Coal key to future power supply

Power utility executives are facing up to an unprecedented period of change — much of it technology-driven - over the next five years and beyond, according to a major survey of the global energy market.

Utility leaders identified coal as important for meeting future growth in fuel demand , according to the eighth annual PricewaterhouseCoopers report on the sector. The study, entitled The Big Leap: Utilities Global Survey 2006, represents the views of 116 top executives from leading utilities companies in 43 countries. “Technology will be a key driver and investment in technology, particularly in clean coal generation, will be a key determinant in the extent to which greenhouse gas growth is mitigated,” said report author Manfred Wiegand, global utilities leader at PricewaterhouseCoopers. Many power utility executives cited advances in fossil fuel-fired generation as the answer to both supply and environmental challenges. Carbon sequestration and coal regasification were forecast to have the biggest impact by 28% and 36% of respondents, respectively — just behind 41% for renewables. The report noted that all current coal-fired technologies could be adapted to capture 80-90% of the CO2 that they release. However, certain key coal-burning technologies were reported as only just approaching commercial-scale . For example, Wiegand cited how Vattenfall is constructing a pilot plant in Germany to enable CO2 capture from pulverised coal combustion — burning combustion of coal in an oxygen/recycled flue gas mixture, with the balance of CO2 taken off for storage. The report went on to forecast much greater end-user involvement in both industrial-scale power projects and smaller and more medium-sized distributed power. The combination of technological developments and energy prices suggest a shift towards cleaner coal and nuclear in the energy mix, the survey found. There is, it added, a very real prospect of much greater distributed generation, where end-users install their own on-site generation facilities “In an era of high power prices and supply uncertainties, we can expect the number of end-user led power projects, both large and small, to increase,” commented the report author. These projects, Wiegand said, will be based on technologies ranging from the local CHP plants and microturbines of today through to tomorrow’s fuel cells. He cited the example of Finland, where the pulp & paper manufacturing industry is investing in a Euro3-billion nuclear power plant. Energy efficiency would, meanwhile, become an increasingly important counter to the cost of investing in more power generation and to the gap between supply and demand, the survey found. According to Wiegand, the survey likely understates the importance of nuclear technology, mainly because this would be more relevant over a 10- to 15-year timeframe. Likewise, he said, the potential of hydro and renewables should not be underestimated, particularly as these technologies were identified as first choice by around 25% of respondents. Wiegand also noted a drive to improve operational efficiency in areas such as sourcing, transporting and converting fuel, transporting and distributing electricity and environmental performance. Utilities companies, he said, are seeking to further minimise risk in asset security, serviceability, performance availability, reliability and restoration after breakdown. The analyst, likewise, highlighted the growing importance of smart asset management — through contracts with expert service providers — with monitoring based on real-time performance data and automation systems that eliminate human error.