NEWS RELEASE                                                                                                    APRIL 2016

$14 Trillion to Be Spent On Power Plant Equipment and Repairs in the Next 25 Years

Electricity production will be up 100 percent by 2040.  This will require an investment of $14 trillion in new hardware and repair parts for existing equipment and systems.  Coal-fired generation will grow by 10 percent.  One would, therefore, expect that investment in coal-fired power generation would be less than in other technologies. However, when you take into account repair and upgrades, coal-fired power will require more in investment than any of the alternatives.

World coal powered generation capacity is 2.2 million MW today and is slated to rise by only 10 percent or only 200,000 MW during the next 25 years. The investment needed to keep an old power plant running from age 50 to age 75 and to be upgraded to the likely emission limits, will be nearly equal to the $2 million/MW cost of a new power plant over a 25 year period.  This means that $4.4 trillion will need to be invested in coal-fired power. Much of that will be in Asia where many new power plants will be built. Net capacity will drop in Europe and the U.S. This does not mean that the two areas will not be spending money on coal-fired power plants.  The U.S. moratorium on new coal-fired power plants and the necessity to maintain 200,000 MW of coal-fired capacity means that the U.S. will have to spend $400 billion just to keep the old power plants running and meet increasingly stringent environmental standards.

Power Plant Investment

Generator Type $ Trillions
Coal-fired Power 4.4
Gas Turbine Combined Cycle 2.2
Nuclear 2.0
Biomass 0.6
Wind 2.3
Solar 2.8
Total 14.3

Nuclear capacity is slated to increase from 392 GW in 2013 to more than 620 GW in 2040.  But its share of global power generation will rise just one percentage point to 12 percent, because almost 200 reactors of the 434 operational at the end of 2013 will be retired, they will need to be offset by new power plants.  Total investment will exceed $2 trillion over the next 25 years.

The gas turbine combined cycle power generation market will grow by more than 300 GW to over 2 million GW by 2040.  Replacements, upgrades and retirements all result in a net capital investment of $2.2 trillion.

Biomass capacity will be 300 GW in 2040.  Wind capacity will be 1300 GW and solar 1000 GW.

By 2040 Chinese energy production will be twice that of the U.S. but per capital consumption will still be only half that of the U.S. The gas turbine market in China will be bolstered by the Chinese coal-to-gas program which will deliver gasified coal to turbine generators throughout the country.

India today is home to one-sixth of the world’s population and is its third-largest economy, but accounts for only 6 percent of global energy. Demand for coal in power generation and industry will surge increasing the share of coal to almost half of the energy mix and making India the largest source of growth in global coal use.  By 2040, Asia is projected to account for 80 percent of coal consumed globally. Coal will remain the backbone of the power system in many countries. 

Many components of coal and gas turbine generating plants need to be replaced frequently. Catalyst for a coal-fired power plant is replaced every 3-5 years and every 10 years for a gas turbine power plant.  Boiler feedwater valves will be replaced more frequently in a gas turbine power plant due to the constant cycling and phenomena such as Flow Accelerated Corrosion (FAC).  Slurry pumps, ball mills, fans and air pre-heaters in coal-fired power plants are in periodic need of replacement parts. Both coal and gas turbine operators are now more likely to use zero liquid discharge (ZLD) systems which are high maintenance systems.

Coal-fired power plants are switching from electrostatic precipitators to fabric filters.  This results in bi annual purchases of new bags. Gas turbine plants now favor high efficiency inlet filters which are more expensive and need more frequent replacement than the low efficiency alternative.

The power plant generation market will be reviewed in a McIlvaine Hot Topic Hour at 10 a.m. CST on April 7.  Click Here to Register

McIlvaine publishes market reports with detailed forecasts of the power market. They include:

59EI Gas Turbine and Combined Cycle Supplier Program

N043 Fossil and Nuclear Power Generation: World Analysis and Forecast 

42EI Utility Tracking System