POWER January 2020 - 9

GLOBAL MONITOR
to 2018-representing 50% of total energy
supply investment worldwide. The
report also notes that annual power sector
investment could average $900 billion
to 2040. It suggests about $500 billion
will be spent on power plants, including
$360 billion for renewables, and more
than $400 billion for networks, including
$15 billion for battery storage. Annual
spending could double for nuclear
power-with more than 10% going to
lifetime extensions-but it could fall by
half for coal-fired power plants, and by
90% for oil-fired capacity.
Technology Costs May Favor Renewables.
Using a value-adjusted levelized
cost of electricity (LCOE), which
does not include environmental externalities
or network integration costs,
the WEO2019 suggests solar PV will
become the most competitive source
of power in 2020 in China and India, and
largely close the gap with other sources
by 2030 in the EU and U.S. It suggests
the global average LCOE of solar PV will
fall by about 50% from 2018 to 2030. The
competitiveness of conventional power
plants could depend heavily on the availability
of low-cost resources and market
conditions. However, " In general, existing
conventional power plants are more
competitive with renewables than new
builds, because they usually need to cover
only their short-run fuel and maintenance
costs to continue operations, and
capital investment for refurbishment is
lower than for new construction, " it says.
Coal Power Not Going Away Soon.
Under the stated policies scenario, global
carbon emissions from the power sector
will remain stable through 2040-even
though power generation rises by almost
60%, owing largely to the renewables
surge and continuing efficiency improvements
at fossil fuel plants, especially
natural gas plants. India, meanwhile, is
set to overtake the U.S. in carbon dioxide
emissions before 2030 to become the
second-biggest emitter, behind China.
Global emissions of sulfur dioxide could
fall another 40%, nitrogen oxide by 25%,
and particular emitter by 33%.
In a special focus on coal plant emissions,
meanwhile, the WEO2019 suggests
more than 700 GW of the world's
total 2,080 GW coal capacity worldwide
is more than 25 years old today (Figure
2), but it refutes calls to shut even that
amount down immediately, noting, " it
would leave many countries short of sufficient
supply and significantly compromise
electricity security. Applying a strict
lifespan limit to existing coal-fired power
January 2020 | POWER
2. This chart shows global coal-fired power
capacity by plant age. Asia is home to 90% of
coal-fired power plants under 20 years of age.
Source: IEA, WEO2019
plants would also entail immediate financial
challenges to the owners, which
are a mix of state-owned and privately
held companies. " Around the world (and
mostly in Asia), it notes, more than $1
trillion of capital invested in the existing
coal fleet has yet to be recovered.
The agency offers a more " multifaceted
approach " to tamping down carbon
emissions from coal that depends
on markets and economic implications,
including retrofitting units with carbon
capture, utilization, and storage (CCUS),
or biomass co-firing equipment or repurposing
them to provide system adequacy
and flexibility. Those options, however,
will likely be costly. CCUS would currently
cost more than $1 billion/GW, it says.
Affordability Will Be a Concern in
the Age of Electrification. According
to the IEA, policymakers are specifically
concerned about affordability as the emphasis
on electrification
continues. A
WEO2019 sensitivity analysis identified
three of the largest uncertainties that
could affect future affordability: fossil
fuel prices, the cost of wind and solar
PV, and the cost of capital for all power
generation technologies. However, it
concludes that no single factor will yield
changes higher than 12%.
The Next Big Market: Africa. Electricity
demand in sub-Saharan Africa, where
more than half the population have no access
to power, is set to soar, and the IEA
is optimistic that African countries will
make progress to improve access rates.
However, it notes, achieving full access
by 2040 will require a significant expansion
of the power system. By 2040, electricity
output in the region could expand
from 225 TWh today to more than 900
TWh. It will likely be supplied mainly
by on-grid power, but decentralized solutions
could also be heavily adopted.
" Although on-grid solutions have traditionally
served as the most cost-effective
option to supply electricity in areas close
to an existing grid, the falling costs of
stand-alone solar PV and battery storage
technologies as well as new business
www.powermag.com
models using digital and appliance innovations
are making these solutions more
competitive, " the WEO2019 says.
A Gust for Offshore Wind. Finally,
the IEA is especially optimistic about
offshore wind's potential to tackle the
separate challenges facing energy transitions,
noting that it is competitive (and
could therefore enable low-carbon power
and hydrogen production), flexible, affordable,
and reliable. It projects that offshore
wind capacity is set to grow into
a $1 trillion business as current installed
capacity expands from 23 GW installed
in 2018 to 345 GW in 2040. Of specific
note is that new offshore wind projects
already have annual capacity factors of
40% to 50% or above, matching those
of gas-fired plants in many markets, and
significantly exceeding that of solar PV.
Innovation in technology has improved
turbine capacities and platform options,
and new geospatial analysis shows its
potential is enormous and widespread.
However, the sector may still face challenges
without long-term plans that
emphasize effective system integration,
including for transmission infrastructure.
-Sonal Patel is a POWER senior
associate editor.
U.S. Company Has Deal with
Jordan for Nuclear Technology
There have long been grand plans for
developing nuclear power in the Middle
East. After Iran brought the Bushehr plant
online in 2011, the country talked of building
another dozen or so reactors. Saudi
Arabia in 2011 announced plans to build
as many as 16 reactors over the next two
decades; it now says it will issue a tender
this year to build its first two units.
Egypt, Turkey, and Jordan have discussed
nuclear power for years, along with Israel,
which to date has one reactor, a small unit
at the Shimon Peres Negev Nuclear Research
Center outside Dimona.
The region's plans for nuclear power
have moved in fits and starts, but change
is underway. Egypt is building a $29 billion
plant with the help of Russia's stateowned
Rosatom (see " Russia Offers to
Expand Nuclear Power in Africa " in the
December 2019 issue of POWER). Construction
on Unit 1 of a four-unit, 5,600MW
nuclear plant at Barakah in the
United Arab Emirates is complete, with
the other three units also well along. Unit
1 is expected online this year.
Concrete was poured in November
2019 for a second unit at Bushehr in Iran,
expected to produce 1,000 MW, and a
third unit at the site is planned. The Akkuyu
9
http://www.powermag.com
POWER January 2020

Table of Contents for the Digital Edition of POWER January 2020
