Peabody, the world's largest private coal producer, projects 2013 US coal demand to rebound 45 to 55 million tonnes over 2012 levels amid rising coal fleet utilization. Higher natural gas prices are cited as a reason for the uptick in coal with the US Energy Information Administration (EIA) estimating that US coal-fired electricity generation will rise by 6.1% this year while natural gas-fired generation will fall by 9.8%.
Stepping up efforts on energy efficiency may limit the need for new-build power generating capacity. "Simply put, the cleanest megawatt hour will be the one we never need (...). It is also often the cheapest, and the easiest to achieve in difficult conditions," says IEA executive director, Maria van der Hoeven.
British Gas will hit domestic customers in the UK with a 9.2% hike in electricity prices ahead of the winter season to compensate for its rising costs of gas imports, loss-making operations of gas power plants in the UK, and reduced profitability of gas storage due to narrowing seasonal gas price spreads.
LNG buyers in power-hungry Asian countries seek more flexible terms and call for a Henry Hub price element in long-term import contracts in a bid to bring down costs of gas purchase. Almost 70% of global LNG supply is consumed in Asian countries but "it seems at times that we are paying more than we need to," Kogas CEO Jang Seok-hyo said at the World Energy Congress in Daegu, Korea.
Replacing coal-fired power with gas-fueled plants on a wide scale by 2030 would reduce carbon emissions in the power sector by five percent compared to today's levels, according to a Siemens study compiled under the lead of Professor Horst Wildemann at the Technical University of Munich. "Of course, it would be illusionary to replace all coal-fired power plants with gas-fueled units – but the potentials identified are really impressive," he admitted.
Uncompetitive gas markets in Europe could lead to the closure of up to 60% of Europe's gas-fired power plants by 2016, Cap Gemini has warned, causing regional price increases and making power shortages unavoidable. The predictions come as part of the consultancy's annual European Monitoring Centre for Energy Markets report and outline an uncertain future for the industry.
The European Commission has launched a €5.85 billion funding push to diversify gas and power infrastructure across the continent, as part of its long-term infrastructure vision. Financing will go to 248 projects, with approximately 140 aimed at "diversification of gas supplies...to significantly increase the gas system's flexibility and resilience in the short and medium term" according to a statement from the commission.
A risk analysis of gas-fired power generation versus nuclear suggests that the current low costs for gas power operators may disguise long-term risks, according to consultancy EnergyPath. A probabilistic comparison of the investment risks shows that "gas has shown great volatility in the past and this volatility must be recognized as part of investment strategies," Thomas Retson, analyst at EnergyPath, told Gas to Power Journal.
Investment in global energy infrastructure in Asia-Pacific is forecast to grow to $11.7 trillion by 2035, with the bulk spent on power and heat generation in China and India. Though there is no lack of local financing, but investors shy away from regulatory risk as power and gas prices are still regulated in many Asian markets, warns Seethapathy Chander, deputy director general of ADB
In the face of a rise in Korea's electricity consumption by a quarter by 2030, the power industry is forecast to reduce the share of coal from currently 40 percent to around 16 percent by 2030 in a bid to diversify energy sources and reduce carbon emission, a study carried out by Siemens shows.
If Korea were to dispense completely with coal-fired power plants in favour of modern gas-fuelled units by 2030, the sector's carbon emissions would drop by a further third, and the country could save 9 million tons of imported oil equivalent per year, the study finds.