POWER January 2013 - 30

2013 INDUSTRY FORECAST
Slow Growth Ahead-with
Unexpected Flares of Activity
North American shale gas was supposed to realign the generation fleet here and
abroad (thanks to anticipated exports) far into the future. Turns out, that's not exactly
how the near term is shaping up. Despite stagnant (and even putrid) economies
and legislative bodies in the U.S. and EU, there promises to be sufficient
market volatility to keep everyone alert.
By Dr. Robert Peltier, PE; David Wagman; Thomas W. Overton, JD; Kennedy Maize; and Charles Butcher
Courtesy: Tennessee Valley Authority
T
he prospects for the U.S. power generating
industry in 2013 aren't exciting, but
they are intriguing. Though familiar challenges
remain-economic pain, regulatory rumbles,
and legislative inaction-the natural gas
and coal markets continue to defy year-ahead
predictions, forcing everyone from generators
to dispatchers to fuel suppliers to rethink their
assumptions with now-predictable regularity.
Before looking ahead to 2013, consider what
has set the stage for the new year.
Reading between the lines of the U.S. Energy
Information Administration's (EIA's) Annual
Energy Review 2012, there is much good news
thoroughly mixed with much unmentioned bad
news. Consider the following energy milestones
that should be cause for celebration:
■ The most hydroelectric power produced
(in 2011) since 1999 (up 25% from a relatively
dry 2007-2010).
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■ The most renewable energy (wind, solar,
geothermal, and biomass) ever produced.
■ The most natural gas produced in history.
Dramatic increases from state and
private lands made 2010 the year with
the lowest volume of natural gas imports
since 1992, principally due to hydraulic
fracturing. The trend continued
in 2012.
■ U.S. CO2 emissions are expected to stay
below 2005 levels through 2035, principally
due to coal-to-gas fuel switching and
a moribund economy. The low price of
natural gas has also moderated or flattened
electricity price increases in many parts of
the country.
■ A federal court determined that the Environmental
Protection Agency's (EPA's)
Cross State Air Pollution Rule (CSAPR)
did not comply with the Clean Air Act. An
EPA appeal is expected.
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The often-overlooked industry lowlights-as
we categorize them-are equally
profound:
■ The only new hydroelectric projects permitted
were upgrades of existing plants
and minuscule hydrokinetic and run-ofriver
projects. The last major hydroelectric
plant built in the U.S. was almost 40 years
ago, and none are planned for the future.
In fact, many activist organizations are actively
campaigning for removal of existing
hydroelectric dams.
■ The cost of renewable energy mandates
was the primary cause of a 2.3% increase
in the national average cost of residential
electricity.
■ The lowest amount of natural gas since
1993 was produced from public lands.
The EPA is proposing additional gas well
fracking rules that are predicted to drive
POWER | January 2013

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POWER January 2013

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