Which power technologies will dominate?
David Walls is a director, John Higgins is a director and Steven Tobias is a managing consultant in Navigant Consulting Inc.’s Energy Practice. Contact Walls at email@example.com.
U.S. power-plant construction tends to follow fads. In the 1960s and early 1970s, the fad was large, sub-critical coal plants. In the late 1970s and early 1980s, it was nuclear plants, although no one could agree on a standard design. In the 1980s, the trend was to not build any plants but instead enter into long-term PURPA-based contracts. In the 1990s, the industry turned to gas turbine combined-cycle (GTCC) plants, and the “dash to gas” began (see Figure 1).
Identifying these trends is easier than determining the primary drivers and issues that contributed to them. Was market growth the primary driver? Fuel price and availability? Policy and regulatory issues (e.g., the Clean Air Act, investment tax incentives)? Lowest installed cost? Lowest levelized cost of electricity? Or, was the utility industry guilty of a group-think mentality driven by common planning processes, selection criteria and assumptions?
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.