U.S. needs all fuel sources to meet electric use

By Eileen O'Grady

NEW YORK (Reuters) - Concern over soaring electricity prices and a deteriorating environment mean no single fuel, whether natural gas, coal or wind, can satisfy the growing U.S. appetite for electricity, industry executives agreed this week at the Reuters Global Energy Summit.

"Looking forward, the U.S. and the world are going to need a diverse mix of environmentally compatible generation solutions," said Randy Zwirn, president of Siemens' (SIEGn.DE: Quote, Profile, Research, Stock Buzz) power generation business in the U.S. "There won't be a silver bullet. We are going to need to utilize all the fuels."

Zwirn said he was surprised at the speed at which public concern about energy security which launched a coal revival were overwhelmed by worry that increasing carbon-dioxide emissions would worsen air quality, contributing to global warming.

"The lines are now blurred," Zwirn said. "That causes a tremendous amount of discussion and delay."

Power-use records were broken across the U.S. last summer, straining generation supply for the first time in years as a heat wave moved from the West Coast to the East Coast.

Higher demand forecast for this summer will shrink the cushion of surplus power needed to avoid blackouts to 16.5 percent from 17.4 percent a year ago, said the North American Electric Reliability Corp., which oversees the power grid.

Gas, which fueled the last power building boom, lost favor as its price soared after hurricane-related production disruptions in 2005, opening the door for coal to reemerge as a low-cost alternative. Utilities rushed to develop new coal units or dusted off long-delayed projects.

Meanwhile, federal incentives breathed new life into the U.S. nuclear power market which had languished for nearly three decades. Nuclear reactors emit no carbon.  Continued...