Utilities in Indonesia plan to add 10,000 MW of coal capacity, similar to this plant on Java, over the next four years.
Black & Veatch
Utilities in Indonesia plan to add 10,000 MW of coal capacity, similar to this plant on Java, over the next four years.

“As they become richer, the citizens of China and India are using more energy to run their offices and factories, and buying more electrical appliances and cars,” the International Energy Agency says in its newly issued World Energy Outlook.

IEA estimates that China needs to add more than 1.3 million MW—the equivalent of 2,000 650-MW coal plants—to its electricity-generating capacity by 2030, more than the total current installed capacity in the U.S. Projected cumulative investment in China’s energy-supply infrastructure between 2006 and 2030 will amount to $3.7 trillion in 2006 dollars, “three-quarters of which goes to the power sector,” IEA concludes.

Powerplant development activity in China is “extremely busy,” says Hoe Wai Cheong, managing director of Black & Veatch’s Asia region energy business. “In 2007, an average of one plant a week has been commissioned there,” about 90% of them coal-fired because of China’s abundant coal reserves.

The 2007 Global Sourcebook
  • Overview:
    Firms Are Now More Selective
  • Manufacturing/Industrial Process:
    Expansion of Market Spurs Firms To Adopt Coherent Global Approach
  • Environment:
    Environmental Market Strong As Developing Nations Update Facilities
  • General Building:
    Economic Recession Worries in U.S. Fuel Interest in International Projects
  • Telecommunications:
    Growing Global Telecommunications Market Reaching Developing World
  • Petroleum:
    Growing Demand in Developing World Boosts Petroleum Market
  • Power:
    Despite Climate Change Fears, China And India Focus on Coal
  • Transportation:
    Rapid Global Development Fueling Greater Demand for Rail and Transit
  • Complete Report
    The Complete 2007 Global Sourcebook with data and market analysis
  • International engineering and construction companies like B&V, which is based on Overland Park, Kan., can compete for work in China, Cheong says. He adds, however, that many Chinese firms are capable of designing and building basic coal-fired powerplants, so unless the projects are very complex, there is really no need to partner with large international firms.

    “A local firm—whether in China or India—would ask, ‘Why do we need the participation of an international contractor?’ The simple answer is that they only need us if we can bring something to the table” in the form of expertise, such as B&V’s extensive experience in designing and building combustion-turbine projects, Cheong says.

    India is in a powerplant building boom of its own. It is expected to add more than 400,000 MW of new generating capacity by 2030. Like China, most of it is coal-fired.

    New Delhi-based National Thermal Power Corp. (NTPC), India’s largest generator, currently has 11,440 MW of new coal plants under construction and expects to be able to place orders for an additional 7,990 MW by March 2008, A.K. Singhal, NTPC’s chief financial officer, recently told energy analysts. Most of the new output would be coal-fired, he says.

    While no other nation can compare with China and India in terms of the number of coal plants being built, others countries, including Indonesia, Thailand, Malaysia, Vietnam, South Africa and Brazil, have aggressive plans nonetheless.

    Utilities in Indonesia, for example, plan to add a total of 10,000 MW of new coal-fired capacity over the next four years alone, according to the country’s Dept. of Energy and Mineral Resources, including 6,900 MW in the Java-Bali region. Engineering, procurement and construction work on one project—the 600-MW Rembang coal station in central Java planned by PT Perusahaan Listrik Negara of Jakarta, Indonesia—is just getting under way. A 70/30 joint venture team of Kuala Lumpur-based Zelan Berhad and PT Priamanaya Djan International of Jakarta won the $560-million EPC contract.

    B&V’s Cheong notes that Tokyo-based Sumitomo Corp. recently subcontracted to his firm a significant portion of its EPC work on a two-unit, 1,320-MW Tanjung Jati B coal-fired power station in central Java that is scheduled to begin commercial operation in the third quarter of 2010.

    In Africa, South Africa’s Eskom electric utility, which is based in Johannesburg, is rebuilding and returning to service three large coal stations that had been put on hold several years ago. It also is planning several new coal-fired facilities, including the Medupi and Brava stations, each of which will have the capacity to generate 4,800 MW.

    While conventional coal plants dominate the global plant-construction market, there also is strong demand for a wide variety of electricity-generation technologies that have much less of a climate impact. A new generation of nuclear-power generating systems is beginning to be built and international utilities are interested in building coal- or oil-fired projects with carbon capture and sequestration. Wind power also continues to grow.

    China leads the way in nuclear projects, with plans to bring on line an average of two nuclear plants a year between 2008 and 2020. As part of that plan, China Guangdong Nuclear Power Group, Shenzhen, in November 2007 awarded Paris-based Areva an $11.9-billion contract to build two new-generation European pressurized-water reactors in Taishan in southern Guangdong province.

    Areva CEO Anne Lauvergeon says that the record-breaking China deal “reinforces our presence in one of the most promising markets for the decades to come [and] opens the way for a new cooperation between CGNPC and [Electricite de France],” the French utility, which will hold a 30% ownership in the new nuclear powerplants.

    In July, a joint venture team of Westinghouse, Monroeville, Pa., and The Shaw Group, Baton Rouge, La., won a contract from China’s State Nuclear Power Technology Co., to build four Westinghouse AP1000 nuclear units—two in Zhejiang province and two in Guangdong province.

    Carbon Sequestration

    The growing list of fossil-fired projects with reduced carbon-dioxide emissions includes a recently announced plan by BP’s hydrogen energy unit and Rio Tinto to co-develop a potential $1.5-billion plant in western Australia that will gasify coal and capture 90% of carbon-dioxide emissions to store it in a deep underground geological formation.

    or all the talk about climate change, one fact is irrefutable: The world—led by China, India and other large developing nations—is in the midst of an extraordinary boom in the construction of conventional coal-fire powerplants. BP and Rio Tinto, both based in London, say they will decide by 2011 whether the project is technically and financially viable. “This would be the first hydrogen-fueled power proj ect to store CO2 in a saline formation, a type of geological structure which is more common globally than suitable oil and gas reservoirs,” BP officials claim, adding that they hope to duplicate the project.