Ontario remains a viable market for gas-driven power generation engines, from 400 kWe and up, through to 2020, according to Delta-EE, a research consultancy specializing in global heat and distributed energy markets, in particular custom energy markets behind the meter.
The firm says the global market for gas engines in that range will increase from 4.5 GWe in 2015 to over 7.0 GWe by 2020, driven by several factors: a recovering global economy, stronger policy support within emerging markets, rising electricity prices, and a growing trend for flexible, gas-powered generation.
The market in Canada basically comes down to Ontario, the company said in a September 1 webinar. Among the larger provinces, Quebec, Manitoba and British Columbia's power systems are dominantly water power. As for Alberta, the gas engine market there is heavily linked to oil production and thus to global oil prices, which have been well below their historic average.
Ontario currently accounts for over 70% of the Canadian gas engine market. Ontario has favourable policy support, in the form of programs to assist efficiency improvements and onsite generation. The market in Ontario also benefits from strong spark spreads. There is some uncertainty about future policy support. An increasing Global Adjustment cost, which is avoidable for onsite generators, including CHP plants, has helped drive gas engine sales. However, DeltaEE considers it possible that the GA will be changed after 2017 to share its cost among a wider pool of consumers, including CHP users.
Alberta can be expected to benefit from an anticipated slow rise in world oil prices after 2017, strengthening the gas engine market there, while overall Canadian annual sales should hover around 150 MWe out to 2022.
Hybrid micro-grids, comprising multiple energy sources, including renewables and dispatchable generation, plus energy storage, will be an increasing factor as well.