The cost to build virtually any type of new power generation — whether coal, nuclear, solar, wind or natural gas — is higher than the current price of power, discouraging new investment in generating assets, a former Texas utility executive is being quoted as saying.

“The signals are that it’s not time to build,” Jonathan Siegler, CFO of Bluescape Resources, was quoted by the Dallas Morning News as saying at a conference organized by the University of Texas’ Energy Management and Innovation Center. Siegler was the top strategist for TXU Corp. before it was bought by private investors and became Energy Future Holdings.

“With gas prices coming down,” the paper quoted him as saying, “asset values for existing generation are trading well below replacement cost.”

He said power prices tend to follow natural gas prices and a recent boom in drilling has caused both markets to drop. Investors aren’t willing to put money into new plants because they don’t know when prices might rise again.

He said electricity on the Texas wholesale power market recently has been trading in a range of $20 to $50 a megawatthour. By comparison, he said solar photovoltaics need an electricity price of around $230/MWh to break even. Natural gas needs a price of around $57/MWh to break even, or $67/MWh including the cost to capture and store carbon dioxide.

Read more news and features on the business of power generation.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...