Released January 24, 2014 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Over the next 25 years, U.S. natural gas-fired electric generation capacity will more than double, and renewable generation capacity will increase by about 150%, according to the latest Energy Market Perspective forecast from Black & Veatch (B&V) (Overland Park, Kansas). But the continued "dash to gas" in the U.S. Electric Power business will not push up natural gas prices significantly, because gas supplies are expected to grow dramatically, B&V's energy analysts told a web conference this week. Overall, the U.S. generating fleet will grow about 30% over the next 25 years, said Rob Patrylak, B&V's managing director for planning and energy markets.
B&V was considerably less upbeat about the future of nuclear power and conventional coal generation. Conventional coal capacity in the U.S. will fall about 40% between now and 2038, largely a function of tougher environmental regulation, while nuclear capacity will tumble 35% over that same timeframe, Patrylak said during a January 21 web conference.
"For coal generation, the Mercury and Air Toxics Standards (MATS) and the upcoming greenhouse gas regulations will be the most significant regulatory drivers," he said, adding B&V expects about 60 gigawatts of coal-fired generating capacity will be retired by 2020.
By 2038, more than 50% of U.S. electricity will be generated by natural gas, dethroning "King Coal," the B&V study predicts. Patrylak said the rate of growth in demand for electricity is expected to fall slowly but steadily in the coming years, as regulators push new energy-efficiency policies and businesses and homeowners replace older, less-efficient appliances with new, more efficient ones.
Click on icon to see Black & Veatch's projection of U.S. electric demand growth through 2025.
Demand for gas from the Power Industry will rise by about 3.1% per year for the next 25 years, resulting in a doubling of gas use by generators by 2038, B&V's Ann Donnelly told the web conference. The Power Industry will add about 348 gigawatts of new gas-fired generation over the next quarter century, she added. But because the supply of natural gas across North America is projected to rise sharply over the forecast 25-year period, price increases are likely to be muted, at least over the next few years, she predicted.
Click on the icon to see Black & Veatch projection of North American natural gas supply over the next 25 years.
In fact, continued dramatic gains in North American gas production, chiefly from the Marcellus, Eagle Ford, Permian and Utica formations, caused the consulting firm to lower its near-term price estimate for natural gas from its prior industry assessment, conducted in mid-2013, said Donnelly, who is director of natural gas and power fuels at B&V. The growth in low-cost gas supplies has dampened the firm's expectation about price growth for gas at the Henry Hub over 2013-17, she added.
Click on the icon to see Black & Veatch's current projection of natural gas prices over the next 25 years.
Meanwhile, the Overland Park consultants see continued growth of renewable energy generating capacity, mainly wind, over the next quarter-century. Much of the growth is expected to take place in the Eastern Interconnect, B&V predicted.
Click on the icon for a chart of the projected growth in renewable electric generating capacity in the U.S. through 2038.
Like the U.S. Energy Information Administration (EIA) (Washington, D.C.), Black & Veatch sees growth in crude oil supplies leading to a decline in prices for West Texas Intermediate as well as Brent crude in 2014 and 2015. Prices for both grades of crude will start trending upward in 2016, B&V predicted.
Donnelly said annual demand for thermal coal in the U.S. will fall from about 850 million tons last year to about 700 million tons in 2020, with continued declines to about 600 million tons in 2035. She added the fate of U.S. coal is increasingly tied to export markets. Exports have been rising in recent years, and in 2012, exports hit a new record. Export terminals on the East Coast and Gulf Coast are being expanded to meet strong overseas demand growth for coal. But coal-export terminal projects on the West Coast have run into delays, she noted. "After 2018, the fate of U.S. coal will largely hinge on exports."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
B&V was considerably less upbeat about the future of nuclear power and conventional coal generation. Conventional coal capacity in the U.S. will fall about 40% between now and 2038, largely a function of tougher environmental regulation, while nuclear capacity will tumble 35% over that same timeframe, Patrylak said during a January 21 web conference.
"For coal generation, the Mercury and Air Toxics Standards (MATS) and the upcoming greenhouse gas regulations will be the most significant regulatory drivers," he said, adding B&V expects about 60 gigawatts of coal-fired generating capacity will be retired by 2020.
By 2038, more than 50% of U.S. electricity will be generated by natural gas, dethroning "King Coal," the B&V study predicts. Patrylak said the rate of growth in demand for electricity is expected to fall slowly but steadily in the coming years, as regulators push new energy-efficiency policies and businesses and homeowners replace older, less-efficient appliances with new, more efficient ones.
Click on icon to see Black & Veatch's projection of U.S. electric demand growth through 2025.Demand for gas from the Power Industry will rise by about 3.1% per year for the next 25 years, resulting in a doubling of gas use by generators by 2038, B&V's Ann Donnelly told the web conference. The Power Industry will add about 348 gigawatts of new gas-fired generation over the next quarter century, she added. But because the supply of natural gas across North America is projected to rise sharply over the forecast 25-year period, price increases are likely to be muted, at least over the next few years, she predicted.
Click on the icon to see Black & Veatch projection of North American natural gas supply over the next 25 years.In fact, continued dramatic gains in North American gas production, chiefly from the Marcellus, Eagle Ford, Permian and Utica formations, caused the consulting firm to lower its near-term price estimate for natural gas from its prior industry assessment, conducted in mid-2013, said Donnelly, who is director of natural gas and power fuels at B&V. The growth in low-cost gas supplies has dampened the firm's expectation about price growth for gas at the Henry Hub over 2013-17, she added.
Click on the icon to see Black & Veatch's current projection of natural gas prices over the next 25 years.Meanwhile, the Overland Park consultants see continued growth of renewable energy generating capacity, mainly wind, over the next quarter-century. Much of the growth is expected to take place in the Eastern Interconnect, B&V predicted.
Click on the icon for a chart of the projected growth in renewable electric generating capacity in the U.S. through 2038.Like the U.S. Energy Information Administration (EIA) (Washington, D.C.), Black & Veatch sees growth in crude oil supplies leading to a decline in prices for West Texas Intermediate as well as Brent crude in 2014 and 2015. Prices for both grades of crude will start trending upward in 2016, B&V predicted.
Donnelly said annual demand for thermal coal in the U.S. will fall from about 850 million tons last year to about 700 million tons in 2020, with continued declines to about 600 million tons in 2035. She added the fate of U.S. coal is increasingly tied to export markets. Exports have been rising in recent years, and in 2012, exports hit a new record. Export terminals on the East Coast and Gulf Coast are being expanded to meet strong overseas demand growth for coal. But coal-export terminal projects on the West Coast have run into delays, she noted. "After 2018, the fate of U.S. coal will largely hinge on exports."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
