While natural gas is the hot topic in North American energy, many other parts of the world – particularly developing countries – are adding more coal-fired power generation capacity and consuming more of the black fossil fuel.
Speaking at the annual conference of the American Society of Public Administrators (ASPA) held March 5th in Las Vegas, Dean Oskvig, President and CEO of Black & Veatch’s Global Energy Business, made the point that B&V is not aligned with any single energy source and the company designs and builds all kinds of energy infrastructure.
He used electricity, however, as a proxy for energy in his comments, due in large part to the direct link between access to electric power and quality of life. Simply stated, as the global population increases, electric power generation capacity will grow along with it.
In a follow-up interview with Breaking Energy, when asked about business opportunities associated with the fastest growing macro trends in energy, Oskvig said North America is adding considerable gas-fired generation capacity with the expectation that gas will be cheap and abundant over the medium to long term.
Natural Gas and Coal – Divergent Paths
However, while coal faces cost and environmental challenges in North America, it remains the fuel of choice in many countries. Southern Asia, for example, is poised for enormous coal consumption growth and Oskvig said B&V is building coal plants in Vietnam, Malaysia, the Philippines, Indonesia and India.
Coal consumption is growing in the Middle East as well, increasing by 6.2% from 2009 to 2010 according to the BP Statistical Review of World Energy.
Cleaning Up Its Image
Thanks to technological advances, modern coal plants are much cleaner than their acid rain-belching forerunners.
B&V’s largest coal project is in South Africa, where the company is constructing a plant with six 800 MW units, each with a full complement of air quality control equipment. The modern technology is also less water intensive, using air-cooled condensers that require roughly 95% less water than a traditional coal plant.
You can read more about the role of coal and natural gas as power generation fuels in different parts of the world in a recent article summarizing an expert panel on the subject hosted by the Manhattan Institute.
Smart grid and demand response systems are a major focus for utilities and companies like Honeywell are working on several of these projects. When asked whether B&V views these companies as competitors, Oskvig explained they have relationships with numerous enterprises and at any given time they can play the role of customer, seller and partner, simultaneously.
Strengthening the US Electrical Grid
At the ASPA conference, Oskvig explained the US has 900 GW of generating capacity, but less than 2 GW of east-west transfer capacity.
Complicating efforts to boost inter-regional transfer capacity are the 5,600 different owners and operators of US power generation infrastructure. The sheer number of parties makes collaboration difficult.
Oskvig believes a two part solution requires both technical and institutional components.
On the technical side, something akin to the interstate highway system could be deployed, on which a direct current backbone is installed that takes advantage of peak loads in one area using numerous generation sources and distributes the power where it is needed most.
While technically feasible implementation would require tremendous capital investment, which an institutional approach would need to address. Oskvig stressed the difficulty of generating the political will needed to fund and build such massive new transmission infrastructure.