The U.S.' electrical power producing plants are at -- or beyond -- maturity, and electrical power producers are looking at building replacement and new capacity. So what's the preferred raw material for most of this new electricity? Coal.
"There are 120 [electrical power plant] construction projects underway [in the U.S.] in some form today," says Roger W. Gale, president and CEO of GF Energy LLC, Washington, D.C., which provides strategic and marketing consulting to electrical power producers. "One or two years ago, there were no power-generation projects in consideration or on the horizon. There is a resurgence now."
The 120 projects that Gale cites are at the initial stages of environmental impact studies or approaching the point at which their owners intend to apply for licenses to begin construction.
He says that nearly all of these projects call for coal as the fuel of choice.
That's because nuclear power is not an option for U.S. utilities because of political and ecological reasons, Gale says. The costs for natural gas and petroleum are at, or near, record highs, and are expected only to rise, and other alternatives -- hydroelectric, wind, solar and distributed power production -- remain out of the question for widespread use for environmental or competitive reasons.
Meanwhile, technologies for coal-fired power production have advanced in the 20 to 35 years since the last large number of power generation facilities was built, making coal more attractive than ever.
"So, coal comes back," Gale says. "It almost sounds strange to say, but the best way to reduce carbon dioxide emissions in the U.S. today may be to build new coal-fired electrical power plants. And, coal is politically acceptable in many states."
He cites pulverized coal power plants and integrated-gas-combined-cycle facilities as technological advances that have improved coal's competitive position.
Power plants that use pulverized coal can be as much as 20% more efficient than older plants, so they are less expensive to operate, and they have far lower carbon dioxide emissions.
Integrated-gas-combined-cycle (IGCC) facilities use more exotic technologies but are very efficient.
An IGCC facility typically combines a coal gasification facility with a gas-burning turbine to power electrical generation. In effect, Gale says, it combines a chemical complex with a turbine generating plant.
"IGCC units have greater efficiency, but they are the next stage. They can use a variety of fuels," Gale says.
Both technologies could be used to give electrical power producers replacement capacity as producers eliminate older, amortized production facilities, or they could provide new, incremental capacity, he says.
Investors want to see the electrical power industry improve its financial performance, and Gale says it has abandoned diversification and has decided to find that improvement by building its core business.
"Electrical power utilities are under pressure to grow.
"The industry has become more efficient over the last 35 years, and it now needs a tremendous investment to catch up with new power production," Gale says, and the industry sees coal as the fuel for its future.