U.S. Electric Power Generation: What Direction Will it Go?

Gordon H. Hart

August 1, 2010

Coal-fired Generation

When the 4,500 expected attendees arrive in Pittsburgh, Pennsylvania, for the 10th annual Coal-Gen Conference August 10–13, 2010, many will listen intently to the keynote address by the Environmental Protection Agency’s (EPA’s) Robert Wayland, Ph.D. Attendees will probably have a number of questions, including:

  • Who is going to regulate greenhouse gases (GHGs), the EPA or Congress?
  • Will the EPA integrate and coordinate the multiple rules that affect coal-fired boilers?
  • Will the EPA define what makes up maintenance, repair, and replacement?
  • Will the EPA give utilities more time to retrofit their older, coal-fired plants with flue gas cleaning equipment?
  • Will the EPA insulate the electric utilities from future changes in priorities of politicians?

Attendees also will listen to James F. Woods, the Deputy Assistant Secretary for Clean Coal, Office of Fossil Energy in the U.S. Department of Energy (DOE), who will speak on DOE’s Carbon Sequestration Program, Clean Coal Power Initiative, and Recovery Act projects.1

The Obama Administration’s goal is to have the United States lead the world in reducing GHG emissions. With over 50 percent of U.S. electric power generation coming from coal-fired units, and coal remaining both abundant and relatively inexpensive in the United States (about $2.30 per million Btus [MMBtus] for Northern Appalachian coal), however, it likely will be necessary to maintain coal-fired power generation while trying to get new plants to adopt GHG emission reduction technologies. As for existing coal-fired plants, retrofitting is likely to take a long time since the technology for GHG capture and sequestration is still in its infancy.

Plants also have to meet existing Clean Air Act requirements to clean flue gas, reducing nitrogen oxides, sulfur oxides, mercury compounds, and fly ash. Coal-fired plants that have not already retrofitted Selective Catalytic Reducers (SCRs) to remove nitrogen oxide gases, scrubbers to remove sulfur oxide gases and mercury, and precipitators or bag-houses to remove fly ash will need to do so. Many NIA member companies have already supplied products and services to coal-fired plants’ flue gas cleaning equipment, and many will provide those products and services in the future.

Natural Gas–fired Generation

Natural gas prices continue to remain stable and relatively low compared to liquid fuels, wholesaling in the $4 to $5 per MMBtus range. While natural gas prices are about double that of coal on a dollar-per-MMBtu basis, the environmental permitting process for a natural gas turbine generator is much simpler and can be completed much faster than for a coal-fired steam plant. Another advantage is that a natural gas turbine generator can be designed and constructed much faster (about 2 years compared to 5 years) and at a lower first cost, on a dollar-per-kW basis (about $1,500 per kW versus $2,500 per kW), than a coal-fired power plant.

A natural gas plant emits about half the carbon dioxide compared to a coal-fired plant on a per-kWh-of-generation basis. Further, there are no emissions of particulate, sulfur oxides, or mercury compounds, and the emissions of nitrogen oxides are significantly lower. Because of this, natural gas–fired generators are viewed by the EPA and the public as relatively benign. For electric utilities looking to construct new plants, the lower the public concern, the better.

Nuclear Power Generation

What about the renaissance of nuclear power? The U.S. Nuclear Regulatory Commission (NRC) has received applications for combined Construction and Operating Licenses (COLs) for 23 new nuclear units. The nuclear industry has not seen this much excitement in several decades. Further, in terms of reducing GHG emissions, nuclear power generation is attractive since it is carbon-free.

On the down side, nuclear power plants are very expensive to construct (about $7 to $8 billion each for an approximately 1,000 MW plant, or about $7,000 to $8,000 per kW) and have, in the past, taken many years to construct—longer even than a coal-fired plant. With the high cost of nuclear plant construction and the lengthy permitting, design, and construction process, some of the 23 nuclear units seeking licenses may never get constructed.

Some definitely will, however. The Obama Administration recently approved loan guarantees for two new nuclear units at Plant Vogtle, to be constructed by Southern Company in northeastern Georgia. Other utilities are trying to obtain similar loan guarantees, having already applied to the NRC for a combined COL. In addition to Plant Vogtle, those nuclear plants include:

  • Nine Mile Point in northern New York, 1 unit
  • Bell Bend in northern Pennsylvania, 1 unit
  • Fermi in southern Michigan, 1 unit
  • Calvert Cliffs in southern Maryland, 1 unit
  • North Anna in Virginia, 1 unit
  • Harris in central North Carolina, 2 units
  • William Lee in western North Carolina, 2 units
  • VC Summer in South Carolina, 2 units
  • Bellefonte in northern Alabama, 2 units
  • Turkey Point in southern Florida, 2 units
  • Levy County in western Florida, 2 units
  • South Texas, 2 units
  • Comanche Peak in northern Texas, 2 units.

Several other new nuclear units are expected to be announced in Mississippi, Louisiana, and Texas.

Base Load Generation

Coal-, nuclear-, and natural gas–fueled units can provide base load generation: steady electrical power, day and night, week after week, month after month. Natural gas–fired turbine generators also can be run as partial load peaking units to provide extra power during times of high demand, as when large portions of the country are immersed in hot, humid weather.

Generating units using fuel oil also can serve as base load units. However, with fuel oil wholesaling at around $15 per MMBtus (triple the price of natural gas), very little electricity is actually generated with fuel oil in the United States, perhaps about 2 percent. Crude oil prices are determined by supply and demand on a worldwide basis, whereas North American natural gas prices are primarily a function of supply and demand only in North America. With that supply abundant due to the new shale gas technology, it is difficult to imagine selection of fuel oil over natural gas for anything other than certain emergency back-up generators.

Renewable, Carbon-free Generation

What about renewable forms of electricity generation? Earlier this summer, there was great excitement in Massachusetts following Interior Secretary Ken Salazar’s approval for the owners of Cape Wind to construct 130 wind turbines in the Nantucket Sound, south of Cape Cod and north of Martha’s Vineyard and Nantucket. This approval process took 9 years, the 130 wind turbines will generate only 182 MW of power collectively, and they are expected to cost about $1 billion to construct (about $5,500 per kW). Meanwhile, the aging Pilgrim Nuclear Plant nearby, just north of Cape Cod, has quietly and reliably generated 690 MW of carbon-free power in Massachusetts for the past 38 years.

Once constructed, the 130 Cape Wind turbines will generate electricity only when the wind is blowing above a threshold speed. However, this power will be both renewable and carbon-free, and its approval is already spurring announcements of new wind projects, such as one in the nearby Long Island Sound to provide electricity to New York City.

To find large solar projects, one generally has to go where the sun shines far more days per year than in New England. On July 6, 2010, Spain’s Abengoa Solar announced that it secured $1.45 billion of loan guarantees from the U.S. government to construct a 250 MW solar generating station in Arizona ($5,800 per kW). Abound Solar Manufacturing, which is building equipment for two new solar projects in California and Colorado, also will receive U.S. government loan guarantees. BrightSource Energy, Inc., has a total of 2,200 MW of power from seven planned solar plants at locations in California and Arizona. The 5-square-mile Ivanpah Solar Power Complex in the Mojave Desert near Needles, California, will house the first 100-MW “solar tower.” The company also plans to start a 200-MW solar tower at the same location, and a new one every 2 years. Around each 300-ft tower, an array of 50,000 flat heliostat mirror pairs will focus sunlight on a boiler at the top of the tower to heat water in the closed system as high as 1,100°F steam to power a turbine. That is a surprisingly high temperature for solar power and will require 1,200°F thermal insulation for the pipes.

The oldest form of such electric power is hydroelectric, but no new projects are underway in the United States. In New England, small, aging hydroelectric plants are being dismantled, usually due to concerns over dam safety and a desire to return the affected rivers to their natural state.

What Is the Future?

Natural gas prices are expected to stay below $6 per MMBtu due to the success of drilling for shale gas with the new technology known as hydraulic fracturing (“fracking”). With the other financial and environmental advantages of natural gas turbine generators, this may be the technology of choice for new electric U.S. power generating capacity in the near future. There certainly will be some new generating capacity from a mix of nuclear power plants, coal-fired power plants (possibly with carbon dioxide sequestration), wind turbines, and high-temperature solar plants; but natural gas turbine generation likely will dominate.


1. Robynn Andracsek, “Five Questions for EPA,” Power Engineering, June 2010.