Natural Gas Fired Generation Showing Signs of a Comeback

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Researched by Industrial Info Resources (Sugar Land, Texas)--During the past two years, the Power Industry has experienced double-digit growth in construction kickoffs for new capacity from natural gas, and currently more than 19,000 megawatts (MW) of new natural-gas-fired generation is under construction. The prospect of building new natural-gas-fired generating units is once again becoming more promising. As concerns mount over the many obstacles that developers of new coal-fired capacity are encountering, natural gas is becoming an attractive option. There are few alternatives to replace the new coal capacity that has been delayed or canceled during the past two years. These proposed new coal-fired units were scheduled to come online after 2010 to meet increasing base-load demand requirements. Where new coal-fired projects are unable to move forward, natural-gas-fired combined-cycle plants will probably be required to fill the void. For quite some time now, natural gas has been one of the leading fuels of choice for new generating plants because of few obstacles, quicker permitting turnaround time, lower capital construction costs and a shorter construction schedule. Of course, the downside of relying too heavily on natural gas is the price volatility and concerns over fuel availability.

Click on the image at right to view a chart showing the breakdown of natural-gas-fired generation units under development in the U.S.

Taking into consideration the units that are under construction, the majority of the capacity is being built in the southeastern region of the United States, with nearly 8,000 MW scheduled to begin operation between 2009 and 2012. In the southwest, 3,600 MW is under construction, and 2,900 MW of natural-gas-fired capacity is under way on the west coast. Overall, there is a significant amount of new natural-gas-fired capacity in the construction stage throughout the country.

Beyond 2008, an additional 76,000 MW from 560 natural-gas-fired combustion turbines and associated combined-cycle steam turbines are under development and scheduled for construction kickoff in 2009-13. Roughly 44% of this capacity has been proposed for a construction kickoff in 2009, but the credit crunch and declining economic situation is expected to lead to multiple project cancellations and deferments.

At this time, 188 natural-gas-fired simple-cycle turbines are under development in the United States at 74 plant sites. If built, these units will supply 12,000 MW of primarily peak load capacity. In addition, 230 combined-cycle natural-gas-fired combustion turbines and 128 combined-cycle steam turbines capable of generating 63,000 MW are under development at 100 plant sites throughout the U.S.

For a detailed forecast and analysis of project spending the natural gas power generation industry see Industrial Info's recently released 2009 Power Industry Outlook.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.