Electricity demand going up at Holland BPW

February 25, 2011
| By Pete Daly |
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Approval of a state of Michigan air quality permit allowing construction of a 78-megawatt addition to the James De Young generating plant in Holland doesn’t necessarily mean it will be built.

Loren Howard, general manager of the Holland Board of Public Works, said that decision may still be a year off, but he said there is “absolutely” no doubt there must be an increase in the load capacity of electricity available to its customers within the next few years.

Electricity demand on the Holland BPW began dropping from a high of 1.122 million megawatt hours in fiscal year 2006 to 947,569 in FY 2009. In FY 2010, it headed back up, finishing at 951,206. The BPW had predicted the demand would be 1,002,117 in FY 2011, but Howard said the first six months of the fiscal year has caused them to increase the forecast to a total of 1,012,129.

Both Johnson Controls-Saft and LG Chem are building factories in Holland that will produce large battery packs for the new wave of electric and hybrid-electric vehicles. Based on what the two battery factories expect to need to power their production, will it have a significant effect on the electrical demand placed on the BPW?

“Yes,” said Howard. “They would add about 105,000 megawatt hours to our demand. That’s about 10 percent.”

“Based on what they tell us they are going to consume, that probably is a fairly conservative number,” he added.

The Holland BPW owns three electric generation facilities: the De Young plant, the 48th Street Generation Station and the 6th Street Generation Station. According to the HBPW website, they use coal, oil, natural gas and renewable fuels. The city-owned utility company also purchases power on the open market.

More than four years ago, the Holland BPW applied for an air quality permit from the DEQ for replacement of the De Young plant's Unit 3 boiler. Unit 3, installed in 1953, is the smallest of the plant's three boilers, producing about 11.5 megawatts of power. Units 4 and 5 produce 22 and 29 megawatts, respectively.

The proposed new boiler would use a circulating fluidized bed technology that the BPW says will “dramatically” reduce emissions of sulfur dioxide, nitrogen oxides and mercury, “allowing for the very clean combustion of coal.”

The new circulating fluidized bed technology could also permit the addition of some biofuels such as wood, biomass and others to the coal mixture, providing flexibility of fuel use in the future.

The cost of the new boiler would be about $250 million, with the project taking at least four years to plan and build. The new unit’s output of up to 78 megawatts would effectively double the total capacity of the plant today.

In 2009, however, then Gov. Jennifer Granholm ordered the Michigan Public Service Commission to consider whether more coal-fired electric plants were needed in Michigan, and whether cleaner alternatives were available. Last summer, the Michigan Department of Natural Resources and Environment denied the HBPW’s requested air quality permit for the proposed addition because, according to the DNRE, the utility had failed to demonstrate a need for the increased capacity.

On Feb. 11, the DNRE reversed itself and approved the air quality permit for the HBPW.

Howard said the options the HBPW has been considering to increase its capacity range from building an additional generating unit to buying into another generating facility.

“We still buy a lot of power from the market,” said Howard. “On a long-term basis, we are buying more from the market than we would like to. We are getting about a third of our power from the market at the market price.”

“We just don’t have a lot of control over that” price, he added, noting that energy prices can be volatile when a crisis elsewhere in the world disrupts oil or gas supplies.

Units 3, 4 and 5 at the De Young plant are the base-load units, running continuously at a fairly constant rate to meet the Holland area’s basic or “base” power needs. When demand goes above the base-load, the utility buys additional power via the electrical grid or operates its gas or diesel oil-fired turbines at the other locations in Holland.

The Holland BPW owns shares in the J.H. Campbell generating plant operated by Consumers Energy in nearby West Olive, and in the Belle River Plant operated on the east side of the state by Detroit Edison in St. Claire County.

Howard noted that the air quality permit just approved by the DNRE permits use of coal as well as other types of fuel, “some of which are renewable energy fuels — biomass — and wastewater treatment sludge.”

“Some people who have a particular bent consistently talk about this (proposed new CFB boiler) being a coal plant, and conveniently ignore the fact that I could burn 50 percent biomass in the plant,” said Howard.

Rachel Hood, executive director of the West Michigan Environmental Action Council, said that group was “very disappointed” with the DNRE approval of the air quality permit “for the unnecessary expansion of the coal-fired” De Young plant, adding that it “certainly wasn’t a data-driven decision.”

“It is encouraging that the Holland BPW is today referring to a new coal option rather than a plan,” added Hood. “As a region, we should hope that, as they move forward with this decision-making process, they consider more sensible alternatives.”

State Rep. Joe Haveman, R-Holland, said plans to expand the De Young plant to meet growing energy needs were “held up by the previous administration,” which he called “incredibly frustrating.”

“Michigan wants to be a contender when it comes to economic opportunities, and having the structure to support and sustain expansion is vital,” said Haveman.

Jane Clark, president of the Holland Area Chamber of Commerce, said the chamber hasn’t taken a position either way on expansion of the De Young plant, but has had several meetings with the Holland BPW “to make sure we understand the issue.”

“I think we are pleased” with the granting of the air quality permit “because it gives the BPW yet another option, as they are exploring what’s the best way to provide power going forward.”

She noted that manufacturing in the Holland area “is picking up, and we have two significant new users with Johnson Controls-Saft and the LG Chem both coming on-line relatively soon.”

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