My Top 10 Predictions for 2010

David Letterman has entertained us with his "Late Show" Top Ten list since 1985. In keeping with this issue’s theme of forecasting the future of the power industry, I’m going to step out with my top 10 list of what to expect in the next 12 months.

10. New Nuclear Will Progress Slowly. I don’t expect much progress in the construction of new U.S. nuclear plants The Nuclear Regulatory Commission’s concern about the structural strength of the AP1000 shield building may cause delays on projects using that technology. Other technologies will hit similar speed bumps on the road to certification. Even the owners of the South Texas Project, after picking ABWR technology to shorten its time to approval and construction, experienced sticker shock when the price of the two reactors rose $4 billion on a project previously estimated to cost $13 billion, including finance charges. Without government assistance, each new nuclear project is now a "bet your company" project.

9. The Smart Grid Will Mature. The "smart grid" defies definition, yet the federal government is in the process of investing massive amounts of stimulus money in related technology bits and pieces (see p. 46). I expect that a uniform set of guidelines, standards, and goals will finally emerge this year. A side benefit will be that consumers begin to grasp that the advantages of a smart grid go beyond an appliance that has a mind of its own and a thermostat regulated by the utility.

8. Electricity Growth Will Resume. After two straight years of negative electricity consumption (a sure-fire way to strangle utility earnings), I expect U.S. electricity usage growth to return in 2010 to about its average over the decade ending 2008, or 1.4%.

7. Transmission Planning Will Stall. The next big energy- related fight in Congress will be over transmission siting and cost allocation authority. Coast-to-coast transmission lines and backstop authority to override state restrictions that are advocated by Sen. Harry Reid (D – Nev.) will die in the Senate. Renewables with capacity factors in the range of 25% will make renewable power – only transmission lines extremely expensive on a per-MWh basis. I also predict that Senator Reid will face his toughest reelection campaign in November and will be defeated.

6. Unconventional Plants Will Be Built. I am not talking about more wind projects but rather about those gas-fired projects that will be built for grid support in regions with large amounts of nondispatchable wind and solar generation under construction or planned. These projects will experience large growth this year, as they are not related to electricity demand growth but to grid stabilization.

5. The Real Cost of Renewables Will Grow. The Electric Reliability Council of Texas expects only 8.7% of all the wind generation in Texas to be available during peak usage hours. Utilities in that state are also experiencing periods when massive amounts of off-peak wind energy must be absorbed into a grid now served by low-cost coal-fired generation, causing those baseload plants to reduce load. Expect utilities to request rate increases to offset these "unexpected" costs, causing customer backlash against renewable projects. This is the future for other states with growing renewable energy generation.

4. More Coal Plants Will Be Decommissioned. Utilities have been loath to permanently shut down coal plants because future carbon credits could be worth much more than the market value of the plant. With uncertainty over cap-and-trade legislation, some utilities are finding these plants to be even more valuable as a bargaining chip when permitting new gas-fired plants. Expect more states to enact laws, such as those passed by North Carolina, that agree to fast-track approval for new, high-efficiency gas-fired projects when emissions are more than offset by the closure of equivalent-sized older coal plants.

3. Carbon Control Legislation Will Die. Waxman-Markey is unpopular on both sides of the political spectrum and has little support in the Senate. Now that there has been time for our legislators and citizens to read this potpourri of legislative mandates, support is waning. The start of the 2010 campaign season will seal its fate.

2. Prince Gas Will Challenge King Coal. I don’t expect any new coal plant announcements in 2010, although a number of plants will be added to the grid. Other than the expected wind turbine projects, I expect the majority of new project announcements to be fueled by natural gas, as the cleaner fuel experiences a mini-revival thanks to reserves that have reached an all-time high (see p. 20).

1. The "Climategate" Scandal Will Explode. The Climategate scandal has revealed that some UK scientists attempted to suppress inconvenient or contrary data to support preconceived outcomes, suppressed dissent on the results, and undermined the peer review process. These revelations will increase the public’s resistance to rush into ill-conceived and expensive carbon legislation. Additionally, the Environmental Protection Agency’s recently released endangerment finding, required before the agency can begin carbon control rulemaking, was based on that same poor science from the UK’s Climate Research Unit (CRU) at East Anglia University, and now for the first time the data are publicly available. To quote one pundit: "The CRU is the Pentagon of global warming science, and these documents are its Pentagon Papers."

I’ve stuck my head on the block with a few of these predictions; others are more wishful thinking than based on any inside knowledge. I expect you’ll have alternate views, and we would enjoy reading them. Our email door (editor@powermag.com) is always open.

— Dr. Robert Peltier, PE, is POWER’s editor-in-chief.