FirstEnergy CEO questions gas ability to replace coal, nuclear role

While natural gas generation is playing a growing role in today’s power market, FirstEnergy (NYSE:FE) President and CEO Anthony Alexander expressed doubts recently about whether it’s ready to do the heavy lifting for the electrical grid.

During the closing minutes of a Sept. 25 appearance before the Bank of America Merrill Lynch conference in New York, Alexander said it is important to remember that many gas units are effectively “intermittent.”

While more reliable than wind or solar power, many natural gas units “dance on the end of a pipeline,” Alexander said.

Typically gas plants “have no inventory,” Alexander said. Contrast this with a coal-fired plant that usually keeps a 30-to-60-day fuel stockpile on hand. Likewise, a recently-refueled nuclear unit typically has more than a year’s worth of fuel in the reactor, the FirstEnergy executive added.

The pipeline infrastructure still needs to keep up with the growing demand for natural gas-fueled power, Alexander said. Currently many units lack pipeline priority, he added.

The FirstEnergy official cited an instance this summer when a company peaking unit could not get the needed natural gas and had to temporarily switch to oil. Fortunately, the generating facility had access to the oil, Alexander added.

“We need it all,” Alexander said, referring to all types of power generation. But it is important to remember that the power business runs around the clock every day of the year, Alexander added.

FirstEnergy’s generating subsidiaries control more than 20,000 MW of capacity. The company’s fuel mix is 60% coal (much of it scrubbed); 20% nuclear; 11% hydro, wind and solar; 7% natural gas and 2% oil. That’s according to a FirstEnergy webpage last updated July 2. The Ohio-based company has several coal units scheduled for retirement in 2015.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.