Global Warming Is Creating Surprise Investment Winners
Global warming concerns are going to create some surprise winners and losers says the McIlvaine Company in its World Market for Your Products. The conventional wisdom is that suppliers of coal-fired boilers and associated equipment will be the losers. McIlvaine provides details as to why these suppliers will actually benefit from carbon taxes or other programs to reduce greenhouse gases.
Some of the biggest winners will be those who supply equipment and services to both fossil generation and renewable energy plants. Hence, suppliers of resins used in high technology plastics will benefit both from the expanded use in coal plants as well as the use in wind turbine blades.
In the electricity generating sector, the greenhouse gas reduction options can be ranked from least expensive to most expensive as follows:
Future investment in greenhouse gas reduction in the U.S. can be predicted from the present activity in Europe. Every coal-fired plant in the U.K. is co-firing biomass. The Drax plant will use 4 percent of available cropland to grow biomass for its 4000 MW generating facility. Germany presently has 23,000 MW of new coal-fired power plants under design and construction.
The replacement of the U.S. coal-fired generator fleet with more efficient units would require a capital investment of $450 billion. The replacement of all coal-fired boilers in the world would require an investment of $2 trillion.
The total investment in wind energy is projected at $200 billion over the next 15 years.
Seventy-five billion gallons/yr of ethanol production will require power generation of 50,000 MW. By using waste steam from coal plants, there would be an annual net reduction in greenhouse gases of 100 million tons of CO2 per year as opposed to firing these plants with dedicated natural gas boilers.
Biomass co-firing substituting for 10 percent of the coal in existing boilers would provide an additional 100 million tons of CO2 reduction. Some of this biomass could be the residue from cellulosic ethanol production.
Replacement of existing coal-fired plants with more efficient integrated combined cycle gasification plants or super-critical coal-fired plants would reduce CO2 by more than 300 million tons/yr.
The greenhouse gas reduction benefits of ethanol as opposed to petroleum are substantial. If half the U.S. transportation fuels were replaced, the net reduction would be 500 million to 1.5 billion tons/yr. This does not include the benefits of the co-location cited above. But this does take into account the full impact of gas and oil exploration and petroleum refining and transport.
The conclusion therefore reached in World Market for Your Products is that the biggest investments will be made in the coal-fired generator sector. Those companies with ties to this industry will benefit substantially.
GE is well positioned to benefit from the coal initiatives. It is a leader in biomass reburn technology. This is a technology which utilizes co-firing to reduce NOx. It is also aggressively pursuing IGCC projects and is a supplier for the AEP plant now underway.
Siemens will benefit through its IGCC offerings but also from its air pollution control activities through its Wheelabrator subsidiary.
Foster Wheeler manufacturers circulating fluidized bed boilers which are capable of handling a wide variety of coals and biomass.
Alstom already has record backlogs in coal-fired power plant orders and is also a leader in air pollution control.
Doosan Babcock has considerable experience with co-firing in Europe.
Headwaters, Inc was the developer of the first ethanol plant to use the waste heat from a coal plant and is pursuing these projects.
ABB, Invensys, Thermo Electron and Emerson all can generate significant revenues from the sales of instruments and software to maximize performance of combustion operations.
For more information on World Market for Your Products, click on:
http://www.mcilvainecompany.com/brochures/water.html#n039 .
Bob McIlvaine
847-784-0012
rmcilvaine@mcilvainecompany.com