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Released November 19, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--In Industrial Info's recent webinar on the global Power Industry, Britt Burt, vice president of research for the Power Industry, discussed some of the movements and trends taking place throughout the world. One of the key themes: The massive movement toward decarbonization throughout the world, prompting a global buildout in renewables. However, in certain markets, particularly in Asia, coal-fired power continues to move forward. According to BP's (NYSE:BP) (London, England) recent Energy Outlook, global power demand is expected to grow around 2% per annum, with a total demand increase of 80%, based on current capacity out to 2050. The majority of this demand increase continues to be in key, high-growth Asian markets.
Burt touched on the impact of the COVID-19 pandemic on power projects. He said that since June, the amount of projects entering construction has increased. Burt said, "We've seen an additional 765 projects move into the construction phase, and that's a $140 billion increase from June this year. ... There have been some effects [from COVID-19], but projects are still moving forward."
North America
The North American market is shaped by a very slow electricity demand growth rate, but with sizable investments going toward a transition in the fuel mix. One of the points of discussion was about the extension of the Production Tax Credit for wind power and the Investment Tax Credit for solar energy. Burt said that while there hasn't been anything passed to extend them beyond this year, the tax credits aren't the only thing driving investment in these areas. "It's also renewable portfolio standards at a state-level that are still moving forward and expanding as we speak." Burt said renewable energy is supplying 19% of U.S. electricity, while coal has dropped to 24% of electricity supply. "Solar has actually doubled or tripled where we were this time last year in terms of capacity added."
The buildout of natural gas-fired has slowed somewhat from the past few years. Much of this was to replace retiring coal-fired plants. Burt said Industrial Info is tracking 90 gigawatts (GW) of coal-fired capacity that is still scheduled to be retired through 2030, so there could perhaps be another wave of gas-fired buildouts to help make up for these retirements.
Europe
Europe is moving away from fossil fuels in a big way. Burt said, "When we look at places like Germany, they're continuing to move away completely from fossil fuels. That's being replaced with wind and solar. When we look at places such as Denmark, Finland, Sweden, Norway, there's a lot of buildout for wind power, onshore and offshore." Burt said the same could be said for the U.K., where a lot of offshore wind power is moving forward.
West Asia
Energy demand is growing in West Asia, which includes countries such as Turkey, Saudi Arabia, Qatar and Kuwait. With its burgeoning population and diversifying economies, the region is meeting this growth largely through the buildout of natural gas-fired projects as well as solar and wind. Burt said Kuwait is developing about $14 billion of natural gas projects. However, renewable energy, mainly solar, is being developed as well. Burt said Saudi Arabia has about $11 billion of solar capacity under development, and United Arab Emirates has about $6 billion worth. The region also is home to one of the biggest projects in the developing Green Hydrogen (Power-to-X) sector, with a $5 billion project in Saudi Arabia. See project report.
South Asia
The South Asia region is dominated by India, which is one of the countries where coal development continues to move forward. Burt said, "They continue to develop renewable energy, but coal is plentiful ... I just don't see a scenario where they move completely away from coal. It just makes too much sense to keep coal as part of the mix." However, there are still a lot of solar and some smaller hydropower projects moving forward to help meet the country's ambitious plans for renewable generation.
East Asia (excluding China)
While demand growth is slow in East Asia, the region still has about $200 billion in power projects that is planned to kick off in the next two years. South Korea is moving away from coal and has targeted numerous plants for closure; some of these will be transitioned to natural gas. Coal currently supplies about 27% of the country's electricity; Burt said coal's share likely will slide to about 15% by 2034. "They're looking to be at 20% renewables by 2030 and increase that to about 30% by 2034," he said. Burt said Japan has seen a lot of leases to develop offshore wind and was looking at the development of Green Hydrogen projects.
China
China has been building out solar and wind, with coal taking a bit of a back seat. However, the country is preparing to transition from its 13th Five-Year-Plan to its fourteenth plan, and lifting the nation's cap on coal-fired power from 1,100 GW to about 1,300 GW has been proposed, which would lead to new coal-fired power moving forward.
Conclusion
While renewables are moving forward in much of the world, coal, in large markets such as India and China, is nowhere near dead. However, there is a continuous march toward decarbonization, being met largely by solar and wind power. However, Burt said battery storage is needed to back this up to approach anywhere near baseload capacity. "I think the two issues we're going to be talking about for quite some time are going to be battery storage ... and also Green Hydrogen--that is developing rapidly all over the world, and it's going to be interesting to see how it develops," Burt said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Burt touched on the impact of the COVID-19 pandemic on power projects. He said that since June, the amount of projects entering construction has increased. Burt said, "We've seen an additional 765 projects move into the construction phase, and that's a $140 billion increase from June this year. ... There have been some effects [from COVID-19], but projects are still moving forward."
North America
The North American market is shaped by a very slow electricity demand growth rate, but with sizable investments going toward a transition in the fuel mix. One of the points of discussion was about the extension of the Production Tax Credit for wind power and the Investment Tax Credit for solar energy. Burt said that while there hasn't been anything passed to extend them beyond this year, the tax credits aren't the only thing driving investment in these areas. "It's also renewable portfolio standards at a state-level that are still moving forward and expanding as we speak." Burt said renewable energy is supplying 19% of U.S. electricity, while coal has dropped to 24% of electricity supply. "Solar has actually doubled or tripled where we were this time last year in terms of capacity added."
The buildout of natural gas-fired has slowed somewhat from the past few years. Much of this was to replace retiring coal-fired plants. Burt said Industrial Info is tracking 90 gigawatts (GW) of coal-fired capacity that is still scheduled to be retired through 2030, so there could perhaps be another wave of gas-fired buildouts to help make up for these retirements.
Europe
Europe is moving away from fossil fuels in a big way. Burt said, "When we look at places like Germany, they're continuing to move away completely from fossil fuels. That's being replaced with wind and solar. When we look at places such as Denmark, Finland, Sweden, Norway, there's a lot of buildout for wind power, onshore and offshore." Burt said the same could be said for the U.K., where a lot of offshore wind power is moving forward.
West Asia
Energy demand is growing in West Asia, which includes countries such as Turkey, Saudi Arabia, Qatar and Kuwait. With its burgeoning population and diversifying economies, the region is meeting this growth largely through the buildout of natural gas-fired projects as well as solar and wind. Burt said Kuwait is developing about $14 billion of natural gas projects. However, renewable energy, mainly solar, is being developed as well. Burt said Saudi Arabia has about $11 billion of solar capacity under development, and United Arab Emirates has about $6 billion worth. The region also is home to one of the biggest projects in the developing Green Hydrogen (Power-to-X) sector, with a $5 billion project in Saudi Arabia. See project report.
South Asia
The South Asia region is dominated by India, which is one of the countries where coal development continues to move forward. Burt said, "They continue to develop renewable energy, but coal is plentiful ... I just don't see a scenario where they move completely away from coal. It just makes too much sense to keep coal as part of the mix." However, there are still a lot of solar and some smaller hydropower projects moving forward to help meet the country's ambitious plans for renewable generation.
East Asia (excluding China)
While demand growth is slow in East Asia, the region still has about $200 billion in power projects that is planned to kick off in the next two years. South Korea is moving away from coal and has targeted numerous plants for closure; some of these will be transitioned to natural gas. Coal currently supplies about 27% of the country's electricity; Burt said coal's share likely will slide to about 15% by 2034. "They're looking to be at 20% renewables by 2030 and increase that to about 30% by 2034," he said. Burt said Japan has seen a lot of leases to develop offshore wind and was looking at the development of Green Hydrogen projects.
China
China has been building out solar and wind, with coal taking a bit of a back seat. However, the country is preparing to transition from its 13th Five-Year-Plan to its fourteenth plan, and lifting the nation's cap on coal-fired power from 1,100 GW to about 1,300 GW has been proposed, which would lead to new coal-fired power moving forward.
Conclusion
While renewables are moving forward in much of the world, coal, in large markets such as India and China, is nowhere near dead. However, there is a continuous march toward decarbonization, being met largely by solar and wind power. However, Burt said battery storage is needed to back this up to approach anywhere near baseload capacity. "I think the two issues we're going to be talking about for quite some time are going to be battery storage ... and also Green Hydrogen--that is developing rapidly all over the world, and it's going to be interesting to see how it develops," Burt said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
