Increased Orders for Gas-Fired Power Plants in U.S. Show Shift Away from Coal

Siemens announced a number of orders for new gas-fired power plants in North Carolina and Florida that seem designed to replace older coal-fired and other high-emission technology rather than to add to existing capacity.

Even as the coal industry scrambles to develop technology for “clean coal” power plants, the substitution of new gas-fired plants for old coal-fired capacity – while virtually no new coal-fired plants are being planned – indicates a significant shift in the industry looking ahead to stricter emission controls.

“Load growth is currently not the driver for new capacity additions,’’ Siemens Energy president Randy Zwirn told The New York Times. “I think we’re beginning to experience the beginning of a fleet restructuring here in the U.S. that’s driven by regulation.’’

Siemens announced contracts for five high-efficiency plants at two Progress Energy sites in North Carolina. The new state-of-the-art gas plants will result in an estimated 60% reduction in the carbon dioxide emission rate, a 100% decrease in mercury emissions, a nearly 100% decrease in the sulfur-dioxides emissions rate and a more than 95% decrease in the nitrogen-oxides emissions rate, the power plant builder said.

Progress Energy said in December that it planned to close a total of 11 coal-fired units, totaling nearly 1,500 megawatts at four sites in the state. The new gas-fired plants will go into two of those sites -- the. Sutton Plant near Wilmington and the H.F. Lee Plant near Goldsboro.

“These state-of-the-art power plants will provide highly efficient and environmentally friendly electricity to meet the demands of Progress Energy’s growing customer service area,” Lloyd Yates, CEO of Progress Energy Carolinas, said in a statement.

Separately, Florida Power & Light agreed to buy six gas turbine-generator packages from Siemens to modernize two of its complexes. The new turbines, which will replace dual oil and gas-fired turbines built in the 1960s, will reduce carbon dioxide emissions by 50%.

The new FPL turbines will be installed at Riviera Beach and at Cape Canaveral.  “At a time when energy consumption is flat in the U.S., more and more customers are making long-term strategic decisions to replace older technology with newer, more efficient gas turbines,” Siemens’ Zwirn said in a statement. “These companies will be well-positioned to comply with new anticipated energy legislation that is likely to have stricter environmental controls.”

By. Darrell delamaide for OilPrice.com - the no.1 source for oil price information