APAC is ‘outperformer’ in gas generation: Fitch

Its gas generation volume will rise by 898TWh from 2022 to 2031.

All regions are expected to see an increase in gas generation in terms of volume with varying growth rates, but the Asia-Pacific (APAC) is the “clear outperformer” as it is seen to post a 62% rise in generation over 2022 to 2031.

In a report, Fitch Solution said gas generation in APAC is seen to increase by 898 terawatt-hours (TWh) over the same period.

Gas generation growth is also robust in other regions with the Middle East and North Africa seen to increase by 37.2%, followed by Latin America (30%), and Sub-Saharan Africa (26.7%), but Fitch noted growth in the latter region is coming from a very low base.

“The drivers vary by region and market, but common threads include the improving efficiency of gas-fired power plants, ongoing decarbonisation efforts and attempts to diversify the power supply away from alternatives such as hydropower, coal and oil,” Fitch said.

“Although the LNG-to-power markets remain nascent, it shows a lot of potential worldwide, in particular in markets lacking adequate domestic gas supplies and where the options for pipeline gas are limited,” it added.

Globally, Fitch said the power sector’s demand for gas will grow robustly, increasing by 1,738TWh or 27.1% over the 10-year forecast period, 42.9% of which will come from emerging markets, and 11.1% will be from developed markets.

The share of natural gas in the global total generation is expected to “decrease marginally” to 21.9% in 2031 from 22.4% in 2021. It is expected to decline in developed markets from 29.8% to 27.1%, offsetting that growth in emerging markets to 19.2% from 18%.