By Kathleen Davis, Associate Editor
Last year saw 95,600 MW of gas-fired capacity announced, along with the actual addition of 50,000 MW of the turbine-based variety, according to Energy Ventures Analysis’ (EVA) latest study.
The fall 2001 special report Tracking the Boom of New Power Plants in the U.S., also stated that 367,007 MW were either operating, in construction or announced between the years 1998 and 2007. (Although the actual number announced hovers around 525,00 MW, EVA’s studies of regulatory approvals, supply contracting, construction activity and other factors eliminated approximately 30 percent, leaving those projects in the category of “unlikely to be built.”) EVA pointed to a 77 percent rise in new capacity last year over the year before but sees even that being surpassed in 2002 and 2003 when 94,000 MW per year are projected.
The report also stated that previously high gas prices prompted a bevy of new coal-fired projects, to the tune of 31,467 MW actively under development for the 2000 to 20013 time frame. Eighty-five percent of that capacity is still in the development stage. Coal-fired capacity, in fact, now has a shorter construction phase, with plant developers looking at three years to completion instead of the average seven or more. EVA believes such a response may be a reaction to the two-year development period for combined cycle projects. However, the report doesn’t lay out continued high hopes for coal-fired capacity.
“New coal-fired projects face substantial impediments, however,” the report concluded. “Foremost among these are the actual and perceived environmental impacts of coal-fired plants.”
The report added, “The result of these impacts is to lengthen the permitting process for new coal projects. And there are few to no coal projects in the power-hungry Northeast and Pacific Contiguous markets.”
Indeed, turbine-based capacity still holds the lead, with combustion turbine and combined cycle dominating new capacity. Between January 1998 and August 1999, EVA reported new combined cycle gas turbine capacity leaping from 20,000 MW to 91,000 MW, or around 3,500 MW per month. After August 1999, that capacity grew to over 10,921 MW per month under development, with Calpine, Duke Energy, Panda, Reliant Energy, Mirant, FP&L, PG&E, Southern, NRB and Cogentrix in the lead.
However, EVA also pointed out a parallel in the number of projects being dropped: It, too, is on the rise. The brakes were applied to approximately 2,000 MW of projected development a month before August 2000. After that date, the number rose to 8,800 MW a month.
There remains a boom in plant construction despite the rising rate of project abandonment, with deregulation the primary factor, according to the EVA report. EVA breaks down the nearly 50,000 MW of new capacity in 2001 in a number of ways, including cost, output and construction. They estimated that approximately $21 billion will be spent on these plants, with enough MW to power about 52 percent of all homes in the U.S. EVA projected that approximately 10 projects will become operational during each month of the next couple of years, about one project every three days.
The estimated cost of constructing the projected 367,007 MW in the 1998 to 2007 time frame hovers around $168 billion. Texas, Illinois, California and Florida top the list of current project developments, with very few new projects proposed for New England, New York, Pennsylvania and New Jersey.
More information on Energy Venture Analysis and their special reports can be found on their Web site: www.evainc.com. You may also contact A. Michael Schaal of EVA directly at 703-276-8900.