Natural gas: Still a contender
During the past decade, an aggressive push to build gas-fired generating capacity resulted in 300,000 MW being added to U.S. grids. But economic downturns, questionable industry business practices, and closer scrutiny of demand forecasts combined to slow that boom. It ended in 2005—the worst Atlantic hurricane season on record—when storms damaged many rigs in the Gulf of Mexico, driving gas prices above $15/mmBtu. The price surge was a message to the U.S. power industry that depending heavily on one fuel is risky business.
Despite the recent slowdown in activity, natural gas is expected to remain a leading power plant fuel. Gas-fired combustion turbine plants, operating either in simple-cycle or combined-cycle mode, still run cleaner than coal plants (making their permitting easier) and are much faster to build.
Construction kickoffs for gas-fired generating units began declining steadily from their peak in 2001, when units representing more than 73,000 MW broke ground. The slide continued through 2004, when only 5,600 MW of gas-fired capacity followed suit. Since 2005, the pace has picked up, and it looks likely to accelerate. For example, 158 gas-fired units totaling 15,469 MW are currently in construction. The latter number comprises 7,000 MW being built as part of greenfield units and 8,456 MW being added to existing plants.
To help meet longer-term demand, 438 gas-fueled units totaling 50,900 MW are in various stages of development. Of those totals, 18 units totaling more than 2,000 MW were scheduled to have broken ground before the end of 2007 (after this issue goes to press), with the other 48,000 MW and change slated to follow by 2015. This year alone will see construction kickoffs for at least 9,000 MW of the 24,000 MW currently under development. The round numbers are necessary because permitting and financing difficulties could delay some projects.
Nuclear: Making a comeback
The drive to diversify generation’s fuel mix may be helped by the possible licensing of dozens of new reactors. They would be the first ordered in the U.S. since 1978, one year before Unit 2 of the Three Mile Island plant in Pennsylvania partially melted down. Currently, nuclear generation supplies about 20% of America’s electricity. Although nuclear plants are more expensive than coal plants (taking into account the costs of licensing, decommissioning, and waste disposal), nuclear fuel is half the price of coal, so the plants’ total production costs are about the same: about $30/MWh. Notably, unlike coal plants, nuclear plants emit no CO2, a major contributor to global warming.
Early this decade, reactor vendors and utilities began lobbying the federal government to reduce the considerable financial risks of building new plants. They succeeded by having the Energy Policy Act of 2005 include tax incentives and loan guarantees for up to 6,000 MW of new nuclear capacity. Earlier, the Nuclear Regulatory Commission (NRC) had streamlined the lengthy processes for permitting and licensing new reactors by creating a new system for issuing combined construction and operating licenses (COLs) for plants and approving reactor designs in advance.
The NRC says it expects to receive applications for 12 new reactors at seven sites within the next few years and 15 more applications over the longer term. Four consortia have already applied for early site permits, using a separate process in which the NRC reviews and approves the suitability of a site before its prospective developers apply for a COL.
In all, developers are currently proposing building 47 new reactors in the U.S. They would be part of 33 projects totaling more than 60,000 MW and would be valued at more than $106 billion. Given the length of the site permitting and COL processes, it’s conceivable that 19 of the proposed reactors could break ground in 2010, but that’s a very optimistic estimate. Until the timetables are firmed up and financing issues are resolved, the U.S. nuclear power industry will have to be satisfied with incremental upgrades of reactor capacity. At present, 12 projects of that type totaling $600 million are in the works.
Email
Comments
Print
Reuse
