III Electric Powerplants Only a minor number of gas-fired and oil-fired units have provision in the original design for future conversion to coal firing and are capable of the conversion to coal which S.1777 would require. Units not capable of conversion are enjoined from burning gas or oil, and therefore, would have to be decommissioned under the provisions of the bill. This would represent a loss of electric generating capacity of approximately 100,000 megawatts (MW) which must be replaced by coal-fired capacity. Present manufacturing capability of the utility fossil boiler manufacturers is in the order of 25,000 to 27,500 MW per year which is consistent with the normal load growth characteristics of the electric industry. Today the utility boiler manufacturers are operating at approximately 90 percent capacity in handling commitments for equipment currently on order for new fossil fuel-fired boilers, plus routine conversions, maintenance and repair parts. This rate of production could increase starting in 1977 when orders which were cancelled or deferred are replaced by new bookings or reinstatements, to meet expected load growth by the utility industry. S.1777 therefore would require a monumental effort, possibly exceeding the boiler industry's ship-propulsion World War II effort, on the part of many entities serving the electric utility industry to meet the coal conversion objectives of the bill within the time-frame constraints imposed. (Involved are consulting engineers, boiler manufacturers and their suppliers, coal producers, railroads, steel makers, and heavy construction industries.) The impact of installing 100,000 MW of coal-fired capacity, in addition to fulfilling normal requirements, would impose on the boiler manufacturer a choice among these alternatives: 1. To install 35 percent more plant capacity, the utilization of which is doubtful after this conversion program is completed. Thus, the recovery rate for this capital will have to be accelerated far beyond the normal rate. In addition the capital costs to support these expenditures would undoubtedly be far greater than in the case where capacity is added on traditional time schedules. Finally, actual manufacturing costs to fabricate steam generating equipment under these conditions will exceed normal limits. If this accelerated program is indeed in the national interest, then suitable compension arrangements should be made; 2. To extend the conversion time schedule, which will reduce the need for additional boiler manufacturing plant capacity, as this additional fossil demand could be scheduled in the 1980's when the impact of nuclear capacity additions is expected to reduce historic fossil requirements; 3. To accelerate nuclear power plant construction to reduce the pressure for greater coal production and additional fossil boiler capacity. When a natural gas or oil-fired unit is not originally designed for coal as an alternate future fuel, it is impractical to convert to firing pulverized coal or lignite because of massive reconstruction at exorbitant costs. The alternative is to provide a complete pulverized coal replacement for each oil and/or gas unit scheduled to be decommissioned. replacement cost for 100,000 MW of existing oil and gas capacity is conservatively estimated to be in excess of 30 billion dollars (1975 The dollars) and is based on the normal engineering-manufacturing-construction cycle; i. e. on a non-accelerated basis. If provision could be made for some of these units to operate on oil or gas for peaking purposes only, or if some newer units could be permitted to operate for a limited but longer period of time because conversion is impractical due to space limitations, then the impact on industry and utility resources would be moderated. Electric utility power plants designed exclusively for gas and/or oil may be lacking in physical space to accommodate a pulverized coal unit and its associated precipitators and stack gas clean-up equipment, the latter generally requiring more ground area than the steam generator proper. The following issues should be resolved before S. 1777 is adopted: 1. Will there be sufficient space at affected plant sites for Coal handling, unloading and storage Ash collection, removal and disposal Stack gas clean-up and sludge disposal Additional fan or other auxiliaries Foundations. 2. Will there be adequate new coal reserves and sufficient new 3. Will rail transport facilities (roadbed/rail cars) be adequate? 5. Will the pace of conversion permit utilities to maintain 6. Will sufficient capital funds be available to finance the huge additional conversion expense? 7. Will the utilities have the financial capability to incur these additional obligations? 8. Shouldn't consideration be given to the immediate deregulation of oil and natural gas prices so that energy values can seek their own relative market levels in open competition with coal and uranium? 9. Wouldn't economic incentives for coal production and plant coal conversion help speed and relieve the burden of the process of conversion? It is recognized that a number of the foregoing issues apply to the industrial sector as well. IV Comments on Specific Provisions of S.1777 This Part briefly describes how certain provisions of S.1777, when read in context of the facts of the boiler industry and the uses of objectives of energy self-sufficiency. steam, run counter to the basic This Part also identifies provisions which cannot apply to the facts because of serious ambiguities. A. S.1777 Would Prohibit Use of Valuable Domestic Energy Resources Other Than Oil or Gas S.1777 does not simply prohibit the use of oil or natural gas. Section The term "primary energy source" means the amount of fuel Thus, after 1985, any fuel in a fossil-fired boiler (other than for the The use of other domestic fuels would also be prohibited in the following manner. In many industries, liquid gaseous and solid by-products, co *It is assumed that "primary source of boiler fuel" and "primary energy source" are synonomous. |