THE INTERNATIONAL JOURNAL OF

HYDROCARBON ENGINEERING

Volume 3 Number 6 – June 1998

Power Generation vs. Independent Power Production

Miro R. Susta

Peter Luby

IMTE AG, Power Consulting Engineers, Switzerland

ABSTRACT

This article analyzes the compatibility of power generation technologies with independent power production.

Power producing state-owned utilities have traditionally been risk-free enterprises. Their anonymity allows them to operate new technologies, as any risks associated with the use of unproven technologies are born by the end-users rather than the utilities themselves.

On the other hand, independent power producers (IPP) are affected by risk evaluation. They are therefore wary of technologies which lack a proven operational record, as any failure to meet their contractual liabilities could have dramatic consequences.

Consequently, it may appear that the traditional players in the power generation industry, the state-owned utilities, have been promoting technical progress more effectively than the modern players, the IPPs.

However, IPPs also have an affinity for modern technologies because they provide higher performance parameters, which in turn offer higher revenues, more fuel choice flexibility, and the ability to respond promptly to market imbalances and volatilities.

This article considers the equilibrium under which these two seemingly opposing trends can coexist and inter-act, and analyses the affects of such equilibrium through examples of gas turbine dependent power generation technologies.