Gas-fired Plants Still Growing, Reach All-time High at 305,000 MW

Despite high natural gas prices and reports of flat production throughout North America over the last five years, gas-fired electric generation in operation, construction or development reached a new all-time record in the month of March, according to a new report by Energy Ventures Analysis Inc (EVA). With the help of new projects announced within the last three months, gas-fired generation topped 305,000 MW.

As reported in EVA's report, Tracking the Building Boom of New Power Plants in the U.S., the new record represents a 13% increase over gas-fired generation in the fourth quarter of 2000. Some of the fastest growing gas-fired electric generation states in 2001 include Indiana, Kentucky, New York and California, EVA said.

"Developers of gas-fired capacity have perfected a standardized template for new projects," said Stephen L. Thumb, director of EVA's natural gas practice. "For example, the lower NOx and SO2 emissions of a new combined cycle facility, by comparison, can be key to overcoming local opposition to a project. This is one reason why higher natural gas prices have yet to quell developers' enthusiasm for these projects."

According to the Energy Information Administration, Edison Electric Institute and EVA, gas-fired capacity additions are expected to more than double in 2001, from 23.9 GW in 2000 to 51.8 GW for 2001. The companies also have forecasted that capacity additions will grow further to 83 GW in 2002 and 88.2 GW in 2003.

EVA said coal-fired generation also seems to be making a comeback with a substantial number of new projects being reported by developers. Currently, the group is tracking over 20,000 MW of new coal-fired projects.

"Higher natural gas prices, higher electricity prices, a power crisis in the West and a Republican in the White House all bode well for new coal-fired power plants," said Seth Schwartz, director of EVA's coal practice. An added factor in coal's favor is the recent improvements that shorten the time it takes to construct a coal-fired power plant, thus decreasing the risk and increasing the return to developers, the group said. The interesting part will be to see whether the number of coal projects grows or shrinks in the near future, EVA said.

For more information regarding the report, contact Michael Schaal with EVA at 703-276-8900, or visit EVA's web site.

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