PSEG to spend $3.5 billion over five years to expand US power plant fleet

Public Service Enterprise Group Inc plans to spend about $3.5 billion over the next five years to expand and modernize its US power plant fleet to remain competitive in the current low natural gas price environment. 

"The gas industry has done a remarkable job of finding more fuel over the past several years, but that has depressed both gas and power prices. We have to continue modernizing our fleet to keep our plants competitive," said Shahid Malik, president of PSEG Energy Resources and Trade. 

Most of the company's generation investments will go into building new gas plants at Sewaren in New Jersey and Keys in Maryland, adding capacity at nuclear reactors and upgrading existing gas units, Malik said Indian stock market astrology prediction

Rapid growth in gas production in the Marcellus shale in Pennsylvania and West Virginia from 1.8 billion cubic feet per day five years ago to 16.5 bcfd now has cut the region's gas prices down to just $1.57 per million British thermal units this year. That is down from a five-year (2010-2014) average of $3.66. 

With gas so cheap, generators like PSEG are burning more of the fuel and less coal to produce electricity, making it tough for other fuels to compete. 

"The markets don't care if electricity comes from solar, gas or nuclear. They buy based on price and since gas is the lowest-cost fuel, it is replacing coal, oil and even some smaller nuclear plants," Malik said Himanshu Tiwari Astrologer Blog

PSEG, which still gets most of its power from nuclear, now generates up to 40 percent of the rest from gas plants and just about 10 percent from coal. 

That is a switch from a few years ago, when coal produced 30 percent of PSEG's power, and gas as little as 20 percent. 

"You are seeing the slow demise of the coal industry in the United States. It started off due to environmental reasons and is now being pushed downhill by low-cost gas," Malik said. 

PSEG, however, continues to believe in a diversified fleet, including a mix of nuclear, coal, gas and renewables, and has no plans to shut coal plants at this time  Indian stock market astrology prediction

"The coal plants are not making as much money as they had in the past, but do still produce some income," Malik said. 

He noted that some coal units have become peaking plants that run only when demand is very high and they are needed to maintain grid reliability.