New US power plants to rely on natgas - Moody's

13 March 2008 15:34  [Source: ICIS news]

HOUSTON (ICIS news)--New US power plants will likely abandon coal for natural gas, a critical chemical feedstock, Moody's Investors Service said on Thursday.

Coal, an alternative fuel to natural gas, was facing public opposition and concerns about greenhouse-gas emissions, Moody's said.

Moreover, pending carbon-control legislation could encourage power plants to find other fuels, it added. As a result, future coal capacity could be limited - even though such plants would make up much of the new capacity in the near future, Moody's said.

In the long run, much of the new capacity would rely on natural gas, the group said.

As it is, US utilities will add new capacity, as electricity demand is projected to grow at twice the rate of new generation during the next decade.

Wind and other renewable energy sources could slow the industry's increasing reliance on natural gas, Moody's said.

Natural gas is the key feedstock for the US chemical industry. However, it is also a favoured fuel for power plants, since such plants are cleaner burning and cost less to build.

By: Al Greenwood
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