Future investment in new power plants

Page - July 13, 2010
The overall level of investment required in new power plants up to 2050 will be in the region of $3.2 to 8.4 trillion. A major driving force for investment in new generation capacity will be the ageing fleet of power plants. Utilities must choose which technologies to opt for within the next five to ten years based on national energy policies, in particular market liberalization, renewable energy and CO2 reduction targets.

A possible cap & trade scheme could have a major impact on whether the majority of investment goes into fossil fuelled power plants or renewable energy and co-generation. Such a scheme will play a major role in future technology choices, as well as whether the investment costs for renewable energy become competitive with conventional power plants. In regions with a good wind regime, for example, wind farms can already produce electricity at the same cost levels as coal or gas power plants.

It would require $6.8 trillion in investment for the Energy [R]evolution scenario to become reality – approximately 110% higher than in the Reference scenario ($3.2 trillion). The advanced Energy [R]evolution scenario would need $8.4 trillion, approximately 25% over the basic version. While over 50 percent of investment under the reference scenario will go into fossil fuels and nuclear power plants, at about $1.7 trillion, the Energy [R]evolution Scenarios, however, the USA shifts about 80% of investment towards renewables and cogeneration, whilst the advanced version makes the shift approximately five to ten years earlier. By then, the fossil fuel share of power sector investment would be focused mainly on combined heat and power and efficient gas-fired power plants.

Greenpeace Energy Revolution figure 6.10 and 6.11