Babcock & Wilcox Co. Supercritical boiler planned for TXU programalready operates in Australia.

Investment could top $25 billion for the coal-fired powerplant construction program of a major Southern utility company. TXU Corp., Dallas, is billing its program as “the largest voluntary emissions reduction in U.S. history” because the plants will use clean coal technology with state-of-the-art emission controls. But some analysts question the premises for making a huge investment in pulverized-coal generation when legislation to limit carbon emissions is widely anticipated. Environmental advocates accuse TXU of trying to construct coal-fired capacity before any such legislation can take effect in hopes of gaining a large allocation of carbon allowances.

CEO C. John Wilder outlined TXU’s plans to construct 16,000 to 23,000 MW of new PC capacity earlier this month at Edison Electric Institute’s Annual Financial Conference in Las Vegas. The total includes 9,100 MW TXU proposed last spring for construction in Texas (ENR 7/10 p. 17). At the EEI conference, TXU announced it has “line of sight” on development of 7,000 to 14,000 MW of additional new capacity, including opportunities outside Texas. The latter include sites for 2,000 to 4,000 MW in the Pennsylvania, New Jersey and Maryland market, some of which are already secured, and 5,000 to 10,000 MW of capacity in other regions. TXU has letters of intent or is obtaining customer approval for 2,500 MW of that capacity. The company did not release details.

Wilder said TXU aims to develop new baseload generation throughout the U.S., adding 3,000 MW of new capacity each year and constructing it 35% cheaper and faster than conventional pulverized coal plants. He said TXU is broadly on target to construct the 9,100 MW of Texas capacity by 2010 for $1,100 per kW. For the subsequent new capacity, his target is $850 to $900 per kW, using a “reference plant” whose design can be replicated with minimal adaptations to local conditions. Bechtel and TXU are seeking permits for the reference plant, aiming for a construction start under an engineering, procurement and construction contract in the second quarter of 2007. Completion would be scheduled for fall 2009.

Neither TXU nor Bechtel would elaborate on the extent of Bechtel's involvement in the utility's construction program, but unions are already in discussion with the contractor about craft labor issues going forward. TXU has traditionally built non-union, source say. "We are putting together a labor document [with Bechtel], but we don't yet have an agreement," says Ray Poupore, executive vice president of the National Construction Alliance, the new affiliation of the carpenters', laborers' and operating engineers' unions that broke away from the AFL-CIO's Building and Construction Trades Dept. earlier this year. "There is nothing formal yet." He says an anticipated manpower crunch could have an impact on program labor relations, with 30,000 skilled craft employees needed in a 44-month period. "We have to be flexible, but we need a proper wage and fringe package to attract people," says Poupore. Claims another industry source: TXU "told Bechtel 'we don't care how you do it, just get [the plants] built.' "

The reference plant uses a Babcock & Wilcox supercritical pulverized coal boiler with selective catalytic reduction, scrubber, sorbent injection and baghouse for control of Clean Air Act criteria pollutants. TXU officials say the design will reduce total emissions in Texas by 20%, offsetting emissions from the new plants. They also note that the reference plant’s design makes it “carbon-capture ready,” with features allowing future retrofit for carbon capture and sequestration.

The Union of Concerned Scientists disputes TXU’s environmental claims. “It’s a very profound kind of retrofit that they’re talking about,” says Barbara Freese, a consultant to the environmental organization. Integrated gasification combined-cycle generation is the only design that incorporates carbon capture, and “every bit of it is already in commercial use,” though it is not yet cost-effective in a single package, she says.

Michael Pickens, an industry analyst with Wood Mackenzie, Boston, questions the wisdom of a huge program of new coal-fired construction. “What’s the carbon assumption?” he asks. He speculates TXU may be trying to get new coal capacity built now in hopes it will be grandfathered in any legislation of a carbon tax or other carbon constraints.

UCS President Kevin Knobloch last month wrote to Wilder, saying, “Voluntary restraints on greenhouse gas emissions are clearly failing….If you will not abandon your construction plans, we urge you to publicly state that you do not expect—and will not accept—any economic windfall under future climate laws from this planned increase in global warming pollution.”

In a response written for ENR, TXU says UCS’ premise is flawed. TXU’s program is needed to meet Texas’ “pressing need for additional reliable, affordable and environmentally sound power,” says the response, adding, “Texas faces the looming threat of falling below reliable electric supplies by 2008.”