Still, new gas-fired plants would be more efficient. This makes a tremendous difference (see here for technical details). New plants would be much cheaper for their owners to run. For a while, this might make little difference in direct electricity prices. After all, just because you can make something cheaper than the next guy does not mean you have to sell it for less (in a free market -- in the regulated system before deregulation, utilities did have to sell it cheaper). But remember that electricity demand varies, and during periods when demand is lower, the new plant can undercut the old one. The new plant will generate the same number of megawatt-hours using only half as much gas.
This is extremely significant, because gas-fired electric generators are the largest gas users.
Consider a single 500 MW plant for example. To generate 500 MW for one hour -- 500 MWh -- at a new, efficient, 7000 BTU/kWh plant, the plant has to burn 3.5 billion BTU of gas. A million BTU is ten therms, so 3.5 billion BTU is 35,000 therms. This could heat a typical house for decades -- and this is just what it takes to run the new plant for an hour!
Decades of heat, every hour. If that plant runs 24 hours a day for 30 days, it uses 2.52 trillion BTU of gas. That is just over 25 million therms.
But this is the new, efficient plant! If the old plant is only
half as efficient, it has to burn fifty million therms to produce
that same power. If you build a new plant, and it keeps the old plant
from having to run for one month a year while demand is lower, that saves
those same 25 million therms. Suppose you build ten of these new
plants, and those ten plants displace ten old plants for eight out of the
twelve months a year. Compare the `before' and `after' situations,
and say that you still need to run two of the old plants all summer.
|before (total)||10 plants @ 50M therms/mo x 12 months = 6000M therms|
|after (winter, spring, and fall)||10 plants @ 25M therms/mo x 8 months = 2000M therms|
|after (summer)||10 plants @ 25M + 2 plants @ 50M, x 4 months = 1400M therms|
|after (total)||2000M + 1400M = 3400M therms|
In other words, by replacing (or `repowering') ten old plants, the demand for natural gas drops by about 2.6 billion therms per year!
You might think that, if you burn half the gas, you would produce half the pollution. It turns out that things are better than this. The new combined-cycle plants often produce something like one tenth the pollution of the old one, on a per-MWh basis. So the new plants are healthier for you than the old ones, by far. This is why the Sierra Club, the American Lung Association, and other such groups have all endorsed the idea of building new power plants.
One problem is `NIMBYism' -- the attitude exemplified by the comment: `that's great, let's build some -- but Not In My Back Yard!' NIMBYism is alive and well, as shown by opposition to Calpine's proposed Metcalf Energy Center next to the proposed Cisco office building. I read a file full of comments that had been made by people in the area, and one of them really did say `maybe we need this plant, but why don't they build it over at Moss Landing where the other plants are?' (There are lots of reasons not to build it there, among them the fact that Duke, who own the Moss Landing plant, are doing their own projects, and the fact that the transmission lines going into San Jose are already overloaded. Without more power plants, San Jose will need more power lines.)
Another common target for blame is `environmentalists'. As noted above, the Sierra Club, an environmental organization, actually supported the Metcalf Energy Center proposal. The plant was voted down by the local city council, on behalf of NIMBYism and because Cisco were against the idea. (Since then, the plant has been re-proposed, and many more are now for it, including an influential industry group, but San Jose's mayor is still in the `anti' camp.)
So who else opposes power plants? The answer is: other power plant companies! (See this ruling for one example, where Cabrillo Power LLC objected to the Otay Mesa plant project. Or simply consider the list of intervenors for the same plant, which includes Duke, Cabrillo Power, NRG Energy Inc., and even SDG&E itself.)
(One other reason an older, dirtier plant might run first is that it might have been bought cheaper, so that even though its output is more expensive, its owner does not have to collect as much revenue to make it profitable. This is perhaps a more likely reason the older, less-efficient generators seem to run `too much' and drive up the price of the fuel and emissions credits. This problem should eventually self-correct: eventually the fuel and emissions prices will go high enough to make the new plant cheaper anyway. In the meantime, though, things could get very expensive.)
All contents are copyright © 2001 Chris Torek.