Released January 03, 2023 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--When Britt Burt, Industrial Info's vice president of research for the Global Power Industry, thinks about potential big developments in the U.S. Power industry in 2023, he starts by invoking Yogi Berra's famous quip: "It's tough to make predictions -- especially about the future."
But if what he saw in recent years is extended into the new year and beyond, then he's anxious. "Sustainability needs to catch up with reality," he said.
In an interview shortly before a late-December bitter Arctic freeze created havoc in electric systems across the country, Burt said the U.S. electric system remains vulnerable to extreme weather. Not enough generation owners are winterizing their plants, he said. A Texan, he lived through Winter Storm Uri in February 2021, which disrupted the energy ecosystem in Texas and beyond, with cascading effects on water systems and other critical infrastructure, leading to the death of hundreds of people. For more on how Uri upended the Texas electric grid, see February 17, 2021, article - UPDATED LIST: Texas Wrestles with Continued Power Outages as Generators Struggle with Demand.
"If grid operators need to change their procedures to compensate generation owners for winterizing their power plants, then that should happen in 2023," he said. "The 'once in a generation' winter storm has happened two years in a row. Generators in Minnesota don't trip offline during the winter. It's time for grid operators to connect the dots and make some changes."
While Burt expects recent trends, such as increased construction of renewable generation and premature retirement of coal-fired generators, to continue in 2023, he also said, "The day is coming when there will be a rebalancing."
He recently co-authored an article in Turbomachinery Handbook on the continued rush to renewables in the U.S. The article estimated that 94% of all new-build generation scheduled to begin construction between 2023 and 2027 would be renewables. As recently as five years ago, renewables were expected to constitute only about 56% of all new-build generation in the U.S.
While Industrial Info does not expect that all of that new generating capacity will be built as scheduled over the next five years, it is clear, the article said, that "renewable power developers are in the green, and carbon-based developers are singing the blues."
"In the build-out of renewables, there has been a shift to offshore wind," Burt said in a mid-December interview. "But we don't have the vessels needed to install 30 gigawatts (GW) of offshore wind."
And for all the upbeat talk about hydrogen, he expects hydrogen will go through a reckoning as well. "In a recent trade journal article," he said, "it was estimated that it would take about 2.2 GW of renewable electric generation to create enough 'green' hydrogen to power a 575-megawatt (MW) generator. That sized plant is expected to burn about 40 tons of hydrogen per hour. The efficiencies are not in place yet for hydrogen to be a dominant fuel in the power generation sector. I am not quite sure when this will occur but I am confident in saying it won't happen in 2023."
He added that the Power Industry is experimenting with co-firing hydrogen in gas-fired generators, but high costs make hydrogen co-firing uneconomic today.
Burt expects the world to continue to aggressively develop solar photovoltaic (PV) generation in 2023, but there are forces that act as an upper bound on the global PV buildout, he said: "The demand for raw materials, inverters and transformers is exceeding supply," and that situation likely will get worse as the world tries to dodge the worst impacts of global warming by ramping up renewable generation.
"At some point--probably not in 2023 but not too long after that--the world will revisit concentrating solar thermal (CSP)," he predicted. Right now, on an installed capacity basis, CSP costs about four to five times what it costs to build solar PV with battery storage, but he expects CSP to become more competitive in the near future: "Sharply declining costs have made it possible to build a lot of PV solar around the world. The same will be true for CSP. It's just not clear when we will hit that wall."
He predicts a similar convergence of global demand for battery energy storage systems (BESS) will force changes. "For the last few years, it's been all lithium-ion BESS all the time. Where will all this future lithium come from? There is sharply rising global demand, but sometimes it seems as if policymakers think we're the only country pursuing lithium-ion BESS. Battery storage is critical to decarbonizing the electricity supply, but other energy storage technologies need to come to the fore."
Invoking the French philosopher Voltaire, Burt said, "Common sense isn't all that common, at least in Washington, D.C."
The pace of development of next-generation small modular nuclear reactors (SMRs) is another concern for Burt. He doesn't see that pace dramatically accelerating in 2023, but he does believe new nuclear needs to be developed faster. "You can't hit decarbonization goals without nuclear. SMRs are coming, but they're not coming tomorrow." He noted that three SMRs are under development in the U.S. He also noted that the out years of some utilities' integrated resource plans (IRPs) contain vague references to SMR generation, but most of that potential construction won't take place until the 2030s. And any reference to new nuclear generation comes with the requirement that is be cost effective.
But of all the U.S. electric generation trends that concern Burt, the dramatic slowdown in constructing new gas-fired electric generation tops the list. "We're making a big mistake in not relying more on gas-fired generation," he said. "I'm not anti-renewables, but you have to be reasonable. Intermittent resources like wind and solar need to be backed up with dispatchable generation if our electric system is to remain reliable."
He noted that Industrial Info is tracking about 139 active gas-fired power projects under development in the U.S. that are scheduled to begin construction between January 2022 and December 2024. The value of those projects is about $21.5 billion. Some of these projects are grassroot projects or unit additions, but a lot are power uprates where a plant's generation capacity is increased by 4% to 6%.
By contrast, about 101 gas-fired power projects, valued at about $45.6 billion, that were scheduled to kick off construction during that same three-year period have been cancelled or placed on hold.
Burt also is concerned that U.S. investment in transmission is not keeping up with the buildout of renewable generation. "By my estimate, about $4.3 trillion will need to be invested in transmission projects to meet our nation's decarbonization goals. That sum is for building new assets and modernizing existing infrastructure. Most transmission projects can be built in a year or two--but you have to get through years of litigation first."
He doesn't expect that to change overnight, but a more business-friendly U.S. Supreme Court could make decisions that streamline and expedite the siting of energy infrastructure.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
But if what he saw in recent years is extended into the new year and beyond, then he's anxious. "Sustainability needs to catch up with reality," he said.
In an interview shortly before a late-December bitter Arctic freeze created havoc in electric systems across the country, Burt said the U.S. electric system remains vulnerable to extreme weather. Not enough generation owners are winterizing their plants, he said. A Texan, he lived through Winter Storm Uri in February 2021, which disrupted the energy ecosystem in Texas and beyond, with cascading effects on water systems and other critical infrastructure, leading to the death of hundreds of people. For more on how Uri upended the Texas electric grid, see February 17, 2021, article - UPDATED LIST: Texas Wrestles with Continued Power Outages as Generators Struggle with Demand.
"If grid operators need to change their procedures to compensate generation owners for winterizing their power plants, then that should happen in 2023," he said. "The 'once in a generation' winter storm has happened two years in a row. Generators in Minnesota don't trip offline during the winter. It's time for grid operators to connect the dots and make some changes."
While Burt expects recent trends, such as increased construction of renewable generation and premature retirement of coal-fired generators, to continue in 2023, he also said, "The day is coming when there will be a rebalancing."
He recently co-authored an article in Turbomachinery Handbook on the continued rush to renewables in the U.S. The article estimated that 94% of all new-build generation scheduled to begin construction between 2023 and 2027 would be renewables. As recently as five years ago, renewables were expected to constitute only about 56% of all new-build generation in the U.S.
While Industrial Info does not expect that all of that new generating capacity will be built as scheduled over the next five years, it is clear, the article said, that "renewable power developers are in the green, and carbon-based developers are singing the blues."
"In the build-out of renewables, there has been a shift to offshore wind," Burt said in a mid-December interview. "But we don't have the vessels needed to install 30 gigawatts (GW) of offshore wind."
And for all the upbeat talk about hydrogen, he expects hydrogen will go through a reckoning as well. "In a recent trade journal article," he said, "it was estimated that it would take about 2.2 GW of renewable electric generation to create enough 'green' hydrogen to power a 575-megawatt (MW) generator. That sized plant is expected to burn about 40 tons of hydrogen per hour. The efficiencies are not in place yet for hydrogen to be a dominant fuel in the power generation sector. I am not quite sure when this will occur but I am confident in saying it won't happen in 2023."
He added that the Power Industry is experimenting with co-firing hydrogen in gas-fired generators, but high costs make hydrogen co-firing uneconomic today.
Burt expects the world to continue to aggressively develop solar photovoltaic (PV) generation in 2023, but there are forces that act as an upper bound on the global PV buildout, he said: "The demand for raw materials, inverters and transformers is exceeding supply," and that situation likely will get worse as the world tries to dodge the worst impacts of global warming by ramping up renewable generation.
"At some point--probably not in 2023 but not too long after that--the world will revisit concentrating solar thermal (CSP)," he predicted. Right now, on an installed capacity basis, CSP costs about four to five times what it costs to build solar PV with battery storage, but he expects CSP to become more competitive in the near future: "Sharply declining costs have made it possible to build a lot of PV solar around the world. The same will be true for CSP. It's just not clear when we will hit that wall."
He predicts a similar convergence of global demand for battery energy storage systems (BESS) will force changes. "For the last few years, it's been all lithium-ion BESS all the time. Where will all this future lithium come from? There is sharply rising global demand, but sometimes it seems as if policymakers think we're the only country pursuing lithium-ion BESS. Battery storage is critical to decarbonizing the electricity supply, but other energy storage technologies need to come to the fore."
Invoking the French philosopher Voltaire, Burt said, "Common sense isn't all that common, at least in Washington, D.C."
The pace of development of next-generation small modular nuclear reactors (SMRs) is another concern for Burt. He doesn't see that pace dramatically accelerating in 2023, but he does believe new nuclear needs to be developed faster. "You can't hit decarbonization goals without nuclear. SMRs are coming, but they're not coming tomorrow." He noted that three SMRs are under development in the U.S. He also noted that the out years of some utilities' integrated resource plans (IRPs) contain vague references to SMR generation, but most of that potential construction won't take place until the 2030s. And any reference to new nuclear generation comes with the requirement that is be cost effective.
But of all the U.S. electric generation trends that concern Burt, the dramatic slowdown in constructing new gas-fired electric generation tops the list. "We're making a big mistake in not relying more on gas-fired generation," he said. "I'm not anti-renewables, but you have to be reasonable. Intermittent resources like wind and solar need to be backed up with dispatchable generation if our electric system is to remain reliable."
He noted that Industrial Info is tracking about 139 active gas-fired power projects under development in the U.S. that are scheduled to begin construction between January 2022 and December 2024. The value of those projects is about $21.5 billion. Some of these projects are grassroot projects or unit additions, but a lot are power uprates where a plant's generation capacity is increased by 4% to 6%.
By contrast, about 101 gas-fired power projects, valued at about $45.6 billion, that were scheduled to kick off construction during that same three-year period have been cancelled or placed on hold.
Burt also is concerned that U.S. investment in transmission is not keeping up with the buildout of renewable generation. "By my estimate, about $4.3 trillion will need to be invested in transmission projects to meet our nation's decarbonization goals. That sum is for building new assets and modernizing existing infrastructure. Most transmission projects can be built in a year or two--but you have to get through years of litigation first."
He doesn't expect that to change overnight, but a more business-friendly U.S. Supreme Court could make decisions that streamline and expedite the siting of energy infrastructure.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
