As environmental regulations continue their forward march and gas prices remain low compared to historic rates due to increased domestic supply, the number of power plants changing their primary fuel source to natural gas has increased dramatically. In 2011 and 2012, just over 5.5 GW of power plant capacity switched to burning primarily natural gas from another form of fossil fuel, according to an SNL Energy analysis of U.S. Energy Information Administration 860 data.
By the end of 2012, 2,183 MW of capacity had shifted to primarily burning gas from another listed fossil fuel source in 2011. The units burning natural gas saw an increase in 2012 net generation to 2,321,539 MWh from 1,491,497 MWh in the previous year, representing an almost 56% rise.
Of the regional transmission organizations, PJM Interconnection recorded the highest primary fuel capacity switch to natural gas in 2012, at 1,631 MW, essentially all at PPL's 1,630-MW Martins Creek 3 and 4 plants in Northampton, Pa. The decision to burn less residual fuel oil was most likely a cost-saving measure, with the delivered cost of oil to the plant in 2011 at $19.80/MMBtu compared to $4.95/MMBtu for natural gas in the same year.
Primary fuel type conversions to natural gas were even more pronounced in 2011, with 3,350 MW of capacity shifting away from other fuels. Although more capacity was converted, the generation from the plants was actually less than when other fuels were burned. Net generation in 2011 was down over 12%, to 1,631,328 MWh, compared to 1,861,835 MWh the previous year.
Keep reading the full report and analysis here: http://www.snl.com/InteractiveX/Article.aspx?cdid=A-18621398-11819
Referenced Tickers: KS, MGEE, Nebraska Public Power District, Wyandotte Municipal Serv Comm, Sonoco Products Company, KS, New York Power Authority, LNT, VLO, Compagnie de Saint-Gobain, Rock-Tenn Co, CPN, New Smyrna Beach Utilities Com, Spreckels Sugar Company, Oxford Village of, SCG, Dow Chemical Co, Jamestown BPU, PPL, Madison Paper Industries Inc, WI, Pacific Gas and Electric Co., Sinclair Oil Corp., MN, University of Cincinnati
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