The cost of gas is pricing gas power plants out of the base load market, leading to a surge of new investment in coal firing, according to a report by the McIlvaine Company.
A major shift in the choice of fuels for the power generators of the world will 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.
In world power generation projects McIlvaine has identified three hundred projects for new coal-fired plants. The largest of these is 3600 MW and will require an investment of $4.3 billion but 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 US. In the US 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 load 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, and 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 desulphurise 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.
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. If consumers are willing to pay $85-$90 per month, then these emissions can be reduced by 85-90 %, and. 95 % can likely be achieved for $100 to $110/month.
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