Composing energy futures to 2050, the World Energy Council (WEC) is contrasting a market-liberal 'Jazz' and government-interventionist 'Symphony' scenario to portray pertinent alternatives for the future fuel and technology mix of power generation, capacity expansion plans and emission levels. The 'large turning radius' of the global energy system will likely delay substantial changes to the fuel mix in power generation and renewable deployment until 2050 (see graph).
'Securing Tomorrow's Energy Today' is the theme of the 22nd World Energy Congress whose portals will swing open in Daegu, Korea, on Monday to host delegations from some 140 countries. The resurgence of coal demand in fast-growing Asian economics, the impact of US gas exports on global LNG trade flows and gas pricing, post-Fukushima nuclear challenges and the transitioning towards clean energies are some of the key topics of 272 confirmed speakers.
Demand for natural gas in Mexico, both from power producers and industries, outpaces supply and spurs pipeline gas and LNG imports predominantely from the US. The government is advancing structural reforms of the energy sector, aimed at increasing foreign investment in the upstream and downstream gas sectors to reduce the dominance of state-controlled Pemex.
"There is a long way to go [for the reforms] and we will likely see some of the more ambitious plans watered down but the outlook is positive for natural gas in Mexico," Patricia Garip, South America analyst at Argus told Gas to Power Journal.
Dismissing SSE's claim that its 8.2% hike in gas and power prices comes in response to "government-imposed levies collected through energy bills," the UK energy secretary Ed Davey stressed wholesale price rises had "contributed more than policy costs to this price increase" adding that "half of an average energy bill is made up of the wholesale cost of energy."
US gas prices will see a steady long-term rise from current low levels but healthy storage levels will help reduce the risk of sudden price spikes, the winter fuel outlook of the US Energy Information Administration (EIA) reads. New England is seen as an exception due to pipeline constraints which could propel up prices in the event of a cold spell this winter.
Gas-fired power plants in Japan are operating at maximum rates as gas burn was already close to 83% utilization before the shutdown of the island nation's sole operating nuclear reactor in mid-September, according to Bentek estimates. Scope to raise LNG imports any further is however limited from October onwards due to bottlenecks at both receiving terminals, so coal- and oil-fired plants will have to fill the vacuum.
Forward fuel prices for winter 2013/14 predicted by the UK's gas and power TSO National Grid strongly favour coal burn over gas. The spark spread versus clean dark spread shows that coal is a clear winner for profitability, with a continued difference of over £10/MWh in favour of coal. For gas and coal to be equitable the gas price needs to fall by about 40% or around 30p/therm, alternatively coal prices would need to see a near doubling and increase by about $80/tonne.
Demand for new highly efficient gas power plants will not abate in Japan and South Korea regardless of high costs for LNG as a fuel, says GE's regional general manager power generation for Asia Pacific, Ramesh Singaram. As for Japan, he sees an annual demand for 3.5 to 4 gigawatt of new-build capacity over the next ten year. "Anything coming from nuclear would be upside," he told Gas to Power Journal.
The operator of Dabhol, India's largest gas-fired power plant, are considering renting out the 1,967-megawatt plant to private electricity producers under a tolling model, after operations were halted due to domestic gas shortages. Burning LNG instead is not an option: "We cannot recover the high cost of imported gas," said the plant operator RGPPL.