As much as 3.5 GW of US coal plant is going to be refueled to burn natural gas instead of being retired, reflecting owners' willingness to accept lower efficiency in refueled plants for lower costs. The refueled units would be run mostly to meet peak demand, so owners are looking to trade off lower efficiency and conversion costs against revenue from peak electricity prices. In some locations, the refueled units could also earn revenues from capacity payments. Coal plants refueled to burn gas could introduce a new, cheap source of capacity to the market. The top end of the cost to refuel a coal plant is about $100/kW and could be substantially less, depending on what needs to be replaced, said Mark Dittus, head of Black & Veatch's steam generation section. By comparison a new gas-fired plant can cost upward of $1,000/kW.
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