Natural Gas

The recent increase in the generation of electricity by natural gas power plants is largely due to an increase in the known supply of natural gas resulting in lower forward-looking prices, increasing focus on power plant carbon dioxide emissions and the relative flexibility of siting, constructing and operating natural gas power generation.

The increase in supply is a result of gas production from unconventional sources, such as shale gas or tight gas, which is trapped in deep impermeable rock or non-porous limestone and sandstone. Natural gas has much lower emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) as compared to coal. Carbon dioxide (CO2) emissions are approximately 50 percent lower than coal when burned to generate electricity. As a result, natural gas power plants can be constructed and operated with fewer environmental control systems than a coal-fueled plant with similar output under current environmental regulations.

Simple-cycle plants typically built for “peaking” opportunities can be constructed in roughly 18 to 30 months, while large combined cycle plants (>500 MW) can be constructed in about 36 months.

Industry data indicates that new combined cycle gas plants can achieve average efficiencies of 50 percent and higher. New simple cycle gas turbines and reciprocating internal combustion engine technologies are achieving efficiencies ranging from 35 – 44 percent and combined cycle plants have efficiencies of 52 – 60 percent compared to efficiencies of up to 46 percent for super critical coal plants and 50 percent for ultra-supercritical coal plants.

Dresden Plant
AEP’s Dresden Plant

Types of natural gas plants

There are three types of natural gas plants currently utilized by AEP to generate electricity: natural gas steam generation, simple cycle and combined cycle.

Steam generation plants use natural gas to heat water and create steam that spins a turbine, just as in a coal plant.

Simple cycle plants burn natural gas in a combustion turbine (similar to a jet engine) to produce high-pressure, high-temperature gas, that is then used to spin the turbine. These plants have short start-up times compared to other generating facilities and, therefore, are used during periods of peak demand. They are relatively inefficient in their ability to convert heat into electricity so their use is often limited to periods of high demand.

Combined cycle plants incorporate simple cycle combustion turbines and a heat recovery steam generator (HRSG). Waste heat from combustion turbines is used to generate steam in the HRSG to drive a steam turbine. The use of waste heat results in higher plant efficiency (50+ percent). The combined cycle arrangement adds to the complexity of operation, but these plants can still be very flexible for load-following, intermediate and baseload generation.

Power generation at AEP

AEP believes strongly in the merits of fuel diversity in generating electricity. Today, natural gas-fueled power plants account for approximately 28 percent of AEP's owned generating capacity, while coal represents approximately 50 percent and nuclear 6 percent. The remaining capacity comes from wind, hydro, pumped storage and other sources, including energy efficiency. Since 2004, AEP has added nearly 5,000 MW of natural gas generating capacity to our portfolio. Through 2026, we project that new generating capacity additions to the fleet will likely be natural gas-fueled and renewable (wind & solar).