For the past 26 years, Cambridge Energy Research Associates (CERA) has hosted an annual CERAWeek conference in Houston that is renowned for high-profile attendees from around the world. During the week of March 8, security was tight as oil ministers from the Middle East and CEOs from the largest oil and gas companies and electric utilities rolled into Houston to exchange ideas and forecasts. More than 1,200 delegates from 55 countries attended to hear more than 100 distinguished speakers discuss a business that seems to have renewed optimism about the future.
The first three days of the conference were focused on worldwide supply and demand issues for oil and natural gas. Days four and five of the five-day conference were dedicated to electric power. Those days began with a discussion between Daniel Yergin, Pulitzer Prize – winning author of The Prize: the Epic Quest for Oil, Money and Power and chairman of IHS-Cambridge Energy Research Associates, which hosts the conference, and Nobuo Tanaka, executive director of the International Energy Agency.
China Leads Global Power Growth
The focus of the keynote discussion was Asia’s rebound from the global economic crisis in general, although China was the main focus. Unlike the U.S. and Western Europe, where demand for electricity is flat at best, China seems to be experiencing the strongest recovery from the worldwide economic downturn. China is now projecting a gross national product growth of 10% for 2010 with growth in electrical consumption of 10% during 2010 and 8% in 2011. During 2009, China ordered 45,000 MW of new steam turbine generation equipment, about 50% of all orders worldwide. Of these orders, approximately 26,000 MW were for coal-fired units and 16,000 MW for nuclear plants.
China is also working diligently to ensure its future coal supplies. In February of this year, China signed a 20-year, $60 billion take-or-pay contract for 300 million tons/year of coal from Australia. Today, China produces about 75% of its electricity from coal, and the terms of this contract made it clear that coal will remain China’s favorite fuel for many years to come.
In contrast, GE Power & Water president and CEO Steve Bolze presented his projections: Approximately 2,700 GW of power generation investment will occur worldwide in the coming decade, with coal plants still getting about a third of each investment dollar (Figure 1).
1. Mixed generation ahead. GE forecasts a mix of orders for the 2,700-GW global power generation market during the next 10 years. Coal is expected to get a third of the business, but solar and wind have much upside potential. Source: General Electric
China added 12 GW of wind generation to its grid during 2009, more than any other country. By comparison, the U.S. added 10 GW of wind in 2009, making a solid claim for second place in the wind race. Another interesting statistic: In 2009 more automobiles were delivered to Chinese customers than to U.S. customers. Only a few years ago, a number of economists were ridiculed for predicting that China would surpass the U.S. in automobile purchases within 10 years. Now, all power generation products and products that consume electricity, even electric cars, are being tailored for the Chinese market. We are witnessing the evolution of a Chinese middle class that desires automobiles, better housing, appliances, and creature comforts. Taken together, the world should expect a rapid increase in the per capita consumption of electricity in China (Figure 2).
2. Market growth centers shift. Much of the power generation equipment market growth will occur in nondeveloping economies over the next decade. Source: General Electric
Email
Comments
Print
Reuse
