FPL Sees Renewables Soon Competitive With Coal

By Timothy Gardner
Reuters

Thursday 27 September 2007

New York - Power generation from low-carbon energy sources like wind, solar and nuclear should soon become competitive with electricity generated by coal, the cheapest of fossil fuels, the chief executive of FPL Group Inc. said Wednesday.

FPL said on Wednesday it will spend US $1.5 billion aimed at building solar thermal energy in Florida, California or other states. It is part of a larger US $2.4 billion program aimed at cutting emissions of greenhouse gas carbon dioxide, including a more efficient power network.

The company is already the largest US wind power producer.

The United States has hundreds of years' worth of coal supplies, which helps make power generated from the black rock cheaper than the relatively new power sources of wind and solar. And building a new nuclear power plant now can cost billions more than building a new coal-fired station.

"The thing we've got to make customers understand is that any fossil fuel has a hidden cost that society is paying every day, and that is the cost of carbon," Lew Hay, FPL's chief executive, told Reuters in an interview on the sidelines of the Clinton Global Initiative, a philanthropic summit organized by former U.S President Bill Clinton.

"We need to put a price on carbon, by doing so the illusion that coal-produced energy is low-cost will go away."

US President George Bush has opposed limits on greenhouse gases like carbon dioxide, saying they would hurt the economy. But presidential candidates from both major parties in next year's election support cutting emissions of the gases that would, in effect, make power companies pay to pollute, and US Congress is studying bills that would do the same.

Hay said FPL will build at least 300 megawatts of solar thermal in Florida, which will help the state reach new goals on renewables outlined by Republican Gov. Charlie Crist. Unlike photovoltaic rooftop solar energy that converts sunlight into power, solar thermal generates electricity by converting solar energy to heat to drive a thermal power plant. The other 200 MW will be built in California or other states.

Right now solar thermal is not cheap. "Solar is clearly more expensive than if we built another gas plant," said Hay. Still, power bills should not rise much. "The costs will blend into rates to the extent that it's not going to be very noticeable," he said.

FPL obtains most of its power from other nonrenewable sources including natural gas. The company has a peak power generation of about 22,000 MW and that is growing at about 500 to 600 MW a year.

While the solar commitment is small compared with its overall generation portfolio, Hay said it was significant enough to make changes in the industry. "Only through companies like ours making commitments of this size are we really going to drive the cost of the technology down."

The solar thermal project in Florida, which will start as a 10 MW pilot project at one of its power plants in the state, will eventually grow to become the largest solar plant in the state, the fourth most populous in the country. And he expects to make the company a top US solar producer.

"Just as we started out being relatively small in wind power, as we built up expertise in wind and we were able to work with suppliers to drive down the cost, we hope to do the same thing in solar."

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