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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The North American Electric Power Industry is imperiling the nation's energy security by relying too heavily on natural gas-fired generation, according to Jim Rogers, the chairman, president and CEO of Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina). It sounds like a message that would resonate with his audience of energy executives, utility regulators and business leaders, but Rogers' warnings do not appear to have slowed the industry's longstanding "dash to gas."
"The temptation is to build all gas, all the time because it's cheap and it's quick to build," Rogers told a conference held earlier this year by The Wall Street Journal. "But the reality is,what strengthens the electric grid of the U.S. is our mix of generation." Today's low gas prices "make it uneconomic to burn coal at this time. ... I don't want to put all my chips on any single (generating) technology--I want a blend. ... The toughest challenge today is to convince regulators and consumers to let us build something other than natural gas (generation)."
It's a message that Rogers has sounded in media interviews and industry conferences for a while. Despite his prominence within the electricity industry, and his role as a former chairman of the Edison Electric Institute (Washington, D.C.), the trade group representing shareholder-owned electric utilities, Rogers' message does not seem to be changing many generation decisions in the industry.
The U.S. Environmental Protection Agency (EPA) (Washington, D.C.) recently unveiled a New Source Performance Standard for power plant carbon dioxide (CO2) emissions that is likely to accelerate the industry's "dash to gas." That EPA rule effectively precludes new-build coal-fired power plants. For more on that issue, see the March 30, 2012, article - EPA Strikes Again With 'New Source Performance Standard.'
Click on image at right for a regional snapshot of North American gas-fired power plant construction projects scheduled to kick off this year.
Across North America, Industrial Info is tracking 79 gas-fired power projects with a combined TIV of $25.6 billion that are scheduled to kick off this year. Most of those projects will be based in the U.S., with the Northeast, West Coast, and Southwest expected to be the most active regions. Right now, North America has more than 18,000 MW of gas-fired generation under construction and an additional 10,000 MW is scheduled to kick off in 2012, according to Shane Mullins, Industrial Info's vice president for product development. For more on this year's gas-fired capital construction projects, see March 6, 2012, article - North American Power Outlook: Capital Spending Expected to Dip in 2012. Next year up to 18,000 MW of new gas-fired power projects could begin construction, according to Industrial Info's data.
View Project Report - 27001242 300049715 300044466 26001137
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.
"The temptation is to build all gas, all the time because it's cheap and it's quick to build," Rogers told a conference held earlier this year by The Wall Street Journal. "But the reality is,what strengthens the electric grid of the U.S. is our mix of generation." Today's low gas prices "make it uneconomic to burn coal at this time. ... I don't want to put all my chips on any single (generating) technology--I want a blend. ... The toughest challenge today is to convince regulators and consumers to let us build something other than natural gas (generation)."
It's a message that Rogers has sounded in media interviews and industry conferences for a while. Despite his prominence within the electricity industry, and his role as a former chairman of the Edison Electric Institute (Washington, D.C.), the trade group representing shareholder-owned electric utilities, Rogers' message does not seem to be changing many generation decisions in the industry.
- Shortly after receiving permission from Virginia utility regulators to build a 1,300-megawatt (MW) natural gas combined-cycle (NGCC) plant in Warren County, Virginia, at a cost of about $1.3 billion, Dominion Resources (NYSE:D) (Richmond, Virginia) announced plans to build a second 1,300-MW NGCC plant in Brunswick County, Virginia. The Brunswick plant will cost about $1 billion.
- Florida regulators recently approved a plan from Florida Power & Light (Juno Beach, Florida), a unit of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach), to build a 1,277-MW NGCC plant to replace generation that the utility is shuttering. The Port Everglades Power Station, with a total investment value (TIV) of about $1.2 billion, is scheduled to begin operating in mid-2016, assuming the utility receives the requisite environment permit from Florida environmental regulators. The plant would be built on the site of existing oil-fired generation, which the utility plans to demolish.
- Last month, Maryland utility regulators gave the go-ahead to build a 661-MW NGCC plant, which has a TIV of about $640 million, in Charles County, Maryland. The plant is being developed by Competitive Power Ventures Holdings LLC (Silver Spring, Maryland).
The U.S. Environmental Protection Agency (EPA) (Washington, D.C.) recently unveiled a New Source Performance Standard for power plant carbon dioxide (CO2) emissions that is likely to accelerate the industry's "dash to gas." That EPA rule effectively precludes new-build coal-fired power plants. For more on that issue, see the March 30, 2012, article - EPA Strikes Again With 'New Source Performance Standard.'
Click on image at right for a regional snapshot of North American gas-fired power plant construction projects scheduled to kick off this year.Across North America, Industrial Info is tracking 79 gas-fired power projects with a combined TIV of $25.6 billion that are scheduled to kick off this year. Most of those projects will be based in the U.S., with the Northeast, West Coast, and Southwest expected to be the most active regions. Right now, North America has more than 18,000 MW of gas-fired generation under construction and an additional 10,000 MW is scheduled to kick off in 2012, according to Shane Mullins, Industrial Info's vice president for product development. For more on this year's gas-fired capital construction projects, see March 6, 2012, article - North American Power Outlook: Capital Spending Expected to Dip in 2012. Next year up to 18,000 MW of new gas-fired power projects could begin construction, according to Industrial Info's data.
View Project Report - 27001242 300049715 300044466 26001137
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.
