Monday, March 28, 2011

Another Industry Executive Rejects New Generation Construction

Former TXU exec said cost too high to build new power plants | Electric Power News | Energy Central

Another speech has been given echoing the opinions of John Rowe noted here earlier this month. The thesis is that the current low natural gas pricing, and bountiful supply, are already driving down the price of electricity. With the profits of generators now more dependent on the price of natural gas than the performance of their existing assets, and demand not rebounding to pre-recession levels, there is no point in building anything - and if there was and it's profitability is going to depend on gas price anyway, it would be gas.

A response to Rowe's speech was that he took the position simply based on his own narrow self-interest (as he had done before).

From the article linked to at the top of this page:
Jonathan Siegler, chief financial officer for Bluescape Resources, said the cost to build any type of new power generation -- coal, nuclear, solar, wind or natural gas -- is higher than the current price of power.
"The signals are that it's not time to build,"

Both Rowe and Siegler provide figures to demonstrate how far the price necessary for each type of new supply falls below the current market prices suppliers are receiving.

The issues don't differ much in Illinois and Texas than those I've examined, from my Ontario perspective, since starting my blog

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