The Importance of Energy Around the World
The organization and structure of the power industry has undergone important change in many countries over the last few years. Reasons for change are political, economic, and technical. The development of combined-cycle power plants is the best example of a technical change. These plants use NG as the primary fuel to generate electricity. They have efficient procedures and several advantages compared to traditional thermal and nuclear power plants. In addition to that, they require less startup investment cost and shorter depreciation periods. The traditional economies of scale that were the reason for the existence of big regulated utilities have either disappeared or greatly reduced. This new insight compels the restructuring of the power industry into a free electricity market. The general trend is to move toward a greater competition, which means larger risks for private companies |1].
NG is considered one of the most reliable sources for supplying the world s growing energy demands. The industrial heating sector is the largest consumer of NG. Electrical power generation comes after that. It has grown strongly after the introduction and development of combined-cycle generation technology (CC-NG) in the 1980s. One reason for this growth has been abundant NG resources around the world: the United States, Russia, Europe, Latin America, and the Middle East. These resources have favored gas-fired generation as the key factor in the total growth of NG consumption. As there are still NG reserves that have not been yet discovered, this consumption is certain to keep growing. As a result, investment in infrastructure such as terminals, pipeline networks, and compressors will increase in the future.
Countries around the world have understood the importance of energy and its role in the development of their societies. The following examples show how countries pay attention to and invest in the energy resources and on-time transportation of energy to the customer.
In recent years, Latin America has been one of the most intensive development regions for NG and electricity [3]. The region is highly dependent on hydropower (about 57% of the region's installed capacity is hydro), and the need to diversify away from heavy investments in hydropower and oil is driving many countries to promote the use of NG, especially for power generation. Examples of these developments are in Brazil, Chile, and Colombia. Countries in the region are diverse in size, electrical installed capacity, electrical power demand, and electrical transmission and NG network characteristics (level of meshing and geographical extension) [4].
Economic reforms let private sectors invest in energy-generation and energy- freight sectors that were previously reserved to national governments. These reforms boosted the development of an energy infrastructure in Latin America. Electricity and NG pipelines developed in the region, separately in each country and in cross-border electricity—gas interconnections. The introduction of NG in the energy matrix of these countries was more aggressive at the end of the 1990s with the construction of cross-border gas pipelines (Bolivia—Brazil, Argentina—Chile, etc.) and the development of local gas production fields [3].
NG is mostly used in industries and automotive sections. As these two sections have experienced significant growth, their consumption rates of NG have increased. Another reason for the increase in the use of NG is the growing numbers of gas- lired thermal generation plants producing electricity.
In addition, Chile and Brazil decided to implement regasification plants in order to start importing LNG beginning in 2009 [4]. The motivation for both countries is similar: (1) to diversify the gas supply for the country (in the case of Chile, to diversify from Argentina; and in the case of Brazil, to diversify from Bolivia) and (2) to create a flexible supply able to accommodate the use of gas to power generation.
In China, NG is becoming one of the main resources of energy, in addition to coal and oil, and its consumption is rapidly increasing [5].
In Spain, gas systems have been restructured from a regulated market to a free and competitive market in the last few years. Gas companies are building combined- cycle power plants to get into the electricity market (1]. Such companies have the opportunity to act in both gas and electricity markets. They can either sell their gas as fuel in the gas market or generate electricity and sell it in the electricity market. Th"s, these two markets are related to each other with respect to market price, and lhe coupling between them is much stronger.
In the European Union, only a few countries have the advantage of having sub- stantial energy resources that not only meet their domestic needs but also can be exported to other countries in the region. Norway, the Netherlands, Denmark, and the United Kingdom are among these countries. There have been considerable investments in pipeline networks in order to transport energy to other European terminals.
The growth in energy-transportation networks then led to the establishment of organizations to manage and coordinate the transmission system. They were also in charge of negotiating import and export transactions between countries that possessed energy and those that did not.
In the United Kingdom, one of the energy exporter and importer countries in the European Union, NG will play a great role in the energy sector in the future. With the closure of coal-fired power plants and the retirement of nuclear plants, the need for NG is inevitable. However, the country's gas supply has decreased as the country has become more dependent on gas to generate energy in recent years. This fact made the country rely more on imported energy sources than domestic resources. Ensuring on-time supply and delivery of energy to the country is necessary in order to increase the energy sector's security.
Over the past few years, more and more gas has been drawn from indigenous North Sea supplies to meet significantly rising domestic consumption. Rather than government looking to protect and prolong supplies (the practice in Norway, for example), policy changes in the 1980s led to the fastest possible promotion of NG production in the area known as the UK Continental Shelf [6].