Reuters covers how Calpine Corporation is increasingly using natural gas as a power generation fuel, citing lower costs and environmental friendliness.
“Calpine Corp, which operates the nation’s largest fleet of efficient natural gas-fired power plants, said the recent increase in gas prices from 10-year lows and the return of coal-fired plants to meet summer demand will temper the increased demand it has seen for its power output.
Higher summer demand to meet air conditioning load means more U.S. coal plants will run, but longer-term Calpine sees a “significant” increase in the amount of coal generation that will shut… Calpine benefited from coal-to-gas switching as utilities were able to buy power from gas plants more cheaply than they can produce it from coal-fired plants as an oversupply of gas depressed spot prices to the below $2.50 per million British thermal units.
…In the next few years, Calpine Chief Executive Officer Jack Fusco said more affordable gas and the finalization of more stringent environmental rules will only “significantly” increase the amount of coal-fired generation to shut.
“Approximately 40 gigawatts of coal plants have already announced retirements, much of which are smaller, older, less efficient units,” Fusco said.
While many shutdowns are attributed to pending environmental regulation, the economics of sustainable lower gas prices play a large role, Fusco said.
“In the current natural gas price environment, coal plants are financially challenged, even before considering the installation of expensive environmental retrofits like scrubbers, SCRs and baghouses,” he said.”
