POWER May 2010 - 8

CERAWeek 2010: " Energy:
Building a New Future "
For the past 26 years, Cambridge Energy
Research Associates (CERA) has hosted an
annual CERAWeek conference in Houston
that is renowned for high-profile attendees
from around the world. During the week of
March 8, security was tight as oil ministers
from the Middle East and CEOs from the
largest oil and gas companies and electric
utilities rolled into Houston to exchange
ideas and forecasts. More than 1,200 delegates
from 55 countries attended to hear
more than 100 distinguished speakers
discuss a business that seems to have renewed
optimism about the future.
The first three days of the conference
were focused on worldwide supply and
demand issues for oil and natural gas.
Days four and five of the five-day conference
were dedicated to electric power.
Those days began with a discussion between
Daniel Yergin, Pulitzer Prize-winning
author of The Prize: the Epic Quest
for Oil, Money and Power and chairman
of IHS-Cambridge Energy Research Associates,
which hosts the conference, and
Nobuo Tanaka, executive director of the
International Energy Agency.
China Leads Global Power Growth
The focus of the keynote discussion was
Asia's rebound from the global economic
crisis in general, although China was the
main focus. Unlike the U.S. and Western
Europe, where demand for electricity is
flat at best, China seems to be experi1.
Mixed generation ahead. GE forecasts
a mix of orders for the 2,700-GW global
power generation market during the next 10
years. Coal is expected to get a third of the
business, but solar and wind have much upside
potential. Source: General Electric
Solar 4%
Nuclear 6%
Other
renewable
7%
Coal 34%
Hybrid 9%
Wind 19%
Gas/oil
21%
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POWER | May 2010
12,000
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encing the strongest recovery from the
worldwide economic downturn. China is
now projecting a gross national product
growth of 10% for 2010 with growth
in electrical consumption of 10% during
2010 and 8% in 2011. During 2009,
China ordered 45,000 MW of new steam
turbine generation equipment, about
50% of all orders worldwide. Of these
orders, approximately 26,000 MW were
for coal-fired units and 16,000 MW for
nuclear plants.
China is also working diligently to
ensure its future coal supplies. In February
of this year, China signed a 20year,
$60 billion take-or-pay contract
for 300 million tons/year of coal from
Australia. Today, China produces about
75% of its electricity from coal, and the
terms of this contract made it clear that
coal will remain China's favorite fuel for
many years to come.
In contrast, GE Power & Water president
and CEO Steve Bolze presented his
projections: Approximately 2,700 GW of
power generation investment will occur
worldwide in the coming decade, with
coal plants still getting about a third of
each investment dollar (Figure 1).
China added 12 GW of wind generation
to its grid during 2009, more than
any other country. By comparison, the
U.S. added 10 GW of wind in 2009, making
a solid claim for second place in
the wind race. Another interesting statistic:
In 2009 more automobiles were
delivered to Chinese customers than to
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U.S. customers. Only a few years ago,
a number of economists were ridiculed
for predicting that China would surpass
the U.S. in automobile purchases within
10 years. Now, all power generation
products and products that consume
electricity, even electric cars, are being
tailored for the Chinese market. We are
witnessing the evolution of a Chinese
middle class that desires automobiles,
better housing, appliances, and creature
comforts. Taken together, the world
should expect a rapid increase in the
per capita consumption of electricity in
China (Figure 2).
U.S. Utilities Face Reduced Demand
Ironically, while China and India are back
to fast track growth with principally coal
2. Market growth centers shift. Much of the power generation equipment market
growth will occur in nondeveloping economies over the next decade. Source: General Electric
OECD
24,000
Non-OECD
TWh

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POWER May 2010

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