Yahoo Finance Shifting from Coal to Gas: One Co-op’s Award-Winning Journey
In 2018, Cooperative Energy, a generation and transmission co-op headquartered in Hattiesburg, Mississippi, had an issue to deal with. Several years earlier, it had joined the Midcontinent Independent System Operator (MISO), giving the power provider access to a competitive market. However, Cooperative Energy’s R.D. Morrow Sr. Generating Station, a 400-MW two-unit coal-fired facility that had opened about 40 years earlier, was not being dispatched as the co-op would have liked. In fact, the facility’s capacity factor in those days was running at only about 3%. “We could not compete in the MISO market due to the cost of the unit, the lack of flexibility, [and] startup time—when you’re bidding the unit into a day-ahead market, a 42-hour startup time is not a good place to be,” Mark Smith, senior vice president of Power Generation with Cooperative Energy, explained as a guest on The POWER Podcast. Smith continued: “We had high transportation costs. Our coal came in by rail and the route from the mine to the plant was roughly 440 miles one way. So, the transportation cost was excessive. Environmental regulations—the goal post seems to keep moving and things keep ratcheting down—we didn’t know where we were heading. At the point that we did decommission, we were well within compliance, but the future was uncertain. It was going to require a lot of capital investment in the coal unit.” With that as a backdrop, Cooperative Energy made the decision to build a new gas-fired unit to take the place of the coal units. However, it wanted to reuse as much equipment and infrastructure as it could in an effort to be good stewards and save money. “We reutilized the Unit 1 steam turbine generator, which is a GE reheat double-flow 204 MW on the nameplate, which, really, for this project was one of the big factors in choosing to do the repower. The 204-MW steam turbine was a pretty good match to the [gas turbine] and the heat recovery steam generator that we used,” Smith explained. “We reutilized our forced-draft cooling towers and our circulating water system, as well as the water wells and demineralizer system at the plant,” he said. “And, then, we added the new equipment, which is the Siemens 9000HL gas turbine and the Nooter/Eriksen three-pressure heat recovery steam generator. [We] coupled all of that together to repower the unit and now we operate at roughly 572 MW, according to what time of the year and the ambient conditions.” Cooperative Energy took a somewhat unconventional approach for the project, utilizing many of its own people to manage the job, rather than opting for a turnkey EPC (engineering, procurement, and construction) contractor. “There were several reasons for us to choose what we call the multi-contract approach, as opposed to utilizing an EPC contractor,” Trey Cannon, director of Generation Projects with Cooperative Energy, said on the podcast. “Probably the one that was most important to us is just having that full transparency and full control of the entire project, including technology selections and equipment procurement, selection of construction contractors, and things of that nature,” Cannon explained. “It was also something that we’re comfortable with, just because we’ve used that same approach on numerous projects. That’s typically how we manage our capital projects here at Cooperative Energy and it’s the same method that we used when we repowered our Moselle plant … that turned out to be very successful for us.” There was also a cost savings involved. “We estimated that we probably saved at least 15% on the total budget by utilizing the self-build self-manage approach,” said Cannon. Meanwhile, the tactic also allowed Cooperative Energy to utilize its own employees more significantly throughout the project. “Utilizing this contracting approach allowed us to interject our employees and leverage them to the fullest extent possible. Whereas, if you were using an EPC contractor and they were shouldering the risk of the project and the schedule, we felt like they probably would have been more reluctant to integrate our employees into their team.” The results were phenomenal. The project finished well ahead of schedule and well under budget. Yet, Cannon admitted that a lot of the savings was due to circumstances. “The market conditions and the timing of the project couldn’t have been better,” he said. The market for power plants in 2018 was down, so Cooperative Energy was able to get very competitive pricing on the gas turbine and a lot of other equipment. As construction work kicked into full swing in 2020, the market took another dip with COVID and other factors pushing projects to the back burner. Cooperative Energy, however, pressed on and was able to cherry pick the best contractors and the best workers. To underscore how the project benefited from the quality of personnel it was able to attract, Smith noted, “The weld rejection rate for our mechanical contractor was 0.41%, which was remarkable.” Hans Thermann, head of HL-Class Portfolio Management with Siemens Energy, noted that the strong collaboration between Siemens Energy and Cooperative Energy was also very important to success. “Such a collaboration only works with trust and openness on both sides and on all levels,” he declared. As an example, Thermann explained how leaders from Cooperative Energy were able to visit Siemens Energy’s facilities in Charlotte, North Carolina, and Berlin, Germany, to monitor progress on equipment being manufactured. Testing and validation information gleaned from test rigs and Duke Energy’s Lincoln County site—where the first 60-Hz HL-class gas turbine is installed—was also shared openly and transparently. “We had very good meetings in these times, and really, that was one of the foundations of this collaboration to have this openness and trust,” said Thermann. Today, the repowered Morrow plant is the heavy-load-carrying unit in Cooperative Energy’s fleet. “Since we went commercial, I think we’re carrying a 90-plus-percent capacity factor on the unit,” said Cannon. “If it’s not the most-efficient plant in MISO South, it’s very close,” added Smith. “And, needless to say, if the unit is available—we’re not in a planned outage—it’s operating and it’s typically baseloaded. In MISO, the name of the game is flexibility, efficiency, and reliability. The Morrow repower has checked all of those boxes for us and has Cooperative Energy in a great position for many years to come.” In recognition of the project’s success, POWER gave the Cooperative Energy and Siemens Energy team its 2024 Reinvention Award. The honor was announced in the July issue of POWER magazine. A ceremony honoring all of POWER’s 2024 award winners will be held during Experience POWER Week in Orlando, Florida, October 9–11, 2024. To hear the full interview with Smith, Cannon, and Thermann, which contains much more about the project and the SGT-9000HL gas turbine, listen to The POWER Podcast. Click on the SoundCloud player below to listen in your browser now or use the following links to reach the show page on your favorite podcast platform:
The POWER Podcast · 167. Shifting from Coal to Gas: One Co-op’s Award-Winning Journey
For more power podcasts, visit The POWER Podcast archives. —Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).
