Engineering Inc. - March/April 2010 - 5

By J o e Sa l i m a n D o MarketWatch New Market Opportunities with Wind Power T he U.S. Department of Energy’s (DOE’s) 2010 Annual Energy Outlook reports that although coal, natural gas and nuclear energy will remain the primary sources of U.S. electricity through 2035, their share of the market will decline and renewable energy’s share will expand. Wind power is expected to become a particularly strong player in the nation’s overall electric generation mix. Renewable energy will make up 17 percent of the U.S. electricity market in 2035, compared with 9.1 percent today. (See Figure 1.) Wind will fuel that surge and could replace half of the natural gasgenerated electricity (which currently has a 21 percent market share) and one-fifth of the coal-fired electricity as soon as 2024. New energy demand will require new distribution systems and transmission lines throughout the nation at a cost of at least $93 billion, according to the National Renewable Energy Laboratory. A new “transmission superhighway” would carry electricity from parts of the country with lots of wind to places where demand is highest. Solar power, which accounts for less than 1 percent of total electric generation, is not expected to build much on its share of the electric market by 2035 (its projected share is just north of 1 percent), as the industry must overcome a lack of infrastructure and accommodate its comparatively expensive installation and usage costs. Nuclear generation is expected to decline slightly to 17 percent by 2035, from Projections 2035 17.1% Nuclear BoB Pool/Getty imaGeS � � � � 1.4% Oil and other 17% Renewable 20.8% Natural gas 43.8% Coal � Figure 1 Renewables gain electricity market share; coal share declines Projections 2035 17.1% Nuclear 1.4% Oil and other 17% Renewable 20.8% Natural gas 43.8% Coal � � � � � 19.6% Nuclear 1.5% Oil and other 9.1% Renewable 21.4% Natural gas 48.5% Coal � � � � � Table 1 2008 2009 and Projected 2035 Energy Costs per Unit � � � (prices in 2008 dollars) 19.6% Nuclear 1.5% Oil and other 9.1% Renewable � 2035 $133.22 $8.88 $2. 1 3 crude oil import Price (barrel) natural Gas (mbtu) at Henry Hub 21.4% Natural gas coal – average delivered price/mbtu � $99.57 $8.86 $2. 1 6 Source: Department of Energy’s Energy Information Administration mbtu = one million British Thermal Units Note: EIA made no projections in a preliminary 41-page PDF of tables from 2010 Annual Energy Outlook for prices of electric power from renewable sources. Source: EIA Annual Energy Outlook 2010 48.5% Coal nearly 20 percent today, primarily because no new U.S. nuclear plants are expected to come online before 2020. Coal-fired electricity’s market share also is expected to decline (44 percent in 2035, from 48.5 percent today), as the nation moves toward improved efficiency and cleaner energy sources. Testing of systems to cap- ture or filter carbon dioxide from burning coal and sequestering it safely away from the atmosphere is still problematic. Despite these shifts, fossil fuels are still expected to satisfy at least 78 percent of U.S. overall energy demand as far out as the year 2035, according to DOE’s Energy Information Administration (EIA). EIA projections also show that while the cost of crude oil is expected to increase, the costs of coal and natural gas will be nearly identical in 2035. (See Table 1.) Joe Salimando writes on construction at www.electrical contractor.com. He can be reached at ecdotcom@gmail. com. ENGINEERING INC. MaRCh / apRIl 2010

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Engineering Inc. - March/April 2010

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