Turbulent politics and market trends cloud prospects for coal-fired power.
Coal faces more uncertainty than any other base-load generating source. Two new factors, hitherto irrelevant to the U.S. industry, will shape future generation investment—imports of liquefied natural gas (LNG) and greenhouse-gas (GHG) restrictions. Taken together, they point to a bleak future for coal unless its technology advances dramatically … or a political consensus fails to emerge.
Greenhouse-gas regulation will impose vastly greater compliance difficulties than did the Acid Rain program.
Greenhouse gas (GHG) regulation picks up where Acid Rain legislation left off, but affects far more sources and pollutants. Utility compliance programs face major uncertainties.
Credit-quality concerns join fuel and market factors to affect power-plant valuation
Devrim Albuz and Gary L. Hunt
Lenders know there are billions of dollars of weak financial assets in the market, such as securities backed by bad mortgages. The problem is no one knows who is exposed at what level to those weak financial assets. This causes a lack of confidence in the lending industry, and a credit crunch that — if unabated — could cause a recession.
Which power technologies will dominate?
David J. Walls, John Higgins and Steven Tobias
U.S. power-plant construction tends to follow fads. Identifying these trends is easier than determining the primary drivers and issues that contributed to them. Understanding how these drivers affect power-planning decisions can help utilities predict generation-construction trends in the future and avoid getting caught in a group-think trap.
Green credits are maturing to become real, tradeable assets.
Michael Zimmer, Jason T. Hungerford, and Jennifer M. Rohleder
By displacing electricity produced from fossil fuels, renewable power plants produce two distinct products—commodity electricity and a set of environmental attributes (particularly avoided emissions). These environmental attributes can be packaged into a product called a renewable energy certificate, or REC, and sold separately from the electricity. As REC markets develop, key issues are being addressed regarding market interaction.
Despite a favorable outlook for utility finance, cost pressures are straining rate structures.
Utilities are bringing monumental capital-expenditure plans before rate regulators just as they’re dealing with a barrage of rising costs—for fuel and other commodities, as well as labor, pension-fund obligations, and interest payments. Ten energy-finance luminaries elaborate on the industry’s fortunes.
Congress is shifting U.S. energy policies toward green alternatives. Is the new direction temporary or permanent?
Fundamental questions about fuel supply, efficiency standards, and environmental performance have splintered Republicans and Democrats into warring factions. As a result, the only proposals legislators can agree upon seem to be watered down half-measures.
The Southeast again is the battleground for fuels, technology, and market structure.
One sure sign of recovery in boom-and-bust power-generation markets is the renewed growth in the planning and construction of power plants. Active efforts are underway in generation development in the Southeast markets in spite of the high levels of generating reserve margins. With its traditional utility-dominated market structure and a preference for baseload generation, the Southeast is the battleground for the next round of power-generation development.
Where are prices going, and where have they been?
Caroline Gentry and Jamie Webster
The Supreme Court’s recent decision empowering the Environmental Protection Agency to regulate carbon dioxide shifted momentum toward a mandatory program to cap greenhouse-gas emissions. Eventually, there will be huge implications for power generation.
Tackling climate change is a monumental challenge. Power-company CEOs discuss long-range plans for a climate-friendly energy economy.
Seven CEOs—from Exelon, Great Plains Energy, National Grid, NRG Energy, Duke Energy, FPL Group, Great River Energy—explain how global warming is affecting their customers, shareholders, and employees.