Bloomberg News

China, India Lack Water for Coal Plant Plans, GE Director Says

June 08, 2012

China’s and India’s plans to build more coal-fired power plants to meet electricity needs aren’t feasible because of a lack of water needed to cool the plants, General Electric Co. (GE:US)’s global strategy director said.

The two countries have not adequately considered the water needs of their proposed coal plants in their plans, Peter Evans, GE’s director of global strategy and planning, said yesterday at a seminar in Tokyo.

“They have not introduced a water constraint on their model,” Evans said. “They assume the water is there. So my view is that they actually will not be able to build as many coal plants as the projections suggest.”

China’s coal demand will increase 70 percent to 3.71 billion metric tons coal equivalent by 2035 from 2009, under the country’s energy policy, while India’s demand will increase 188 percent to 1.15 billion tons equivalent over that time, according to the International Energy Agency’s World Energy (MERENER) Outlook for 2011.

“Tons of coal equivalent” is a unit used by the IEA to compensate for discrepancies in energy output among various types of coal.

China’s water consumption for power generation is set to increase to 250 billion gallons (947 billion liters) a day in 2025 from 141 billion gallons in 2011, according to GE’s calculations. The 2025 figure is 167 times the total current daily water use of New York City, according to GE.

China Demand

GE, which produces gas-fired and wind-powered turbines, solar equipment and other projects that would benefit from a shift away from coal, was not immediately able to provide comparable water-use figures for India.

India’s NTPC Ltd. (NTPC), Tata Power Co. (TPWR) and Reliance Infrastructure Ltd. (RELI) plan new coal plants in the South Asian country, according to a 2010 report by HSBC Finance Corp. and the World Resources institute that found 79 percent of India’s new power capacity was being built in areas of limited water availability.

In China, coal-fired plants are planned by such companies as Shenhua Group Corp., which intends to build an 8-gigawatt generator in the southern province of Guanxi, the official Xinhua News Agency reported in December.

Evans predicted that Chinese leaders would have to adopt less water-intensive power-generation strategies, such as a heavier reliance on wind farms and more expensive dry-cooled coal plants.

Water constraints will also probably prompt China to use more natural gas than it is currently targeting, since gas-fired generators also use less water than coal-fired ones, Evans said.

China’ natural gas demand is forecast to increase more than five-fold to 502 billion cubic meters in 2035 from 93 billion cubic meters under an IEA scenario where fossil fuel subsidies are cut, according to the 2011 World Energy Outlook.

“It’s interesting when you think about a new constraint like water: ’What will it do to effect the system?’” Evans said. “I think it will add more gas and wind than many people are anticipating.”

To contact the reporter on this story: Jacob Adelman in Tokyo at jadelman1@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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