May 21, 2019 Read More →

APS: Biomass conversion at Cholla coal plant could cost $115/MWh

S&P Global Market Intelligence ($):

Arizona utility regulators are scheduled to consider an Arizona Public Service Co. study assessing the feasibility and potential cost of modifying an existing coal-fired unit to burn forest cuttings in order to help reduce the risk of wildfires. They apparently will not, however, take up at the meeting a separate proposal by Arizona Corporation Commission staff related to utility electric vehicle pilot programs.

Burning biomass at the Pinnacle West Capital Corp. subsidiary’s Cholla unit 1 would help the U.S. Forest Service meet the goal of its Four Forest Restoration Initiative to remove unwanted trees and other overgrowth from a million acres in northern Arizona over 20 years, according to a study Arizona Public Service, or APS, submitted to the commission on May 9.

The commission is scheduled to discuss the study at its May 21-22 meeting, but the commissioners are not expected to vote on whether to move forward at that time. In December 2018, the commission adopted a policy stating that forest bio-energy is an increasingly important carbon-neutral, renewable energy resource that encourages responsible forest management and reduces wildfire risk. The commission is requiring APS and other parties to help provide solutions for forestry management to deal with densely packed trees and undergrowth.

APS retained Black & Veatch to perform a technical analysis and prepare capital and operational cost estimates for modifying Cholla unit 1 to burn biomass. The study concluded that the Cholla unit could be converted to burn wood waste and provide 83 MW of generation capacity by sometime in 2022 at a cost of $205 million.

With a 116-MW net output, Cholla unit 1 is the smallest generating facility at the four-unit plant in Joseph City, Ariz., and it no longer will be able to burn coal beyond 2025 based on Arizona’s Regional Haze State Implementation Plan. The other units at the plant include unit 2, which was retired in 2015, and units 3 and 4, which also are required to cease burning coal beyond 2025. Of the Cholla units — units 1-3 are owned by APS and unit 4 is owned by PacifiCorp — the relatively small size of unit 1 makes it the best choice for biomass conversion, the study said.

Even so, fuel availability is a limiting factor on how many hours the plant is run. APS assumed that if enough fuel could be provided to run the plant unit 75% of the time, the cost of producing electricity would be $115/MWh.

More ($): Ariz. regulators to discuss APS study on converting coal unit to burn biomass

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