In the medium- and long-term the prospects for natural gas-fired power generation look "sound" for North America and Europe in particular and to a lesser extent worldwide, according to a report from London-based Frost & Sullivan (F&S).
"While the market will be restrained in the short term, medium- and long-term prospects for gas-fired power are sound," the F&S report said. "North America and Europe will maintain their lead as the regions with the largest installed gas-fired capacity."
Eventually, all of the principal energy-consuming regions of the world will experience more of a push for gas, according to F&S Industry Director Harald Thaler, author of the report, "Global Prospects for Gas-Fired Power Generation," which calls "coal's unpopularity" a leading driver.
"New analysis finds that global gas-fired power plant orders will total 537 GW through 2020," Thaler said. He listed a number of factors spurring this demand growth, including coal conversions and the "massive" availability of gas supplies around the world, led by the proposed Nabucco pipeline between Turkey and Austria in Europe, liquefied natural gas expansions in Qatar and Australia, and the U.S. shale gas boom.
The "high availability" of natural gas is growing globally. Combined with a economic downturn over much of the industrialized world, a "prolonged period" of low gas prices has set in, Thaler said.
"It is probable in the short term that gas-based [generation] plants also will have delays associated with availability of finance, exacerbated by the Eurozone sovereign debt crisis, which erodes market confidence, and liquidity of the banking sector," said Thaler, adding that electricity consumption in many developed nations has still not fully recovered from pre-crisis levels.
The F&S analysis also shows that the aftermath of the Japanese accident at Fukushima is further advancing natural gas for power generation, considering the setbacks that both nuclear and coal are going through.
Gas turbines also have flexibility advantages, being able to offer quick start-up and better efficiency than other baseload options for power generation, the F&S report said.
Thaler thinks the leading regions for new power plant orders will be the Middle East and China. "The global market will be sustained by the burgeoning demand for new plants in emerging economies as well as replacement demand arising from decommissioning of old coal-fired plants, particularly in Europe and North America."
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