GAS AND WIND DOMINATE ANNUAL ANALYSIS

This time of year is always one to look forward to. Yes, the fall colors are quite a sight and the sporting world has come to life again. But more importantly, we can sink our teeth into a couple of reports that are provided to us by Industrial Info Resources (IIR) and Forecast International (FI) for publication in our annual Turbomachinery Handbook.

This year, there is certainly a lot to take in. IIR makes it clear that there are only two games in town when it comes to new generation — renewables and gas turbines. Out of the nine regions showcased in the IIR market outlook, two have plans to add power from other sources. But even in those cases, the actual percentages are tiny.

One region that finally got the memo is New England. Two years ago in this column, we chastized it for having almost no new generation on the horizon. Last year, it still only planned to build 3,000 MW over the next five years. The current year’s forecast for over 13,000 MW is more like it.

At the same time, however, the Northeast has sunk in a single year from about 20,000 MW planned to little more than 5,000 MW. This region appears to have taken over from New England as the one finding the most excuses not to construct new energy facilities. With pressure being continually brought to bear to shutter aging coal and nuclear facilities, the Northeast will need to change its tune.

Talking about coal, that once great industry is really taking a hiding. It is somewhat reminiscent of Muhammed Ali getting mauled by George Foreman in that famous heavyweight boxing match during the seventies. Like Ali, coal refuses to go down despite being overwhelmed by a mighty adversary. But the analogy wears thin at this point as there is no rope-a-dope strategy coming to the rescue of Old King Coal, according to IIR. It predicts 15,000 MW of coal closures in 2015 alone for a total of 65,000 MW between 2010 and 2020. It could get much worse once mercury emission rulings take effect. IIR said that could lead to a further 49,000 MW of coal plant shutdowns. The silver lining is the fact that dollars are being spent on coal service and maintenance, particularly in pollution control.

As a result, natural gas-based electricity production actually topped coal in April of 2015. It still lags coal by a small margin over the course of the year, but that will soon change permanently. IIR estimates that 67,000 MW of new-build natural gas plants will be established by 2020. Large combined cycle plants will comprise a growing proportion. IIR data shows a dozen such projects on the cards with each costing over a billion dollars.

Along with gas, renewables are the other energy source forecast to be in the ascendancy. From 15% of U.S. generating capacity in 2010, the EPA expects renewables to reach 28% by 2030. When you factor in rising capacity factors and declining costs for the latest renewable plants, gas turbine projects can look forward to having wind and solar as regular competitors.

To end on a positive note, the FI summary of GT worldwide trends shows all sales totals up slightly compared to the previous year’s forecast. It looks like the pessimism that has lurked around since the recession is continuing to lift. That gives you even more reason to study well our Handbook specs as part of the turbomachinery specification and selection process.