plans to become the fifth country to ratify it, but that hasnt happened yet. And while India is a signatory of the CSC, it will continue to rely on its own law covering nuclear liability, which it blankly refuses to dilute, as officials told the U.S. energy dialogue delegation in March.
59-MW Fuel Cell Park Opening Heralds Robust Global Technology FutureThe 59-MW Gyeonggi Green Energy fuel cell park (Figure 3) in South Koreas Hwasung Cityone of the worlds largest fuel cell facili-tiesbegan operation in February. The five-acre facility built by South Koreas largest private energy producer, POSCO Energy, con-sists of 21 FuelCell Energy DFC3000 power plants rated at 2.8 MW each to provide continuous baseload power to the power-strapped South Korean grid and heat for a district heating system.
Completion of the projectbegun in November 2012took only 13 months, according to project developers. And though it is the first fuel cell project of its scale for stationary power, several more are in the pipeline, evidence of an emerging trend for the fledgling alternative energy source. UK-based market intelligence firm Fuel Cell Today posits that overall shipments of fuel cell sys-tems for stationary power in 2012 soared 50% compared to 2011, with more than 24,100 units shipped worth a total 125 MW.
Proton exchange membrane fuel cells (PEMFCs) dominated a stunning 88% of the market in 2012, because that technology is well-suited to applications from the small, sub-watt scale to the megawatt scale and can be used with different fuel types. PEMFCs are expected to continue their growth because the technology is the preferred choice in automotive applications.
But the firm also noted exceptional growth for five other spe-cific fuel cell technologies. Molten carbonate fuel cells (MCFCs) are rising to an equal footing with PEMFC in terms of megawatts shipped, largely due to adoption of large stationary power plants in South Korealike the Gyeonggi Green Energy fuel cell parkand the U.S., says Fuel Cell Today. The firm forecasts that more megawatts of MCFC will be shipped in 2013 than any other fuel cell type. Then, there are solid oxide fuel cells, which are showing in-creasing penetration of residential microcombined heat and pow-er in Japan and megawatt-scale installations in the U.S. by Bloom Energy, it said. The other three technologies are direct methanol fuel cells, phosphoric acid fuel cells, and alkaline fuel cells.
FuelCell Energy, maker of the Direct FuelCell power plant, says Asian markets, in particular, are accelerating market demand for stationary power plants. The company in October 2012 agreed to supply modules worth 122 MW to POSCO, which is pursuing a number of combined heat and power applications as well as a demonstration project at a liquefied natural gas terminal to con-
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May 2014 | POWER www.powermag.com 15
vert boil-off natural gas to power.Meanwhile, in Seoul City, 26 miles
to the north of Hwasung City, FuelCell Energy is putting up seven DFC3000 plants for the 19.6-MW Godeok Rolling Stock Management Office fuel cell park, a project that could counter power dis-
ruptions to a nearby railroad depot when it becomes operational later this year. And in the U.S., the 14.9-MW Bridgeport fuel cell park, owned by Dominion, has been completed and is delivering power to the grid under a 15-year power pur-chase agreement.
POWER DigestNetherlands to Ban Financing of Coal Plants Abroad. The Netherlands on Mar. 24 joined an initiative of the U.S., the UK, Denmark, Finland, Iceland, Norway, and Sweden to reach a global climate change agreement in 2015, agreeing to end support for public financing of new coal-fired power plants abroad except in rare circumstanc-es. The Netherlands and U.S. are already working together to promote a technology-neutral standard in the Organization for Economic Cooperation and Development Export Credit Group that limits support for high-carbon-intensity power plants by export credit agencies, said Dutch Prime Minister Mark Rutte in a statement.
IEA: High Renewables by 2050 Sce-nario Is Challenging. A report released in March by the International Energy Agencys platform for enhancing interna-tional cooperation on policies and market instruments for renewable technologiesthe Renewable Energy Technology Deploy-ment (IEA-RETD)envisions what the energy system of a high-renewable-energy world might look like in 2050. Many chal-lenges will need to be overcome before the vision could become a reality, it con-
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3. 21 plants on site. The 59-MW Gyeonggi Green Energy fuel cell park that recently began operating in South Koreas Hwasung City comprises 21 FuelCell Energy DFC3000 power
plants rated at 2.8 MW each. Courtesy: FuelCell Energy
-
www.powermag.com POWER | May 201416
cludes however. These will include making the implementation and the transition to such a radically different energy architec-ture happen; ensuring the system will op-erate in a stable manner without crashing and jeopardizing security of energy sup-ply; and determining how all this can be achieved at a reasonable societal cost.
The cost hurdle could soon be overcome: Large hydropower, photovoltaics, and on-shore wind in areas with high yields, and some biomass waste generation, are now competitive when compared with fossil fuelbased energies, while most remaining renew-able energy technologies can be expected to see considerable cost reduction through learning by doing as increased capacity is deployed, the report notes. But it remains to be seen what level of centralized control will be required to provide the markets and regu-lators confidence that the energy system will be able to respond dynamically to bal-ance demand and supply while maintaining supply, it concludes. All this needs studying and testing in practice.
Renewable Targets, Promotion of Nuclear Power Highlighted in Japans Draft Energy Plan. Japans ruling coali-tion comprising the ruling Liberal Demo-cratic Party (LDP) and the New Komeito party on Apr. 4 approved a draft of what could become the countrys first Basic En-ergy Plan since the Fukushima disaster. The draft includes revisions, pushed for by New Komeito, that include numerical targets, not just stated commitments, for renewable energy. It reportedly now calls for renewables to constitute 20% of total power supply by 2030. Japans Ministry of Land, Infrastructure, and Transport on Mar. 17, meanwhile, unveiled a compre-hensive environmental action program identifying steps the country should un-dertake by 2020 to reduce greenhouse gas emissions by 3.8% in 2020 compared with 2005 levels. The pledge is much lower than the 25% reduction in 2020 compared to a 1990 benchmark proclaimed in 2009.
Though all 48 of the countrys operating reactors are still shut down pending safety approvals, and no specific targets have been unveiled for nuclear power, the gov-ernments draft energy plan also reportedly calls for the promotion of further research and development of high-temperature gas-cooled reactors that make them less sus-ceptible to core meltdown than other types of reactors, and for technological develop-ment to enhance the safety of light water reactors, including countermeasures for severe accidents. Japans Cabinet is soon expected to approve the new energy plan.
Spains Renewables Subsidy Cuts
Make Big Gains in Deficit Reduction. Spain reported a 33% tariff deficit drop to $5 billion in 2013 compared with $7.5 billion in 2012, a reduction that it said is due to an industry overhaul that cut renewable subsidies and introduced new taxes on electricity generation starting in July 2013. In February, the govern-ment laid out a proposal that sets new formulas for calculating an overall reduc-tion in subsidy payments to solar, wind, and other renewables to further slash the deficit by $2.4 billion. The formulas are based on a level of reasonable profit-ability that each type of project can expect during its decades-long lifespan. Wind farmsrepresenting 37% of the countrys installed wind power capaci-tywould receive no further subsidies under the proposal. Energy companies such as wind leader Iberdrola and renew-ables group Acciona have reportedly sold off assets and overhauled business plans in response to the proposed rules, which have yet to be signed into law.
World Bank OKs Grand Inga Funding. The World Bank on Apr. 1 approved a $73.1 million grant for the gargantuan 40-GW Grand Inga project in the Democratic Republic of Congo (DRC). The funds will be dedicated to Inga 3, the first of six stages planned for the $80 billion Grand Inga scheme, which gar-nered $33.4 million last year from the Afri-can Development Bank. Under a deal signed with the DRC in May 2013, South Africa will
receive 2.5 GW of the 4.8 GW capacity an-ticipated from Inga 3.
Unit 14 Commissioned at Chinas 13.9-GW Xiluodu Dam. The China Three Gorges Corp. on Mar. 30 commissioned the 14th generating unit at its 13.9-GW Xiluodu hydropower project. The project located on the Jinsha River near Chengdu in Sichuan province consists of 18 Francis turbine generators each rated at 770 MW and a 937-foot-tall dam, one of the tallest in the world. It is Chinas second-largest hydropower project after the 22.5-GW Three Gorges plant. Construction began in 2003 and the project could be fully opera-tional as soon as 2015.
France Gets a Carbon Tax. Frances car-bon tax on coal, heavy fuel oil, and natural gas became effective on Apr. 1. The internal tax on consumption (taxe intrieure sur la consommation) was adopted in December 2013 to back President Francois Hollandes announced target of reducing fossil fuel consumption by 30% by 2030, to speed the governments planned energy transition to renewables while reducing the role of nuclear power, as well as to reduce the pub-lic deficit. Only 3% of Frances total power and heat was generated with coal and peat in 2011; natural gas took a larger share of 5%. The tax on gas is set at 1.41/MWh as of Apr. 1, and will double to 2.93/MWh in 2015 and 4.45/MWh in 2016.
Sonal Patel is a POWER associate edi-tor (@POWERmagazine, @sonalcpatel)
Editorial Excellence
POWER is proud to report that Associate Editor Sonal Patel was a finalist for a Jesse H. Neal Award for a series of country reports, Exceptional Transitions, published in the magazine in 2013. The articles recognized were: The Russian Power Revolution, Germanys Energy Transition Experiment, Indonesia: Energy Rich and Electricity Poor, and South Korea Walks an Energy Tightrope (available at powermag.com). Sonal graciously included Editor Gail Reitenbach, PhD in the nomination.
The Jesse H. Neal Awards are the most prestigious editorial honors in the field of specialized journalism and are given by The Association of Business Information & Media Companies. The award winner in our category (one of 45 total categories with approximately 180 finalists combined) was also the overall Grand Neal Award winner, so we had some extra-tough competition!
Congratulations, Sonal on your strong submission and your contributions to each issue of POWER and POWERnews.
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www.powermag.com POWER | May 201418
Himalayan Run-of-River Project Depends on New Component Types
The Himalayan Mountains tower over some of the most rugged terrain and harshest climate conditions on the planet. Melting snows from Mount Everest, K2, and hun-dreds of other snow-capped peaks carve out more than 6,000 rivers in Nepal, Chi-na, Bhutan, India, and Pakistan. The vast majority of the people living along these remote rivers and valleys survive in under-developed living conditions in geographi-cally isolated and difficult-to-access areas. In more ways than one, the rural people of the Himalayas exist off the grid.
The homes and schools in these tiny vil-lages (Figure 1) do not have a consistent source of electricity, although a few have small solar panels that provide enough power for one or two lights. As in most developing countries, basic serviceslike heat and electricityare scarce and in-consistent. Small stoves, burning animal dung or scarce wood resources, provide all of the heat and cooking for villagers. Unfortunately, connecting these small communities to existing power grids and centralized power is cost prohibitive.
Life isnt easy in a tiny Himalayan com-munity that doesnt have reliable power, explains Lynn Tessier, engineering advi-sor with Advantage Products Inc. Small rural schools, for example, are limited in their ability to educate students because of the lack of consistent electricity. The schools in these remote villages typically only provide education up to grade seven, and beyond that the children must go to a bigger city, like Katmandu, for additional schooling. And, as is often the case, once the children experience the world at these bigger schools, they dont return to the village to help improve living conditions or educate the next generation.
Hydrokinetic Generation
System Changes Lives
To combat the scarcity of reliable power, US Synthetic, Advantage Products Inc., New Energy Corp., World Wildlife Fund (WWF), and Himalaya Currents Inc. have teamed up to develop a local, sustainable, clean energy system that can provide Hi-malayan villages with continuous power. The project relies on an in-stream hydroki-netic power generation system that is sub-merged in a flume in a nearby river. The
5-kW EnCurrent power generation system (Figure 2) converts kinetic energy in the rivers water current into electrical power. The pollution-free electricity is then trans-mitted to the village.
As a humanitarian project, Advantage Products is donating the EnCurrent power generation system developed by New En-ergy. New Energy, for its part, is provid-ing project support and flume and weir
design. US Synthetic is donating an envi-ronmentally friendly, grease-free polycrys-talline diamond (PCD) bearing. Funding to transport and install the equipment is being provided by Himalaya Currents. WWF is providing project coordination with lo-cal government and communities, permit applications for the project, and travel co-ordination for the project team. Local com-munity members from the village are also
1. View from a helicopter of Ringmo, Nepal. Isolated villages, such as Ringmo, offer significant challenges for electricity generation and distribution. Courtesy: US Synthetic
2. A hydrokinetic turbine generator. Using the current of a river, the turbine and direct drive generator can provide continuous power in a free flow environment. Courtesy: US
Synthetic
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www.powermag.com POWER | May 201420
helping out with the projectgathering rock and constructing wire mesh gabions to form the flume and weir in the river and installing the EnCurrent generator.
The life-changing possibilities of this project are exciting! explains Jair Gon-zalez, general manager for US Synthetic Bearings. Its fun to think that our tech-nology might literally keep the lights on in a classroom or help a child learn some-thing new online.
New Bearing Design Improves
Reliability
The project utilizes the flow of the river to keep the hydrokinetic turbine rotors constantly spinningsupplying power 24 hours a day, seven days a week. The gen-erators simple design provides clean and continuous power with an extremely small environmental footprint. The industrys first above-water direct drive generator coupled with the water-lubricated, long-lasting PCD bearings used in the underwa-ter turbine rotor eliminates environmental contaminates like grease or oil.
As snow melts year round in the high Himalayas and flows down into the ex-pansive river system, villagers have access to significant and consistent potential energy. Hydroelectric power generation is more reliable and, in many locations, more easily accessed than other renewable energy sources like wind or solar. The riv-ers in the Himalayas offer one of the larg-est, untapped renewable energy sources in the world. The EnCurrent generator is ideally suited to capture potential energy in these remote areas.
Geographically, most remote villages in the region are built in deep mountain val-leys that experience limited sunlight. The shadows made by these towering moun-tains limit the efficiency and effectiveness of solar power (especially when panels are installed within or near the village). In-stalling solar panels on mountaintops or ridgelines where sunlight is more abun-
dant, presents other problems in construc-tion, system maintenance, and energy transmission.
Like solar power, wind power would present logistical problemsrequiring mountaintop or ridgeline construction that would require transmission line construc-tion. In both cases, providing 24-hour power would require a much larger sys-tem and an equally large battery storage bank. Batteries also present a significant environmental hazard, are expensive, offer limited life, and present significant trans-portation challenges in remote areas.
The first EnCurrent system will be in-stalled at the remote mountain village of Ringmo. Ringmo is located on the shores of Lake Phoksundo in the Shey Phoksundo
National Park, high in the Dolpa region in Nepal. A suitable location along the river was chosen in April 2013. Ringmo residents were very enthusiastic about the possibility of having electricity for their village (Figure 3).
Villagers were so excited that as soon as they were shown the sketches of the gabion (Figure 4) and weir design (Figure 5), they wanted to go down to the river and begin construction immediately, says Tessier.
Overcoming Challenging
Conditions
A significant problem with this project is the remoteness of the location. The first location for installation is a three-day
3. Ringmo villagers. Residents meet to learn details about the project. Courtesy:
US Synthetic
4. Model image of the gabion with a hydrokinetic turbine installed. The caged rocks form the foundation for the turbine. Courtesy: US Synthetic
5. Model image of a weir constructed in the river. The low damwhich is relatively easy to construct using locally available rocksdirects the flow of water through the
turbine. Courtesy: US Synthetic
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May 2014 | POWER www.powermag.com 21
walk from the nearest airstrip and a six-day walk from the nearest road. Getting equipment in and out is difficult. And, doing it by helicopter is incredibly expen-sive, explains Clayton Bear, president, New Energy Corp. Because we will have to haul the equipment in by porter or pony caravans, we quickly recognized the need to make our system as simple and light-weight as possible. So, we scrapped the gearbox and focused on a simple above-water direct drive hydrokinetic generator using a submerged water-lubricated PCD bearing for the turbine rotor. This design breaks the system down into small enough components that can be carried by porters and assembled on site with hand tools.
The biggest challenges facing the hydro-kinetic system are underwater abrasion and wear on the turbines rotor. As water moves downstream in Himalayan rivers, it picks up more and more debris and sedimentturning the water brown from all of the mud, gravel, and sand churning up from the river bottom. The melting ice from Hima-layan glaciers is laden with abrasive sedi-ment. These abrasive particles can quickly destroy standard sealed bearings and wear components on traditional turbine rotors; however, New Energy designed the projects underwater turbine rotor to work with PCD bearings from US Synthetic.
PCD bearings are ideally suited for oper-ation in harsh process fluid environments where abrasive particles can cause accel-erated wear. US Synthetic diamond bear-ings are designed to be the perfect match for the harshest, most demanding condi-tions and environments. In our initial testing, we threw sand and gravel into the PCD bearing to see how it would perform.
It seemed to like itjust ground up the particles with no problem. In some ways, it actually worked better, Bear quipped.
The system was scheduled to ship to Nepal in mid-March 2014, as this issue was being produced. The people of Ringmo plan to install the system in April and May 2014. Once completed, the project will
generate 24-hour power, easily handling fluctuating energy loads without losing a lot of energy in the transmission process. PCD bearings will make the generator vir-tually maintenance free. And, the small, environmentally friendly hydrokinetic sys-tem will provide power for needed light and satellite connections to the rest of the world for an isolated, ecologically sen-sitive area of the planet (Figure 6).
The first installation builds on the con-cept of localized power. It utilizes clean energy technology and available resources without contaminating the environment in the process. The initial load for the village was estimated to be in the neighborhood of 2 kW, but there is already talk among the villagers of additional uses for the electric-ity. More units could be installed on the river downstream from the initial system.
There are tens of thousands of loca-tions around the globe, similar to this one in Nepal, that do not have access to continuous, reliable electricity. Thanks to the new technology utilized in this in-novative system, that may change in the near future.
Edited by Aaron Larson, a POWER associate editor (@AaronL_Power,
@POWERmagazine).
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6. Hydrokinetic turbine in the water. Turbines can be floated or mounted in a struc-ture. The floating versionshown hereis easy to install and is anchored in place using cables.
Courtesy: US Synthetic
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www.powermag.com POWER | May 201422
What to Watch for in EPA Carbon Regulations for Existing PlantsMark Perlis
The U.S. Environmental Protection Agency (EPA) is expected to propose first-of-a-kind greenhouse gas (GHG) emission limits for existing power plants by June 2014. The EPA will
do so under a rarely used provision of the Clean Air Act, known as Section 111(d). Here are some of the key questions that the EPA faces in crafting its forthcoming regulations.
What Kind of GHG Limits Will Be Imposed?Section 111(d) authorizes the EPA to prescribe performance stan-dards for existing sources that emit GHGs. Although the EPA has identified six primary GHGs that endanger the worlds climate, car-bon dioxide (CO
2) is the most prevalent (measured in terms of its
potential global warming impact), and fossil fuel electric generating plants are the largest source of CO
2 emissions in the U.S. Since the
EPA is not required to regulate all GHGs or to regulate all sources that emit a particular GHG, the EPA will likely start its regulatory regime by proposing performance standards only for fossil-plant emissions. The EPA will likely reserve similar authority to impose, in the future, performance standards under Section 111(d) for other GHGs, such as methane and nitrous oxide, and upon other industrial sources that emit significant CO
2 or other GHG emissions.
Will the EPA Prescribe Uniform or Differentiated Limits?Performance standards are typically expressed as maximum rates of emissions per unit of output, for example, pounds of CO
2 per MWh.
As a very rough approximation, existing coal-fired plants produce approximately twice as much CO
2 per MWh as combined cycle plants.
This CO2 performance differential is attributable to the higher car-
bon content in coal and higher heat rates of coal plants. The EPA might prescribe a uniform, national power-sector per-
formance standard. Alternatively, the EPA might prescribe higher performance standards for coal-fired steam boilers than for com-bustion turbines, both simple cycle and combined-cycle. Further differentiation may be introduced because Section 111(d) relies upon state implementation plans, rather than a uniform national plan. Thus, the EPA might prescribe different performance stan-dards for each state, based on its historic generation mix.
How Will the EPA Justify the Stringency of Performance Standards?From a climate policy perspective, the EPAs goal is to achieve substantial reductions in the aggregate level of power sector CO
2
emissions. President Obama has established an economy-wide target for reducing the nations GHG emissions to 17% below 2005 levels by 2020. A key challenge for the EPA is whether it can prescribe performance standards that will lead to CO
2 emis-
sion reductions from the power sector at least as large and as quickly as the presidents overall target.
From a legal perspective, Section 111(d) might constrain the EPAs discretion to set the stringency level of proposed CO
2 perfor-
mance standards. Section 111 requires that performance standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction which . . . the Administrator determines has been adequately demonstrated. Among the most controversial issues confronting the EPA are how to determine the best system of emission reduction (BSER) for power plant CO
2 emissions, and how to determine that BSER has
been adequately demonstrated. Some commentators contend that BSER must be determined based on emission reduction strate-gies and technologies that operators can implement within the fence of the power plant. Other commentators contend that BSER may be determined for the electricity sector as a whole based on regulatory measures that can be imposed beyond the fence to reduce aggregate load (for example, by end-use energy efficiency and demand side management measures) or to force a shift in gen-eration mix away from coal to natural gas and to renewables (such as by pricing carbon in electricity dispatch models or imposing renewable portfolio standards).
How BSER is determined matters greatly because within the fence, existing coal and natural gas plants might not be able to achieve more than 4% to 5% reductions in heat rates and CO
2 emis-
sions. However, outside the fence policies and measures might reduce demand for fossil-fuel generation and induce a shift in the sectoral fuel mix that could, in the aggregate, achieve CO
2 emis-
sion reductions of at least 17% to 25% from the existing fleet.
How Will State Implementation Plans Reduce the Overall Cost?Section 111(d) is enforced through the EPA-approved state im-plementation plans. This opens up the possibility that, however BSER is determined, the EPA might encourage state adoption of sector-wide policies and measures that enable a target level of CO
2
emission reductions to be achieved at least cost for the electricity sector as a whole. The EPA might endorse statewide or region-wide emissions trading systems, similar to those in California or under the Regional Greenhouse Gas Initiative. The EPA might also encourage state deployment of energy efficiency measures and re-newable portfolio standards.
Given that the starting point for regulation will be the EPA-prescribed performance standards only applicable to power plants, states may need to design creative trading and crediting systems that translate CO
2 emission reductions achieved throughout the
electricity sector into compliance obligations imposed on fossil fuel power plants.
Mark Perlis ([email protected]) is a partner in Davis Wright Tremaines energy practice group in the firms
Washington, D.C., office.
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www.powermag.com POWER | May 201424
ENERGY STORAGE
The Year Energy Storage Hit Its Stride
Just-in-time delivery has become an ide-
al for many industries looking to optimize
their efficiency and responsiveness. For the
power sector, though, its been the business
model for well over a centuryand thats
the problem.
The North American grid is the largest
distribution system on earth, yet its one
with virtually none of its product in reserve.
For the most part, electricity needed by cus-
tomers and the system must be produced
at the moment its required. At the end of
2013, according to Energy Information Ad-
ministration (EIA) and Department of Ener-
gy (DOE) data, the United States had about
1,200 GW of installed generating capacity
and a miniscule 21.1 GW of grid-connect-
ed, utility-scale storage (counting projects
larger than 1 MW). Measured by electricity
generation, the figures are even worse: To-
tal net generation in the U.S. for 2013 was
about 4,058 TWh, against roughly 10 TWh
of total utility-scale storage. (These totals
are somewhat arbitrary given the many dif-
ferent functions played by energy storage;
see sidebar.)
Storing energy on the grid is not a new
idea, and a number of major storage projects
have been operating since the 1970s. Virtu-
ally all of these, however, are pumped storage
hydroelectric (PSH) plants. Of the 21.1 GW
of total energy storage capacity in the U.S.,
more than 96% is PSH. Another method,
compressed air energy storage (CAES), has
been in use since the 1990s, though world-
wide only two large-scale CAES projects
are currently in operation. According to the
International Energy Agency, of the ap-
proximately 140 GW of large-scale storage
in global operation, more than 99% is PSH.
Nearly 50% of the remainder is accounted for
by the two CAES plants.
PSH and CAES, however, have geograph-
ic limitations in that they can only be sited
in areas where storage of large volumes of
water or air is feasible, not where they might
be most useful for the grid. In addition, both
methods, though well-suited for hours-to-
days storage, cannot ramp fast enough to
respond effectively to more immediate de-
mands, such as for frequency regulation.
More nimble methods that can be sited in
areas of highest need have been handicapped
by limited capacities and high costs.
However, 2014 may be remembered as the
year that began to change.
Whats driving the shift is a mix of factors
from greater policy support, to growing need,
to advances in technology. Around the world,
a number of significant projects are poised to
begin operation this year or in the near future,
while several technologies that have been per-
colating in development for years are finally
seeing meaningful grid-scale deployment.
(For additional background, see the web sup-
plement to this article, Energy Storage Tech-
nologies Primer, associated with the features
for this issue online at powermag.com.)
A report in January from IHS predicted
After operating on the sidelines for years, the energy storage sector is finally poised to begin making its mark, driven by greater policy support and technological ad-vances that have begun making new solutions economic.
Thomas W. Overton, JD
Courtesy: A123 Energy Solutions
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ENERGY STORAGE
www.powermag.com POWER | May 201426
that the energy storage market was about to
explode, adding 6 GW in 2017 and 40 GW
by 2022, with about 40% of this growth oc-
curring in the U.S. While total capacities are
currently small, events suggest energy stor-
age is building momentum toward becoming
a key element of the grid.
Policy DevelopmentsPerhaps the single most significant devel-
opment driving attention to energy storage,
according to Matt Roberts, executive direc-
tor of the Energy Storage Association, has
been the increased penetration of intermit-
tent renewable generation. Adding storage
is a way to help with intermittency and peak
load aspects, he told POWER in March. This
has meant increased demand for methods to
smooth output and respond to sudden drops
in production. Not surprisingly, most of the
policy activity has been in areas with sub-
stantial recent additions to renewable capac-
ity (Figure 1).
California. In 2010, California passed
legislation instructing the California Public
Utilities Commission (CPUC) to consider re-
quiring the states service providers to procure
certain levels of energy storage. Last year, the
CPUC issued a requirement for the states
investor-owned utilities, Southern California
Edison, San Diego Gas & Electric, and Pacific
Gas & Electric (PG&E), to collectively obtain
1.3 GW of energy storage by 2020.
The targets are broken down into trans-
mission, distribution, and customer storage,
and will be phased in over two-year periods
starting this year. No more than 50% can be
owned by the utilities, and PSH is excluded
from the mandate. Certain existing projects
can count toward the total, and the program
is designed to encourage a range of owner-
ship models.
Roberts noted that the mandate incorpo-
rates a lot of storage activity that was already
under way. Many of these projects, he said,
were coming because they were valuable,
not because they were policy driven. That
said, the policy is there to encourage con-
tinued growth after this year and help over
the long term.
Coming up with a process for procurement
required some new thinking. The CPUC rec-
ognized that the existing auction process un-
der the states renewable portfolio standard
wouldnt work for energy storage, which
isnt simply a block of generation but rather
a range of roles and services that cut across
most grid functions. Instead, the utilities are
to issue requests for offers (RFOs) that will
meet defined needs.
Other electricity service providers have
their own marching orders. Entities other
than municipal utilities must procure stor-
age equal to 1% of their annual peak load
by 2020. Municipal utilities do not have
fixed targets but must instead conduct as-
sessments, come up with their own plans
for obtaining storage, and submit them for
approval by the California Energy Commis-
sion by October 2014.
The targets, though ambitious, are some-
what fluid. In the event the RFOs dont
produce bids that meet identified needs, the
utilities are allowed to defer up to 80% of
their targets to the next phase. The utilities
are also allowed to shift targets between cat-
egories to some extent.
New York. This state has long suffered
from significant load congestion around New
York City, where the majority of its popula-
tion lives. Most of the citys power is gener-
ated elsewhere and transmitted through a few
narrow corridors. This congestion naturally
causes frequent spikes in wholesale power
prices. Another key concern is the potential
closure of the Indian Point nuclear plant
the Nuclear Regulatory Commission has yet
to rule on a license extension, and state poli-
ticians have called for its retirementwhich
supplies about 25% of the citys power.
In January, the state government an-
nounced a program with Consolidated Edi-
son (ConEd) intended to reduce the load on
the area grid by 125 MW, in part through en-
ergy storage. The proposed program includes
generous subsidies for storage projects: up to
$2,100/kW for battery storage and $2,600/
kW for thermal storage, with added incen-
tives for large-scale (greater than 500 kW)
facilities. The state is also investing in a bat-
tery storage testing and commercialization
center in Rochester, a $23 million partnership
between the New York Battery and Energy
Storage Technology Consortium and DNV
KEMA (now DNV GL).
The New York Independent System Op-
erator (NYISO) has the distinction of having
the first large-scale flywheel-based frequency
regulation plant in the country, a 20-MW/5-
MWh facility operated by Beacon Power.
Beacon Power struggled financially when
the plant was opened in 2011, but changes in
compensation for frequency regulation (see
Apples and Oranges
Energy storage facilities are unfortu-
nately not always described consistently
in media reports and press releases (or
even government data), being typically
rated in terms of power capacity (watts)
and only sometimes in storage capac-
ity (watt-hours). The approach in this
article is to report both figures where
available, because two 2-MW projects
may have very different performance
characteristics despite having the same
rated power.
The distinction is important because
some technologies (such as flywheels)
have high power but low energy, while
others (flow batteries) may be low power
but high energy, and still others (pumped
storage hydro and compressed air) have
power and energy capacities that are de-
termined by their associated power plants
and volume of available physical storage,
values that unlike other storage technolo-
gies are generally not interdependent.
1. Looking to lead the way. After adding nearly 4 GW of renewable capacity in 2013, Californias need for energy storage is growing rapidly. This 4-MW/24-MWh sodium-sulfur bat-
tery in San Jose, inaugurated last year, is a pilot project by the California Energy Commission
and Pacific Gas & Electric Co. Courtesy: PG&E
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ENERGY STORAGE
www.powermag.com POWER | May 201428
below) have placed the company on a more
stable footing.
FERC and the ISOs. The Federal Energy
Regulatory Commission (FERC) has issued
several orders intended to improve market
access for energy storage. FERC Orders 890
in 2007 and 719 in 2008 directed the nations
independent system operators (ISOs) to re-
vise their regulations and operating proce-
dures to allow energy storage to participate
in wholesale energy markets. These were
followed by Orders 755 and 784 in 2011
and 2013, respectively, that required ISOs
to adopt methods allowing compensation for
frequency regulation and other ancillary ser-
vices, roles that newer energy storage tech-
nologies are well-suited to adopt.
Previous rules had handicapped third-party
ancillary services because there was no finan-
cial benefit for a transmission customer to go
outside the services offered by its transmission
provider, a share of which it was required to
pay for anyway. Most recently, in November
2013, FERC issued Order 792, which adds
energy storage to the category of resources
eligible to connect to grid under the Small
Generator Interconnection Procedures.
PJM was the first ISO to adopt Order 755,
followed by NYISO, which was the first to
adopt 784. (The others have followed suit,
with ISO-New England most recently adopt-
ing Order 755 this year.) PJMs Advanced
Technology Pilot program has explored
a number of options for storage within its
territory, and PJM has partnered with AES
on two battery projects, one of them a 32-
MW/8-MWh facility at a wind farm in West
Virginia. AES and PJM also launched an
initiative known as the Storage Applications
Center at the PJM campus in Pennsylvania
in March (see below). PJM has also been
studying the feasibility of using electric ve-
hicle batteries for frequency regulation in a
project with NRG Energy and the Univer-
sity of Delaware.
The Electricity Reliability Council of
Texas (ERCOT), while not under FERC ju-
risdiction, is studying similar steps to make
its market more storage friendly. A law
passed in 2011 gave energy storage the same
rights of interconnection and transmission as
generators. Though a possible shift toward a
capacity market has grabbed the headlines,
ERCOT is also looking at revisions to ancil-
lary services rules.
A pilot project using advanced lead-acid
batteries has been operating at Duke Energy
Renewables 153-MW Notree wind farm
near Odessa. ERCOT has also been testing a
fleet of 12 truck-mounted batteries to provide
mobile frequency regulation services.
Island Time. Solar energy has been a boon
for island grids that must rely on expensive
imported diesel and fuel oil. But the growth
of residential and commercial solar in places
like Hawaii and Puerto Rico has challenged
grid operators to maintain stability during pe-
riods of peak daytime output.
Late last year, the Puerto Rico Electric
Power Authority and the islands main utility,
the Autoridad de Energa Elctrica, issued
new guidelines for renewable energy proj-
ects that want to connect to the island grid.
All new projects must include energy stor-
age equal to 45% of maximum output for 1
minute in order to smooth output and reduce
the severity of ramping events. In addition,
projects must have storage equal to 30% of
rated capacity for 10 minutes for purposes of
frequency regulation.
This approach has garnered attention for its
focus on installed capacity rather than perfor-
mance. Whereas storage projects bidding into
markets such as PJM could face penalties for
failing to perform, such a scheme was seen as
a deterrent on the islands much smaller grid.
Hawaii now requires new wind projects
to limit their ramp rates, which as a practi-
cal matter is only possible through energy
storage. The state government has launched
several partnerships and initiatives to study
the best means of integrating storage into the
power mix and find ways for reducing costs.
Japan. The success of Japans ambitious
feed-in tariffs in spurring development of re-
newable energyit installed a breathtaking
9.4 GW of solar photovoltaic generation in
2013has created a sudden need for energy
storage, and the national government is mov-
ing aggressively to support it.
The Ministry of Economy, Trade and In-
dustry (METI) has allocated about $300 mil-
lion for energy storage projects, among them
the worlds largest redox flow battery in Hok-
kaido. The 15-MW/60-MWh facility, due to
come into service in 2015, will support the
massive build-out of solar in Hokkaido that
has threatened to overwhelm the islands
grid. (See Japan Ramps Up Renewables
in the February 2014 issue.) METI is sup-
porting several other smaller battery projects
elsewhere in the country, including through a
$100 million subsidy program for individuals
and small businesses announced in March.
Japan is a world leader in sodium-sulfur
(NaS) battery technology thanks to intense
research and development, mainly by NGK.
It currently has more than 190 NaS installa-
tions across the country with a total of 270
MW/1,640 MWh of installed capacity. The
largest installation is a 34-MW/245-MWh
facility backing up the 51-MW Rokkasho-
Futamata Wind Farm in northern Aomori
Prefecture (Figure 2).
Germany. With the worlds largest in-
stalled capacity of renewable generation,
Germany has not been idle on the energy
storage front. The federal government has al-
located $260 million for support of grid-scale
energy storage, of which $172 million has
been apportioned to specific projects.
In 2011, the government revised regula-
tions governing energy storage to clarify grid
fee exemptions for such projects and improve
the policy support for storage investment. In
2013, it also began offering 25 million in
homeowner subsidies for energy storage. The
program is aimed mainly at rooftop solar and
covers up to 30% of the installed cost of a stor-
age system when paired with solar panels.
Germany is also looking into power-to-
gas (P2G). In August 2013, E.ON inaugurat-
ed a 2-MW/30-MWh facility in Falkenhagen
that generates methane via electrolysis and
methanization with CO2, and uses it to gen-
erate electricity via fuel cells. In October,
a second P2G facility was added to a wind
farm in Grapzow; that plant has a capacity
of 1 MW/27 MWh. Both projects were built
by Canadian firm Hydrogenics. A third P2G
facility near Hamburg, also for E.ON, is un-
der development.
Batteries Charge AheadA great deal of activity is afoot in the battery
industry, from evolution of existing designs
and improvements in manufacturing to new
technologies. Navigant Research estimates
that the global market for utility-scale stor-
age batteries will grow from $164 million
this year to more than $2.5 billion by 2023.
Lithium-ion (Li-ion) batteries have reached
grid-scale commercial viability for certain
applications, with several manufacturers
moving beyond merely selling batteries to of-
fering integrated storage-related services. In
March, AES subsidiary AES Energy Storage
introduced its Advancion solution compris-
ing containerized Li-ion batteries, a propri-
etary hardware and software management
platform, turnkey installation, and full opera-
tions and maintenance support. The system
is available in 2-MW to 50-MW units and is
scalable into the hundreds of megawatts.
According to Chris Shelton, president of
AES Energy Storage, Advancion is intended
as a clean, cost-competitive alternative to
peaking power plants. A