Tracking New Coal-Fired Power Plants February 18, 2008 a National Energy Technology Laboratory Office of Systems Analyses and Planning Erik Shuster
Tracking New Coal-Fired Power Plants
February 18, 2008a
National Energy Technology Laboratory
Office of Systems Analyses and PlanningErik Shuster
2/18/200822
Tracking New Coal-Fired Power Plants
This report is intended to provide an overview of proposed new coal-fired
power plants that are under development. This report may not represent
all possible plants under consideration but is intended to illustrate the
potential that exists for installation of new coal-fired power plants.
Recent experience has shown that public announcements of new coal-fired
power plant development do not provide an accurate representation of
actual new operating power plants. Actual plant capacity commissioned
has historically been significantly less then new capacity announced.
The report focuses on those power plant projects that have achieved
significant progress toward completion, to provide a more accurate
assessment of the ability of this segment of the power generation industry
to support demand for new electricity capacity in various regions of the
United States.
The Department of Energy does not warrant the accuracy or
suitability of this information.
2/18/200833
Tracking New Coal-Fired Power Plants
This report provides a perspective of coal-fired power plants that are currently under development, with a focus on those having made significant progress toward achieving commercial operation
The status of projects in development varies from project announcements to those under construction
Announced projects that are canceled before or during the permitting phase are not unusual; announced projects are not necessarily strong indicators of capacity additions
Plants that are permitted or under construction reflect a developer’s significant financial commitment to completion and offer a better perspective of the new generation capacity that may be forthcoming
Long-term forecasts reflecting declining natural gas production for North American also highlight the increased importance of coal-fired power generation to the Nation’s energy security and to a growing economy
2/18/200844
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Actual 2002 Report 2005 Report December 2007
Cap
acit
y G
W
Delays in Implementation
Past Capacity Announcements vs. ActualFigure 1
Historically, actual capacity has been seen to be significantly less than proposed capacity. For example, the 2002 report listed 36,161 MW
of proposed capacity by the year 2007 when actually only 4,478 MW (12%) were constructed.
Source: 2007 data Global Energy Decisions – Velocity Suite (12/31/2007)2002 – 2005 data – Previous NETL Tracking New Coal-Fired Power Plants Reports
Del
aye
d a
nd
Ne
w
Pro
ject
s St
acki
ng
2/18/200855
Historic Capacity Additions by YearsRefer to Figure 1
Actual plant capacity, commissioned since 2000, has been far less
than new capacity announced; the year 2002 report of
announcements reflected a schedule of over 36,000 MW to be
installed by 2007, whereas ≈ 4,500 MW (12%) were achieved
The trend over several years has reflected the bulk of power plant
developments shifting out in time due to project delays
Delays and cancelations have been attributed to regulatory
uncertainty (regarding climate change) or strained project
economics due to escalating costs in the industry
New announcements combined with delayed projects have tended
to increase the backlog of plants in the queue
Cancellations become more prevalent as prospects of fulfilling all
projects in the queue become impractical
2/18/200866
Current Coal-Fired Capacity Projects (quarterly change)
Table 1
Status Listing Description
Under Construction Project is under construction.
Near Construction Project has been approved; majority or all permits are obtained. Sponsor is
contracting vendors and Engineering, Procurement and Construction
(EPC) contractors. Site preparation has begun.
Permitted In the permitting phase. Two or more permits approved or fuel or power
contracts have been negotiated.
Announced Early stages of development to filing for permits. May include a feasibility
study.
Progressing
Projects
Uncertain
Potential and
Timing
Source: Global Energy Decisions – Velocity Suite
October Report data collected (9/20/2007); Current Report data collected (12/31/2007)
Number of Plants Capacity (MW)
General Status October
2007 Report
Current
Report ChangeOctober 2007
Report
Current
Report Change
Under Construction 24 28 +4 12,506 14,885 +2,379
Near Construction 8 6 -2 4,565 1,859 -2,706
Permitted 13 13 0 6,169 6,422 +253
SUB TOTAL 45 47 +2 23,240 23,166-74
(-0.3%)
Announced (early stages of
development)76 67 -9 48,440 42,394
-6,046(-12.5%)
TOTAL 121 114 -7 71,680 65,560-6,120(-8.5%)
2/18/200877
Current Capacity Additions by YearsRefer to Table 1
Table 1 reflects the current status of coal-fired plant development
activity with quarterly changes
“Progressing” plants are projects with status indicating permitted,
near construction, or under construction
Progressing plants have attained a higher likelihood of advancing
toward commercial operation; however, regulatory uncertainty and
industry cost increases are impacting development decisions for
all projects
Two net plants have been added to Progressing projects in the last
quarter; there has been a modest net loss of 74 MW (0.3%) of
Progressing projects during the quarter
2/18/200888
Current Capacity Additions by YearsFigure 2
Source: Global Energy Decisions – Velocity Suite (12/31/2007)
Actual Operational Dates Proposed
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cap
acit
y (G
W)
Actual
Announced
Permitted
Near Construction
Under Construction
2/18/200899
Current Capacity Additions by YearsRefer to Figures 2 & 3
Current coal-fired projects in development reflect the potential for a
surge in growth but questions exists as whether this is achievable
The ≈ 2,400 MW of new added capacity installed in the last three
years (800 MW per year) is only 18% of the 13,400 MW of
progressing plants that are proposed to be operational in the next
three years
Coal-fired plants commissioned, from 1990 through 2007, have
averaged 976 MW per year in the U.S.; this lack of domestic demand
has significantly reduced the level of skilled human resources
available to perform current projects (Figure 3)
Scarcity of skilled labor for power plant engineering, procurement,
project management and construction activities, increases major
equipment and EPC costs and calls into question the viability of the
annual commissioning levels reflected in current schedules
2/18/200810
Our Workforce and Skills ChallengeFigure 3
A Two Decade Gap for Coal; Three Decades for Nuclear
Source: EIA AEO’07 reference case and Annual Energy Review 2006
Lost opportunity
to transfer a
generation of
valuable
experience
2/18/20081111 Source: 2007 data Global Energy Decisions – Velocity SuiteOctober Report data collected (9/20/2007); Current Report data collected (12/31/2007)
Past Quarter Comparison (all Projects)
Figure 4
Continued Delays with a Quarterly Decline in Mostly “Announced” Projects
Commissioning dates determined for these projects during the quarter
2/18/20081212 Source: Global Energy Decisions – Velocity Suite (12/31/2007)
Removed Capacity
Stanton Energy Center
315 MW
IGCC
Lima Energy
600 MW
IGCC
91% of MWs removed represent
“Announced” projects
Net Capacity Changes (Removed or Added Opportunities)
Figure 5
Total Net Reductions 6,120 MW (-8.5%) for 4th Quarter 2007
2/18/20081313
Geographical Map by NERC Regions: Coal-Fired Plants(Permitted, Near Construction, and Under Construction)Figure 6
Source: Global Energy Decisions – Velocity Suite (12/31/2007)
2/18/20081414
Proposed Capacity Relative to NERC RegionsTable 2
Progressing Projects
NERC
Region
Under
Construction
Near
Construction
Permitted Sub
Total
Announced Grand Total
ASCC Capacity (MW) - - - 0 300 300
Plants - - - 0 2 2
ERCOT Capacity (MW) 3,265 0 900 4,165 5,330 9,495
Plants 4 0 1 5 5 10
FRCC Capacity (MW) 0 0 0 0 750 750
Plants 0 0 0 0 1 1
MRO US Capacity (MW) 1,649 55 0 1,704 2,880 4,584
Plants 5 1 0 6 6 12
NPCC Capacity (MW) 0 0 0 0 1,420 1,420
Plants 0 0 0 0 3 3
RFC Capacity (MW) 2,505 562 985 4,052 9,558 13,610
Plants 3 2 4 9 13 22
SERC Capacity (MW) 4,150 500 2,557 7,207 7,391 14,598
Plants 7 1 3 11 15 26
SPP Capacity (MW) 1,832 0 1,350 3,182 800 3,982
Plants 4 0 2 6 1 7
WECC Capacity (MW) 1,484 742 630 2,856 13,365 16,221
Plants 5 2 3 10 20 30
N/A Capacity (MW) 0 0 0 0 600 600
Plants 0 0 0 0 1 1
Total Sum Capacity (MW) 14,885 1,859 6,422 23,167 42,394 65,560
Total Count of Plants 28 6 13 47 67 114
Source: Global Energy Decisions – Velocity SuiteSource: Global Energy Decisions – Velocity Suite (12/31/2007)
2/18/20081515
Proposed Technologies of New Plants (quarterly change)
Figure 7
Technology ListingsOperational(Since 2000)
Progressing(Permitted, Near-, and Under
Construction)
Announced Total
Proposed
October Current(Change)
October Current(Change)
October Current(Change)
PC Subcritical 10 25 22 (-3)* 26 18 (-8) 51 40 (-11)
CFB 8 12 14 (+2) 12 11 (-1) 24 25 (+1)
PC Supercritical 1 4 8 (+4) 9 9 (0) 13 17 (+4)
IGCC 1 4 3 (-1)** 29 29 (0) 33 32 (-1)
*Progressing PC subcritical:
- 3 plants due to revised status
reported reverting from
Progressing to Announced
**Progressing IGCC: 2 removed
+ 1 added = -1 plant net
Source: Global Energy Decisions – Velocity Suite
October Report data collected (9/20/2007); Current Report data collected (12/31/2007)
Table 3
2/18/20081616
Proposed Technologies of New PlantsRefer to Figure 7 and Table 3
Opportunities involving conventional technologies, such as
subcritical PC and CFB, are more plentiful and tend to be more
advanced due to earlier start in development (Figure 7 & Table 3)
Advanced technologies proposed, such as supercritical PC and
IGCC, reflect more recent trends in development activity, so fewer
have achieved permitted status
Regulatory uncertainty for GHG legislation is a key issue impacting
technology selection and project economics
Returns on investment for conventional plants, including super-
critical, can be severely compromised by the need to subsequently
address CO2 mitigation
Higher capital costs incurred for IGCC may make such new plants
less competitive unless their advantage in CO2 mitigation is secured
2/18/20081717
NERC Generation Capacity Margins PerspectiveFigure 8
Source: 2007 Long-Term Reliability Assessment – NERC, October 2007
135 GW Increase in Summer Peak Capacity Required by 2016
2/18/20081818
Consideration of EIA and NERC Capacity ForecastsRefer to Figures 8 and 9
NERC foresees inadequate peak summer capacity margins in several regions of the U.S., as early as next year, requiring 135 GW of added capacity by 2016 (Figure 8)
In contrast, AEO’08er (2008 early release) forecasts a net increase of only 4 GW in total capacity by 2016, substantially lower than NERC’s estimate (Figure 9)
Differences are partly attributable to declining assumptions for annual electricity generation growth rates, with NERC’s report reflecting prior year data compared to EIA
The forecasts represent a wide variation in the perceived need and value for near-term added generation of all types
Note: EIA, AEO 2008 Early Release, December 2007 data is referenced in this report; EIA is expected to reissue this report in March 2008
incorporating the Energy Independence and Security Act of 2007 ("EISA")
2/18/20081919
U.S. Peak Summer Generation Capacity NERC and AEO’08er Capacity Outlook Figure 9
Capacity Growth Forecasts Vary Substantially, Partly Due to Assumptions for Annual Electricity Generation Growth Rates
Source: EIA, AEO 2008 Early Release, December 2007; NERC 2007 Long Term Reliability Assessment, October 2007
-
200
400
600
800
1,000
1,200
1,400
GW
s
NERC New Summer Capacity Other Renewable Sources
Nuclear Power Combustion Turbine/Diesel Combined Cycle
Oil and Natural Gas Steam Coal
+4 GW by 2016 (AEO ’08er)
(41 GW of retirements)
979 GW
+131 GW additional required to maintain capacity margins (NERC)
2/18/20082020
Declining Total Electricity Generation Growth Rate Assumptions Figure 10
Declining Growth in Long-term Electricity Demand;NERC Estimates Tied to Higher Growth Rate
Source: EIA, AEO 2008 Early Release, December 2007; NERC 2007 Long Term Reliability Assessment, October 2007
4,000
4,200
4,400
4,600
4,800
5,000
5,200
5,400
5,600
5,800
6,000
2005 2010 2015 2020 2025 2030
Bil
lio
n k
Wh
/ye
ar
AEO’05
AEO’08er
AEO’07
AEO’06
1.9%/yr
growth
1.2%/yr
growth
Reduction of 27 BkWh/year growth equates to reduced need for 3,700 MW of new generation each year (@85% c.f.)
1.5%/yr
1.6%/yr
NERC
growth
2/18/20082121
Declining Electricity Generation Growth Rate Refer to Figures 10 and 11
Electricity generation growth rate assumptions have declined substantially over the last 4 Annual Energy Outlook reports,dropping from 1.9% in AEO’05 to 1.2% in AEO’08 (Figure 10)
The resulting decline in forecasted average annual increase in kWh demand for the U.S. amounts to ≈ 27 BkWh per year; this equates to the generation of approximately 3,700 MW of new capacity (each year) operating at an 85% capacity factor
There has been a long term trend in declining generation growth rates in the U.S. (Figure 11)
The current AEO’08er forecast of 1.2% electricity generation growth has moved below the last six year average growth of 1.7%
If the forecasted growth rate is too low this will underestimate the new capacity needed to maintain adequate capacity margins with implications for periods of insufficient electricity supply
2/18/20082222
Total Electricity Generation GrowthFigure 11
AEO’08er
1.7%/yr
6 yr 1.2%/yr
EIA
Sources: Electricity generation: Energy Information Administration. 1949-1994: Annual Energy Review 2006; 1995-2006:
Electric Power Annual 2006; 2007-2030: Annual Energy Outlook 2008 early release; NERC - 2007 Long Term Reliability Assessment
2.2%/yr
20 yr
1.5%/yr
NERC
Forecast for Electricity Generation Growth Well Below Recent Averages
2/18/20082323
Development Activity vs. EIA AEO’08erFigure 12
Actual Installation Trend and EIA AEO’08er Reference Forecast Correspond;A Significant Surplus of Developments Exists Above EIA’s Forecast Demand
Source: EIA, AEO 2008 Early Release, December 2007; Global Energy Decisions – Velocity Suite (12/31/2007)
Trendline 5-Year Actual
AEO’08er reference case
and trendline
≈ 20GW through 2016
Low forecasts for new capacity may not reflect sufficient market
promise to attract new skilled human resources to the industry
2/18/20082424
Coal and Natural Gas-fired Development Issues Refer to Figures 12 and 13
Coal-fired power plant development activity significantly exceeds the current estimate of need by EIA (Figure 12)
Evidence provided by recent installations and the low forecast for new capacity in 2008 suggest that the capability to install and commission plants is constrained by limited skilled resources
Low forecasts of demand growth add an element of “demand uncertainty” to the problems of regulatory uncertainty and rapidly escalating costs for coal-fired power plant development
Should electricity demand growth prove higher than anticipated,the alternative of increasing natural-gas fired generation will create fuel resource adequacy issues, due to diminished natural gas supply expectations (Figure 13)
Virtually all incremental demand for consumption of natural gas can be seen to require increases in imports of LNG
2/18/20082525
Gradual Decline to 20 Tcf without LNG
AEO’06
Total Natural Gas Supply to U.S. (Including LNG)Figure 13
Tcf/
Year
AEO’01
AEO’02
AEO’03
AEO’04
AEO’05
AEO’07
Increased Use of Natural Gas in Electricity Will Require LNG;N. American Natural Gas Supply for U.S. Trending Down
AEO’08er
Source: Annual Energy Outlook 2001, 2002, 2003, 2004, 2005, 2006, 2007 and 2008 early release reference cases
AEO’08erno LNG
2/18/20082626
Summary
Coal-fired power plant development activity has experienced a significant number of cancellations (8.5% of MW) during the quarter, mostly involving “Announced” projects
“Progressing” projects have increased by two plants with little change in the total MW involved, during the 4th quarter 2007
Recent forecasts of EIA and NERC represent disparate views on the need for near-to-mid-term increase in U.S. capacity
Should NERC’s views for required new electricity capacity prevail, significant added coal-fired plant capacity will be required to maintain reliability in several U.S. regions and to keep electricity prices from rising due to shortages
Forecasts for natural gas supply to the U.S. indicate that turning to additional natural gas-fired generation will create fuel resource adequacy issues and increase LNG imports