Coal key to future power supply issues

Power utility executives are facing up to a technology-driven period of change over the next five years and beyond, according to a survey of the global sector.

Utility leaders identified coal as a key fuel for meeting future demand growth, said the ProcewaterhouseCoopers report on the sector. The study, entitled The Big Leap: Utilities Global Survey 2006, represents the views of 116 executives from 43 utilities companies.

"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 mitigiated," said report author Manfred Wiegand, global utilities leader at PricewaterhouseCoopers.

Many power utility executives named 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, the report 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.

"In an era of high power prices and supply chain uncertaintities, we can expect the number of end-user power projects, both large and small, to increase," commented Wiegand.

Wiegand said that these projects will be based on technologies ranging from the local CHP plants and microturbines of today to tomorrow's fuel cells. He cited the examples of Finland, where the pulp and paper industry is investing in a Euro-3billio nuclear power plant.

Energy efficiency would, meanwhile, become an increasingly important counter to the cost of investing in more power generation to the gap between supply and demand, the survey found.

According to Wiegand, the survey understates the importance of nuclear technology, mainly because this would be more relevant over the longer 10 "“ 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.

The combination of technological developments and energy prices raise the prospect of 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.