After TXU's decision to cancel plans for eight pulverized coal-fired power plants in Texas, analysts are wondering how many other proposed coal-fired power plants will be shot down in the nationwide environmental battle against dirty coal.

"If we looked at all these [proposed coal-fired power] plants again today, I think we would have to say a number of them are going to be canceled," said Steve Thumb of Arlington, VA-based Energy Ventures Analysis (EVA).

The Department of Energy's National Energy Technology Laboratory estimates that about 64 GW of coal-fired power generation is on the drawing board between now and 2015. Thumb said a more realistic number is about half of that, and in light of the TXU decision many more could go under. "We came up with about 34 GW of likely capacity, so right off the bat there's nearly a 50% difference. And we try to acknowledge that some of those really have to be tracked now to see if they are going to come to fruition."

He said about 6% of the 34 GW already has been built or is near completion, 20% is under construction, 28% has made it through the permit process and 46% is in the early development stage.

"About 50% of that last category are still in the 'debatable' stage; they don't even have permits yet. The other side of the coin is you could make an argument that all of those in the early development stages" face steeper uphill battles now that TXU has changed its plans.

"The environmentalists are emboldened. They think half of what is proposed, if not all, should just go away. They are adamant about that," said Thumb. "But where in the heck are we going to get the capacity [to meet demand]?"

In the aftermath of the TXU announcement late last month (see Daily GPI, Feb. 27), David G. Hawkins, who heads the Natural Resources Defense Council's (NRDC) Climate Center, said, "What we're witnessing is the beginning of the end of investments in old-fashioned coal plants."

NASA climate scientist James Hansen recently called for a halt to building all coal-fired power plants until technology allows for the capture of emissions from burning coal.

Environmental litigation against coal-fired generation is going to grow even stronger now, said an analyst who asked to remain anonymous. He said he's beginning to be skeptical about many proposed coal plants. And those that do make it through the permit process are likely to face even longer delays because of environmental appeals.

NRDC President Frances Beinecke called the TXU decision a "turnaround" that "marks the beginning of a new, competitive focus on clean, efficient, renewable energy strategies... It is a big step forward for the state of Texas and for the American energy economy as a whole."

Thumb isn't so sure. "You can only get so much from wind," he said. "The next question is how much can you get from new technology such as integrated coal gasification, combined-cycle generation (IGCC)." He noted that IGCC to date as been a "tremendous technological success, but a commercial failure.

"We've talked to some of the folks who are building the three (IGCC) plants that we think are likely to go forward, and they have been frank about the operational problems, the capital problems, etc," said Thumb. "They are saying this is not a guarantee and are expecting bumps in the road. This is really breaking new ground and there are a lot of questions. What kind of operational problems are they going to have? What are their likely capacity factors?

"But when you talk to the press and to environmentalists, they act like it's proven and we have to use it. The companies know it's a big risk."

It's the large energy companies that can shoulder the risks of building IGCC plants -- Southern, Duke, American Electric Power. You don't see small companies in the mix, Thumb noted. "We have identified 22 IGCC projects (13,000 MW) as possible," he said. "But much of what is planned is questionable and another 3,000 MW we think just don't have a chance.

"The price is not cheap. It's a promising energy technology, but are you going to put that in your pension portfolio?"

Thumb said if coal-fired generation is going to face ever larger road blocks, natural gas likely will have to shoulder much more of the demand burden. Wind is intermittent. IGCC is unproven. Nuclear is decades away from development.

"We were not surprised TXU caved on some of those plants. But they gave up more ground than we had guessed. The question is, will this sweep through the nation?

"If you think the environmentalists are going to experience some kind of unification in their drive against coal across the nation and this [TXU decision] is the lightning rod, then you had better kick up your natural gas price forecast," said Thumb. "We're not ready to do that yet. We think saner minds will prevail. We think coal needs to be [a big part of the mix]. We think utilities need diversification; they can't be dependent on gas. But I would be thrown out of the room if I gave that speech to [Sen] Barbara Boxer (D-CA)."

Anthony Damiano, manager of power research at consulting firm Wood Mackenzie, said environmentalists may use the TXU decision as a lightning rod, but only the naive would believe TXU made its decision for anything other than economic reasons.

"It's definitely something the environmentalists will rally behind. Will it set a precedent? They will say, 'absolutely.' Our view is that this decision didn't just happen because environmentalists were all over them. It happened because costs were going up extremely high, the permitting process takes a long time and they thought they were going to be able to side-step it and take short cuts, but couldn't. Will it impact smaller projects in different parts of the country? It's hard to say. It's definitely a signal that the strength of the [environmental movement against coal] is growing."

He noted that if coal-fired power plants are having significantly greater difficulty even before carbon emissions laws are set, "things are going to be really tight" when those laws are put into place. "This just means more natural gas is going to be needed in the short-term."

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