If the gas-fired sector of the power generation industry was competing in a NASCAR event, then the National Economy car's spectacular wreck has the yellow caution flags flying and the race slowed to a crawl until the debris can be pulled off the track. Orders for new natural gas-fired generation may be off by 20% to 30% since the recession began, said David Walls, director of energy for Navigant Consulting. Just before hard times hit the power generation industry seemed poised for a new round of construction aimed at meeting environmental requirements and replacing aging units. For independent power producers a long-term purchased power agreement is almost a must. Given the tight credit markets, environmental compliance mandates and retirements involving older, less efficient units are no better than secondary market movers in many instances. Another significant market consideration is pending federal climate change legislation and its potential effect on natural gas.
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