A four-year-long boom in powerplant construction, consisting almost entirely of natural gas-fired turbines, has largely blunted fears of widespread U.S. electricity shortages. But federal energy officials now worry that the West's gas pipeline system may not be able to meet growing demand. An energy consulting firm is warning that the electric-transmission grid must be reinforced.
By the end of 2001, the powerplant boom had added more than 70,000 Mw of generation capacity, and 210,000 Mw more were in development or construction, according to a new report from Energy Ventures Analysis Inc., Arlington, Va. But the boom already was turning into a bust, says A. Michael Schaal, EVA principal. And "financing is not there" for a lot of the forecast capacity additions, he says.
For engineers and equipment suppliers, the peak of the boom has passed, says Schaal. Construction-services providers will be next. "It's already starting on a decline." Schaal expects a slide lasting "12 to 18 months."
But the new generation capacity may not be able to get the electricity to the load. That's the warning from a report by Platts Research & Consulting/RDI, Boulder, Colo. Platts is a unit of The McGraw-Hill Cos., which also publishes ENR.
"Unless transmission reinforcements are built, new generating capacity is likely to be trapped in several regions," including New England, South-Central U.S. and the Pacific Northwest, says Doug Logan, Platts Research principal. "The vast majority of large projects are stalled for lack of financial commitment."
The West's current respite from rolling blackouts and natural gas shortages probably is temporary, federal officials warn. A Federal Energy Regulatory Commission report concludes that "the energy infrastructure in the West is insufficient relative to overall energy demand, and that additional infrastructure expansions are needed to support a competitive market."
Although California "continues to rely heavily on electric imports to meet demand," the report says, "imports and exports of electricity between regions are limited by a constrained transmission system." It identifies 11 bottlenecks on key electric-transmission corridors in California and other western states (http://www. ferc.fed.us/calendar/commissionmeetings/dis cussion_papers/07-17-02/A-3west.pdf).
FERC also fears the interstate gas pipeline network may be unable to meet growing gas demand. Over the next five years, powerplant-driven gas demand could rise by anywhere from 30% to 140%, the report notes. But the Enron-inspired crisis of investor confidence is hampering infrastructure investment.
FERC urges the creation of a regional agency to coordinate electric and gas infrastructure planning. The report also recommends one-stop permit shopping, streamlined state and local permitting, construction of new electric generation in urban areas, expedited construction of electric transmission in congested corridors, and incentives for locating liquid natural gas and underground gas storage facilities in prime locations.
In spite of some skepticism, FERC's streamlining efforts are winning compliments. Kern River Gas Transmission Co. received its FERC certificate for a $1.2-billion expansion of its Wyoming-to-California pipeline this month only 11 months after filing, "which is phenomenal," according to Micheal G. Dunn, director of construction for Salt Lake City-based Kern River.