Relevance of CCGT Power Projects in a Green Energy Future
A growing coalition of countries, cities, businesses and other institutions are pledging to get to net-zero emissions. In order to achieve that, it is essential to concentrate efforts on areas that yield the most substantial results. One such area is increasing investments to enhance efficiency and reduce emissions of gas-based power plants.
To meet the influx of challenges global private companies are collaborating to reduce emissions from CCGT power plants using Carbon capture, utilization, and storage (CCUS) technology and upgrading the turbines to allow them to use hydrogen. Investing in new plants and retrofitting existing power plants to utilize these technologies may be much more effective short-term solutions to reduce emissions while the energy infrastructure is upgraded over time to integrate renewable energy more effectively.
The hard stop directive on conventional power project financing may be counterintuitive for the Net zero transition. Incentives need to be explored allowing lenders to propose competitive financing solutions that incorporate newer environmental-friendly technologies. Similarly, national, and corporate procurement strategies have the opportunity to mandate such technologies as part of their minimum functional specifications for gas-based power plants.
Multiple initiatives are being designed and implemented globally demonstrating the ability of the conventional power sector to meet stringent emission requirements and support the Net Zero targets. For instance, in April 2023, Indonesia established new CCS/CCUS regulations promoting energy transition and integration. Similarly Japan in January of 2023 announced a Green Transformation Policy promoting traditional technologies alongside renewables in the path to Net zero based on private sector influence.
In the short-term, promoting conventional power projects using emissions off-setting strategies through regulations and attractive financing will enable governments to accelerate the Net zero transition.
