Cyber issues; Big nukes struggle; Wind farm’s future unclear; Gas dominated coal in ‘16; Kemper plant closer to full operation


Conference, senators, ponder cyber issues
Prevention of cyberattacks on utility systems is important, but more crucial is certainty of detection followed by a swift response to contain and minimize damage, participants were told at a recent Wisconsin Energy Providers Conference in Madison.

Represented in the audience were Wisconsin Electric Cooperative Association members, Dairyland Power Cooperative, the Wisconsin Utilities Association, Madison Gas and Electric, Alliant and Xcel Energy, WEC Energy Group, the Municipal Electric Utilities of Wisconsin, and WPPI Energy.

Panelists from Dairyland Power, the American Transmission Company, and the Wisconsin Army National Guard, led by Public Service Commission Chairperson Ellen Nowak, advised that customers, businesses, and government need to develop relationships with local utilities to help prioritize corrective actions if a problem occurs.

Elsewhere, five U.S. Senators have introduced legislation seeking a low-tech approach to cybersecurity. Chief sponsor Angus King (I-ME) indicated the bill emphasizes low-tech defenses over automated systems that can be more susceptible to cyberattack.

The impetus is the December 2015 attack, presumably by Russian hackers, that blacked out three Ukrainian utility service areas. The Ukrainians were able to restore service within six hours in part because their systems—less automated than those of Western utilities—were brought back on line by human operators with physical access to controls that the hackers didn’t have.

As big nukes struggle, small ones inch ahead
While operators of large nuclear plants in Illinois and New York have obtained subsidies to help them compete with cheaper gas-fired generation and often-mandated wind energy, federal regulators are ready to begin reviewing an application to build multiple small modular reactors (SMRs) at an existing nuclear site in Tennessee.

The Tennessee Valley Authority announced that the Nuclear Regulatory Commission (NRC) in January accepted and has opened a docket on its early site permit application to build and operate SMRs on the Clinch River site at Oak Ridge, Tennessee.

The utility (TVA), which last October began commercial operation of its 1,150-megawatt Watts Bar Unit 2 nuclear plant 43 years after announcing the project, said a decision on construction of SMRs at Oak Ridge is still years away. “Nevertheless, the NRC’s docketing of TVA’s early site permit application moves the nuclear industry closer to potential commercialization of the technology,” the utility said in a statement on the regulatory action.

Development of the early site application received financial assistance through the Energy Department’s SMR Licensing Technical Support program, initiated in 2012 to accelerate market entry by SMR technologies, the TVA said.

The utility currently operates three nuclear plants with a combined capacity of more than 8,000 megawatts.

Wind farm’s future remains unclear
The first of five annual 20 percent reductions of the federal production tax credit (PTC) for wind energy took effect January 1, and developers of what would be Wisconsin’s largest wind farm say they don’t know when construction of their project might begin.

The Public Service Commission’s (PSC) 2013 approval of the proposed Highland Wind Farm in St. Croix County required quarterly progress reports, and in an update received by the commission at the end of January, William Rakocy, managing member of project developer EEW Services, wrote that, “A formal start date for construction is difficult to estimate at this time.”

Approved by the PSC after a prior denial, Highland Wind obtained permit extensions in October and December of last year from the Department of Natural Resources and from St. Croix County and the Town of Cylon, respectively.

Value of the PTC subsidy has varied. First enacted in 1992 at 1.5 cents per kilowatt-hour, it had climbed to 2.3 cents per kilowatt-hour for the first 10 years of a project’s operation, but the value now depends on the year construction starts. The full credit was available for projects begun through 2016. This year started the clock running on annual 20 percent reductions continuing through 2020.

With low prices, gas dominated coal in ‘16
Both monthly and full-year average natural gas prices were the lowest in almost two decades during 2016, helping gas eclipse coal as the primary U.S. electric generation fuel for almost the entire year, the Energy Information Administration (EIA) reports.

Spot gas prices at the national benchmark Henry Hub averaged $2.49 per million Btu during 2016, the lowest annual average price since 1999, EIA said.

Though the mid-January report included data only through the first nine months of 2016, the EIA concluded that last year was the first in which, measured on an annual basis, natural gas was the nation’s primary generation fuel, contributing about 34 percent of total utility-scale generation compared with about 30 percent for coal. Gas also led coal through the second half of 2015, but coal was dominant or virtually tied with gas through the first half of that year.

Gas-fueled generation, briefly and for the first time, exceeded coal as the primary source of U.S. electricity in April of 2015, the EIA said.

Seven gigawatts of coal-fired generation shut down in 2016, retiring 2.5 percent of the coal-fired capacity active at the end of 2015, the EIA said.

Kemper plant closer to full operation
The nation’s biggest carbon capture project, Mississippi Power’s Kemper County plant, began generating electricity from gasified lignite coal during the last weekend in January.

But company officials said adjustments are needed, full commercial operation was delayed until the end of February, and the plant was not yet capturing carbon dioxide released in the gasification process. The CO2 is to be used to help recover oil from depleted wells.

The project is two years past its planned start-up date and more than $4 billion over its original $2.9 billion budget. In February, Moody’s Investors Service said it might lower Mississippi Power’s investment-grade bond rating based on the Kemper plant’s cost overruns and difficulty competing on its price of power compared with generation from conventional natural gas-fired plants.