Natural Gas: The Destination Fuel? Defining the next decade

Transcription

1 General Electric Natural Gas: The Destination Fuel? Defining the next decade Peter Evans, PhD Senior Director Global Strategy and Analytics Conference Brussels October 10,

2 What is it? Gas is a destination fuel 2

3 Rethinking the role of gas Bridge Fuel Destination Fuel Old way of thinking Role of gas temporary bridge to low carbon economy Gas supply constrained Many regions facing future of high import dependency New way of thinking Role of gas key long term solution to achieving a low carbon economy Gas supply abundant Many regions facing a more secure energy future 3

4 Global natural gas growth Electric Sector Gas Consumption expansion, Europe +35.5BCM World +590BCM Power gen NG consumption to grow by 50 percent 4

5 Global natural gas prices disconnected Natural gas price trends: US, Europe, Asia Nominal Dollars per MMBtu Asia LNG UK NBP EU pipe gas US HH Crude Oil futures Singapore HFO NBP Futures HH Futures '09 '10 '11 '12 '13 '14 '15 '16 Source: GE Energy, History: EIA, IMF, Platt s Futures: ICE, CME. Futures based on Sept 14, 2012 settlements Asia LNG :Japan, Korea LNG prices; EU pipe gas: Russian gas delivered to German border; NBP: National Balancing point UK. Tight LNG market conditions may ease after 15 EU gas prices have been softening on lower demand and recently lower oil prices High gas prices and low CO2 prices in Europe have allowed coal generation to increase. Look for continued softness in spot prices as gas tries to compete. US prices will remain low till demand growth occurs US export opportunities remain attractive 2010, General Electric Company GE Energy: 5 GE Global Research Rev. April 2010

6 What is it? Less water 6

7 Water requirements for power gen Plant-type Nuclear Coal Steam turbine: Non-coal Coal Combined Cycle Steam turbine: Non-coal Combined Cycle Geothermal Steam Nuclear Nuclear Concentrating Solar Coal IGCC Combined Cycle Cooling technology Once through Cooling pond Cooling tower None Gal/kWh Steam turbine: Non-coal Source: NETL 2009 Gas-fired plants compare favorably to coal and nuclear 7

8 Global drought history Total 620 serious events in last 100 years Impact 2,159 million affected 11.7 million killed Source: EM-DAT: The International Disaster Database,

9 What is it? High flexibility 9

10 Partnership gas + renewables Gas Renewables Central and distributed Flexible supply to grid Ability to co-dispatch with wind Proven technology Large installed base (1,325 GW) Lower carbon footprint than coal Distributed Intermittent supply to grid Zero marginal production cost Strong social and local acceptance Rapidly growing installed base (250 GW) Zero carbon emissions Bringing together complementary capabilities General Electric 2012 All Rights Reserved 10 Evans Princeton University

11 Work: Much more from much less Wind-Solar-Gas plant expected to be 69% efficient and power 600,000 homes in Karaman, Turkey 22-megawatt GE wind farm 50-megawatt esolar solar thermal system 11

12 What is it? Employment 12

13 Job creation from unconventionals Jobs created = ~70 per Bcf / 100 per well Job creation estimates range from 1.7 million to as much as 7.2 million jobs created by 2035 Study, year Estimated Total Jobs IHS-CERA, M by 2035 T. Considine, 2010 Range: 102k to 283k by 2020 PWC, 2011 Direct US mfg jobs: 5.3M to 7.2M by 2035 W. Virginia U., k in 2009 U. of Arkansas, k by 2012 variation in results stems from different assumptions of future demand, policy and industry economics UC tends to have the largest job impact in rural areas, which can be a positive force for rural development 13

14 What is it? High digital potential 14

15 Scale of industrial internet Social media vs. a key power source in generating electricity 2012 Twitter usage Gas turbine compressor blade monitoring potential* 80 GB per day Sources: Twitter s Dick Costolo: Twitter Mobile Ad Revenue Beats Desktop on Some Days, Forbes.com, June 2012; Twitter by the Numbers, Twitter s Raffi Krikorian vs. 588 GB per day Sources: Platts UDI World Electric Power Plant database, June 2012; GE Energy RM&D information * Note: Assumes operational gas turbines (generating units only) >50MW are equipped with Blade Health Monitoring capabilities Data volume potential is 7x greater than current Twitter usage 15

16 GE Energy M&D Center Turbines monitored ~1,550 units globally 24x7x365 coverage 16 Euro Gas 2012

17 Potential from GT fuel savings How might industrial internet growth impact gas-fired power fuel spend? Global power sector fuel spending on NG Billions of constant 2010 Dollars Reference case Latin America Africa Middle East Other Asia Pacific China Eurasia OECD Asia Pacific Europe North America '00 '05 '10 '15 '20 '25 Sources: GE Energy calculations based on Fuel COE Aug 2012 country generator gas demand and NG price outlook. Historic data from IEA, BP Stat report, EIA, CERA, BMI. Notes: Fuel savings estimates assume a 1% improvement in country level system average btu/kwh generation efficiency by $178 B Global power sector fuel annual spending on natural gas With 1% improvement in installed fleet fuel performance Annual savings 2015 $292 B $4.0 B 2020 $440 B $6.5 B Efficiency gains from software and network optimization driving better dispatch optimization & improved gas/power system harmonization $66 Billion = Cumulative savings over 15 years 17

18 Summary Advantages of gas as a destination fuel Less water intensive than other base-load solutions Flexible and complementary with renewables Strong jobs creation potential High digital potential Industrial Internet Gas a key force shaping the future energy landscape 18

19 General Electric Natural Gas: The Destination Fuel? Defining the next decade Peter Evans, PhD Senior Director Global Strategy and Analytics Conference Brussels October 10,