March 9, 2004 — A major shift in the choice of fuels for the power generators of the world could result in investment of over one trillion dollars in coal-fired generation plants between 2004 and 2020.
This includes both the investment in new plants and the upgrading of existing plants. These forecasted expenditures have been documented by the McIlvaine Company in several reports.
In World Power Generation Projects McIlvaine has identified three hundred projects for new coal-fired plants. The largest of these plants is 3600 MW and will require an investment of $4.3 billion. Even the smallest projects will require investments of more than $300 million each. The average plant size is 700 MW and the required investment is $l billion. The largest number of planned plants is in China followed by India and the U.S.
In the U.S. there has been a complete about face in the last four years. In 2000 it was assumed that nearly all the needed capacity increases (14,000 MW per year) would be through gas turbines. It is now clear that natural gas will not play an important role as a fuel for base loaded power generation.
The cost of gas has risen to or above the price of the electricity which would be sold by the plant. A number of recently built gas-fired plants are not operating for this reason. There is no expectation of reduction in gas prices. As a result, there have been dozens of announcements of new coal-fired projects just within the last few months.
Information Technology for Electricity Generation, published by the McIlvaine Company, predicts that upgrading of existing coal-fired plants in the U.S. will require an investment of $1.3 billion per year just for information technology (automation systems, instrumentation, smart sensors, field devices, and software).
In two other reports (World FGD Systems and World NOx Control Market), McIlvaine predicts that annual expenditures to desulfurize and denitrify flue gases from coal-fired plants will require $9 billion per year or $144 billion over the 16 year period. Other McIlvaine reports quantify the substantial anticipated expenditures for particulate control equipment and emission monitoring.
Skepticism about the future of coal has been based on the assumption that coal plants will be dirty. The fact is that coal emissions can be reduced to very low levels. The level of reduction is a function of cost. McIlvaine predicts that the ultimate cleanliness of coal-fired power plants will be decided by rate payers.
The average monthly electricity bill is $73 per household in the U.S. This level can be maintained even with the Bush administration program to reduce SO2, mercury and NOx by 70 percent. If consumers are willing to pay $85-$90 per month, then these emissions can be reduced by 85-90 percent. 95 percent removal of the NOx and SOx and 90 percent mercury removal can likely be achieved for $100 to $110/month.
This is without any major technical breakthroughs. DOE is investing large sums to achieve these technical breakthroughs and achieve lower emissions.
The choice of coal, gas, or renewables is also going to be decided by the rate payer. Any alternative to coal is going to more than double monthly household bills. Modest reductions can be achieved in greenhouse gas reduction as plants are upgraded and efficiency is improved. However, the co-combustion of biomass and coal, along with increased efficiency, could result in significant greenhouse reduction.
For more information on World Power Generation Projects, Information Technology for Electricity Generation, World FGD Markets, World NOx Control Markets, and other related reports click on www.mcilvainecompany.com or contact:
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