World Cogeneration named Gerald R. Forsythe,
Chairman and CEO of Indeck Energy Services, Inc. as its Executive of the
Year in 1993. Indeck develops, owns and operates cogeneration and independently
owned power plants, concentrating on US and Canadian markets. Indeck currently
has ten operating plants for 550 MWS, two plants under construction, and
five plants in development.
Indeck has a corporate staff of 70 engineers,
technicians, financial and fuel supply experts plus another 80 personnel
located at the operating facilities. Inc. magazine ranked Indeck seventh
in its 1992 annual fist of America's fastest growing privately held companies.
WC: Congratulations to you and the Indeck team on your many accomplishments
in the cogeneration industry.
GRF: I am very pleased to accept this prestigious award on behalf of
the employees of Indeck who are responsible for our success. We appreciate
your recognition.
WC. Where do you see industry changes occurring the next five to ten
years?
GRF: Over this period cogeneration plants will supply the majority of
new North American capacity rather than central electric utilities. In
the United States, this increasing reliance on non-utility sources represents
a fundamental departure from the traditional method of meeting new electric
power requirements. It is a change of the first magnitude.
I can illustrate this point as follows. Over
the past five years, the percentage of all new electric generating capacity
coming on-line from non-utility sources has increased from 34 percent
in 1987 to 50 percent in 1991.
US cogen market penetration is already occurring
outside the already strong base in the northeast and California. Many
public utilities in the Midwest and elsewhere have traditionally opposed
cogen projects vigorously. Some public utilities have gone so far as to
cut normal rates in half for industrial customers planning large expansions
and considering cogen for new plant power needs.
WC: Will these "blocking" actions diminish?
GRF: Yes. This reactive behavior is changing more and more as US utilities
face the prospect of growing power demands and shrinking ability to meet
those demands through their own construction. For example, one utility,
that in the past was wholly antagonistic to our service, now has asked
Indeck Energy to bid on a peaking power installation.
WC: In the multi-utility grids, dispatching occurs across all plants
on the basis of next best unit, best measured in terms of marginal cost.
Do you see a time when independent cogen plants will become true nodes
in these dispatching systems?
GRF: Over the long-term, this is a real possibility. With an increasing
number of independent power projects entering the grids, it's a matter
of time before the independent facilities become base load and some of
the older, less efficient utility plants become the variable in a dispatching
system.
WC: What keeps utilities out of this business?
GRF: I think initially they discounted the third party developer and
the opportunity that was presented. The utility philosophy differs entirely
from the third party developers just from the way they approach design
and construction to the way they buy fuel. There has not been an incentive
for them to make it better. One of our 50 MW plants that we built for
$40 million would cost the utility $60 to $70 million. And from the operating
standpoint, we operate each of our facilities with 17 personnel, while
they would have three times that number. The efficiency of the third party
developer is the difference and that's where we make our money.
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