With some recent key installations in power plants across Central America and the Caribbean, Wärtsilä proves once again that its engine portfolio has the versatility to run on a variety of different fuels suiting both the needs of its customers and a challenging energy market.
In early 2016, the first of several LPG-powered power plants with Wärtsilä technology went into operation in Central America. A second plant on Roatan Island, Honduras, soon followed. Another plant is due to start operations in St. Thomas in the US Virgin Islands in late 2018.
LPG has its advantages. For instance, while liquefied natural gas (LNG) requires special shipping terminals and cryogenic storage solutions, LPG’s primary advantage is its easy accessibility in world markets. It is a global and easily tradeable commodity. In many parts of the world, LPG is used for transportation, cooking and heating. In addition, LPG is also more environment-friendly than heavy fuel oil (HFO).
Today, the lion’s share of LPG is sourced from the US, where it is a byproduct of the shale gas exploration bonanza, and from the Middle East. The US supply makes LPG especially attractive in the Caribbean and Central America, hence Wärtsilä’s recent LPG plant orders in the region.
This trend is supported by the World LPG Association 2017 market report, which points out how small countries and island nations without access to gas could be a future niche for LPG-fuelled power plants, and describes how LPG will have an increasingly important role to play in the world’s energy production.
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 50% growth in the demand for liquefied natural gas (LNG) 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 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.
In some cases, governments are looking at using LPG as a ‘bridging’ fuel in newly built power plants – 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.