Developers in 2000 set an all-time record in the United Statesfor production of megawatt capacity from natural gas-firedturbines. The interesting part about the new record is that it isexpected to be more than doubled in 2001, according to a new studyconducted by A. Michael Schaal of Energy Ventures Analysis, Inc.(EVA).
The study shows that 23,830 MW of new gas turbine-based capacitywas built during 2000, up from 6,400 MW which was constructed in1999, and 1,200 MW put in place in 1998. Added turbine-basedcapacity is forecast to increase by 53,800 MW during 2001, and byup to 82,800 MW in 2002. Expanding on the record set for 2000, EVAestimates it represents a $10 billion investment that will powerover 22 million homes, approximately 8% of all U.S. homes. Schaaladded that five to six projects became operational during eachmonth of 2000.
And the growth is expected to continue at break-neck pace.Schaal said that in the last quarter alone there has been a 14%increase in projects to be built between 2000 and 2005. Currently,262,842 MW are scheduled for construction over the next five years.For the five-year period, Kentucky and South Carolina enjoyed thesharpest increase in planned generation over last quarter’s study.Kentucky’s additions rose from 1,676 MW to 3,766 MW, while SouthCarolina went from 1,850 MW to 3,257 MW. Even with all of thepositive statistics, the consultant warns there are hurdles downthe road.
“Higher fuel prices are but one risk that developers face,” saidSchaal. “We will continue to monitor the progress of those projectsunder development.” The EVA said that scenarios including marketre-regulation and over-shooting demand could also turn financingsour for project developers, killing the growth momentum in theindustry.
Of the planned generation sites for the recent surge ofturbines, EVA singled out California as “missing in action.” Schaalfound that planned electric generation in California is lagging farbehind current and future needs.
The California Independent System Operator (ISO) anticipatedthat to get around the supply issues experienced during the summerof 2000, and to be ready for the growth in demand during the summerof 2001, the system needs an additional 1,800 MW. The ISO, in aneffort to get plants built quickly, labeled the facilities neededas “temporary” to get around the lengthy permit process. Schaalsaid that of the nine projects proposed initially to help meet thegoal, six have been withdrawn, leaving California only anadditional 371 MW of new capacity. The consultant listed numerousroadblocks to the new generation, such as revenue caps for plantowners and environmental complaints on siting.
Elsewhere around the nation, the EVA cites better technology andderegulation as major reasons for the sharp increase in gas turbineproduction.
For more information on the most recent study, “Tracking theBuilding Boom of New Power Plants in the U.S.,” contact Schaal at703-276-8900.
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