Over the past twenty years, natural gas power generation has gained a large share of power generation capacity in the U.S. Even before abundant new supply coming from the shale revolution of the past several years, ease of permitting and the low plant construction costs compared to coal and nuclear resulted in 73% of all new electric generating capacity being natural gas-fired plants.
Electric power infrastructure may be the single most important necessity to life as we know it in the U.S. Nearly everything in our economy relies on electricity, so reliability and stability in electric power are critical in planning. Because of the long life of electric power assets, full life-cycle costs (construction costs plus fuel and operating costs) must be considered in planning along with maintaining diversity in fuel sources in the interest of reliability and stability.
Because fuel costs make up a significant portion of electricity rates, it’s important as a factor when building assets with 50 year operating lives. The graphs below provide comparisons in fuel costs over the past few years.
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