Development of Coal Fired Power Plants Increases With Rising Demand for Electricity

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The following is an advisory from Industrial Information Resources Incorporated (IIR): As electricity demand increases at alarming rates, coal is once again a viable fuel option for developers of new power plants. Based on current growth, industry sources estimate that the United States will need an additional 390,000 mega-watts (MW) of capacity by the year 2020. Presently approximately 90 percent of new power plants in development are comprised of natural gas fired simple cycle and combined cycle units. However, concerns about natural gas supply and volatile prices indicate that coal must play a more significant role to address increasing demand for electricity. Currently over half of the nation's electricity is generated from coal-fired power plants, yet in 12 states across the Mid-Atlantic, Great Lakes, Mid-West and Rocky Mountain regions, electricity generated by coal accounts for as high as 80 percent of the overall capacity.

Nationally, IIR's research has identified over 45 coal-fired power plant projects either under construction or in development and scheduled for completion between July 2001 and January 2009. These projects include 27 new coal fired generating plants representing 23,061 MW of new capacity and 21 unit additions at 17 existing stations representing 12,177 MW of capacity. Some of the companies active in development of new coal fired plants and units are LS Power, EnviroPower LLC and Dominion Energy.

Despite the need for new generation capacity, there are still obstacles with development of new coal fired plants and unit additions including major issues involving coal supply and environmental regulations. Based on statistical information released by the U.S. Department of Energy (DOE), the nation's production of coal in the year 2000 exceeded one billion tons, with electricity generation accounting for about 90 percent of all coal consumption. With electricity already consuming most of the coal produced today, adding more capacity using this fuel may cause a problem with supply if more coal mining does not occur.

Power plant owners are still faced with federally and state mandated environmental issues addressing tighter Nitrogen Oxide (NOx), Sulfur Dioxide (SO2) and particulate emissions. While technological advancements have led to solutions such as Selective Catalytic Reduction, Flue Gas Desulfurization Improvements, and Integrated Gasification Combined Cycle Technology, there are further environmental challenges on the horizon. The Environmental Protection Agency (EPA) is in the process of developing mercury emission standards and regulations for CO2 emissions. The Bush Administration has promised to assist by pledging $2 billion over the next 10 years for clean coal technology including the $150 million Clean Power Plant Initiative Program earmarked for the 2002 budget.

Britt Burt, Power Group Manger for IIR concludes by stating `Despite tougher environmental regulations, coal still remains the most plentiful natural resource today. With proper support from government and private industry, coal fired power plants may play an integral part of the solution in meeting future electricity demands.`