The Prospects of Natural Gas in Electricity Generation – a view from OAPEC

Published October 29th, 2000 - 02:00 GMT

Human needs and practicalities play a significant role in determining the course and goals of development. Nuclear energy appeared on the scene, despite its hazards, in response to an urgent need for more electricity. 


It accounted for a sixth of the total electricity generated worldwide in 1998. Hydroelectricity accounted for a similar proportion. Fossil fuels, on the other hand, constituted the main source of electricity, meeting the remaining two thirds of the world’s electricity requirements.  


Just as human needs led to the development of nuclear energy as a source of power generation, they led to the development of other means of ensuring the continued progress of humankind.  


This took the form of inventing technology to generate electricity by means of gas turbines and adopting a combined cycle system, in which the waste heat of a turbine generator is recycled to feed a steam generator.  


The fact that combined cycle technology helped in 1995 to cut the capital cost of building power plants to about $400-500/kilowatt, just half that of building conventional thermal power plants in the 1980s, contributed significantly to the demand for gas as a fuel.  


On the supply side, new technologies, such as horizontal drilling and 3-D seismic surveying, have made it easier to discover natural gas reserves, and to delineate their size more accurately.  


Advancements in technology that have raised the prospects of abundance of low cost natural gas, particularly in areas accessible to major markets, as well as lowering the cost of transporting it by pipeline or as a liquid in special tankers, are helping natural gas to compete successfully with other sources such as coal and fuel oil in power generation.  


Its competitiveness is enhanced by the low emission of greenhouse gases and suspended particles by gas-powered electricity plants. This makes gas an attractive option when plants are to be built in environmentally sensitive areas.  


In economic terms, electricity generated by a gas-powered combined cycle system wins hands down over nuclear power. A 1300-megawatt nuclear power plant requires an enormous capital outlay of over $2 billion, while a 375-megawatt combined cycle gas power plant can be built much quicker and at a cost of between $0.15 billion-$0.2 billion.  


The capital outlay for power from a combined cycle system using gas is therefore about 70 percent lower than power generated by a nuclear plant; not to mention the unseen long-term hazards of nuclear radiation, and the problem of disposing of nuclear waste and the decommissioning of reactors.  


A comprehensive comparison should take all these factors into consideration.  

The role of natural gas as a fuel for power generation is not merely a transient phenomenon imposed by economic and environmental circumstances. 


Rather, it is dictated by new technological trends and forecasts based on the aforementioned facts and developments.  


OAPEC countries must take these developments on board in view of their significant reserves of natural gas. OAPEC natural gas reserves in 1999 were estimated at about 32.3 trillion cubic meters, or 21.5 percent of total world reserves.  


Until recently, the predominant downstream utilization of natural gas in OAPEC member countries has been for export or for use as a feedstock to produce petrochemicals.  


The General Secretariat anticipates that gas exploitation will now be expanded to cover the generation of electricity for use within OAPEC members as well as for export.  


The linking of national power grids will certainly contribute to the economic, social and technological development of OAPEC member countries and the region as a whole.  




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