NEWS RELEASE                                   FEBRUARY 2012

China to Outspend U.S. 6 to 1 on New Fossil/Nuclear Generation, But Will Add 45 Times as Much Generating Capacity by 2020

China is pushing the U.S. off the world’s center stage. This transition is clear when one analyzes the power generation plans. In the 2010-2020 timeframe, China will outspend the U.S. on new generators by $550 billion.  But they will gain 496 GW of generating capacity compared to only 14 GW in the U.S.  These are the new conclusions in the McIlvaine Fossil & Nuclear Power Generation: World Analysis & Forecast.

Industrial production and energy consumption are directly proportional. California will continue to limit construction of new generators within the state, but will buy enough goods from China to fund generation increases in that country.

China will build more coal generation facilities in the decade than existed in the U.S. at its peak. The U.S. will invest $30 billion in environmental controls and life extension of its existing coal-fired power plants, but will be handicapped by the inefficiency of these power plants. They will burn 20 percent to 30 percent more coal per kWh than will the ultrasupercritical plants operating in China and Europe. The price of coal is slated to rise substantially in the coming decade.  Since coal is the largest component of generation cost, this inefficiency will be increasingly costly.

The U.S. has shale gas which will replace most natural gas as fuel for gas turbines in the coming years. Nevertheless, there will be only modest investment in new combined cycle gas turbine plants through 2020.  The long term EIA outlook is for gas to grow from 24 percent of the fuel used for power generation in 2010 in the U.S. to 27 percent in 2020.  In the meantime, coal will fall from 45 percent to 39 percent.

China will spend $140 billion on nuclear construction in the decade while the U.S. will spend $50 billion. The estimated cost of new nuclear plants in China is less than half that of plants in the U.S.

It is clear that more than 100,000 MW of old U.S. coal-fired power plants will continue to operate for the next 30 years or more.  It is also clear that the U.S. would be much better off if this capacity were the latest ultrasupercriticals rather than the old designs. Even with a 25 year life the new power plant investment would be more than justified. Since there are ways to re-power existing sites with the new ultrasupercritcals and since these units would generate environmental benefits otherwise unattainable, there is every reason for these replacements to take place.

For more information on Fossil & Nuclear Power Generation: World Analysis & Forecast, click on:  http://www.mcilvainecompany.com/brochures/energy.html#n043