Curtailed by competition

摘要

Coal-fired power generators in the USA today find themselves in a bewildering conundrum Coal-fired power plants provide the bulk of electric generation in the USA, and are a recognized source of consistent, reliable, low cost electricity. As the electric industry deregulates and restructures for a very competitive, commodity-based environment, common sense would dictate that a low cost producer should flourish in such an environment. But this logic is upset by the introduction of a series of environmental regulations that promise to significantly increase the cost of coal-fired generation. The issues most expected to impact coal-fired generation include electric industry deregulation, new environmental regulations and the delining cost of high efficiency gas-fired generation. The forces of competition and profit motive will drive power production costs down to typical market levels forcing the retirement of uneconomic fuel supply contracts, a significant source of the disparities in production costs. The competitive position of each plant in the future under these conditions goes a long way in determining the long-run value of each generating asset.