Development of New Coal-Fired Generating Capacity Projects Grows to More Than 85,000 Megawatts

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Researched by Industrial Info Resources (Sugar Land, Texas). Utility companies and private energy producers across the nation continue to develop strategies to meet future energy demands. These plans vary greatly, depending on the region of the country, but there is a common factor in almost every long term planning strategy, and that is a growing need for new coal-fired generating capacity. In fact, the U.S. is now entering an era where existing baseload capacity is not going to be sufficient by the year 2020. Over the next several years, it is expected that natural gas will be the dominant fuel of choice for new generating units when practical. Price volatility of natural gas over the past five years, has the industry nervous about putting all its eggs in one basket. In reality, it is clear to most in the industry that future electric energy demands must be satisfied by a diverse fuel source of fossil, nuclear and renewable fuel sources.

Not only is new coal-fired generation needed to meet future energy needs, but construction of new units will be necessary to replace or repower coal units that are nearing the end of their lifespan. In fact, since 2000, the industry has lost 5,900MW of coal-fired capacity due to retirements. Over 60,000MW of our baseload coal-fired capacity is greater than 40-years old with 9,800MW scheduled for retirement by the end of decade. In order to remain competitive and comply with environmental regulations, it will be necessary to replace or repower much of this existing coal-fired generating fleet with cleaner burning technology.

Currently, Industrial Info is tracking 21 new coal-fired units representing 8,962-megawatts that are under construction in the U.S. Completion of these new units and commercial operation of the new facilities ranges from this year through 2010.

Click on the image at right to view a chart showing construction of coal-fired units in 2006.

In addition to these new units already under construction, there are 226 units and over 77,000MW in various stages of development. This represents a total investment of over $100 billion of new coal-fired generating capacity under development anticipated for construction kick off between now and 2017. Projects identified through Industrial Info’s research take into account the overall amount of capacity understudy to date. This includes companies that are studying multiple sites for a single or in some cases two or three projects. In short, it is probable that some of these projects could be cancelled or delayed to later years.

Of the capacity under development, roughly 147 units and 44,862MW are expected to be constructed at grassroot sites, while 79 units and 32,325MW are expected to be expansions to existing generating stations. Utility companies are proposing construction of 97 new coal-fired generating units with a capacity of almost 37,000MW, compared to 129 units and 40,108MW proposed by private energy producers. In many cases, projects developed by utilities have a better chance of moving forward due to the fact that they have a customer base in place for new capacity and they face fewer financial hurdles. Many units are expected to utilize clean coal technology, including 21 circulating fluidized bed (CFB) units representing 5,479MW of capacity and 63 integrated gasification combined-cycle units with a total capacity of over 11,800MW.

Some of the most active companies developing new coal-fired generating units include American Electric Power Company Incorporated (AEP)(NYSE:AEP) (Columbus, Ohio), TXU Corporation, (NYSE:TXU) (Dallas, Texas), LS Power Development LLC (East Brunswick, New Jersey), The ERORA Group LLC (Louisville, Kentucky), NRG Energy Incorporated (NYSE:NRG) (Princeton, New Jersey) and Sithe Global Power LLC (New York, New York).

AEP has announced plans to move forward with the development of one to three IGCC power plants in Kentucky, Ohio and West Virginia. In addition to this, the company is also evaluating existing plants in Texas and Arkansas for the addition of a new pulverized coal unit. TXU has over 8,000MW under development at existing sites and grassroot locations in Texas. The company plans to utilize lignite and Powder River Basin coal to fuel pulverized coal and possibly IGCC units. LS Power recently started construction on the Plum Point project in Arkansas and is moving forward with development of projects in Texas, Iowa, Nevada and Georgia. Meanwhile ERORA is developing IGCC projects in Illinois and Kentucky and NRG is evaluating sites in New England and the Northeast region for the possible construction of one or more IGCC units at their existing stations. Sithe Global is moving forward with developing new coal-fired projects in New Mexico, Nevada and Pennsylvania.

For more information on future business trends and project spending in the Power Industry, check out Industrialinfo.com's 2006 Power Industry Forecast.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.