The $1.2-billion Brunswick County project is being built both to keep pace with rising demand and replace the soon-to-be-retired coal units at Dominion's Chesapeake power station, says Genest. Fluor Corp. is designing and building the Brunswick project, which will come on line in 2016, he adds.

Dominion is far from alone in retiring older coal units and building new gas units. In Michigan, Consumers Energy is seeking regulatory approvals for a planned $750-million combined-cycle unit that would be constructed, by 2017, at a site near Flint. The 700-MW unit would help Consumers offset the announced retirement of 950 MW of older coal units and help meet its goal of reducing greenhouse-gas emissions by 20% by 2025.

Footprint Power, Bridgewater, N.J., plans to replace 720 MW of older coal- and oil-fired capacity at its Salem Harbor site, north of Boston, with a new 674-MW, gas-fired, combined-cycle unit. The independent power company said the investment makes sense because of tightening federal regulations and low gas prices.

Another independent, Panda Power Funds of Dallas, is planning an 859-MW, combined-cycle unit in Prince George's County, Md. The firm told state regulators the capacity is needed to "fill a hole" created by coal-unit retirements in the mid-Atlantic region. Panda also is building three 758-MW, combined-cycle units in the Electric Reliability Council of Texas (ERCOT) region.

New Coal Units Off the Table

Upcoming EPA regulation of greenhouse gases from new coal-fired plants has all but killed the market for such projects. The agency's proposed rules, issued in late September, require new coal units to emit no more than 1,100 lb of carbon dioxide per MWh of energy generated, a standard that could be met only by projects that gasify coal and capture the resulting CO for underground storage or use in enhanced oil-recovery.

In the U.S., only one such integrated gasification combined-cycle project with carbon capture and sequestration is currently under construction: Mississippi Power's 582-MW Kemper County IGCC unit. The project is already at least $1 billion over budget and its operational date recently was delayed by six months.

The situation for coal-unit owners is complex, says Bob Nussmeier, vice president of business development at Kiewit Oil, Gas and Chemical North America Group. "The challenge is in understanding changes in the regulatory environment so you can decide whether to invest on upgrades or convert your coal-fired units to gas-firing," he observes.

Nussmeier says demand for electricity "has been growing at a slower pace than forecast," in part because of anemic economic growth. He further says, "Demand-side management by all market segments has done a good job in slowing the increase in electricity demand."

The Kiewit executive adds, however, that, over the long term, "low prices for natural gas will fuel growth in petrochemical and industrial manufacturing and increase demand for electricity." The bottom line, says Nussmeier, is that he and his colleagues "see a gradual uptick in the number of conversions of existing coal units to combined-cycle plants."