North America Outlook: Future Looks Promising for Natural Gas-Fired Power Projects, Hydrogen Still a Way Off

The outlook looks bright for new natural gas-fired power generation in the U.S. and Canada, says Britt Burt, Industrial Info's vice president of Power Research.

Burt was a speaker at Industrial Info's 2024 North American Industrial Market Outlook event on January 17 in Sugar Land, Texas. He covered the outlook for the Power Industry in the U.S. and Canada for 2024 and beyond.

Among other things, he noted a promising outlook for natural gas turbine projects. Among fossil-fuel projects, coal-fired project activity is limited to in-plant expenditures and maintenance spending.

"Newbuild activity in the fossil fuel sector (not including renewables) is really limited to natural gas, and I think we are going to see some of that moving forward," Burt said. He mentioned the Tennessee Valley Authority (TVA) (Knoxville, Tennessee) as one of the companies that "are actually moving forward with gas turbine projects."

The TVA expects to bring an additional 3,400 megawatts (MW) of gas-fired generation capacity online over the next three years. For more information, see January 4, 2024, article - TVA Brings New Natural Gas Power Generation Online; and September 7, 2023, article - TVA Board Authorizes Three-Year, $15-Billion Capital Program.

"All the major utilities, as part of their integrated resource plans--the plan of how they are going to meet their customers' needs over the next 10 years--are stressing the need for more natural gas-fired generation. So, I believe the outlook is bright," Burt said. "We saw more natural gas come online last year than we had in the previous two years. I think we are going to see another 7 or 8 gigawatts (GW) of natural gas-fired capacity come online this year and next and beyond that I think the potential is quite promising."

He added: "Later down the line, of course, the question will become how much will hydrogen contribute to that; how much will they supplement their natural gas turbines with hydrogen?"

Burt said hydrogen eventually will have a substantial place in the electric power industry, but not in the near term.

"There's a lot of testing, a lot of studies going on," he said. "I think at some point it will play a role, but right now there's a lot of constraints to that."

One hydrogen power project now underway is Intermountain Power Agency (South Jordan, Utah) and the Los Angeles Department of Water & Power's (LADWP) $1.2 billion IPP Renewed Project in Delta, Utah. The project entails construction of an 840-MW natural gas/hydrogen-fired power plant next to the existing IPP coal-fired power plant. The new plant is designed for a 30% hydrogen fuel mix. Construction kicked off in the third quarter of 2021 and is planned for completion in the second quarter of 2025.

The project includes the retirement of the existing coal-fueled units at the IPP site; installation of new natural gas-fueled electricity generating units capable of utilizing hydrogen; modernization of IPP's Southern Transmission System linking IPP to Southern California; and the development of hydrogen production and long-term storage capabilities. IPP will use renewable energy-powered electrolysis to split water into oxygen and hydrogen, storing the latter in underground salt caverns for use as fuel to drive electricity-generating turbines. The new natural gas generating units will be designed to utilize 30% hydrogen fuel at startup, transitioning to 100% hydrogen fuel by 2045 as technology improves, according to Intermountain Power Agency.

Subscribers to Industrial Info's Global Marketing Intelligence (GMI) Power Project and Plant databases can click here for the project report and click here for the related plant profile.