A mid-year update of Black & Veatch’s Energy Market Perspective (EMP) reports several major trends, including a more rapid shift to natural gas than previously anticipated.
The updated EMP projects that 380,000 megawatts of new natural gas-fueled electric generating capacity will come on line through 2037. This represents a 27 percent increase over the December 2011 projections, says Rob Patrylak, Managing Director of Strategic Resource Planning and the Energy Market Perspective for Black & Veatch’s management consulting division.
“Several factors are driving this growth,” he said, “including lower natural gas prices, current EPA regulations and the introduction of newer, highly efficient combined cycle technologies.”
Other key findings of the mid-year update include:
• Coal retirements remain steady: A projected 61,500 MW of coal capacity retirements over the next eight years are consistent with December 2011 findings. Black & Veatch projects an additional 70,000 MW will go offline between 2020 and 2037. These projections are based on economic considerations (including long-term natural gas prices), technological advancements and future greenhouse gas regulations.
• Pipeline and storage infrastructure are evolving: Storage values continue to decline due to tight seasonal spreads and greater natural gas price stability. Pipelines are pursuing regional growth strategies while working to mitigate reduced throughput and volumes.
• Gas growth puts the spotlight on reliability: Regulators, regional electric grids and natural gas industry associations are increasingly focusing on reliability as gas and electric systems become more interdependent.
Updated semi-annually by Black & Veatch, EMP is a subscription-based service that provides 25-year projections for the North American energy market. EMP supplies a baseline market perspective based on data compiled from leading sources, primary research and client consulting experience. The report is analytically neutral and doesn’t advocate specific technologies or agendas.
– Written by Joyce DeLay, Black & Veatch. Reprinted with permission from the Black & Veatch Energy Strategies Report August 2012. The subject matter expert Rob Patrylak may be reached at