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Most of the power generated in the world today comes from thermal plants. These are very easy to understand. There is a heat source (Coal, Oil, Natural Gas, Nuclear, Concentrated Solar) that heats up water in a boiler to produce steam. The steam runs a turbine which generates electricity, then the steam is cooled (condensed) to turn it back to water and returned to the boiler. This is called a Rankine cycle, just think of putting a pinwheel in front of a teapot.
Utility Power Planners have to balance many different considerations when planning for future power supplies. Conservation is by far the most cost effective investment to to keep from having to purchase new generating capacity, (creating “Negawatts”). According to the New York State Energy Research and Development Agency, an investment of $1 million in energy efficiency measures (with a ten-year life span) can translate to an energy cost savings of approximately $3 million, the creation of 58 job-years, and emissions avoidance of approximately 100 tons of sulfur dioxide, 70 tons of nitrogen oxides, and 45,000 tons of carbon dioxide.
But eventually utilities have to think about building new generating capacity. Most power plants in the Midwest and East, use coal as a fuel because it is the cheapest, but it is very dirty. Natural Gas costs about twice as much but has half the pollutants. Oil costs about twice what natural gas costs, and the pollution is about midway between coal and natural gas. Proponents of Nuclear power claim that nuclear fuel is cheaper * and has no CO2 emissions, however the uranium processing is very energy intensive and the power for processing it does create CO2. Another thing to consider with nuclear is that once it starts operating, it generates enormous quantities of radioactive nuclear waste and there is still no safe place to isolate it for at least a quarter of a million years. Now the spent fuel is stored in ponds by the plants where it is vulnerable to terrorist attack. After the government fuel subsidies are considered, Nuclear fuel costs are about equivalent to natural gas. Solar power is of course free and has no pollutants.
The Capital costs are the costs of building a plant. Based on the U.S. Energy Information Administration (EIA), http://www.jcmiras.net/surge/p130.htm
Solar plants are the most expensive of the thermal plants costing $3149/kW, Advanced Nuclear costs $2081/kW, Coal fired plants with a scrubber costs $1290/kW, Advanced Gas/Oil combined cycle costs $594/Kw and Advanced open cycle gas turbines are the cheapest to build at $398/kW and they are also the quickest to construct.
Our power planners have to consider the money they have in their budget for new plants, siting of the plant, the size of the plant needed, the fuel types available, the pollution generated, and the costs of the fuel. Renewable energy is attractive because there is little or no pollution, the “fuel” is free, and there are tax credits available. The down side of solar and wind power is, the power generated is intermittent. It only works when the sun is shining or the wind is blowing.
Most utilities have a limited budget so building a very large expensive Nuclear Plant, would be like putting all of your eggs in one basket. Siting is also a problem for large plants. Nuclear plants occasionally release small amounts of radioactivity into the air and water. No one wants to be near a Nuclear plant or a coal plant, and there is feirce public opposition. For this reason most utilities opt for the smaller, simpler, cleaner, and inexpensive, natural gas plants.
The efficiencies of most steam plants is about 35% -40% The efficiency of a combined cycle gas turbine can be double that, because after the combustion gases run through the gas turbine, they are then run through a boiler generating steam, which goes through a steam generator. We get twice the power for the same amount of fuel without any additional pollution. The efficiency of the plant can be further increased by cogeneration. The steam after it comes through the steam turbine can be sold to buildings for heat, or to factories to help in the manufacturing processes.
These improvements make the use of natural gas one of the most cost effective options available. Now there are a couple of technological developments that make this option even more attractive.
A hybrid solar thermal, and natural gas plant, provides the free fuel of the solar plant with the high capacity factor of the gas turbine, meaning that it can generate power all of the time. During the days when the sun is shining, the gas turbine can be shut down and a mirror array would concentrate the sun to boil water to run the steam turbine. At night, or if it gets overcast, the gas turbine can generate power. See: http://climateprogress.org/2009/08/18/hybrid-csp-concentrated-solar-natural-gas-power-plants-provide-power/
The maximum power need is during the daylight hours so if this plant was used and the gas turbine only turned on when needed 70% of the power could come from the sun. The cost of the combined plant would be considerably lower than the cost of two separate plants (a solar plant with a natural gas plant for peak power), because they share the same steam turbine in the same site.
The other new development that will bring power costs down, are Sterling cycle power plants. http://en.wikipedia.org/wiki/Stirling_engine A sterling engine is a closed cycle external heat source engine. There are now efficient cost effective sterling solar power plants that are twice as efficient as other solar power systems. See the introductory video.
The really exciting thing about sterling power, is that it can be used for low temperature heat sources that can be found free in many places. It can for example, take the place of cooling towers (which are now used in almost all thermal plants). Instead of just pumping that excess heat into the atmosphere or into a river or stream, that energy can now be used to generate electricity. Using the Sterling engine to recover wasted heat from existing power plants, you can nearly double the power output, without using any additional fuel or creating any additional pollutants!
See:See: http://www.sterlingsolar.com/
Now imagine our super efficient, combined cycle, natural gas solar hybrid, power plant, I talked about above. If we use the Sterling engine to condense the output from the steam turbine we could generate even more energy. In this plant you would have four separate thermodynamic cycles, (five with cogeneration!) so you could produce up to four times the amount of power from the same amount of natural gas with no additional pollutants!
Because the Sterling Engine runs on temperature differentials it is also ideal for geothermal uses, and for Ocean Thermal Energy Conversion (OTEC), there is sufficient temperature differential between the cool water from the bottom of the ocean and the warmer water on the surface to run the engine. OTEC would pump the bottom water up for the cooling cycle and use the surface for the warm side, to power the Sterling Engine. Because the water at the bottom of the ocean is full of nutrients, and surface water in the center of the ocean is generally lacking nutrients, it might be paired with fish and/or algae farms to further bring costs down.