Asia is the world’s largest infrastructure market, with $4.1 trillion in power market spending expected over the coming decade, experts told industry participants and journalists at a recent quarterly power sector briefing held by infrastructure firm Black & Veatch.
“Coal remains the bedrock of Chinese power generation,” said George Currie, Managing Director of B&V’s Management Consulting division in Asia Pacific.
Despite holding the world’s third largest proved coal reserves, along with production and consumption levels that dwarf the rest of the world, China became a net coal importer for the first time in 2009. The power sector consumes the largest volume of coal and the country’s rapid urbanization makes the cement industry the second largest consumer of the fuel.
Sticking With Coal, but Cleaning it Up
In an effort to deal with stifling air pollution in many cities, the country has pushed hard to gain the indigenous expertise and supply chains required to construct more sophisticated coal plants that generate fewer harmful emissions.
In 2010, General Electric reported that China can now build integrated gasification combined-cycle coal plants using almost exclusively domestically sourced equipment. IGCC plants increase efficiency and reduce emissions, initiatives that are consistent with China’s medium-term development goals.
While coal is expected to remain the dominant power generation fuel through 2020 and beyond; natural gas, nuclear and hydro represent the largest power industry growth sectors, according to B&V.
Playing Catch Up With a Little Help From the Global Marketplace
In B&V’s analysis, India is five to ten years behind China in most infrastructural development areas, including the power sector where 40% of households have no access to electricity, the country faces 12% – 14% power shortage during peak hours and blackouts are common in cities large and small.
India fell short of its 11th five-year plan goal to add 78 GW of power generation capacity, realizing only 50 GW. However, 22% of added capacity was renewable energy and the country plans to add an additional 30 GW of renewable energy in the next 5 years.
As energy demand increases, Indian companies are partnering with international firms in order to benefit from the transfer of technology and management expertise. Given the need for businesses to secure reliable power delivery, utility scale off-grid solar installations are a fast growing business, said Currie.
In recent years, domestic firms have inked partnerships, joint ventures and other arrangements with a host of experienced multinationals including BP, Alstom, Toshiba and Hitachi. Many of these ventures are focused on developing supercritical steam generation for the power and manufacturing sectors.
A Common Trend: Powering Regional Growth
Energy demand across the region is set to significantly increase over the coming decade as countries rapidly urbanize and seek to fuel economic growth. Vietnam has set the ambitious goal of increasing power generation capacity by about 247% from 21.6 GW in 2010 to 75 GW by 2020.
The renewable energy tariff set to go into effect in Japan this July is expected to support new project development by ensuring long-term pricing stability, according to B&V.
Malaysia is moving forward with solar project development, palm-based biomass and ultra-supercritical steam generation technology.
Natural gas consumption and production in Indonesia have been outpacing reserve replacement, putting the sustainability of its longstanding LNG export businesses in question.
As domestic energy needs continue to increase – total primary energy consumption rose by 42% from, 2000 to 2010 – Indonesia is looking to tap what are expected to be significant coal bed methane reserves, along with ample undeveloped hydro potential, B&V said in its presentation.