Briefing summary on conversion of steam plant to coal or coal-derived fuel sources

The conservation of natural gas and oil resources is a national objective likely to be permanent. Regulatory requirements and economics favor further reduction in the use of these resources for the generation of electricity. Electric utilities reduced their consumption of natural gas and oil over the past few years through use of ''economic dispatch.'' Growth in national demand for electricity declined as new coal- and nuclear-fueled power plants entered operation, creating a substantial excess of reserve margin. Thus, plants fueled by natural gas and oil could be idled as new plants with lower marginal costs of generation picked up the load. This situation may reverse during the late 1980s as the reserve margins decline due to restoration of growth of electricity demand and delays in construction of new plants operating on coal and nuclear energy. The slippages in new plant construction can be partly compensated through conversion of existing oil- and gas-fired power plants to coal. Also, these conversions can have nearer term impact due to the expected speed with which existing plants can be converted, as compared with new plant construction. Therefore, the Division of Direct Combustion Applications in the Department of Energy's Office of Fossil Energy is examining,more » on a unit-by-unit basis, existing oil- and gas-fired power plants to determine the specific factors that would affect such a conversion. Conversions of this type should only be encouraged where they are reasonable. Financial, economic, regulatory, environmental and technical issues all must be considered before the conclusion may be reached that a fuel conversion is sensible, and all of these factors are addressed in the Department's study. 14 refs., 13 tabs.« less