Last year was the best year ever for gas turbine orders, but 2000 promises to be even better – more than 40 per cent up on 1999 if current projections turn out to be correct. The gas generation boom, notably in the USA, seems to be continuing unabated – at least for now – and is indeed showing signs of accelerating in some areas of the world. In the UK, for example, the recent lifting of the "stricter consents policy" – colloquially known as the gas moratorium – has opened the floodgates to quite a few more gigawatts of gas power generation capacity (see this month’s news).
In the UK the ending of the gas moratorium has been accompanied by a £110 million government subsidy to the coal industry. The coal industry in the UK and elsewhere has also been benefitting from the dramatic rise in natural gas prices of recent times, resulting in part from the international dash for gas in the power generation business.
The sharp rise in gas generation in some areas is also leading to the resurrection of a quaint issue not much aired in the power industry for a good few years: maintaining adequate diversity of supply.
In the USA, coal’s rehabilitation as a possible option for new power plants seems to be continuing, with a groundswell of opinion in its support. A number of new coal plants are in the pipeline and increasing interest in coal is being reported in the power companies. Both candidates in the presidential election declared themselves in favour of clean coal, while one of Bill Clinton’s final acts as outgoing president has been to sign into law something called the Power Plant Improvement Initiative. This is a $95 million programme aimed at demonstrating "advanced coal-based technologies applicable to existing and new power plants including co-production plants" (ie plants that can also produce liquid fuels in addition to heat and electricity).
Actually this $95 million is not strictly speaking new money but seems to represent a redirection of unspent funds in the existing clean coal technology account. However it does reflect congressional interest in improving coal plants, notably existing ones, and in technologies suitable for commercialisation in the near term.
A request for proposals, with at least a 50 per cent industry cost share, will be issued shortly. The Initiative recognises that "demands on the existing fleet of coal-based electric generating facilities are changing. Power plants must operate in a fashion that reduces environmental impacts, achieves greater efficiency in operation, reduces carbon dioxide and other emissions, remains cost-competitive, and responds quickly to changing customer demand." Testing times As reported on pp 37-39 the gas price hike, coupled with panic about petroleum coke, seems to have also completely transformed the fortunes of integrated gasification combined cycle (IGCC) projects. Once written off by many as uneconomic and technically problematic, IGCC technology is increasingly being touted as a promising technology in the battle against greenhouse gases. This is because of the high efficiency that gasification offers and therefore its ability to achieve a rapid reduction in the carbon dioxide emissions from coal-based electricity generation.
Integrated gasification combined cycle technology may turn out to be an example of a technology whose obituary has been written prematurely. Another case could well be powerline telecommunications (PLT), which has suffered its share of setbacks in recent times, including the spectacular failure of the Nor.Web programme, which ran into regulatory compliance problems. Recently PLT came in for a severe battering in a report by UBS Warburg and telecommunications specialists The Smith Group. The cover featured a picture of a Dodo and the warning "This bird may not fly." The UBS Warburg/Smith report concluded that the potential impact of PLT "widely billed as a pot of gold hidden within lowly valued utility stocks" has been exaggerated and warns that PLT will encounter significant obstacles to becoming a successful alternative telecom provider, including problems of "regulatory approval, functionality and competition". It also says that "PLT does not offer any decisive advantage versus alternative telecom providers such as xDSL, wireless loop or cable." The report is particularly dismissive of prospects in the USA, where PLT has "yet to receive regulatory approval or undergo trials" and concludes that: "The competitive challenge from cable (which already has 75 per cent penetration is so strong that we believe it is unlikely that PLT will ever succeed." But it is simply too early to dismiss the technology in this way. A number of projects continue around the world and the benefits to utilities of being able to use the existing powerline infrastructure and mains plugs to offer broadband services is simply too good to walk away from lightly.
One increasingly prominent champion of the technology is Ambient Corporation, which is working on trials with New York utility Con Ed and gave a very upbeat press conference at the recent PowerGen show in Orlando. Part of the Ambient strategy is to provide both consumer services, eg Internet, telephony and video, and utility functions, eg meter reading and power quality monitoring. It remains to be seen, of course, whether Ambient can succeed. And this can only be assessed after extensive testing, clearing of regulatory hurdles and establishing competitiveness with the rival broadband technologies.
Certainly, its proponents are making some very bold claims. However, recent experience in the power industry has led us to be very wary of overoptimistic assessments of technologies before they have been adequately tested under real field conditions.
In an increasingly competitive power industry the pressure to underplay potential problems, shrink development times to the unrealistically short and underestimate testing requirements is of course considerable.
Getting back to gas turbines, there are a number of expensive lessons to be learnt there. Alstom, to take just one example, has recently announced that it is making a provision of u903 million to cover technical difficulties encountered during the introduction of the GT24/GT26 machines. This will cover the cost of implementing modifications and payments to customers to compensate them for delivery delays and for failure to meet availability and performance guarantees. However the experience will benefit the management of future innovations. It is clear that vendors are now trying to be much more circumspect about the way they introduce new technology, allowing much more time for testing under real conditions and aiming to introduce and trial new features incrementally where feasible.
