POWER PLANTS GET EXPENSIVE

The biggest loser: The fight against climate change. Stuck with old power plants means being stuck with old technology and heavy emissions. The good news: Opoortunity is pounding on the door.

Costs Surge for Building Power Plants
Mathew L. Wald, July 10, 2007 (NY Times)

WHO
Utilities, power producers, plant builders, skilled labor and energy consumers. Is there anybody else?
click to enlarge

WHAT
The cost of nuclear and coal-fired power plants is rising as raw materials, high-tech component parts and labor become more expensive and competition grows for all three.

WHEN
Costs are generally estimated to have grown 25% to 33% in the last 18 months.
Although wind energy remains cost competitive, prices are rising: In 2004, Puget Sound Energy paid 4.5 to 6 cents/kilowatt hour for wind energy. In 2006, the cost was 8 to 10.5 cents/kilowatt hour.

WHERE
Costs are on the rise in the U.S. and internationally, in nuclear, coal, oil refineries, gas plants and even wind technologies.

WHY
- GE estimated $2000-$3000/kilowatt-hour to build its newest nuclear plant.
Duke Energy raised its estimate for a new coal plant from $2 billion to $3 billion in 18 months.
- Causes: (1) Competiton for raw materials (2) Competition for EVERYTHING with China and India.
- Demand is only expected to rise. The best coping strategy is to develop consumption efficiency programs.
turbine basics (click to enlarge)

QUOTES
- John Krenecki, president/ceo, GE Energy: “There’s massive inflation in copper and nickel and stainless steel and concrete…So many industries are at cyclical peaks at the same time…We can’t forecast how long that will continue.”
Randy H. Zwirn, president, Siemens Power Generation Group: “There’s real sticker shock out there…”
- Jason Makansi, consultant, Pearl Street: “There’s a lack of production and manufacturing facilities in this country, and that may be partly to blame…the bigger culprit is the incredible demand in China and the rest of Asia. Basically everything is being sent over that way.”
- Christine Real de Azua, spokeswoman, American Wind Energy Association: “Costs have increased for wind as they have for other technologies…While wind farm operations are not hit by fuel price volatility, steep increases in the cost of raw materials like copper and steel and other factors have driven up the price of wind turbines…”