This report by Paul Baruya considers the key factors that determine the operation of existing and new coal-fired capacity in selected OECD countries. Coal-fired power cannot be analysed in isolation, and so a broad analysis across all power generating types is given in order to provide a picture of coal’s position in world generation today and in the near future.
Coal has a varied role to play in different countries, partly due to environmental reasons, but also due to the availability of economic coal reserves which have historically underpinned the use and development of coal-fired capacity in many countries.
The report moves away from idealised cost comparisons where stations are assumed to run at high loads, and looks instead at the effects on stations’ economics under a range of likely plant utilisations and efficiencies.
To illustrate how unrepresentative ideal conditions can be, the annual utilisations for different generation stations were calculated for each sample country for the years 2000 to 2007, and are summarised as follows:
Range
Coal-fired stations 24–95%
Combined cycle
gas turbine stations 42–79%
Wind turbines 6–36%
Hydroelectricity 19–57%
Nuclear 64–94%
In view of the variables that can affect all the cost components of generation, such as utilisation shown above, sensitivity analysis has been carried out for the main criteria of power station utilisation and fuel prices to see the effects they have on the full cost and variable operating costs of power generation. This enables a clearer picture of how stations are run in different countries, and what cost structures different technologies are likely to operate under based on technology type and age of the plants. Included in the analysis is a notional cost for CO2 to assess what effect it has on fossil fuel generation.
In many of today's power generating fleets across OECD Europe and OECD North America, generation and transmission infrastructures remain a legacy of past investments mostly made in the 1970s and 1980s. In the Far East such as Japan, the power station and transmission infrastructure developments have been built more recently and are growing rapidly. The difference in age and technological deployment across a range of countries complicates understanding the competitiveness of coal-fired power.
Half of the report is devoted to analyses for a number of countries across the IEA/OECD; these include Canada, Finland, Germany, Italy, Japan, Spain, UK, and the USA. These represent a range of countries where coal plays a major or minor role in their markets, and frequently competes against other forms of generation. The report suggests that the economics of running coal-fired stations are attractive, but the disadvantages and risks from climate change and other environmental regulations remain high in some countries.
This report provides an essential introduction to readers looking to understand the basic issues of power station economics and operation, and also raises awareness of how these issues are not consistent across the world.
Competitiveness of coal-fired power generation
Paul Baruya
CCC/137, ISBN 978-92-9029-456-6, September 2008
£255 non-member countries
£85 member countries
£42.50 educational price
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