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8 November 2007 -- The future of U.S. power generation was termed "extremely uncertain" by an industry consultant at a forum held in Washington, D.C. Growing opposition to traditional coal-fired power plants, combined with still-uncertain carbon policy, is at the heart of the uncertainty, said Art Holland, director of Power and Forecasting services for Pace. "The competing objectives of emissions reductions, cost containment, and security of supply are stumbling into a dangerous quagmire."
Pace projects that more than 120 GW of new capacity additions will be required over the next 10 years. Coal-fired capacity will be part of the generation mix, although the actual amount will be dictated by near-term regulatory and legislative action. According to Pace, 12 GW of coal capacity is in advanced stages of development with an additional 9 GW of capacity in the near-term. It said these proposals now face growing opposition from environmental groups and regulatory bodies. The recent Kansas Department of Health and Environment decision to deny the Holcomb coal-fired power plant its air permit because of concerns over CO2 emissions illustrates the obstacles coal-fired generation will need to overcome.
If expectations for additional coal-fired capacity are not met because of public opposition, legislative uncertainty, or prohibitive capital costs, additional intermediate-term generation capacity will have to come primarily from gas-fired power plants, Holland said. This gas-fired capacity will be in addition to the more than 50 GW that Pace already projects over the next eight years.
"Gas prices have doubled in recent years and a nearly all-gas future for incremental electric capacity has implications, not only to electric prices, but to the wider economy and, possibly, national security," Holland said.
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