Power Generation

Following the successful delivery of the report “Power Generation from LPG – The Global Status of LPG-based Power Generation in Commercial, Industrial, and Power Sectors” by Delta-ee in 2016, WLPGA wanted to build on this study.
Market Development & Recommendations for Future Growth
Market Outlook
Further explore the global market outlook associated with the growth of the LPG Power Generation sector within a band of systems from 250 MWe as an upper threshold to 5 MWe as a lower threshold of analysis
Market Characteristics
Identify the market characteristics which are likely to be present in the markets which are most promising for LPG Power Generation (e.g. lack of natural gas infrastructure, high electricity prices, etc.)
Case Studies

Highlight 6-8 specific countries which have some promising characteristics for LPG for Power Generation, together with an analysis of these market characteristics.

Guidance

Provide clear guidance and recommendations to global LPG stakeholders (e.g. governments, associations, suppliers, manufacturers, etc.) on steps that can be taken to maximise the opportunities to grow the LPG Power Generation sector globally.

Viability

Demonstrate that LPG is a viable and proven option for large scale power generation.

Final Research

The final report, completed by Delta-ee in Spring 2017, summarises the results from this research and consists of three parts: Market Outlook, Key Countries & Market Characteristics and Recommendations.

The full report can be downloaded here.

Market Outlook
There is growing evidence to suggest that LPG will have an important role to play within the global Power Generation sector in the next 10 to 20+ years.

As the trend towards renewables continues throughout many parts of the world, and with coal increasingly seen as a power generation source of the past rather than the future, the role of gaseous fuels as a lower carbon, flexible way to generate electricity has never been more important.

The International Energy Agency (IEA) anticipates a 50% growth in the demand for natural gas in the period 2016 to 2040 – with much of this growth associated with electricity generation, and a continuation of the trend away from using coal-fired power plants.

Where pipeline infrastructure exists in close proximity to the demand, natural gas is clearly the gaseous fuel of choice. However, many countries do not have an established network of natural gas pipelines. In countries where these do exist, infrastructure is often reserved for areas of high population density and/or centres of industrial activity, leaving more remote areas with little or no access to natural gas. In such cases, there is a clear opportunity for LPG to provide a solution for power generation – especially when new power plants are necessary to meet increasing electricity demand.

Over time, we expect natural gas grid infrastructure to expand in many regions throughout the world. However, in some countries, power shortages are becoming critical issues today and governments cannot afford to wait for five to ten years before natural gas pipelines are in place to fuel new-build power plants. Therefore, in a bid to provide security of electricity supplies, governments are increasingly considering the potential for using LPG as a ‘bridging’ fuel. In these cases, power plants fuelled by LPG are built – often with short one to two year lead times – but with a longer-term plan to convert to natural gas once the pipeline infrastructure is in place.

Once such example is the Bridge Power Plant, which is currently under construction in Ghana. This facility, which will ultimately have an electricity generating capacity of 400 MWe, is the largest power plant of its kind to be fuelled by LPG. The plant will use gas turbine generator sets with steam turbines in a CCGT (Combined Cycle Gas Turbine) configuration. Once completed, it will represent over 15% of the country’s power generation capacity. In the short term, the plant will be run on LPG. However, the plant is ‘fuel-flexible’ with the intention to replace LPG with natural gas once the pipeline infrastructure is complete. There is also the option to fuel the plant with diesel should there be any disruption to supplies of either LPG or natural gas. This flagship project illustrates the potential for using LPG as a flexible, low-emission alternative to other fuel types within power generation facilities. Other, similar projects are expected to follow in the coming years as the potential for LPG becomes more understood.

In the future, there is also likely to be an emerging opportunity associated with the use of LPG Power Generation in combination with renewables such as solar PV (photovoltaics) and wind power. These ‘hybrid’ (or microgrid) projects are likely to be particularly well-suited to remote, or island, locations which currently rely on expensive diesel to meet their power needs. While this is not a topic explored within this study, it will likely be a focus area for future projects carried out by the WLPGA.

Key Countries
The following eight countries were identified as markets of high opportunity for LPG Power Generation
Recommendations
The following recommendations, targeted at LPG industry stakeholders, have been compiled with the ultimate intention of improving the future prospects of using LPG as a fuel for Power Generation
For Policymakers
Better positioning of LPG to policymakers and energy users

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Development Finance
Better positioning for development finance for energy projects in emerging markets

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New business models
Develop and encourage new business models for LPG – new solutions and services

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Indexation

Indexation of LPG with other fuels

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Pollutant comparisons

A comparison of emissions profiles of pollutants between LPG and other fuels

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Costs

Better understanding of the costs of local LPG infrastructure development

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Conversion
Exploring the opportunity of converting diesel engines for LPG use

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