Calpine Analyst Day Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

Shale gas is here to stay, and we’re blessed in America to have it. And by all accounts, there’s at least 100 years, and in one account, we saw a number that exceeded 400 years of supply.

In addition, the U.S. is facing an aging, technically-obsolete and environmentally-challenged power generation industry. The investment requirements are staggering, and by most accounts, will require up to 10 Calpine’s worth of new power plants to be built over the next decade or 2.

the utilization of the current natural gas fleet in America equals less than a 30% capacity factor in most years during the last decade. There’s an abundant excess available of energy production capability from the existing natural gas fleet.

even with natural gas generation gaining market share, the U.S. power generation sector is projected to maintain a diversified and balanced fuel source — production profile for the next 30 years.

we’re very bullish in energy prices in the middle of the decade when those coal plants are retired or other types of plants, given rules in New Jersey, and what will be setting price is increasingly either well units or even demand response.

So today, we’re 27,300 megawatts with almost 1,500 under construction.

Here we are, it’s 2013, 4 years after a low point of the recession. While we have seen load pick back up, we haven’t seen the kind of growth rates that we saw earlier in the last decade.

Our point overall is not that efficiency gains won’t bear fruit. We just question the sense that the impact is necessarily accelerating relative to a long history of already becoming more efficient. We still think economic growth will continue to drive load, especially regional economic growth.

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