Posts Tagged ‘Clean Power’

Southeast CHP Technical Assistance Partnership (CHP TAP) Launched at NC Solar Center / NC State University

Posted on: October 29th, 2013 by shannon No Comments

Regional partnership will provide technical assistance on CHP for end-users and other stakeholders, including communities

Raleigh, NC – This week, the U.S. Department of Energy announced the launch of seven regional Combined Heat and Power Technical Assistance Partnerships  (CHP TAPs) to support businesses and communities in understanding the benefits of developing CHP. The CHP TAPs support DOE in leading the regional and state deployment of CHP technologies to address “a number of our national priorities including improving the competitiveness of U.S. manufacturing, increasing energy efficiency, reducing emissions, enhancing our energy infrastructure, improving energy security and growing our economy.” [1]One of these regional partnerships, the Southeast CHP Technical Assistance Partnership, is located at the North Carolina Solar Center at NC State University.  The Southeast CHP TAP will offer information on best practices for CHP project financing, management and state policies, market analysis tools and resources and technical site evaluations.

CHP is a significant resource that many industries and institutions in the Southeast U.S. already use to efficiently generate onsite power and thermal energy.  By lowering energy consumption and improving the bottom line, CHP strengthens manufacturing competitiveness while reducing harmful emissions.

CHP technologies can also help strengthen energy infrastructure by providing sites and communities the capability to maintain power during severe weather events.  Several sites in the Southeast in the hospital sector, including Shands Cancer Hospital in Gainesville, Florida and Baptist Medical Center in Jackson, Mississippi, have CHP systems that have helped them continue their services during hurricane events, including Hurricane Katrina.

Recognizing the value of CHP, President Obama issued an Executive Order in 2012, establishing a national goal of developing 40 gigawatts of new CHP capacity by 2020 – a 50 percent increase from what is installed today.  The Southeast CHP TAP is supporting this national goal.

The Southeast U.S. has a significant amount of potential CHP to be developed, and the Southeast CHP TAP’s services are directed at identifying cost-effective CHP installations and assisting in developing the market for them.   The Southeast region covers the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.
For further information on the Southeast CHP TAP, visit


See Additional information on the Energy Department’s broader efforts on CHP at



Shannon Helm, 919-423-8340,

Isaac Panzarella, 919-515-0354,

[1] Combined Heat and Power: A Clean Energy Solution. August 2012. US DOE and US EPA.

Serving Critical Infrastructure with Microgrids, Combined Heat & Power and Solar PV

Posted on: June 25th, 2013 by shannon No Comments


A recently released report, “Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities[1] offers examples of critical infrastructure facilities that maintained onsite electric and thermal services during Superstorm Sandy with combined heat and power (CHP).  Critical infrastructure (CI) collectively refers to those assets, systems, and networks that, if incapacitated, would have a substantial negative impact on national or regional security, economic operations, or public health and safety.  While Superstorm Sandy caused extended power outages along the east coast of the United States, these and other critical facilities in the affected area with CHP were able continue their operations despite the emergency status of the power grid. The report was prepared for Oak Ridge National Laboratory by ICF International and several of the U.S. Department of Energy’s Regional Clean Energy Application Centers (CEACs), including the Southeast CEAC managed by the N.C. Solar Center.  Besides offering examples of how actual CHP facilities performed, the report contains information on the strategic application of CHP systems to provide CI facilities with reliable power, as well as state and local policies that promote this application.

Along with enhanced disaster resiliency, CHP systems for CI facilities deliver energy efficiency and cost savings to end users, local utilities, and the electric grid on the whole.  During normal operation, combined heat and power systems operate at an average efficiency of 80% or higher, compared to an average of 45% for utility grid power and onsite thermal generation.  An independent localized grid, termed a microgrid, enables CHP-powered CI facilities to island from the utility grid in anticipation of an emergency.  During such times, microgrids with CHP can maintain utilities for CI facilities without demand for grid power, freeing utility power resources to serve other needs until the grid is restored to full capacity.  Development of a CHP based microgrid for a CI facility, such as a hospital, institutional campus or government facility establishes reliable onsite base load infrastructure that can be complemented with intermittent distributed energy resources, such as solar photovoltaics (PV).  A district energy system provides the infrastructure necessary to distribute heating and cooling to CI facilities in a campus setting.  Great care must be taken to analyze the facility’s electric and thermal needs, and select the combination of CHP, district energy and other DG resources to reliably and cost-effectively provide the desired CI energy infrastructure.

Several of the facilities described in the report “Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities” utilize the effective design and technological benefits of an integrated CHP and solar PV microgrid system.


  • South Oaks Hospital is a 245-bed healthcare facility located near Long Island in Amityville, NY, that operates a 1.25 MW CHP system coupled with a 47 KW PV solar system.  On During Superstorm Sandy South Oaks isolated itself from the Long Island Power Authority (LIPA) grid on and remained disconnected from the grid for approximately fifteen days.  During this time, the Hospital admitted patients from other sites that had been displaced by the storm and offered refrigeration for vital medicines to those who had lost power and had no means of keeping medicines refrigerated.  At the request of the utility, the Sandy Oaks remained islanded, despite the partial restoration of local power, affording the utility time to restore the grid to normal.


  • Princeton University operates a 15 MW CHP system integrated with a 5.3 MW solar PV system.  The CHP system produces electricity, steam, and chilled water for the campus, and during Superstorm Sandy the University was able to continue normal operations by disconnecting from the grid and relying on its CHP microgrid district energy system to power the campus.  Non-critical loads around campus such as administration buildings and some classrooms were shut off to keep the CHP system within its generating capability.  The CHP based microgrid system supplied campus with needed energy for three days until the University was able to receive power from the macro utility grid.


  • The Marine Corps Air Ground Combat Center, Marine Air Ground Task Force Training Command in Twentynine Palms, CA  (MCAGCC) operates a 7.2 MW CHP system that is complimented by a 4.8 MW solar PV system and 1.0 MW of fuel cells. By the end of 2013, an additional 9.2 MW of CHP will be operational, for a total of 16.4 MW of CHP.  “Strategic energy planning is a key component of our master plan,” says Commander Rob Tye, head of the facilities management division at Twentynine Palms.  “[The CHP system] is helping us treat energy as a resource rather than as an expense.” (cite CI CHP report) Since the installation of the CHP system, capable of operating independent of the grid, the base has had to disconnect from the utility grid to operate in “island mode” a number of times due to curtailment by Southern California Edison.


State and local policymakers in the Northeast and other areas are considering CHP and solar PV-powered microgrids as a strategic resource for strengthening CI facilities against future storm events.  An example of recent legislation supporting the use of CHP as CI was recently passed by the Texas Legislature and signed by Governor Rick Scott on June 14, 2013.  HB 1864[2] instructs the Texas Energy Conservation Office to issue guidelines for conducting feasibility analysis of CHP for government facilities meeting the definition of CI.  These analyses are already required under legislation passed in 2012, and these new guidelines will establish clear criteria for decisions on whether to implement CHP based on cost / benefit ratios.

The N.C. Solar Center’s Clean Power and Industrial Efficiency (CPIE) team supports advanced deployment of microgrid powered CHP and other distributed energy resources through it’s work on the DOE Southeast CEAC and other strategic initiatives.  At the 2012 N.C.  Sustainable Energy Conference, the N.C. Solar Center’s Clean Power team organized a panel session describing the roles and capabilities of CHP systems in microgrid systems.  This year, at the same conference, the session topic grew into a separate, pre-conference Smart Grid Forum that focused heavily on microgrid applications.  The CPIE team works increase awareness of market opportunities to develop this transformative technology by working alongside the N.C. Solar Center’s Renewable Energy program on technical assistance efforts, and working with the Research Triangle CleanTech Cluster[3] on awareness of policies that promote applications of microgrids with CHP.

[1] Oak Ridge National Laboratory, ICF International and DOE Clean Energy Application Centers, March 2013; available at

[2] “An Act relating to certain energy security technologies for critical governmental facilities”, Texas Legislature;


Solar Center staff support Southeast states teams in NGA Policy Academy

Posted on: April 9th, 2013 by shannon No Comments


In March, staff from the U.S. Department of Energy’s Southeast Clean Energy Application Center (SE-CEAC), based at the N.C. Solar Center, participated in the second convening meeting for the National Governors Association’s Policy Academy on Enhancing Industry through Energy Efficiency and Combined Heat and Power (CHP) in Philadelphia, Pennsylvania.  The Policy Academy provides a forum for select states to focus on identifying cost-effective strategies; designing new policies, programs and measures; structuring effective funding and financing options; and exploring innovative outreach, education and training approaches.   At the convening meeting the five participating state teams from Alabama, Arkansas, Illinois, Iowa and Tennessee shared developments since the project began in the fall of 2012.

At the conclusion of the Policy Academy in April 2013, each team will have developed an action plan for their state.   To support this goal, senior-level policy advisors and business leaders from other states presented in Philadelphia on their experiences with clean energy portfolio standards, interconnection policies, statewide public benefits programs and utility energy efficiency programs.  The SE-CEAC served  as expert faculty for the Policy Academy teams from Alabama, Arkansas and Tennessee, providing information on the application of the above policies and other programs, and will continue to support the states during the implementation of their action plans.  As part of their action plans, these three states propose to hold a Governor’s Summit on Industrial Energy Efficiency and CHP.

The SE-CEAC, in collaboration with seven other regional CEACs, works to promote and assists in transforming the market for combined heat and power, waste heat recovery, and district energy technologies and concepts.

Annual Update on Combined Heat and Power in North Carolina for 2012

Posted on: December 12th, 2012 by shannon No Comments

North Carolina saw an active combined heat and power (CHP) market in 2012 with five projects totaling 13 megawatts (MW) of electric capacity installed in the state.   Of these projects, four are renewable biomass fueled CHP systems that are located on industrial sites and provide large amounts of process steam from recovered heat.  One example of a completed project is a biomass fueled CHP installation at a Pfizer plant in Sanford, which generates 250 kilowatts of power and 30,000 pounds per hour of steam, equivalent to approximately 8.8 megawatts of thermal energy.

The N.C. Solar Center’s Clean Power & Industrial Efficiency provided a range of technical and policy support to four of the new CHP projects during their development through its role as a University Energy Center and headquarters for the U.S. DOE Southeast Clean Energy Application Center (SE-CEAC).

Backpressure steam turbines such as this one at a NC industrial site supply onsite electric power from steam that's produced with renewable biomass

Backpressure steam turbines such as this one at a NC industrial site supply onsite electric power from steam that's produced with renewable biomass

Looking ahead to 2013 and beyond, there are at least eight CHP projects planned in North Carolina, representing 45 MW of capacity, with as much as 36 MW of that potentially fueled by renewable biomass.  This development trend is partly explained by the addition of CHP as an eligible technology for North Carolina’s 35 percent Renewable Energy Investment Tax Credit by the North Carolina General Assembly in 2011.  Another influence is activity by the state’s investor owned utilities to comply with North Carolina’s Renewable Energy Portfolio Standard by contracting for purchase of electricity and renewable energy credits (RECs) from renewable sources.

Two unique CHP projects currently under development in North Carolina will be powered by biomass and landfill gas systems; at Reventure Park and UNC Chapel Hill’s Carolina North Campus.

ReVenture Park’s 1.5 MW CHP project in Charlotte, NC received an air-quality permit from Mecklenburg County this Fall.  The CHP system is part of a plan to redevelop a 700-acre former EPA Superfund site into a clean energy fueled eco-industrial and business park.   ReVenture intends to use a technology called gasification, primarily fueled in this case by waste sawdust, that yields a clean burning organic gas as fuel for an engine generator.  ReVenture has contracted with Electricities, the state’s public power membership organization, to purchase the power output from the plant.  The recycled heat generated from the system will be used to dry other wood fuel, making it more viable for use in boilers converted to use biomass.   The CHP project will be the first of its kind in Mecklenburg County, and is expected to be complete in 2013.

The University of North Carolina at Chapel Hill is proposing to build a 1 MW CHP system into a central utility plant for its planned 250-acre research and mixed-used academic campus, Carolina North.  The CHP system will support the campus’s sustainability goals to use renewable energy energy and conserve water, as well as reducing air emissions that contribute to carbon footprint.  UNC-CH’s project will be fueled by methane gas from the Orange County landfill that is currently being flared, releasing heat to the atmosphere.  The landfill gas piping and CHP generator is expected to be complete in the coming year, according to Carolina North’s Annual Report on development, and will be ready to provide heat and power for the campus’s buildings as they are completed.

Growing awareness of the opportunity to invest in CHP systems for business, industry and government facilities is expected to lead to further project successes in the state.  As such, an industry group, the North Carolina CHP Initiative, has begun forming to represent CHP businesses and help potential end-users to connect with experts and find available resources.


NC-CHP Initiative holds second meeting; attends NCSU CHP facility ribbon cutting

Posted on: November 16th, 2012 by shannon No Comments

The North Carolina Combined Heat and Power Initiative (NC-CHP Initiative), an industry group focused on creating a favorable environment in the state for development of CHP, held its second meeting on Wednesday, November 14, 2012.  The meeting hosted 30 attendees from the CHP industry, including project developers and end-users, and featured invited guests from the North Carolina General Assembly and North Carolina Public Utilities Commission. The NC-CHP Initiative leadership provided updates on an action plan and policy initiatives for 2013, and led a lunch discussion session with Representative Deborah Ross from the North Carolina General Assembly and Sam Watson of the North Carolina Utilities Commission.

The NC-CHP Initiative coordinated this meeting with North Carolina State University’s ribbon cutting ceremony for its 11 megawatt Cates Facility combined heat and power (CHP) system. NC State University’s Facilities Division hosted the NC-CHP Initiative and other guests for the ceremony, at which NC State University Chancellor Randy Woodson, Vice Chancellor for Finance Charlie Leffler and Assistant Vice Chancellor for Facilities Operations Jack Colby, gave their views of the CHP system’s financial benefits and contribution towards the University’s goal to become carbon neutral by 2050. The ceremony was followed by tours of the new facility.

NC State University completed the 11 MW combined heat and power project on campus to move toward making the NC State a more sustainable community.  The project is located on main campus at the University’s Cates Facility, and is expected to generate $4.3 million of energy savings in the first year of operation.  The project will increase NC. State’s electrical and steam system efficiency by roughly 35%, reducing the University’s greenhouse gas emissions by 8%, or 33,000 CO2 equivalent metric tons. The system will be fueled by natural gas, and will include two 5.5 MW Combustion Turbines, two 50,000 PPH heat recovery steam generators, a 2,000 ton chiller and a cooling tower.  Overall the system will provide approximately 30% of a typical day’s supply of power to North and Central campus.

The project at NC State was financed by Bank of America through a performance contract with Ameresco, Inc., and the cost savings will be used to repay the loan.  If the savings exceed the guaranteed level, the University can apply the excess towards other clean energy or energy efficiency projects on campus.

The Clean Power and Industrial Energy Efficiency team at the North Carolina Solar Center, in the University’s College of Engineering, manages the US DOE Southeast Clean Energy Application Center, and provided technical assistance on the project.   For more information on clean energy resources, visit

Dialogue On Investment in Industrial Energy Efficiency and Combined Heat & Power Underway in the Southeast

Posted on: October 10th, 2012 by shannon No Comments


The U.S. Department of Energy Southeast Clean Energy Application Center co-hosted a workshop with the Industrial Energy Efficiency Network for Southeast utilities and major industrials on September 25th in Nashville, Tennessee.   The one-day workshop connected nearly 40 manufacturing corporate energy managers and energy utility energy efficiency program design managers for a one on one conversation concerning utility incentives for energy efficiency and combined heat & power systems.   Southeast industry was represented by a broad range of participants from Frito-Lay Inc., Saint-Gobain, Olin Chemical, Michelin Tire, Nissan North America Inc, Bonnell Aluminum, Johnson Controls, Honda Manufacturing and McKee Foods.  Southeast utility representatives from Tennessee Valley Authority, Duke Energy, Alabama Power, Georgia Power and Southern Company were in attendance.

On January 24th, 2013, The U.S. Department of Energy’s Advanced Manufacturing Office, in conjunction with the State and Local Energy Efficiency Action Network (SEE Action Network) is convening a southeast regional dialogue meeting on Industrial Energy Efficiency & Combined Heat and Power in Little Rock, AR.  The meeting will be a part of a series with two regional workshops hosted in Baltimore, MD on March 13, 2013 and in the Western United States in May, 2013.  These workshops will gather state energy officials, industry, utilities and other stakeholders to discuss strategies to meet the objectives outlined in the August 30, 2012 Executive Order – Accelerating Investment in Industrial Energy Efficiency.  The Executive Order sets a goal of 40 gigawatts of new, cost-effective industrial CHP in the U.S. by 2020, it directs the agencies, including DOE, with convening stakeholders, through a series of public workshops, to develop and encourage the use of best practice State policies and investment models that address the multiple barriers to investment in industrial energy efficiency and CHP.  Discussions will cover developing and implementing state best practice policies and investment models that address the multiple barriers to greater investment in industrial energy efficiency and combined heat and power (CHP).

Click here for more information on the U.S. Department of Energy’s Southeast Industrial Energy Efficiency & Combined Heat and Power Regional Dialogue Meeting

The N.C. Solar Center hosts the U.S. DOE Southeast Clean Energy Application Center (SE-CEAC) as part of its Renewable Energy, Clean Power and Industrial Efficiency program.  The SE-CEAC promotes market development for CHP throughout the Southeast region as a clean distributed energy resource. As part of this the SE-CEAC supports policy analysis and barrier removal, as well as education and outreach resources. Together the N.C. Solar Center and SE-CEAC combine efforts to work with legislators, regulatory commissions, state and local government officials, and their staffs to educate them on effective CHP policies and existing barriers that need addressed.

President Obama Signs Executive Order Promoting Industrial Energy Efficiency

Posted on: August 30th, 2012 by shannon No Comments

For Immediate Release
August 30, 2012
WASHINGTON, DC – Today, President Obama signed an Executive Order to facilitate investments in industrial energy efficiency that will strengthen American manufacturing and help create jobs.  These efforts to boost industrial energy efficiency, including combined heat and power systems, can save manufacturers as much as $100 billion in energy costs over the next decade, improving their bottom lines and strengthening U.S. manufacturing competitiveness.  These types of efficiency measures will reduce energy consumption and reduce harmful emissions.

“Today, we are taking another step to strengthen American manufacturing by boosting energy efficiency for businesses across the nation,” said President Obama. “This action will cut costs, increase efficiency, and help our businesses create strong, middle class jobs.  We’ll continue to do everything we can to put more people back to work and build an economy that lasts.”

While manufacturing facilities have become more energy efficient over time, there is an opportunity to accelerate and expand this trend with investments that reduce energy use through more efficient manufacturing technologies and processes, such as the expanded use of efficient, on-site heat and power generation, known as combined heat and power (CHP).  This Executive Order builds on important steps the Administration has taken to scale up private sector investments in energy efficiency in our homes, buildings, and factories with efforts like the Better Buildings Initiative and investments upgrading homes around the United States.

In addition, it directs the Departments of Energy, Commerce, and Agriculture, and the Environmental Protection Agency, to coordinate actions at the Federal level while providing policy and technical assistance to states to promote investments in industrial energy efficiency.  The Executive Order also directs agencies to foster a national dialogue through ongoing regional workshops to encourage the adoption of best practice policies and investment models that overcome barriers to investment, provide public information on the benefits of unlocking investment in industrial energy efficiency, and use existing Federal authorities that can support these investments.

Today’s Order also establishes a new national goal of 40 gigawatts of new combined heat and power capacity by 2020, a 50% increase from today. Meeting this goal would save energy users $10 billion per year, result in $40 to $80 billion in new capital investment in manufacturing and other facilities that would create American jobs, and would reduce emissions equivalent to 25 million cars.


Learn more about Combined Heat & Power: A Clean Energy Solution

NC CHP Initiative meeting 6/28 to discuss ways to promote the Combined Heat & Power market

Posted on: June 20th, 2012 by shannon No Comments

The North Carolina CHP Initiative (NC-CHPI) will have its first meeting of the year on June 28th, from 11:00-1:30 in Charlotte.  Piedmont Natural Gas will host the meeting of roughly 30 participants who are interested in promoting the CHP market in North Carolina. Participants include industrial energy end users such as Coca-Cola Bottling company, NGOs, utilities, governmental agencies and private developer’s such as Recycled Energy Development.

This first meeting of the year will be a working session where participants will evaluate NC CHP incentives and financing mechanisms, as well as define its goals for 2012. This effort is lead by the U.S. DOE Southeast Clean Energy Application Center, a Clean Power and Industrial Efficiency project hosted by the N.C. Solar Center.

NC CHP Initiative mission statement: The North Carolina CHP Initiative (NC-CHPI) is an association of business interests supporting combined heat and power in industrial, commercial and institutional settings. The NC-CHPI champions CHP as a clean, reliable and cost effective power resource that supports the economy of the state.

Interested in learning more and being a part of the discussion?  Join the LinkedIn Group


Combined Heat and Power Plant at Fort Bragg Wins 2012 EPA CHP Award

Posted on: February 8th, 2012 by shannon No Comments

Fort Bragg was honored with a US EPA Energy Star CHP Award on Tuesday, February 8th for its 5 megawatt combined heat and power (CHP) plant.  This award, presented at the International District Energy Association’s 25th annual Campus Energy Conference, recognizes the high energy and environmental performance of this CHP project.  The facility, which began operation in 2004, provides the US Army’s 82nd Airborne Division with an efficient and reliable source of power, heating and cooling.  The heart of the system is a natural gas fueled combustion turbine generator with heat recovery boiler, that together operate twice as efficiently as a central utility plant, saving the base an estimated $1 million per year in energy costs.

The use of combined heat and power systems is an important means to increase the efficiency of electricity production, in which the heat is normally exhausted as waste.    CHP plants like Fort Bragg’s generate electricity onsite and capture the resulting heat, which in this case is used to produce steam or chilled water in an absorption chiller.  The steam and chilled water is distributed to the base through a district energy system, an underground piping network that connects multiple buildings to a central plant.  A total of 67 buildings are served by the Fort Bragg system, to the benefit of more than 10,000 soldiers, family members and base employees.

The use of CHP at Fort Bragg also has a significant impact on the base’s emissions, avoiding an estimated 12,300 metric tons of CO2 emissions per year, equivalent to the annual carbon emissions of 4,036 cars.

The Department of Defense and the US Army have developed strategic plans for increased energy security and independence, which Fort Bragg installation energy management professionals are implementing through the use of a combination of technologies that include onsite CHP, energy efficiency and renewable energy resources.  Ultimately, using more CHP as a constantly available resource in conjunction with available renewable energy resources, the base may generate as much power as it uses, with capability to operate as a secure and independent power island, called a microgrid.

The North Carolina Solar Center, housed at North Carolina State University, operates US Department of Energy Southeast Clean Energy Application Center (CEAC) as a key part of its mission to advance the use of clean power and renewable energy technologies such as CHP.  The US Department of Energy Southeast Clean Energy Application Center (CEAC) assists private and public sector entities to identify and develop the opportunities that exist for energy and cost savings through the application of combined heat and power, district energy and waste heat recovery technologies.   Organizations that use CHP and district energy in North Carolina include the University of North Carolina at Chapel Hill, and North Carolina State University, which is currently building an 11 megawatt CHP plant that will serve its campus.

Electric plants shift from coal to natural gas

Posted on: January 17th, 2012 by shannon No Comments

PITTSBURGH — The huge, belching smokestacks of electric power plants have long symbolized air pollution woes. But a shift is under way: More and more electric plants around the nation are being fueled by natural gas, which is far cleaner than coal, the traditional fuel.

The most optimistic projections describe an abundant domestic energy source that will create enormous numbers of jobs and lead to cleaner skies.

Nationwide, the electricity generated by gas-fired plants has risen by more than 50 percent over the last decade, while coal-fired generation has declined slightly. The gas plants generated about 600 billion kilowatt hours of electricity in 2000 and 981 billion hours in 2010, according to the U.S. Energy Information Agency.
During the same period coal generation declined from 1,966 billion hours to 1,850 billion hours, while hydroelectric and nuclear generation stayed about the same. The figures include electricity use by consumers and industry.

Nationwide, EIA said natural gas use for power generation rose 7 percent between 2009 and 2010. That’s about 515 billion cubic feet. The biggest jumps were in the Southeast, with use rising 24 percent in North Carolina, 18 percent in Virginia and 15 percent in South Carolina.

“Most of the people I know in the electric power industry are building natural gas” plants, said Jay Apt, a professor of technology at Carnegie Mellon University in Pittsburgh. That’s because of low prices over the last few years and the relatively low cost of building such plants, compared with coal-fired or nuclear.

But Apt cautions that the trend could stall because the basics of supply and demand mean that if too many plants embrace cheap gas, it won’t stay cheap.

“The surest route to $6 or $8 gas is for everybody to plan on $4 gas,” Apt said, and if prices do rise, coal will again be the most cost-effective fuel. Natural gas is priced per million BTU.
Apt noted that there was a “huge building boom” in natural gas plants from the late 1990s to 2004, because utilities thought they would get rich from the combination of cheap fuel and plants that were highly efficient and relatively cheap to build. There were predictions that prices would stay low over the long term, too.

But natural gas prices spiked, and the new gas-fired plants around the nation stayed idle much of the time. That trend was also driven by another irony: The gas-fired plants are easier to start and stop compared with coal or nuclear, so many utilities used them just for peak electric demand periods.

Still, history may not repeat itself because of the huge surge in supply from Marcellus Shale gas drilling. Vast gas deposits that previously couldn’t be extracted economically are now being tapped using new technologies. Instead of drilling straight down, companies can drill horizontally and follow seams of gas for a mile or more deep underground. Then the drillers use hydraulic fracturing, or “fracking,” to free the gas from the relatively dense shale rock.

That’s led to environmental concerns from some residents, scientists and regulators who feel there are too many unknowns in the process, along with an undisputed boom in production that’s brought great wealth to some landowners, and a surge of jobs.

Some companies clearly believe the switch to natural gas plants makes long-term sense.

Sunbury Generation LP in central Pennsylvania plans to close five of its six coal-fired generators and replace them with two natural gas-fired turbines by 2015, the Daily Item reported last month.

But some companies are deciding not to switch fuels.

The owners of the Homer City Generating Station in western Pennsylvania, the state’s second-largest coal plant, plan to add $700 million in pollution control equipment to keep the 40-year-old plant running and in compliance with clean air laws.

Natural gas-fired power plants are “orders of magnitude cleaner” than coal plants, said Jan Jarrett, president of the PennFuture environmental group.

Jarrett said PennFuture wants coal-fired units retired and replaced by gas-fired, at least for the short term.

“There’s no way that we can scale up wind and solar to meet the demands over the near future,” she said. “Gas itself is a much cleaner burning fuel that can help clean up our air.”

But Apt sees a slow, moderate shift.

“My sense is you’ll get small changes here,” he said, since the current low natural gas prices are attracting market demand from around the world.

There are already federal permits for 3 trillion cubic feet per year of natural gas exports, Apt said.

“Will we export that bounty, and if we do, will that drive up U.S. prices,” he said. Natural gas sells for about $8 in Europe and $14 in Japan, but less than $4 here.

“They’re not going to tear down the coal plants, because they’ve seen this movie before,” Apt said of electric companies. “They will mothball those plants and start up the coal plants again” if natural gas prices rise.


By KEVIN BEGOS – Associated Press