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the power - Global Media Publishing Ltd. - UK.COM

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SHAREWATCHChina’s big spending plansMore than 100,000 MW of old U.S. coal-fired <strong>power</strong> plants will continue to operate until2042 ra<strong>the</strong>r than using <strong>the</strong> latest ultrasupercriticals instead, explains WIP’s Chris Hopkins.China is pushing <strong>the</strong> U.S. off <strong>the</strong>world's centre stage. This transitionis clear when one analyzes <strong>the</strong><strong>power</strong> generation plans.In <strong>the</strong> 2010-2020 timeframe, China willoutspend <strong>the</strong> U.S. on new generators byUS$550 billion. But <strong>the</strong>y will gain 496 GWof generating capacity compared to only14 GW in <strong>the</strong> U.S. These are <strong>the</strong> newconclusions in <strong>the</strong> McIlvaine Fossil &Nuclear Power Generation: WorldAnalysis & Forecast.Industrial production and energyconsumption are directly proportional.California will continue to limitconstruction of new generators within <strong>the</strong>state, but will buy enough goods fromChina to fund generation increases in thatcountry.China will build more coal generationfacilities in <strong>the</strong> decade than existed in <strong>the</strong>U.S. at its peak.The U.S. will invest US$30 billion inenvironmental controls and life extensionof its existing coal-fired <strong>power</strong> plants, butwill be handicapped by <strong>the</strong> inefficiency of<strong>the</strong>se <strong>power</strong> plants.They will burn 20% to 30% more coal perkWh than will <strong>the</strong> ultrasupercritical plantsoperating in China and Europe. The priceof coal is slated to rise substantially in<strong>the</strong> coming decade. Since coal is <strong>the</strong>largest component of generation cost, thisinefficiency will be increasingly costly.The U.S. has shale gas which will replacemost natural gas as fuel for gas turbinesin <strong>the</strong> coming years. Never<strong>the</strong>less, <strong>the</strong>rewill be only modest investment in newcombined cycle gas turbine plants through2020. The long term EIA outlook is for gasto grow from 24% of <strong>the</strong> fuel used for<strong>power</strong> generation in 2010 in <strong>the</strong> U.S. to 27percent in 2020. In <strong>the</strong> meantime, coalwill fall from 45% to 39%.It is clear that more than 100,000 MW ofold U.S. coal-fired <strong>power</strong> plants willcontinue to operate for <strong>the</strong> next 30 yearsor more. It is also clear that <strong>the</strong> U.S.Company(Currency)Monthlyshare price52 weekhigh/lowABB (CHF) 18.52 14.40/23.97Ansaldo (EUR) 9.66 8.85/11.94Atlas Copco (SEK) 148.90 98.10/161.20Caterpillar (USD) 105.82 58.06/116.55* CHLORIDE Taken overby EMERSONCummins (USD) 103.32 63.04/121.49Doosan HeavyIndustries (KRW) 56500Foster Wheeler(USD)50800/9620030.49 20.33/39.75GE (USD) 18.85 13.75/21.65John Deere (EUR) 1400 990.00/1400Kirloskar (INR) 286.60 280.00/3406.65MAN (EUR) 91.96 47.90/97.85Mitsubishi (JPY) 2000 1784/2500MTU DetroitDiesel (EUR)555.08 34.91/56.60Rolls-Royce (GBX) 645.00 533.00/674.50Siemens (EUR) 94.70 70.02/99.39Volvo Penta (SEK) 110.50 80.85/122.00Wärtsilä (EUR) 23.11 18.17/29.50would be much better off if this capacitywere <strong>the</strong> latest ultrasupercriticals ra<strong>the</strong>rthan <strong>the</strong> old designs.Even with a 25-year life <strong>the</strong> new <strong>power</strong>plant investment would be more than justified.Since <strong>the</strong>re are ways to re-<strong>power</strong>Change overmonthChangeover yearChange sinceJan. 20080.00 -16.01 % -33.62%-2.08% -12.34% +11.81%+2.62% +43.31% +68.73%+1.17% +58.64% +120.11%-1.57% +134.46% +125.56%-2.75% -25.26%-10.03% +44.78% -57.53%-3.03% +30.72% -47.87%0.00% +2.94% +13.36%-1.60% -28.71%Monthly figures taken at <strong>the</strong> end of February 2012-5.11% +73.89% +3.32%+3.96% +4.48% -15.99%+1.62% +37.42% +53.07%+2.38% +14.67% +32.65%+4.77% +27.94% +5.94%+0.09% +26.50% +23.12%-6.68% +23.03% -46.60%existing sites with <strong>the</strong> newultrasupercritcals and since <strong>the</strong>se unitswould generate environmental benefitso<strong>the</strong>rwise unattainable, <strong>the</strong>re is everyreason for <strong>the</strong>se replacements totake place.WIPW ORLDWIDE I NDEPENDENT P OWER • MARCH 201211

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