Category — Bush (George W.) Energy Policy
Power Generation Industry Forecast: Natural Gas as Fuel of Choice, Little Change for Other Technologies (Part II)
In Part I of this two-part post, we presented our observations of a power generation industry that will likely become more dependent on natural gas as a source of fuel for new power plants constructed in the coming years. Other fuel-based technologies (principally nuclear and coal) don’t seem to have the wherewithal to grab a larger piece of what should be a growing demand for electricity in the U.S. Both will be lucky to maintain their market share in the future. Renewables, with high levels of production tax credits, coupled with legislative mandates, will continue to grow in installed capacity but will contribute little to peak demand reduction. And should politically correct renewables (not hydropower) lose part or all of its government support, say as part of a deficit reduction program, then market share will actually be lost.
What follows is what we believe to be the future path of the remaining fuel-based power generation alternatives in 2010 and beyond.
Nuclear power, the last best hope for zero-carbon emissions from baseload generating plants, was many analysts’ early pick for a generating revival in the first decade of the 21st century. If one accepts the conventional view of climate change, the rational case for nukes appears unassailable. If you want low-carbon generation, you must go nuclear, period. (Gas-fired capacity to firm intermittent sources of power makes carbon-free wind and solar an illusion.)
The first decade of our new century has passed. After years waiting for the nuclear renaissance, it doesn’t look as if the second decade will bring the nuclear industry closer to revival. Indeed, the horizon may be receding. Literature Nobel laureate Samuel Becket could not have had U.S. nukes in mind when he wrote his iconic 1953 play, Waiting for Godot. But some of its dialog is eerily on target. The character Vladimir in the second act comments, “What are we doing here, that is the question. And we are blessed in this, that we happen to know the answer. Yes, in this immense confusion one thing alone is clear. We are waiting for Godot to come.”
In the U.S., we are into the second decade of the 21st century, waiting for the nuclear renaissance, after the market collapsed in the 1970s. Waiting and waiting.
Nuclear power plants won’t pick up U.S. generating market share in 2010, by all accounts. That’s despite prior federal government policy aimed at jump-starting new nuclear generation, including allegedly streamlined federal regulations and a longed-for candy jar of additional subsidies, such as major loan guarantees, pledged in the Republicans’ Energy Policy Act of 2005. Those have yet to materialize.
Some in the Obama administration and Congress are contemplating additional loan guarantees and other nuclear subsidies, to be included in pending climate change legislation. Arguing for $50 billion in additional federal loan guarantees, Exelon CEO John Rowe told a Senate committee in late October, “Deployment of new nuclear plants simply will not happen, given the large up-front capital costs, without a much more robust federal loan guarantee program than currently exists.” There doesn’t seem to be much enthusiasm on either side of the partisan aisle for committing that kind of money to nuclear power.
The 2005 congressional vision (perhaps a hallucination) was of a modest new fleet of nukes—a dozen or so—that would come into the U.S. market and revitalize the stagnant industry. New reactor designs from U.S., Japanese, and French companies; interest from multiple utilities; applications for more than 30 units under the streamlined approach of the Nuclear Regulatory Commission’s (NRC) licensing reforms of the 1990s; and the Energy Policy Act of 2005 all led to irrational exuberance among nuclear power developers. The 2005 loan guarantees would jump-start the market, the legislation assumed and the industry agreed.
More than four years later, [Read more →]
January 14, 2010 3 Comments
Last December, Texas governor Rick Perry, speaking at a Houston fundraiser, sadly noted how President George W. Bush had lost his way in Washington, D.C. His good friend had compromised his principles and left the nation in a lurch, however unintentionally.
But then the governor launched into his Texas-is-great stump speech that included kudos to windpower, a new large industry (no) thanks to a legislative mandate requiring that Texas electricity retailers purchase qualifying renewable energy. (Wind is the most economical of the qualifiers.) The 1999 mandate, enacted with the crucial help of Enron lobbyists, was increased in 2002 with a powerful wind lobby at work. And so at the point of a gun, Texas became the leading windpower state in the country, passing California along the way.
So it was not surprising that last Saturday night Gov. Perry handed T. Boone Pickens the 2009 Texan of the Year Award at a ceremony in New Braunfels, a town of 50,000 in the Texas Hill Country. [Read more →]
March 24, 2009 12 Comments