America is building power plants. Indeed, 2012 saw a power plant construction boom, with new generation capacity coming on line rising 21% over 2011 levels. The boom is especially noteworthy, since wholesale generation prices dropped from 15% to 43% in 2012.
Despite falling wholesale power prices, total new generation built in 2012 was 26,387 megawatts, a considerable jump from the 21,795 megawatts installed in 2011. http://www.ferc.gov/legal/staff-reports/dec-2012-energy-infrastructure.pdf. Moreover, any year,when new capacity coming on line exceeds 20,000 megawatts is a strong one, and so the last two years have been robust for those in the business of building power generation.
Wind and natural gas led the way in 2012, with wind adding more than 10,000 megawatts and gas more than 8,000 megawatts of new generation. The surge in new wind farms as well as a big increase in solar drove the 2012 increase in total new capacity. Indeed, renewable energy capacity accounted for 49% of the total new generation built. Renewable energy is big business, indeed!
Interestingly, the new natural gas capacity constructed in 2012 actually declined in 2012 when compared to the 2011 total. While new gas plant capacity saw a drop, new coal plants had a surprisingly strong showing, with more than 4,000 megawatts added.
Last year also marked the arrival of solar in a big way to the new generation business. The solar boom is underway and not going away. No longer can any discussion be had about the new electrical capacity being built in the US without looking at solar.
The Federal Energy Regulatory Commission data counts about 1,500 megawatts of solar added to the grid in 2012, an impressive number. But the FERC solar number importantly does not include large amounts of distributed or roof top generation constructed last year. Indeed, if the distributed or behind-the-meter solar capacity is added, the total solar generation built in the US is about 3,000 megawatts--a stunning number.
All the substantial amounts of new capacity added to the grid in 2012 is much cleaner and more efficient than either the capacity that retired last year or the average power plant still operating. The new capacity also helps maintain reliability and keep power prices affordable. All in all the 2012 new power plant capacity is good news for our economy and environment.