New Gas Power Plant Boom Poses Financial Risk as Utilities Underestimate Fuel Price Volatility
By
Leonard Hyman & William Tilles
A second-rack bagel that's nearly first-rack. Tasty stuff.
Summary
The article warns that America's boom in new gas-fired power plants (over 100 under construction) could end disastrously. While the EIA projects a 6% rise in domestic gas demand next year as new plants come online, utilities are underestimating fuel-price risk. Repeated spikes in gas prices could make many of these 30-year-life plants uneconomic, underutilized, or stranded assets, turning what the industry sees as a long-awaited transition into a costly mistake.
Key quotes
· 5 pulledThere are over 100 new gas fired power stations under construction in the US.
The US Energy Information Administration (EIA) projects that domestic gas demand will rise 6% next year as some of those new plants enter commercial operation.
These new gas power plants are designed to last more than thirty years.
This is the transition in central station power generation that the US utility industry has long hoped for.
Repeated spikes in gas prices could make many new plants uneconomic, underutilized, or stranded.
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