Technological Determinants for Asian Power Generation Fuel Scenario Outlook

Miro R. Susta

IMTE AG Power Consulting Engineers

Switzerland

Kurien George

Zelan Holdings (M) Sdn Bhd

Malaysia

www.powergolflink.com

ABSTRACT

World net electricity consumption is expected nearly double over the next two decades, according to the International Energy Outlook 2004 (IEO2004) reference case forecast.

Worldwide total demand for electricity is projected to increase on average by 2.3% per year, from 13’290 TWh[1] in 2001 to 23’072 TWh in 2025. According to the same forecast, the electricity consumption in developing Asia[2] is projected to increase on average by 3.7% per year, from 3’000 TWh in 2004 to 6’275 TWh in 2025.

In Asia, the power generation industry is a diverse and complex patchwork of utilities, governmental agencies, and independent and captive power producers. Regional differences in industry composition and structure as well as fuel resources are in large part attributable to patterns in population, climate, economic activities and history of electrification in each region.

Regional differences in generation reserve margin, load growth, fuel mix and generation technology are very important factors in encouraging or discouraging the participation of power generators in competitive regional markets.

Many dynamic factors have been also seen in the Research & Development of new power generation technology and its commercial realization. Gas turbine (GT) machinery has achieved scientific and engineering technical status which otherwise would hardly have been possible under less favorable natural gas (NG) price circumstances.

Miscellaneous impulses have been seen in the independent power market arena. New legislation frameworks, financing tools, deregulation, privatization and liberalization trends have become typical in Asian region.

At the same time, the strong effect of fuel commodity prices upon engineering progress generates its counter-effect. A feed-back of power generating technology towards the fuel commodity structure does exist. All these factors have favored NG as first-priority fuel option wherever this was possible. GT based technologies have dominated in the new capacity demand saturation and they will also dominate further on. However, this does not mean that NG will retain the first choice for ever; its market saturation may appear by about 2025.

Huge reserves of coal together with appropriate coal-based technologies like Ultra-Supercritical Steam Cycles, Integrated Gasification Combined Cycle or Pressurized Fluidized Bed Combustion will cause subsequent decline from NG towards coal and other fossil fuel commodities.