NEWS RELEASE                                   FEBRUARY 2007

$350 Billion For New Coal-fired Generators In The Next 6 Years

More than $350 billion will be spent for new coal-fired electricity generation in the next 6 years.  China will be the biggest purchaser and the U.S. will be a distant second.  Nearly 70 percent of the additional units will be built in Asia, but they will represent only 50 percent of the expenditures due to the lower cost of power plant construction in India, China, and other developing countries in the region.

This forecast in the World Market for Your Products, an online report published by the McIlvaine Company, is in turn supported by other forecasts and studies by McIlvaine on alternative power sources.  McIlvaine publishes World Power Generation Projects which provides data on all current projects.  Between China and the U.S. there are more than 400 coal-fired projects in the planning stage.  If each of these is completed, they will account for most of the projected expenditures.

The potential of massive cancellations of these projects is lessened by several factors. One is the shortage of gas and oil and the resultant price increases.  McIlvaine also tracks LNG projects.  They will not develop fast enough or in the needed quantities to close a big gap in generation cost.  Despite citizen concerns over global warming, the average rate payer is not going to be willing to pay an additional $1000/yr for a benefit which will be hard to quantify.

Nuclear power is potentially a major source for new electricity generation, but presently retirements of existing plants will make it difficult for the industry to contribute much to a net increase in generation. 

Renewable energy will only play a minor role in the short term.  Wind power is proving viable on a limited basis.  Solar power holds promise as advances in technology reduce the cost.  But at present, the technology is not competitive for large scale electricity generation.

Biomass will play a minor role due to the limited availability.  Its best use will be as a supplemental fuel in coal-fired boilers.  The combination of fuels will both reduce costs and environmental emissions. 

The world is on the course to replace much of the dwindling oil and gas with renewable fuels such as ethanol.  The energy needs for these plants can be served with the waste heat from coal-fired plants. There are several successful examples of this co-generation scheme.