An Ignoble Experiment

2. Gob proves good fuel source for DVP

In order to execute its long-term earnings growth strategy, American Electric Power (AEP) is investing in the company's utility operations and building its transmission business to support an annual earnings growth rate of 4 percent to 6 percent.

"The strategic investments we're making in infrastructure and system improvements to benefit customers, along with our focus on cost discipline, will allow us to continue achieving strong financial results and a healthy dividend for our shareholders," Nicholas K. Akins, AEP's chairman, president and chief executive officer, told shareholders at the company's annual meeting recently. "More than ever, customers recognize the importance of a reliable supply of electricity, and we are committed to refining and improving the grid so we can continue to meet their needs and expectations in the future."

AEP has plans to invest approximately $4 billion in capital per year from 2014 through 2016, with priority given to transmission. In 2013, AEP completed the largest set of transmission projects in company history, the majority designed to facilitate the development of the Competitive Renewable Energy Zones in Texas and the retirement of generation in the PJM Interconnection.

"Transmission presents a huge growth opportunity for AEP, especially as our nation manages the significant generation retirements occurring over the next two years and seeks to redesign the transmission system to support the changing generation mix and optimize the grid," Akins said.

AEP will continue to invest more than $1.5 billion per year in transmission infrastructure projects.

In 2013, AEP also completed the separation of its Ohio generating assets from its wires business in the state as part of Ohio's transition to a competitive generation market. AEP continues to diversify its overall generation fleet as it retires nearly 6,600 MW of coal-fueled generating capacity between now and 2016 due to environmental regulations and market conditions. AEP will also focus on its use of natural gas, renewables and energy efficiency resources.

AEP is on a fast track so far in terms of curbing emissions and meeting environmental regulations. Between 2005 and 2013, AEP reduced carbon dioxide emissions by 21 percent and emissions of sulfur dioxide and nitrogen oxide by more than 80 percent each since 1990. Mercury emissions have gone down by nearly 60 percent since 2001.

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By Barbara Vergetis Lundin

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3. Exelon touts the nuclear necessity

Originally built in order to help clean coal hot spots from the coalfields of Southwest Virginia, the Dominion Virginia Power Virginia City Hybrid Energy Center (VCHEC) has recycled nearly 1.1 million tons of waste coal since it began commercial operation in July 2012. The Virginia City station used about 484,000 tons of waste coal in 2012 and about 615,000 tons in 2013 to generate electricity.

Virginia City Hybrid Energy Center. Credit: Dominion Virginia Power

The leftover waste coal (known as gob) from earlier coal mining is piled along miles of streams and rivers in the region and contains contaminants that leach into local waterways. Gob -- mostly rock and lower BTU coal -- was discarded by mining operations in the early to mid-1900s. Prior to gob handling regulations, the material piled up, often along stream beds, creating hundreds of gob piles throughout the central Appalachian coalfields.

"One of the benefits we saw in building the Virginia City Hybrid Energy Center was the abundance of low-cost waste coal that newer technologies would allow us to use as fuel," said David A. Christian, chief executive officer for Dominion Generation. "At the same time that we are holding down rates for our customers by burning waste coal, we also are helping Southwest Virginia clean up some of its biggest environmental challenges."

In order to take advantage of these benefits, Dominion selected a circulating fluidized bed technology for the station's boilers because it can burn a variety of fuels, allowing the station to select and blend fuels and obtain the least expensive of the bunch, saving money for the company's customers.

The station also operates under one of the strictest air permits in the United States for a plant of its kind, driving Dominion to convert the coal-fired Bremo Power Station to natural gas, which will be completed in spring -- resulting in significant net reductions in sulfur dioxide and carbon dioxide emissions.

About 80 percent of the waste coal used at the VCHEC has come from Virginia -- specifically, from a Virginia Department of Mines, Minerals and Energy Abandoned Mine Land Project. The pile, which contained more than 1 million tons of gob, is expected to disappear completely as it is used for fuel at VCHEC by the end of 2014, at which time actual reclamation of the land and the stream bed will begin.

The Virginia City power station also is designed to be able to burn up to 20 percent biomass waste wood from timbering operations. The station began burning biomass in October of 2013 and is working toward burning up to 5 percent by the summer of 2015. The station's air permit requires that 10 percent of the electricity be generated by biomass by 2017 if it is economically viable to do so.

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By Barbara Vergetis Lundin

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4. Solar capacity increases 418 percent over four years

Current government policies and market structures fail to account for the full value that nuclear power provides as an "always-on source of carbon-free energy." That is according to a keynote presented Exelon Senior Executive Vice President and Chief Strategy Officer William A. Von Hoene, Jr. at yesterday's United States Energy Association (USEA) Public Policy Forum.

Unless policymakers take action soon, a series of additional early nuclear power plant retirements could threaten the reliability of the nation's electric grid and hinder the country's ability to meet its carbon reduction goals, Von Hoene contends.

"The loss of 25 percent of existing nuclear facilities would cut U.S. progress toward achieving its 2020 climate change goals in half. In fact, closing even a few nuclear plants could make achieving state and national carbon reduction goals difficult or impossible," he said. "The unfortunate reality for nuclear right now is that, despite being the largest, most reliable and lowest-emitting power plants -- and among the lowest cost -- they are not getting recognized or compensated for those attributes."

The performance of the nation's nuclear generating fleet during severe cold this past winter underscores the role of nuclear plants in ensuring electric grid reliability. While the PJM electricity market experienced record winter demand, most other resources experienced higher-than-expected outages rates, Von Hoene said.

"Our nuclear fleet proved critical to keeping the lights and heat on for millions of homes and businesses," he said. "Many natural gas-fired plants didn't run, either because they couldn't get fuel, couldn't start, or because other units were more cost-effective. Similarly, wind was generating at only about one-quarter of its nameplate."

In his keynote, Von Hoene emphasized the urgent need to repair policy shortcomings if the nation wishes to safeguard the value of existing U.S. nuclear plants and their role in ensuring a future energy supply that is reliable, clean and affordable. He commended policymakers -- including those at the Federal Energy Regulatory Commission, Department of Energy and state commissions -- who have acknowledged the need for action.

"Our state and federal lawmakers need to seriously examine, now, how their policies must change if they want to preserve the benefits of the nation's nuclear fleet," he said. "This is a national challenge, and so we need attention of all of the nation's policymakers to solve it."

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By Barbara Vergetis Lundin

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5. Study touts benefits of California's oil and gas industry

In the last four years, the solar generating capacity has increased by 418 percent, according to the U.S. Energy Information Administration (EIA). This includes residential and commercial rooftop and other photovoltaic (PV) capacity reported by distribution utilities as net-metered, utility-scale PV equal to or greater than 1 MW, and utility-scale solar thermal capacity greater than or equal to 1 MW.

Credit: EIA

In 2010, total solar capacity was just a small fraction of the U.S. electric generating capacity -- 0.22 percent or 2,326 MW. In just four years, this capacity increased to 12,057 MW -- a 9,731 MW or 418 percent gain -- accounting for nearly 1.13 percent of total U.S. capacity as of February 2014, according to EIA.

EIA predicts strong near-term growth based on reported planned solar capacity additions in each of the three sectors with the same drivers pushing both utility-scale solar and net-metered capacity. Proposed additions include 6,459 MW of utility-scale PV and 1,841 MW of thermal solar.

These numbers suggest that the U.S. has moved quickly in terms of adding solar capacity, perhaps taking a cue from the wind sector where EIA says growth went from 6,456 MW in January 2005 to 60,661 MW in January 2014.

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By Barbara Vergetis Lundin

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