Aging power plants in Asia shun investors

Power plants that date as far back as the 1970s are responsible for low investments in Asian power market says Aggreko.

Asian Power spoke with Aggreko managing director for Asian operation Debajit Das during the Power and Electricity World Asia 2012 and here’s what he said regarding the aging infrastructure in the region and what it has to mean for the power market:

We operate in a region which is home to many developing economies where the rate of demand for electricity is growing faster than the supply available in the market. Therefore, these economies are playing catch-up.

The problem is further complicated by an aging infrastructure in the region. Statistics indicate that globally, there is approximately 53 GW of power generation capacity that will cross the 40-year mark in the next three years, of which 37 GW are in Asia alone.

In general, power plants have a useful lifespan of approximately 25-35 years. Crossing the 40-yea–mark for power plants could be a stretch, and beyond that they are generally unreliable and prone to break down. Once plants break down, they may take a considerable amount of time to repair. At this stage, using interim power solutions can be beneficial.

For example, in 2010, Bangladeshi national peak demand for electricity was 5300 MW, of which the Bangladesh Power Development Board (BPDB) could only supply 3600 ~ 3800 MW reliably. In an effort to meet the national demand, Aggreko was commissioned to install a total of 200 MW of diesel-powered plants amongst others. In 2011, the power demand grew; however during the year, the gas-powered turbine generators base load power station, which was located adjacent to Aggreko’s plant broke down. The opportunity arose to assist BPDB in installing interim solution whilst they repair the generator. Switching the power plant's fuel supply from imported diesel to locally-sourced natural gas enabled BPDB to reduce the overall cost of energy production from the power plant by over 60%.

We are currently at the stage where there is a genuine need to bridge the gap between the growing demand for energy and having reliable power sources to meet Asia’s critical energy demands. This is a major concern as major industries – and consequently the economy in general – will suffer if the demand for power is not met.