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Engineering News-Record and Architectural
Record Each Win 2002 Jesse H. Neal Awards
McGraw-Hill
Construction Information Group Publications Recognized for Editorial
Excellence in Business Journalism
Record Boom in Powerplant Construction Reaches
Plateau
Market Forces, Fuel Constraints, Transmission
Capacity And Limited Financial Resources Cast New Doubts On Long-Term
Development Plans
Engineering News-Record (ENR) and Power Magazines
Collaborate on Special Report
NEW YORK, N.Y., December
5, 2001 - The unprecedented and unexpected boom in new powerplant
construction that began in 1998 is reaching a plateau, according
to a special report by the McGraw-Hill Construction Information
Group's Engineering News Record (ENR) magazine and Platts' Power
magazine. Construction Information Group (CIG) and Platts are both
units of The McGraw-Hill Companies (NYSE: MHP).
"Between 1999 and 2001, about 83,000 megawatts (MW) of new capacity
came on-line, adding 10% to the nation's generation base," said
Jan Tuchman, editor-in-chief, Engineering News-Record. "Another
300,000 MW to 400,000 MW of new capacity are still in the pipeline."
ENR and Power report that capacity additions will continue around
45,000 MW in 2002, but then will begin to ebb on an annual basis
nationally. However, new plant construction in capacity short regions
such as the West and Northeast should continue unabated.
The report also speaks of a shakeout in ownership of new merchant
capacity, with a small number of financially strong players consolidating
their positions as weaker groups fade. An industry database maintained
by RDI - like Power magazine - lists 473,000 MW of new capacity
in construction or development, but notes that about 60,000 MW of
this have been put on hold or canceled.
ent.
"Constraints on fuel also factor in the slowing of powerplant construction,"
said Robert Swanekamp, editor-in-chief, Power. "Approximately 90%
of proposed plants would use gas. The gas industry is expected to
increase supplies 1% to 3% annually in the coming years, not enough
to fuel the 400,000 MW of new merchant capacity in the timeframe
originally planned. Expect capacity additions of 46,000 MW in 2001
and between 36,000 MW and 53,000 MW in 2002 based on plants now
in construction and in advanced development. We expect the gas constraints
will limit further additions to about 20,000 MW annually through
2005."
A third major factor likely to restrict new powerplant construction
is the nation's challenged electricity transmission system, which
was not built to handle large-scale merchant traffic between regions.
Several states have been forced to slow permitting because local
grids cannot handle additional load. It is estimated that the power
industry since 1999 has borrowed $50 billion to finance the new
wave of plant construction. The economic downturn and less optimistic
forward energy price estimates have created a new climate in which
credit ratings for the competitive energy industry are expected
to drop, possibly putting a crimp in borrowing power for marginal
projects.
However, even with the decline in the U.S. generation market, capacity
is being installed at a far more robust rate today than at any time
during the 1980s and 1990s. The U.S. will be the main attraction
in the global marketplace for new plant construction for the foreseeable
future.
The 84-page Powerplant Construction Report is co-produced by the
staffs of ENR and Power. The issue takes detailed looks at: the
shortage of qualified power contractors; risk-sharing contract strategies;
energy resources such as gas, coal, hydroelectric, renewable and
nuclear; the top 10 power owners; and a complete listing of the
U.S. plants over 50 MW in startup, under construction or planned.
The Market Overview of the Powerplant Construction report is accessible
on enr.construction.com
About McGraw-Hill Construction Information
Group
The Construction Information Group is the world's premier information
provider to the commercial construction industry. With its leading
brands F.W. Dodge, Sweet's, Engineering News-Record, Architectural
Record, and Design-Build, and the industry's most popular Internet
portal, construction.com, CIG provides the latest industry intelligence
and interactive solutions that enable construction professionals
to do their job faster, better and cheaper. CIG employs more than
1,700 professionals around the world.
About Platts
Platts is the world's largest and most authoritative provider of
energy information and marketing services, with 17 offices worldwide.
Products range from real-time and Internet-based news and price
assessment services, to newsletters, market reports, databases,
magazines, conferences, research services, geospatial tools and
consulting. Platts offerings cover the oil, petrochemical, natural
gas, electricity, nuclear power, coal, bandwidth and metals markets.
Every day more than $10 billion of trading activity and term contract
sales are based on Platts' price assessments. Additional information
is available at www.platts.com
and www.plattsmetals.com.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a global information
services provider meeting worldwide needs in financial services,
education and business-to-business information through leading brands
such as Standard & Poor's, BusinessWeek and McGraw-Hill Education.
The Corporation has more than 300 offices in 33 countries. Sales
in 2000 were $4.3 billion. Additional information is available at
http://www.mcgraw-hill.com.
construction.com Contact:
John Puccio
RF Binder Partners
(212) 593-6389
john.puccio@rfbinder.com
© 2001 The McGraw-Hill Companies - All Rights
Reserved
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