May 29 2008
A report commissioned by the Electric Power Research Institute (EPRI) and prepared by economists at The Brattle Group and Energy Ventures Analysis has assessed the outlook for electric generation capacity in the largest electricity and fuel markets around the world and found that there is little uniformity in preferred new generation choices and in the reasons behind these observed preferences.
After reviewing several different regions of the world, the study found that while it often appears that generation developers are pursuing the same expansion technology at any point in time, this is not the case. Utilities and policymakers in various countries have reached very different conclusions about what types of capacity are preferred over the next two decades, depending on their indigenous fuel supplies, the strength of their environmental concerns, and their pace of economic development.
While the report does not make its own projections, it does document and interpret the range of forecasts coming from numerous public agencies in order to identify patterns and issues surrounding regional electricity and fuel markets that can provide insights for developers and planners generally.
The report focused primarily on Western Europe, China, India, and the United States (which are, or will soon be, responsible for more than two-thirds of total global electricity consumption) as well as Brazil and the wealthier Asian nations of Japan, South Korea, and Taiwan. It identified and catalogued major patterns of fuel use for power generation and drivers behind expansion in the generation sector. A country-by-country assessment showed that there are diverse factors that underlie global decisions for new generation, including:
- Regional economics. The relative economics of coal vs. gas-fired generation are not uniform across the different countries, mostly due to varying carbon and fuel prices, but also due to technology subsidies or restrictions.
- Infrastructure limitations. Many of the developing nations analyzed in this study (and perhaps even the U.S.) are potentially limited by fuel and transmission delivery infrastructure. India in particular may not be able to continue its rapid macroeconomic growth without corresponding, ambitious growth in energy infrastructure, and vice versa.
- Carbon dioxide policies. CO2 regulations are not yet strongly shaping technology choice in most of the countries examined in the study, with the exception of the European countries.
"One clear conclusion from this study is that some national goals appear all but unachievable and will require further research to understand the uncertainties and critical success factors facing these regions. For instance, the EU aspirations to achieve high levels of renewables and move away from both coal and nuclear power in many countries may not be feasible," noted Frank Graves, a co-author of the study and a principal of The Brattle Group.
For more information on the report, Drivers of New Generation Development -- A Global Review, EPRI report no. 1014920, or to obtain a copy, please visit the EPRI website at http://www.epri.com.