Thursday, January 17, 2013

America's 2012 Power Plant Construction Boom: New Generation Capacity Jumps 21%

America is building power plants.  Indeed, 2012 saw a power plant construction boom, with new generation capacity coming on line rising 21% over 2011 levels.  The boom is especially noteworthy, since wholesale generation prices dropped from 15% to 43% in 2012.

Despite falling wholesale power prices, total new generation built in 2012 was 26,387 megawatts, a considerable jump from the 21,795 megawatts installed in 2011.  Moreover, any year,when new capacity coming on line exceeds 20,000 megawatts is a strong one, and so the last two years have been robust for those in the business of building power generation.

Wind and natural gas led the way in 2012, with wind adding more than 10,000 megawatts and gas more than 8,000 megawatts of new generation. The surge in new wind farms as well as a big increase in solar drove the 2012 increase in total new capacity. Indeed, renewable energy capacity accounted for 49% of the total new generation built.  Renewable energy is big business, indeed!

Interestingly, the new natural gas capacity constructed in 2012 actually declined in 2012 when compared to the 2011 total.  While new gas plant capacity saw a drop, new coal plants had a surprisingly strong showing, with more than 4,000 megawatts added.

Last year also marked the arrival of solar in a big way to the new generation business. The solar boom is underway and not going away. No longer can any discussion be had about the new electrical capacity being built in the US without looking at solar.

The Federal Energy Regulatory Commission data counts about 1,500 megawatts of solar added to the grid in 2012, an impressive number. But the FERC solar number importantly does not include large amounts of distributed or roof top generation constructed last year.  Indeed, if the distributed or behind-the-meter solar capacity is added, the total solar generation built in the US is about 3,000 megawatts--a stunning number.

All the substantial amounts of new capacity added to the grid in 2012 is much cleaner and more efficient than either the capacity that retired last year or the average power plant still operating. The new capacity also helps maintain reliability and keep power prices affordable.  All in all the 2012 new power plant capacity is good news for our economy and environment.


  1. You keep commiting the same error or intentional misleading when you mention capacity of dispatchable and non-dispatchable sources together.

    Sun or wind produce energy about 25% of the time, while gaz or coal CAN produce about 90% of the time, and, moreover, can produce when needed, unlike wind and solar.

    Since wind and solar produce only 25% of the time, you need 4 times more "capacity" to produce the same amount of energy. That means that 1000 megawat of wind or solar are, in best case, equivalent to 250 MW fossil. And they are worth even less, as they are non-dispatchable - i.e. you can't fire them up when you need them.

    Your peristance in this missrepresentation is either disshonest, or ingnorance.

    1. Its neither. The post is based on the FERC data that reports in capacity. FERC is not misrepresenting or ignorant. Like all data points capacity numbers are useful but have limits. Most readers of this blog understand that. I sometimes convert wind capacity numbers into electricity produced and point out that 12,000 megawatts of wind produces an amount of electricity equal to 6 nuclear plants of about 600 MW each. You also should take a look at the average capacity factor of a gas plant or coal plant. They do not run in many hours of the year for economic reasons--the cost of running them in those hours exceeds the market price.

  2. "12,000 megawatts of wind produces an amount of electricity equal to 6 nuclear plants of about 600 MW each."

    They are equal in one respect: the total quantity. Not the continuos production.

    They are not equal in another key aspect:
    The nuclear plants are reliable.
    The wind farms are intermittent, and are totally useless without nuclear or gas backup.
    And worse, their on-off intervals are unpredictable and uncontrollable.
    They impose a great burden on the controllers who must balance the grid, and cause extra waste and fuel consumption because of the start-stop cycles they impose on other power plants.

    1. No machine runs all the time. No machine is 100% reliable. No machine runs whenever it is called to do so. This is especially true of power plants. Power plants do not run because of economics, fuel shortages, breakdowns, and outages due to planned maintenance. In PJM power plants break down and are out of service about 5% of the time as one example. In Texas, during the winter blackouts, wind operated, while gas and coal plants broke down and ran out of fuel. The ERCOT operator said wind helped to keep the blackout from being much worse. Wind does contribute to reliability and is typically included to some degree in capacity available to meet reliability requirements. Texas coastal wind farms for example reach peak wind production during the late afternoon hours of the day when the system often reaches daily peak. Wind also pushes down the market price of power and is far from useless to consumers. It saves them billions of dollars every year by keeping wholesale electricity prices in the spot markets lower than they would be without the wind supply. And all power plants must be backed up. Indeed the amount of spinning reserves is tied typically to the biggest unit in a system (usually a coal or nuclear plant).