Calpine CEO Peter Cartwright announced Jan. 16 that the San Jose, Calif.-based company will complete 27 gas-fired projects now under construction. It will continue to develop, but place on "hot standby," another 34 projects that will cut Calpine's construction investment this year by about $2 billion. The move will set back the company's goal of having 70,000 Mw of power on line by 2005. Instead, it will have just 26,300 Mw on line by mid-2003, with 15,100 Mw on hold until market forces are ripe for construction, says Ron Walter, Calpine senior vice president.
Calpine's announcement is the latest in a flurry of recent powerplant delays and cancellations by other power companies totaling about 82,000 Mw. Much of the market problems simply are a result of the forces of supply and demand. The weakening economy and warmer than normal temperatures have softened the demand for electricity, says Hugh Holman, a power industry analyst. "On the supply side, the financing spigot was closed. In the wake of the Enron collapse, rating agencies put fast-growing power companies on credit watch," says Holman.