Coal to keep the lights on
Peltier's realistic analysis of electricity demand over the next five years, and his sobering review of the supply options available to meet it, underscores the major shift in thinking caused by concerns about global warming. Assuming that demand will rise at only half the rate of GDP growth due to demand reduction, and that demand has historically averaged 2% annually, we will still need 78,000 MW of new capacity by 2010, or a whopping 20,000 new megawatts per year.
However, new nuclear units won't be ready to come on-line until the 2015–2020 time frame, and forecasted growth in wind capacity is just 2,500 MW/year. Although imports of liquefied natural gas are growing, at their expected price of $10/mmBtu, gas-fired plants simply won't be competitive. What's more, gas pipelines are running at capacity, and, as Peltier noted wryly, "if you think it's hard building a coal-fired power plant, try building an interstate pipeline."
Coal is the only remaining option for fueling needed baseload capacity, he argued (Figure 2). Given the high costs and unproven reliability of immature integrated gasification combined-cycle (IGCC) technology—the basis of what are essentially 600-MW coal "refineries," according to Peltier—conventional pulverized-coal plants will have to carry the capacity ball until 2015. Thus, global warming and energy politics butt heads with the practical reality of having to use substantially more coal to meet electricity demand.
2. It's good to be king. Rising U.S. electricity demand though 2030 will have to be met by 20,000 MW of new supply each year, or the lights will go out. Given the long lead times of nuclear capacity, the price of gas, and the negligible contributions of renewable energy, the only near-term option is to build more conventional pulverized-coal plants. Source: DOE/EIA
Here's where those escalating costs enter the picture. Turner reported that after Duke announced plans to build a two-unit, 1,600-MW supercritical coal plant, its initial capital cost estimate of $2 billion became $3 billion after firm bids were solicited. As a result, the plan was reduced to one unit. Midwest Generation, reported Gorney, planned to install scrubbers at its Homer City station in Pennsylvania, but costs were almost double what was originally anticipated. "In 2005, scrubbers were a slam dunk," he said. "Eleven months later, we were looking for other options."
For those who experienced the cost escalations of the U.S. nuclear construction program of the 1980s, these figures are distressing, especially because they represent escalations in estimates, not even actual construction costs.
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