As we have been reporting in this blog, the energy scenario is changing. In fact, it might be changing faster than anyone expected due the low oil prices. As reported by the World Energy Outlook 2015, “renewables contributed almost half of the world’s new power generation capacity in 2014 and have already become the second-largest source of electricity (after coal).”
Non-OECD countries account for seven out of every eight additional units of electricity demand. With 60 cents of every U.S. dollar invested in new power plants to 2040 spent on renewable energy technologies, global renewables-based electricity generation increases by some 8300 TWh (more than half of the increase in total generation). By 2040, renewables-based generation is expected to reach a share of 50% in the European Union, around 30% in China and Japan, and above 25% in the United States and India.
It is clear that the power generation is changing faster than most everyone imagined or predicted. This obviously presents a problem for frequency regulation in the power grid, but also the renewable facilities will be facing more competition since there will be so many options. Therefore, I think that renewable facilities would also have to be prepared to face more competition and invest in in technology in order to operate at the maximum efficiency.
In addition, the report mentions that coal will continue to be used around the world, but it will have to be compatible with more stringent environmental policies. Plants will have to become more efficient in reducing emissions.
This is also why I think that coal plants will have to invest in technologies that that will allow them to be more environmentally compliant and remain competitive in this new landscape. These technologies include new measurement devices, advanced process control and extensive use of analytics. Also, partnerships with suppliers of these technologies with a deeper level expertise will be more common to receive the expected results.
The power generation industry will continue to change rapidly and the long-term survivors will be the most adaptable and efficient.