Electric utilities did provide steam to some customers but generally only in the centers of large and usually older cities because of the economics of distributing steam. In most cases customers who needed steam for industrial processes produced their own. They might also generate electricity, but for a variety of reasons, including regulation, they could not sell excess electricity to the local electric utility. The recent changes in the electric utility industry sketched above have created the opportunity to realize economies where electricity, or the fuels to generate electricity, are the by-product of some other industrial process.
These processes typically operate at a smaller scale than the conventional electric utility generating unit, and this feature has meshed well with smaller-capacity additions demanded by recent slower electricity growth.
The joint production of electricity and steam has been the main beneficiary of these changes to date. Coproduct systems are discussed further in Chapter 6. The gas turbine combined-cycle systems now being installed that use natural gas as a fuel also offer opportunities to use clean coal-based gases, either as an integral part of the power generation system or obtained as a fuel from a separate supplier. The decrease in electricity demand growth relative to growth in the gross domestic product through is expected to result primarily from energy efficiency improvements associated with demand-side management and compliance with the directives of EPACT.
The industrial sector is the fastest-growing demand sector in the EIA projections. Alternative estimates from Data Resources, Inc. These projections assume a smaller impact of demand-side management on electricity demand than the EIA projections.
EIA projections of new capacity needs to meet new demands and to offset plant retirements are summarized in Figure EIA, a. These new capacity requirements are in addition to the augmentation of existing resources through electricity imports and through plant life extension and repowering see below.
In response to legislative changes aimed at making electricity production more competitive, NUGs and cogenerators are expected to add an additional 73 GW, accounting for a large share 40 percent of total new capacity additions of GW over the forecast period.
Figure shows that new capacity will be needed particularly between and , during which time repowering and other options will be insufficient to meet increased demand. The surplus capacity of the s still persists in some areas, and it will probably not be completely employed in many areas until the turn of the century. Thus, projected capacity additions lag projected increases in demand Makovich and Smalley, Table compares several forecasts of total U. Detailed comparison of these estimates is difficult because of.
Source: EIA, a. However, all the projections for indicate a need for significant generating capacity increases compared with the value of GW EIA, a. An energy forecast that relies less on historical trends and more on market forces and rapid deployment of new, high-efficiency technologies projects a total generating capacity in of GW The Alliance to. Generating Capacity, and GW. GRI Gas Research Institute projection represents nameplate capacity, which is typically 5 to 10 percent higher than net summer capacity.
Save Energy et al. Despite these different assumptions, coal is still projected to be a major energy source for power generation in The additional generating capacity does not necessarily require the construction of new plants.
Repowering, broadly defined to include any activity that stabilizes or reverses the age-induced deterioration of generating units Makovich and Smalley, , can result in improved efficiency and increased generating capacity at less than replacement cost.
This forecast trend is consistent with the low number of scheduled power plant retirements reported to the North American Reliability Council for the period through Although a large number of the fossil-fuel-fired steam plants operating today are nearing the end of their nominal life 40 to 45 years , utilities appear to be planning to continue using them for the foreseeable future EIA, b. The choice of technologies to meet additional generating capacity requirements depends on both peak load and baseload needs.
Peak load is the maximum load during a specified period of time, whereas baseload is the minimum amount of power required during a specified period at a steady state. According to EIA projections EIA, a , there will be a need through for flexible generating technologies, such as gas-fired or oil- and gas-fired combined-cycle and combustion turbine systems, designed primarily to meet peak and intermediate load requirements but able to meet baseload requirements as needed.
How much of the projected demand for electricity is likely to be supplied by coal? This section addresses the major competing sources of energy for electric power generation over the time periods of interest for this study. More extensive discussions can be found in the various references cited throughout this section. The coal base of the world is large, some 1, billion tons. The top two producing countries are China and the United States.
The U. The DRB is the amount of coal that can potentially be mined by surface or underground methods. The amount of coal that can be extracted economically using available technology, taking into consideration the laws, regulations, economics, and usages that affect coal production, is the recoverable portion of the DRB; EIA currently uses an estimate of 56 percent of the DRB, which equals Estimates of recoverable reserves vary with location.
All projections for U. A range of forecasts is shown in Table Estimates of coal's share of the power generation market in range from 45 to 58 percent, slightly lower on average than the current value of 56 percent. New coal-steam units are expected to account for 25 percent 42 GW of all new capacity additions through , with approximately three-fourths of the new coal-fired capacity coming online after EIA, a. This 42 GW of new coal capacity is equivalent to new power plants in the MW size range.
The fraction of the DRB that is recoverable has recently been estimated for the Central Appalachian coal mining region, which encompasses the states of Kentucky and West Virginia. The study revealed that only 50 percent of the reserve base was potentially recoverable because of various mining, environmental, social, economic, and regulatory factors Carter and Gardner, Considering additional restrictions in the form of coal mining factors, recovery factors, and economic factors further reduced the economically recoverable coal resource to between 4.
The price to a utility is greater than the wellhead price and may vary by region. While domestic gas resources are adequate to support this trend in the near- term, the depletion of domestic gas resources will likely result in their reduced availability and higher prices within the time period considered in this study. Estimates of the remaining technically recoverable domestic natural gas resource provide some perspective on the future use of natural gas for power generation.
Assuming current technology and unspecified prices in the lower 48 states, and varying assumptions on access to potential gas fields, the estimates ranged from a low of trillion cubic feet Tcf , the value used in formulating the National Energy Strategy, to the Gas Research Institute GRI estimate of 1, Tcf.
The National Petroleum Council estimate of Tcf falls between these extremes. Table gives National Petroleum Council estimates of the effect of wellhead price on the recoverable resource. Dividing the total amount of gas by the current annual consumption provides a rough measure of the time before depletion, assuming constant consumption see Table The actual time will depend on consumption rate, which is expected to rise for the next decade and then decrease as finding and production.
Major technological advances would extend the period of economic gas production. EIA and GRI projections for the supply of natural gas and its disposition see Table indicate that domestic production and imports will increase to meet demand. The increase in domestic production will require the use of new gas recovery technology, which will account for 29 percent 7.
By , gas imports will have risen to approximately 15 percent 3. Projections for delivered gas prices for electric utilities are summarized in Table As natural gas prices increase, there will be a point at which coal-derived electricity is more economical. Personal communication from N. Preston and J. A higher-capacity factor may apply to advanced coal plants; this would decrease the crossover price, while a shorter amortization period would raise it.
Similar analyses can be made for repowering applications using coal-fueled integrated gasification combined-cycle IGCC or pressurized fluidized-bed combustion PFBC technology. Construction of a power plant in , for example, will involve assessing the likelihood of increasing gas prices and decreasing supply during the year or longer plant lifetime. In addition, extended growth in high-priority residential and commercial gas consumption is anticipated EIA, a. Thus, the EIA projection that new electric generating capacity will depend primarily on coal after seems well founded.
In considering the outlook for natural gas in the United States, attention must also be given to liquefied natural gas LNG.
More importantly, there are huge, low-cost reserves of natural gas in the Pacific Basin and Middle East that, when liquefied, can be transported across oceans. Thus, the cost at which LNG can be imported operates as a limit on the domestic price of natural gas and on the price that would be paid for gas produced from domestic coal.
The process through which natural gas is liquefied, transported at cryogenic temperatures, and regasified is unique and costly and was economic only when domestic gas prices were higher than currently.
At the time, domestic natural gas availability was limited, and rolled-in pricing permitted the high LNG cost to be cross-subsidized by low-priced, regulated gas.
An advantage of LNG for power generation is that it can be stored and used to meet peaking requirements without the need to construct larger pipelines. In the United States, coal gasification and other options should be economic at lower prices. Although world reserves of crude oil are not as large as those of natural gas, they are still very large, and the cost of landing crude oil in the United States is substantially less than comparable costs for LNG. Distillate can be used in combined-cycle power generation systems as a substitute for natural gas, LNG, or coal-derived gas.
Nuclear power accounted for 21 percent of U. However, no new commercial orders for U. Nonetheless, recognizing the future attractiveness of electricity from nuclear fission, in part because of the potential for simpler, more economical nuclear plants, U.
The resulting average price was not prohibitively high, and natural gas continued to be in demand. Also, there was an apparent market for the high-cost supplies. The system worked only so long as there was a price-controlled "cushion" of low-cost supplies. With price controls gone, all gas is now priced at the market, and there is no longer an ability to mix high- and low-cost gas.
Modular high-temperature gas reactor and advanced liquid metal reactor designs are under development. Although these designs may be available as early as , their adoption is uncertain. While concern over greenhouse gas emissions could increase the attractiveness of nuclear power plants relative to coal, the economic and environmental issues associated with plant operation and waste disposal are likely to impede any significant growth of nuclear capacity in the near to mid-term.
In the committee's base scenario, significant deployment of new nuclear power plants is unlikely until after Considering installed and anticipated nuclear power plants in the United States and worldwide, there is no prospect of a uranium shortage before However, a significant expansion of nuclear power thereafter could challenge accessible uranium supplies.
If supply constraints forced up uranium prices after , the continued use of nuclear-based electricity would require technology development on fast breeder reactors and fusion reactors. The support of further development and use of nuclear power in the United States and worldwide will depend on growth in overall electricity demand, regulatory evolution, the direction of the global climate change debate, and resolution of public concerns with operational safety and waste disposal.
Policy actions that increase the cost of fossil fuel use would make nuclear power more competitive. Most electricity from renewable resources in the United States comes from hydroelectric power, which in accounted for about 10 percent of installed generating capacity and 9 percent of electricity generation. Other renewable sources accounted for 0. EPRI has projected cost ranges for wind, photovoltaic, and biomass, assuming favorable locations Table These data indicate likely decreases in cost over the next 15 years, together with changes in the relative economics of different renewable sources.
Although wind and biomass may be attractive for specific applications in favorable locations, it is clear that renewables could not meet energy demands across the economy as a whole Preston, Many utilities look at renewable technologies as a strategically valuable set of contingency options if prices rise substantially or fossil fuel use is curtailed.
For example, policy actions to tax emissions would make renewables more competitive. While renewable energy sources are expected to gain a larger share of the U. While electric power generation is expected to be the principal use of coal in the near- to mid-term periods, liquid and gaseous fuels derived from coal have the potential to compete with natural gasand petroleum-based fuels in the mid and long-term. The outlook for coal-derived liquid and gaseous fuels is discussed in Chapter 6.
Liquid hydrocarbon resources can be classified on the basis of viscosity as conventional petroleum, heavy oil, and tar or bitumen. In general, it contains less sulfur than the heavier hydrocarbons and can be refined to specification fuels more easily and cheaply than heavy oils and tars. While large resources of heavy oils and tars have been found, current production is restricted by the higher production and refining costs.
Estimates of world and U. Petroleum finding and production costs for major producers are currently well below the international price, which includes profit taken by producing countries and by private investors, and is the result of an extremely complex combination of economic and political factors. As low-cost resources are depleted and production costs rise, the trading cost can be expected to rise. The resource base for natural gas was discussed above in the context of fuels for power generation.
Defining viscosities are as follows: conventional petroleum, less than centipoise cp ; heavy oil, to 10, cp; tar or bitumen, greater than 10, cp. In addition to conventional petroleum, there are substantial resources of heavy oil and bitumen 9 Riva, The total world resource for heavy oil is estimated to be billion bbl equal to 35 percent of the conventional petroleum resource.
About 50 percent of the heavy oil resource occurs in Venezuela and about 30 percent in the Middle East. The total resource for tar sands is approximately 3, billion bbl, but only 5 to 10 percent of this amount is currently considered to be economically recoverable.
Here Canada is dominant, with 75 percent of the world total. Both heavy oil and bitumens require more costly production and refining than conventional petroleum and are not competitive with petroleum at current prices.
To compete with coal for power generation, heavy oils and bitumen would require pollution control similar to that required for coal, because of their high sulfur and metals content.
The above considerations support the assumption that unrefined tars and heavy oils will not displace a significant amount of coal for power generation in the foreseeable future. Coal still has some limited uses as a fuel outside the utility sector. Industry burns coal as a boiler fuel to raise steam.
Limited use is also seen commercially in. The primary use of coal not combusted directly is the production of metallurgical coke, which is both the fuel and the source of the reducing agent carbon monoxide in smelting various ores.
The most important application of metallurgical coke is for reduction of iron ores in blast furnaces. EIA projections reference case of domestic coal consumption for these applications through are shown in Table Data on coal use for electricity generation are included for comparison. The only anticipated growth in demand except for electricity generation is industrial steam, due largely to growth in coal use for cogeneration in the chemical and food processing industries. The utilization of coke in the iron and steel industry is steadily diminishing for several reasons.
First, improvements in blast furnace technology have significantly reduced the amount of coke required to produce a ton of iron. Second, there has been a major shift away from the use of blast furnaces toward the use of electric furnaces that use scrap steel. This change has reduced the demand for freshly produced pig iron or steel, reducing the need for coke.
Third, the domestic iron and steel industry has suffered from competition with imported steel products, further reducing the domestic use of coke. No major upturn in the demand for metallurgical coke is foreseen for the periods of interest to this study. The conversion of coal to metallurgical coke yields by-product hydrocarbon mixtures commonly known as coal tar. The value of coal tar as a source of chemicals or synthesis material for other products began to be recognized in the s. For about 75 years, until the end of World War II, virtually the entire organic chemical industry was based on the utilization of coal tar.
However, in the past half-century the organic chemical industry has derived substances principally from petroleum and natural gas, although coal tar is still a useful source of certain specialty chemicals, such as aromatic hydrocarbons with multiple fused aromatic rings, and coal tar pitch has some niche applications that cannot be satisfied by petroleum-derived pitch. When imported petroleum increases in cost, coal could once again become a source of chemical products, though any large.
Coals have a variety of other specialized uses, most of them low-volume applications. For example, anthracites can be used as filter material for tertiary water treatment processes.
Lignites have some ion-exchange behavior and can be used in some cases as inexpensive ion-exchange ''resins. Lignites can also be converted into so-called humic acids, which are useful soil amendments and can be nitrated to form fertilizers. There is also interest in converting coals, particularly those of high carbon content, into carbon-based materials, such as graphites. At the present time, no significant domestic markets for these applications are anticipated during the period addressed in this study.
Environmental concerns will have the greatest influence on future coal use for power generation in the industrialized countries IEA, b. In the United States, coal-fired power plants are already subject to a range of emission controls that will likely become increasingly stringent and wide ranging over the periods addressed by this study. Current and possible regulations governing emissions from coal-fired power plants are summarized below, along with information on the current status of control technologies.
Appendix D reviews recent trends in U. Emissions control technologies are discussed in more detail in Chapter 7. National ambient air quality standards for particulate matter, sulfur dioxide SO 2 , nitrogen dioxide NO 2 , and photochemical ozone were promulgated under the Clean Air Act to protect human health and welfare throughout the country.
In contrast to ambient air quality standards, aimed at protecting human health, acid deposition regulations guard against cultural and ecological concerns, including damage to aquatic systems, forests, visibility, and materials.
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Get a sample copy of the Anthracite Coal Market report According to this latest study, the development of Third-Party Replacement Strap for Anthracite Coal will have huge change from earlier year. QYResearch has surveyed the Anthracite Coal manufacturers, suppliers, distributors and industry experts on this industry, involving the sales, revenue, demand, price change, product type, recent development and plan, industry trends, drivers, challenges, obstacles, and potential risks. This will become increasingly evident once global demand begins a long-term decline from about , suggesting that we will be in a structurally loose market for some time.
We are confident that weaker thermal coal prices are coming. It is difficult to imagine that a supply-side that was more than able to meet demand levels would have much trouble meeting a demand level that is likely 40—50 MMt lower than that. However, there are risks around the timing. We expect prices to ease substantially in spring But if the equipment shortage in Indonesia lingers or prolonged rains return in , then prices could remain supported longer.
And if the coming winter proves mild then an earlier timing could easily occur. Growth in steel production is one of the main drivers that contribute the most to the rising global demand of metallurgical coal.
Mainland China should reach peak steel production in coming years but there are still large uncertainties around when. Many commentators have been calling for Chinese production to peak over the last years, but growth has continued. Part of that growth will be increasingly met with imports. Post Hydrogen direct reduced iron DRI may start to have a meaningful impact on demand, particularly given likely investment in the wake of mainland China's carbon neutrality by pledge.
Here uncertainty is highest: Hydrogen DRI is a nascent technology that is higher cost than traditional steelmaking technologies.
And existing capacity has a major benefit of incumbency, and also may achieve CO2 compliance via offsets rather than by being replaced with hydrogen DRI or EAF. Against that, mainland China no doubt sees advantages in technology development of hydrogen DRI which is one potential future for steelmaking generally.
Our expectations for the decline rate in Chinese steel production and the decline in domestic metallurgical coal production could easily be over- or under-estimates.
We expect the opposite to happen from sometime in the s. But with India lacking much domestic coking coal, imports will steadily strengthen even further out in the forecast. In Japan, Korea, and Taiwan, met coal demand will gradually contract as carbon friendly technologies are steadily adopted. We are examining the longer term for Europe and consider that our current outlook may be an overestimate of met coal imports.
On the supply side, we of course expect Australia to remain the globally dominant supplier of metallurgical coal, albeit with slightly declining market share.
Australia faces a rising risk or potentially realization that mainland China is not as reliant on its coking coal as previously thought. As such it may see a major customer cut off for a significant time. While the current trade war will no doubt be resolved, this will contribute to weak future investment. However, Australia is very low cost, meaning it should happily compete into other markets as it is currently , and there are a number of existing projects that will allow export growth this decade.
Beyond , however, Australian exports should generally decline. Russian exports will rise but face the perennial constraint that Russian simply doesn't have the capacity to export much hard coking coal, instead growing its expects of semi-soft coking coal, pulverized coal injection PCI , and anthracite.
Canada and the United States are currently enjoying extra sales to mainland China, but there remains uncertainty around how risky this trade is. Not only could the trade war with Australia end, but the risk is that there are trade wars with other countries, and the United States and Canada are certainly at risk.
We expect that met coal supplies from Mongolia into mainland China will recover in the near term, with some growth. Smaller sources of met coal are unlikely to grow much: Indonesia has some upside, but we expect little growth from Mozambique or Colombia. EnergyCents- Ep. He leads an integrated commodity analytics product management, data science and research team.
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