US Gas Plants Fill Nuclear Gap
Gas-fired power plants look an attractive way for developers to fill the gap that will be created as 7.2 GW of nuclear capacity is retiring early, and will be off the grid by 2025, according to the US Energy Information Administration (EIA).
Through 2027, planned natural gas generation capacity additions total 62 GW for 130 projects with an average capacity factor of 93%, it said in its weekly report September 28. More than three-quarters of the planned capacity are from combined-cycle gas turbines (CCGTs). The two CCGT projects with the largest planned capacity, both in Florida, are Citrus County Combined Cycle Plant (1.6 GW with a capacity factor of 83%) and Okeechobee Clean Energy Center (1.7 GW with a capacity factor of 100%), said the EIA. The capital cost estimate for a nuclear power plant is more than six times greater than that of a CCGT plant on a per kilowatt basis, although some are still planned such as the overall 2.2 GW Vogtle nuclear project in Georgia which will have a capacity factor of 100%.
Dry natural gas production has increased steadily over the past decade, averaging 72bn ft³/day over 2014–2016. During that same time period, the Henry Hub spot price for natural gas averaged $3.17/mn Btu and reached its lowest annual price in 17 years in 2016 at $2.52/mn Btu. Lower natural gas prices combined with increased electricity generation from natural gas-fired plants contributed to a decrease in electricity prices. In 2016, the national average wholesale price for electricity was about $30/MWh, about 17% lower than in the previous year.
The EIA said US LNG exports remain flat, with five tankers with a total carrying capacity of 18.5bn ft³ gas leaving Cheniere's Sabine Pass terminal between September 20-27 and one vessel (LNG-carrying capacity 3.8bn ft³) loading at the terminal September 27. The terminal operator, Cheniere, requested approval by the Federal Energy Regulatory Commission to put its fourth liquefaction train at Sabine Pass into service. The October benchmark gas contract closed at a few cents below $3.00/mn Btu while a year strip from November 2017 to October 2018 closed at 8 cents above $3.00/mn Btu.
William Powell