Construction Slows, Sort of
Nearly 18,000 MW of New Gasfired Capacity Expected on Line in 2004 as Building Boom Slows
A special to New Power Executive from the
editors of Io Energy’s Generation Markets WeekThe gas-fired power plant building boom has slowed down considerably
but isn’t finished yet, VA-based Energy Ventures Analysis says in its latest quarterly update on plant construction.EVA said it expects 17,890 MW of new generation fueled by natural gas to begin operations in 2004."While this level of construction activity is well below the 52,100 MW that began operation during 2003, it is still a significant level of construction," EVA said.
"A view taken by some is that progress on completing practically all of the capacity under development has ground to a halt," but the numbers tell a different story.
The building boom for combined-cycle and simple-cycle power plants hit its zenith in 2002 at about 58,000 MW. The almost 18,000 MW expected in 2004 would be the smallest amount of new capacity brought on line since 9,200 MW in 1999. But, it would still be more than double the gas-fired capacity brought into operation in any year between 1986 and 1998, EVA reported.
"The current 17.9 GW expected during 2004 is only 31 to 34 percent of capacity placed into service during the past two years," EVA said. "However, this level of construction activity still remains above all years prior to the year 2000. Indeed, it was only six years ago that turbine-based capacity additions were less than 2 GW."
The new power plants are concentrated in areas of the South, mid-Atlantic and central industrial states. "A key industry issue going forward is how much new capacity will be installed post-2003 in light of the deterioration in the financial health of many developers and the overbuilding that has occurred in many areas," the firm said. EVA expects that 29,000 MW now under construction will begin operation during the 2004 to 2007 time period.
"In addition, another 22 GW of capacity has not yet entered into construction that is anticipated to start up over that same time period," EVA said. "EVA’s assessment of the industry’s post-2003 capacity addition plans indicates that 88 percent of the 52 GW under development [between now and the end of 2007] will likely be built," the firm said. "About 62 percent [about 28,000 MW] of this post-2003 capacity is already under construction."
The firm says that more than 87,000 MW of new capacity will have been brought on line between 1998 and the end of this year. Of course, generators have also cancelled plans for 142,000 MW of new capacity over the past couple of years, EVA said.
In the fourth quarter of 2003 there were no projects cancelled during the middle of construction. A couple of projects actually restarted construction.
During the past year or so, about 9,700 MW of projects were halted during construction. Here’s an EVA breakdown of those projects including generator, project name, state and MW capacity: Calpine’s Otay Mesa (510 MW) and Pastoria (750 MW), both in California; Allegheny’s Acadia Bay II in Indiana (542 MW); Mirant’s Delta in California (530 MW) and Mint Farm in Washington state (286 MW); Duke’s Luna in New Mexico (560 MW), Grays Harbor in Washington (620 MW) and Moapa in Nevada (1,150 MW); TECO’s McAdams in Mississippi (599 MW) and Dell in Arkansas (599 MW); Shaw Group’s Pike Phase I and II in Mississippi (1,168 MW); PG&E National Energy Group’s Mantua Creek in New Jersey (881 MW); NRG Energy’s Nelson in Illinois (1,168 MW); Rockford Phase II in Illinois (100 MW) and NorthWestern Corp.’s Montana First Megawatts (240 MW).
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