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Abundant Natural Gas And Looming Regulations Have U.S. Unregulated Coal-Fired Power Generation On The Ropes Jan 11
Standard & Poors, Jan 2011
Abstract
It is the best of times for U.S. natural gas-fired power generation and the worst of times for coal-fired generation. Besieged by large shale gas deposits and a slew of regulations, culminating in the Best Available Control Technology (BACT) for new coal plants, King Coal seems increasingly likely to relinquish its throne to natural gas. Two trends are driving the switch to natural gas. Currently, the U.S coal-fired plant fleet is under pressure not only from economic considerations but from increasingly stringent environmental controls as well. In the near to medium term, the major threat is from shale gas development, which has lowered fuel costs for competing combined-cycle gas turbine (CCGT) plants. In contrast, 'dark spreads' (gross margins for coal-fired...
Companies mentioned in this report are: Allegheny Energy Inc.,Dominion Resources Inc.,Energy Future Holdings Corp.,American Electric Power Co. Inc.,Public Service Enterprise Group Inc.,Edison Mission Energy,PPL Corp.,NRG Energy Inc.,FirstEnergy Corp.,Constellation Energy Group Inc.,Dynegy Inc.,AmerenEnergy Generating Co.,Southern Power Co.,Texas Competitive Electric Holdings Co. LLC,GenOn Energy Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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