One has to decide if a CCGT is a pure energy resource paid off through maximum sales of its electricity, or a flexible resource that holds back on production to support the grid.
Senior executives from Exelon Generation, Alstom, General Electric and Zachry officially broke ground on the construction of a new low-carbon, combined-cycle gas turbine (CCGT) at Exelon's Colorado Bend Generating Station in Wharton. The new CCGT will provide an additional 1,000 MW to the existing 498-MW natural gas power plant. The new unit at Colorado Bend is one of two new CCGTs the company is developing in Texas.
Calculating the implied value of CO2 abatement in green energy policies.
Renewable portfolio standards and other green energy rules put a price on environmental benefits. Calculating this price can help clarify the social value of GHG reductions.
Navigating the power and gas markets.
The power and gas markets look very different today from what we were anticipating three to four years ago. Gas has gone from seeming shortage to seeming abundance with recent spot prices falling to well under $3/mcf. Power prices and volatility are down significantly. Demand is soft and excess capacity exists in most of the country. While it might be easy to attribute the conditions in the power markets largely to the recession, the reality is that the fundamentals of the market are materially changing—creating opportunities while revealing new pitfalls.
Are merchant power assets overpriced?
By some measures, merchant power assets look like a bargain, selling for well below their replacement cost. But whether low prices signal a buying opportunity or a value trap depends on the outlook for electricity demand growth—not just in the long term, but also in the fairly immediate future.
Models are evolving for utility-scale solar development.
During the next few years, the biggest growth in the solar energy market will happen in the form of utility-scale projects, mostly driven by state renewable portfolio mandates. But financing such projects has become more difficult, with a smaller pool of equity capital and an evolving set of regulatory requirements.
Utility deals resume after 18 months of austerity.
Utilities are taking advantage of a sweet spot in the capital markets, pre-funding and refinancing at record low rates. But cheap money won’t resolve overhanging uncertainties preventing cap-ex projects and M&A deals. Greater certainty in America’s economic and policy outlook will clear a path for strategic change.
California defends its cogen feed-in tariff—complete with its own virtual carbon tax.
California’s new feed-in tariff (FIT) is creating a burgeoning market for green energy investments, but the policy has sparked a fierce battle over state authority to dictate wholesale power transactions. A federal case will determine whether the 1978 Public Utility Regulatory Policies Act pre-empts states from requiring purchases that exceed utilities’ avoided cost.
The need for many hundreds of billions of dollars in capital expenditures creates huge opportunities and challenges, especially in a more challenging credit environment.
An estimated $900 billion of direct infrastructure investment will be required by electric utilities over the next 15 years, and $750 million already is in place. Nukes, renewables, low-carbon technologies, combined-cycle gas turbines—all have faced cost challenges. The magnitude of the numbers requires a multi-pronged approach.
State regulators grapple with investments, supply planning, and structural issues.
The opposing challenges of higher gas prices and rising environmental concerns have put utility regulators in a difficult position: How can they bring rate stability while minimizing environmental impacts? At the same time, they are grappling with trends in consolidation, competition, transmission planning, and distribution service quality. Each state brings a different view of the changing utility landscape. For insight, Fortnightly brought together regulators from several states to discuss their plans and priorities for today and the future.