Analysis of Global Power Market
Analysis of Global Power Market
Development Trends
1
Adjustment of
Power Generation
Mix
•
Nuclear Phase-
2
out
3
4
Improvement of
Power
Generation
Efficiency
Enhanced
Competitiveness
of Renewable
Energy
•
•
With the increasing attention paid by the government and the public to environmental issues, major countries
and regions are actively promoting the adjustment of power generation mix, increasing the proportion of clean
energy such as hydropower, wind power, solar power and nuclear power in total power generation. In the US,
due to the low gas price, its power generation mix is undergoing the switch from coal to gas. The European
Commission has set an ambitious goal with the target that at least 20% in 2020 and 32% in 2030 of gross
final consumption of energy comes from renewable sources. In 2017 renewable energy represented 17.5% of
gross final consumption of energy in the EU, on a path to the 2020 target of 20%. With the structural
adjustment of energy supply, major countries and regions will reduce the dependence on fossil fuel
consumption, as well as the emission of carbon dioxide and harmful gases, which is more conducive to
sustainable development of economy.
In countries such as Germany and Switzerland, there exits a gradual phase-out of nuclear plants, mainly due
to the economic challenges, diminishing costs of other alternative renewable energy sources, rising operating
costs and safety concerns. For example, the electricity generation from nuclear source in Germany has
decreased from approximately 150 TWh in 2008 to 76.1 TWh in 2018 with a CAGR of -6.5%.
With the improvement of the environmental awareness of government and public, as well as investors'
increasing demand for return on power plant investment projects, the overall efficiency of power generation
system will continue to improve. In terms of thermal power generation, the system efficiency can be improved
from about 35% to over 50% through the adoption of CHP (Combined Heat and Power) technology, which will
lead to less coal consumption and carbon dioxide emission. With regard to wind power, solar power and
hydropower, the improvement of electricity generation system efficiency means that under the same
environmental conditions, more electricity will be generated and the return of investments will in turn increase.
At present, the LCOE (Levelised Cost of Energy) of wind and solar electricity is still higher than that of thermal
power and hydropower, weakening their competitiveness. In most countries and regions, wind and solar
energy industries rely heavily on government subsidies. With the rapid development of technology,
improvement of electricity generation efficiency and cost reduction brought by the large-scale application of
wind and solar power, their respective LCOE is expected to continue to decline in the next few years, and
application of those power generation technologies will gradually achieve growth without subsidies.
FROST
SULLIVAN
Source: Frost & Sullivan
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