GAS AS POWER PLANT FUEL TO JUMP IN EUROPE, FAR EAST

Demand for gas as a fuel for electrical power generation in western Europe and the Far East could double by the end of the century. The huge upturn in demand in this sector will follow widespread introduction of combined cycle technology already in use in North America, says a briefing paper from the Royal Dutch/Shell Group. The paper also sees continued growth of gas as a combined cycle generating fuel in the U.S.

Feb. 17, 1992

2 min read

Demand for gas as a fuel for electrical power generation in western Europe and the Far East could double by the end of the century.

The huge upturn in demand in this sector will follow widespread introduction of combined cycle technology already in use in North America, says a briefing paper from the Royal Dutch/Shell Group.

The paper also sees continued growth of gas as a combined cycle generating fuel in the U.S.

In Europe, gas for power generation consumed a little more than 1.4 tcf in 1990. Netherlands, Germany, and Italy accounted for most of that volume. Increased use of combined cycle power plants in Germany, Italy, and Britain will fuel the rapid growth expected during the rest of the 1990s.

In the Far East, power station gas demand also was a little more than 1.4 tcf in 1090 with the market dominated by Japan. As consumption doubles, Japan will still consume most bulk of the gas in this sector, but there also will be growth in South Korea, Taiwan, Thailand, Indonesia, Malaysia, and Philippines.

New gas supplies for power generation will command as much as $3.90/MMBTU delivered to the plant. The Shell paper said at this price gas will produce electricity at the same cost as internationally traded coal at $45/metric ton from a new coal fired plant.

And it pointed out that coal prices often are higher where indigenous supplies or added transport costs are involved, such as $93/ton in the U.K., $167/ton in Germany, $59/ton in Italy and $84/ton in Spain. Such prices increase the opportunity value of gas.