Why hydrocarbon-based energy will continue dominating the market

A crucial factor in generating power and producing transportation fuels from renewable resources depends on efficient supply and distribution. For example, power generation from renewables is increasing relative to power from coal or heavier fuels oils.

Rene Gonzalez
Editor, PTQ

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Article Summary

Market drivers, regulations and government incentives are why more baseload power may come from renewables and other low carbon sources. Over the past 13 years, wind power capacity has increased from 160 MW to over 12 GW.

But before renewables can approach grid parity with conventional power generation, advanced planning is necessary for dealing with challenges at every phase of the project’s lifecycle, such as during startup and commissioning challenges. Without expert support, unplanned events could affect warranties, financing, safety and project completion.

Emerging technology, government support and competitive economics favoring variable renewable energy (VRE) are why they are now globally feeding over 2000 GW, or 2 TW (terrawatts) of power into the grid. At a recent industry forum, it was noted that the entire planet consumes about 15 TW of power.

If renewables are given an assumed 0.25 capacity factor, then 0.5 TW of the world’s power is from renewables. This is only 3% on the path to a global renewable energy economy. One of the major challenges to more widespread global deployment of renewable energy has to do with regulating intermittency and variability in generation and synchronization with the grid.

Advancements in energy storage technology will eventually resolve this problem and facilitate grid integration of power from VRE resources, but the projects currently underway are confounding developers with the “timing” involved in the commissioning process. Against this backdrop, mega refinery and petrochemical project investments continue expanding in growing economies, including significant expansion of coal fired power plants in China and Africa.

Even in mature markets, petrochemical investments continue going forward. Just this week, Linde announced that it will increase capacity starting up in 2024 to meet growing demand from the petrochemicals, clean energy, manufacturing, food and aerospace sectors in the U.S. Gulf Coast.

It will also supply Linde’s existing Gulf Coast pipeline system, which includes nitrogen and oxygen pipelines extending from the Houston ship channel south to Freeport, Texas. In parallel, building and commissioning wind, solar, hydropower, waste-to-energy and anaerobic digestion plants takes years of planning requiring careful coordination of services between developers, OEMs, contractors and specialized suppliers that are brought in at different project phases.

Once connected, power from VRE resources rely on efficiently managed electric power grids, but during the planning, construction and startup phase, a lot of expertise and support services are needed to test and connect new capacity to power grids.

These services vary across a wide spectrum of renewable projects, but they share a common need to meet tighter deadlines, control costs and demonstrate flawless project execution. With the downstream energy infrastructure already well developed and diversifying into the chemical value chain, reliance on the role they play in manufacturing, commerce and transportation sectors will prevail for decades.

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