Due to customer and demand-growth expectations and the need to replace aging infrastructure, EE programs and renewable energy resources will not be enough to meet our customers’ energy needs. We are developing an advanced energy-delivery system that includes power from a diverse portfolio of plant technologies.
We are planning to retire 11 coal-fired units, totaling nearly 1,500 MW, at four sites in North Carolina by 2014. These units are our remaining coal-fired power plants in the state that do not have flue-gas desulfurization controls (scrubbers), and represent about 30 percent of the company’s coal-fired power generation fleet in North Carolina. In addition to the 170-MW W.H. Weatherspoon Plant, which was retired in 2011, we plan to retire the:
• 575-MW L.V. Sutton Plant near Wilmington;
• 316-MW Cape Fear Plant near Moncure; and
• 382-MW H.F. Lee Plant near Goldsboro.
We must replace this generation to ensure continued reliable electric service; therefore, we are building two new, state-of-the-art, natural gas-fueled combined-cycle power plants. These will be a 950-MW plant at the Lee Energy Complex, and a 625-MW plant at the Sutton Energy Complex. We broke ground on both projects in 2011 and expect both to come online in 2013.
In 2011, the company added a 600-MW natural gas-fired combined-cycle plant at its Sherwood H. Smith, Jr., Energy Complex in Hamlet, N.C., increasing the site’s generating capacity to 1,890 MW, and making it Progress Energy Carolinas’ second-largest electricity-producing station.
Due to our fleet modernization strategy, by 2014 we will have added almost 2,200 MW of cleaner-burning gas capacity for our customers in the Carolinas.
This fleet modernization plan has many benefits, including:
The coal-fired Lee Plant near Goldsboro, N.C. (left), will be replaced with a new natural gas plant,
currently under construction (right).
Progress Energy Florida completed the repowering of our Bartow Plant in St. Petersburg in 2009. This two-year, $800 million investment changed the 50-year-old facility's primary fuel source from fuel oil to more efficient, cleaner-burning natural gas. The project included the installation of a natural gas-burning, combined-cycle unit featuring four combustion turbines and one steam turbine.
The completed Bartow project helps provide electricity in a cost-effective manner and has already delivered a number of benefits, including:
In March 2012, we announced plans to convert the Anclote Plant, located in Holiday, to 100 percent natural gas. We anticipate the conversion, which will reduce sulfur dioxide emissions by more than 99 percent, will be complete by the end of 2013.
We continue to evaluate additional fleet-modernization initiatives in Florida.
Progress Energy considers natural gas a “bridge fuel.” Natural gas plants emit carbon dioxide at about half the rate of coal-fired plants, but meeting potential long-term carbon targets will not work even if all our coal and oil sites were repowered with natural gas. Such reduction goals would require the building of emission-free generating sources, such as nuclear energy.
Of the large-scale, cost-effective technologies available today to address the need for new baseload generation (plants that run 24 hours a day), nuclear power emits no carbon dioxide. Progress Energy pursued several options to take full advantage of this energy source, including upgrading current plants to increase generation output and extending operating licenses. In 2008, Progress Energy filed Combined Operating License (COL) applications with the U.S. Nuclear Regulatory Commission (NRC) for the opportunity to build new, state-of-the-art nuclear units in Florida and North Carolina. The decisions to build these units have not been made, but the applications are necessary to keep the option open.
As we evaluate long-term resource needs, we are continuing to assess regional, joint-ownership options as a means of adding new carbon-free nuclear capacity while reducing cost and risk for our customers and shareholders. We do not have any current agreements and cannot speculate on potential plans.
In March 2011, natural disasters caused accidents at nuclear power plants in Fukushima, Japan. Progress Energy has worked with the U.S. nuclear industry, the Nuclear Energy Institute and global resources to systematically review the events and implement changes to further enhance the multiple layers of safety, security and operational protection that are already in place at our plants.
Progress Energy completed an in-depth inspection and analysis at each of its nuclear facilities and made site-specific upgrades at each one. For example, Progress Energy has added high-capacity pumps at each plant to maintain the ability to quickly cool the reactor core in an unlikely accident. In addition, diesel generators have been added to further enable power restoration to critical equipment and other associated support components in the event of an emergency. We are committed to ensuring the health and safety of the public in all we do.
Another component of our state-of-the-art power system strategy is investment in new energy-delivery technologies. Progress Energy is focused on developing an advanced energy-delivery system, to enable the grid to become more efficient and support future potential customer programs. Many enhancements to the energy-delivery system are considered part of the country’s evolving smart grid. The U.S. Department of Energy (DOE) has defined seven functions and characteristics as goals for the smart grid. According to the DOE, the smart grid will:
Our EnergyWise® smart grid initiatives are an integral part of our balanced solution strategy. Progress Energy is investing more than $500 million in its grid modernization efforts. This includes a $200 million grant for smart grid programs, awarded by the DOE in 2010. This grant program is expanding investments necessary to transform the electric grid to give customers greater control of their energy use, enable utilities to harness the potential of renewable energy and electric vehicles and improve power quality and service reliability. Our investment also includes more than $300 million in company matching funds, which will support projects in the Carolinas and Florida.
These investments include installing advanced communication and load management technologies to make our distribution grid operate more efficiently, especially during periods of peak demand. We’re also installing technologies to isolate outages faster and monitor the health of system assets, which will improve service quality and reliability for our customers. And we are enhancing our electric system to support emerging technologies such as renewable energy and electric vehicles, as well as programs that will help customers manage their energy use and their monthly bill.
For example, the EnergyWise Home℠ Program gives residential customers a monetary incentive to allow the company to place load-control devices on select appliances to reduce energy demand during times of peak demand. Typically activated only a few times a year, the program allows us to temporarily reduce energy consumption by cycling power off and on to select appliances (e.g., air conditioner compressors). More than 464,500 customers have signed up for this program in the Carolinas and Florida, enabling us to reduce power generation by as much as 758 MW during these high-demand periods.
Our EnergyWise smart grid initiatives also position the company to provide reliable, high-quality power through distributed generation (smaller, decentralized power sources), including renewable energy resources and storage sources.
The long-term results of our grid modernization initiatives will be improved efficiency, quality and reliability for our customers and communities across our service territory.