Timing Changes, But Coal-fired Power Plant Boom Will Continue
In April, the McIlvaine Company predicted the world would be operating 1.7 million MW of coal-fired boilers in 2011. The new forecast in the continually updated, Coal-fired Boilers: World Analysis and Forecast is for 1.6 million MW of installed capacity. However, the forecast for 2020 of 2.1 million MW remains unchanged. The prediction that $2.5 trillion will be invested in new coal-fired plants in the next 35 years also remains unchanged.
A new forecast by the International Energy Agency is consistent with the McIlvaine predictions. The report acknowledges the “spectacular growth of the past few years.” In its forecasts, the report says that “coal sees the biggest increase in demand in absolute terms, jumping by 73 percent between 2005 and 2030 and pushing its share of total energy demand up from 25 percent to 28 percent. Most of the increase in coal use arises in China and India.”
Net capacity increases will not be substantial in Europe and the U.S., but the investment in new plants to replace existing ones will be very large. This replacement program is the most economical way to reduce greenhouse gas emissions.
East Asia will see the biggest growth, according to the McIlvaine forecasts which are made for 80 countries and sub-regions. (India is in West Asia.)
East Asia Capacity Projections (1000 MW)
Classification 2008 2012 2016 2020
Existing 612 738 876 1000
New 31 35 39 39
Retirements 10 2 2 2
The large number of retirements will occur primarily in China where small, old coal-fired boilers are being replaced by new ones. Contrary to popular perception, the Chinese are installing highly efficient super critical boilers with the latest pollution control equipment.
The present price of oil and the promise of even higher prices make coal highly attractive. Natural gas typically follows oil prices at a ratio of between 1-6 and 1-8. Presently gas is at the very low 1-13 ratio. Even at the present $7/MMBtu, coal-fired power is much lower in cost than gas.
Great strides have been made in reducing emissions from modern coal plants. For example, scrubbers are now capable of removing 99 percent of the sulfur oxides (SO2). Older scrubbers average only 90 percent removal. More than half the old plants have no scrubbers. This means we could build 100 new plants and by just shutting down one unscrubbed old plant, SO2 emissions would be unchanged or even lower. If highly efficient new plants are built and the plant being shut down is inefficient, there would actually be 30 percent less SO2 emissions from the 100 new plants than from the one old plant.
Efficient coal plants with co-firing of biomass and the most efficient pollution control equipment are capable of producing electricity with comparable emissions to an LNG fired gas turbine. Since most new gas turbines in the U.S will be supplied with imported LNG, this is a fair comparison. CO2 and pollutants created in the liquefaction, transport, and regasification of foreign gas are substantially greater than when domestic gas is used.
There are more uncertainties in the near term U.S. market than in the European or Asian market. In Europe the construction of new coal plants is seen as the most efficient way to achieve CO2 reductions. In Asia the cost differential will remain so great between coal and alternatives that no greenhouse gas initiatives will change the course.
Each project in the U.S is followed closely in the McIlvaine system. Adjustments to yearly forecasts are made as conditions warrant. For more information on:
Coal-fired Boilers: World Analysis and Forecast, click on http://www.mcilvainecompany.com/brochures/energy.html#n043 .
Bob McIlvaine
847-784-0012