Gas Will Replace Coal Rather Than Renewables, says Study

Only 4 percent of new generation capacity in the United States will come from coal, but this is double the contribution expected from renewable energy.

NEW YORK, New York, US, 2001-12-12 [] Of the 296,000 megawatts of new generation capacity needed in the U.S. by 2015, only 11,400 MW will come from coal, predicts the study by RDI, a research unit of Platts. The total is equal to 592 utility-scale 500-MW plants. Natural gas will be the fuel of choice for 279,000 MW of new capacity, while the remaining 5,600 MW will come from wind, hydraulic, solar and other renewable energies, according to the report, ‘New Coal-Fired Generation: The Race Is On.’ The current installed power capacity in the U.S. is 780,000 MW, with coal units generating 52 percent of electricity output. Coal plants have low operating costs but higher capital costs, and the gas-fired capacity that will come on-line during the next few years will dim prospects for coal, with half of the 279,000 MW proposed by 2015 to be on-line by the end of 2003. The result of overbuilding will be lower electricity and capacity prices that will be a disincentive to coal plant developers. New coal plant development is competitive when natural gas prices are in the range of US$3.50 to $4 per MMBtu. Specific situations, such as plants adjacent to a coal mine, can make a coal facility competitive when gas prices are below that range. According to Platts, average U.S. monthly natural gas spot prices for November were $3.01/MMBtu, a 79 percent rise from October but still well under the levels of one year ago. Platts is the energy research and marketing division of McGraw-Hill Companies, with 17 offices worldwide.


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