POWER September 2010 - 71

FUELS
U.S. Gas-Fired Power Development:
Last Man Standing
In 2010, U.S. wind power development has slowed, coal-fired power development
remained stalled, and the much-awaited renaissance of nuclear
power took a few tentative steps forward. That left natural gas power development
as the last man standing.
By Britt Burt and Shane Mullins, Industrial Info Resources
U
.S. natural gas power development
continued at a healthy pace during
the first half of 2010: Industrial Info
Resources was tracking a total of nearly
9,000 MW of new gas-fired generating capacity
that had a scheduled 2010 kickoff
date. That sum includes about 3,800 MW
that was actually under construction as of
July, another 2,700 MW that was in the
engineering phase, and about 2,400 MW
that was planned. In addition, 5,369 MW
of new capacity became operational during
the first seven months of 2010 (see
figure).
Moreover, during 2010 construction
continued on more than 13,000 MW of
U.S. gas-fired generation that had broken
ground during 2007-2009. We expect that
construction will finish on several hundred
megawatts of those projects during the second
half of this year. By contrast, for all of
2009 dirt was turned on roughly 8,000 MW
of gas-fired generation in the U.S., and another
8,480 MW became operational.
Although 2010 is not expected to be a
banner year for the construction of gasfired
generating capacity in the U.S., this
year does compare favorably with gas
power construction starts in 2005, 2006,
and 2007. And given the historic surge
in gas-fired construction that took place
at the start of this decade, the kick-off of
nearly 9,000 MW of gas-fired generation
projects should be regarded as a respectable
year.
Why Gas Held Ground
Several factors drove this year's continued
dash to gas. Natural gas for electricity
generation continues to be reasonably
priced-in the $3 to $4 per million Btu
price range for much of the past 12 months.
Lower capital costs and faster construction
times continued to work to the benefit of
gas-fired power developers. Each installed
kilowatt of gas-fired generating capacity
September 2010 | POWER
U.S. natural gas development by construction kickoff year. Nearly 9,000
MW of new gas-fired generation capacity is scheduled to begin construction in 2010. That's
about even with 2009 levels and less than 2008 but significantly ahead of 2005 and 2006 levels.
Source: Industrial Info Resources
14,000
12,000
10,000
8,000
6,000
4,000
2,000
11,866
8,528
8,823
7,324
6,005
8,989
2005
2006
2007
costs about $750 to $1,000. Wind power,
by contrast, costs about twice that, and
coal is at least three times that. On average,
siting and building a new combined-cycle
gas generator takes 18 to 24 months; siting
and constructing a new coal-fired generator,
by contrast, takes a minimum of three
to four years and requires an extremely
high tolerance for the risks associated with
pending environmental legislation.
Siting issues are another important reason
behind this year's continued gas buildout.
Gas-fired generators could be easily
sited on existing power plant footprints
or located close to existing transmission
lines, thus obviating the need to site and
construct transmission lines to connect
generators to the grid. Baseload coal generation
or wind farms, by contrast, require
large footprints and often require the conwww.powermag.com
2008
2009
2010
struction
of transmission lines to get power
to the grid.
Development of gas-fired generation
in the U.S. also benefited from increased
regulatory and legislative efforts to limit
emissions of carbon dioxide, mercury, and
oxides of sulfur and nitrogen. Several energy
and climate change bills were introduced
in Congress this year. Although they
took different approaches and included
different timelines, none of the proposed
bills was good news for the coal industry
and developers of coal-fired power. In
many cases, the only unresolved questions
in these draft bills were: How many older,
less-efficient, high-emitting coal-fired
generators would have to be retired, and
over what time frame, to meet increasingly
stringent U.S. environmental standards?
The lower risk profile offered by gas71
MW

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POWER September 2010

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