Coal, Nuclear

‘All of the stars are aligned’ for U.S. natural gas plants, Alstom exec says

By Wayne Barber

While it’s not a “dash-to-gas,” Alstom’s (NYSE: AOMFF) president of United States operations, Amy Ericson, sees a definite “march” toward domestic natural gas generation – especially new combined-cycle plants.

“Dash-to-gas” was a frequently-heard phrase in the power industry more than a decade ago during an earlier building boom for natural gas power plants. It was also a common refrain in the 1990s in England as the country deregulated its power markets, began shutting suddenly uneconomic power plants fired by English coal, and began building new gas plants to replace them.

 “I would put it as a march,” rather than a dash, Ericson said in an Oct. 1 interview with GenerationHub in Washington, D.C. “The trend has been pretty clear in the U.S. It has been growth in gas.”

Barring a dramatic change in U.S. gas prices, the Alstom manager sees natural gas playing an ever-greater role in the electric grid. Before being recently named as president in charge of Alstom’s 8,000 employees in the United States, Ericson was responsible for Product & Platform Development for Alstom’s gas turbine and plant portfolio.

“All of the stars are aligned right now” for domestic natural gas generation, Ericson said. “Investment will have to happen and we believe it is going to be gas, married with renewables,” Ericson said.

With 29 states having some type of renewable portfolio standard (RPS), it is increasingly important for power plants to “cycle” to accommodate intermittent energy, Ericson said. It’s difficult for coal and hydroelectric facilities to do that, Ericson said.

U.S. gas plants must “absolutely” start up quickly. “The standard out there right now is a hard, fast start in 30 minutes,” and faster is better, Ericson said.

Alstom polled many of its electric power customers recently and the vast majority expected to see between $5 and $7/mmBtu natural gas prices over the next five-to-10 years. That’s pretty consistent with what many national studies have shown, Ericson added.

Alstom also asked its customers when they expected to order their next coal plant and the answer was “pretty depressing,” Ericson said.

The customer response was more encouraging when asked about natural gas generation, although everything is tempered by a tepid economic recovery. “It’s not surprising, but I get the sense that people are uncomfortable with the rate of recovery,” Ericson said.

The need for new gas-fired generation cannot be adequately addressed by simply running the existing gas fleet more, Ericson said. Some units are not in the right spots to compensate for coal plant retirements. In other cases newer, more efficient gas units are needed.

The Alstom executive was quick to add that the U.S. electric generation market, with its access to cheap natural gas, is not necessarily typical of the rest of the world. In some international regions the natural gas price can run from $15 to $20, Ericson said. That’s because many nations lack much gas supply – whether conventional or derived from shale.

Coal and nuclear power are still strong choices for new electric generation internationally, Ericson said. China is setting the pace in building new nuclear reactors and Alstom is providing a large number of the turbine generator sets for the China nuclear market, she added.

“Nuclear power on the margin is about as good as you get,” Ericson said. Alstom still believes in nuclear power, she added.

“If and when the [domestic] industry is ready to go back to cost-effective coal and nuclear technology we are going to be there with the best technology there is,” Ericson said.

In the meantime, Alstom is staying busy helping its customers make “reliability investments” to the existing fleet of coal, gas, nuclear and hydro facilities, Ericson said.

Alstom active in transmission, wind power

Many of Alstom’s customers are also upgrading their transmission infrastructure. “The path of least resistance will be for transmission investments,” at least in the near term, Ericson said. Such upgrades are often the best way to move more megawatts “cost effectively,” Ericson said.

Alstom is a global leader in the world of power generation, power transmission and rail infrastructure.

Alstom has experience with both offshore wind generation and undersea electric transmission systems internationally and hopes to help spawn a commercial offshore wind energy business in the United States. Alstom has been active with the growing offshore wind industry in Europe.

Alstom is in a partnership with Dominion Resources  to develop a demonstration wind energy project in the Atlantic Ocean off the coast of the Virginia. The demonstration project is connected with DOE funding.

Dominion was also the winning bidder for Interior Department rights to eventually develop up to 2,000 MW of wind off the coast of Virginia.

As a major international energy player, Alstom will continue to invest in emerging technologies – from offshore wind to carbon capture and storage, Ericson said.

Ericson became Alstom’s U.S. president Sept. 1. She is taking over from Pierre Gauthier, who previously served as Alstom’s President for both the U.S. and Canada. Gauthier’s role is transitioning to focus solely on the company’s activities in Canada.

Globally, Alstom has approximately 93,000 employees in 100 countries. Alstom has also provided equipment for half of all U.S. power plants.


This article was posted with permission from our sister website, GenerationHub.

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