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Prospect of Advanced Generation Technologies in a Competitive Marketplace FREE

[+] Author Affiliations
Manoj K. Guha

American Electric Power, Columbus, OH

Paper No. 97-GT-377, pp. V002T05A018; 5 pages
doi:10.1115/97-GT-377
From:
  • ASME 1997 International Gas Turbine and Aeroengine Congress and Exhibition
  • Volume 2: Coal, Biomass and Alternative Fuels; Combustion and Fuels; Oil and Gas Applications; Cycle Innovations
  • Orlando, Florida, USA, June 2–5, 1997
  • Conference Sponsors: International Gas Turbine Institute
  • ISBN: 978-0-7918-7869-9
  • Copyright © 1997 by ASME

abstract

To meet the challenge of deregulation and customer demands for a free competitive market, the electric utility industry in the U.S. (and, for that matter, throughout the world) will experience tremendous changes over the next five years. These changes will be driven by two major forces: the deregulation of the industry and, therefore, no guaranteed return on investment but more importantly, the demands of customers for a free competitive market in the electric utility industry where they can achieve the lowest cost for the commodity. This will force utility companies to position themselves as low-cost producers. Although low cost does not necessarily mean success, it is obvious that cutting and/or reducing capital expenditures will play the most important role.

Unregulated markets encourage product diversity, as firms look for “niche” profit opportunities. A pervasive lesson from other industries that have recently been deregulated clearly shows that unless properly planned, these companies will not only do poorly but may be completely wiped out from the market Generation Planning (base load vs. peak load, long-term vs. short-term) will become more important since two-thirds of the capital investment is tied to generation facilities. While low-cost utilities will have greater flexibility in adapting to competition, they will be far from immune to industry changes.

Under a fully competitive marketplace, all generating plant assets/investments will come out of a rate base. Since all companies will be exposed to competition, high-cost generating assets would no longer be subsidized by ratepayers. This will force the utility companies to invest in low capital cost generation only, at least during the next ten to fifteen years.

This paper will briefly discuss the status of various advanced generation technologies with respect to their costs, applicability and limitations, where these technologies are expected to be cost effective and finally how these technologies compare with the state-of-the-art combined cycle gas-turbine technology. It is predicted that as environmental regulations tighten on pollution, advanced generation technologies may benefit at the expense of current fossil fuel technologies. However, it is not certain whether economic growth in the U.S. can be sustained if new regulations on pollution force to add new plants with advanced generation technologies, compared to continuing with today’s generation mix. It will be examined how, when and where the advanced generation technologies would play an important role in penetrating the market on their own merits.

Copyright © 1997 by ASME
This article is only available in the PDF format.

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