Study on Profit Prospects and Business Opportunities of Natural Gas Power Generation Projects in Sichuan-Chongqing Region

Abstract

This study focuses on the profit prospects and business opportunities of natural gas-fired power generation (gas-fired power) projects in the Sichuan-Chongqing region. By analyzing their operational status, existing problems, electricity pricing mechanisms, cost structures, and business environment, it reveals the development potential and challenges of gas-fired power projects. The Sichuan-Chongqing region is rich in natural gas resources, with total reserves reaching 39.94 trillion cubic meters. The annual gas production is expected to reach 78.6-85.6 billion cubic meters by 2030. However, the installed capacity of gas-fired power (1.277 million kilowatts in Sichuan and 979,600 kilowatts in Chongqing at the beginning of the "14th Five-Year Plan") is much lower than that of provinces such as Guangdong and Zhejiang. Currently, gas-fired power projects are mainly of peak-shaving and combined heat and power types, facing issues such as contracted gas volume shortages, low proportion of gas used for power generation (only 1.2%), high fuel costs (accounting for over 80%), imperfect pricing mechanisms (two-part tariff lower than that in eastern regions), and competition from hydropower and coal-fired power. Profit calculations show that with the implementation of the two-part tariff and equipment upgrades (e.g., the gas consumption rate of Unit H in Dazhou Phase II drops to 0.1834 cubic meters per kWh), projects can achieve slight profits. However, to reach an internal rate of return (IRR) of 6%, the capacity tariff needs to increase by 62.88% (to 39.09 yuan per kilowatt per month) or the energy tariff by 16.72% (to 0.5055 yuan per kWh). In terms of business opportunities, policy support, growing demand for clean energy, peak-shaving needs under extreme weather, and demand for combined heat and power in industrial parks are major positives, while challenges include high and volatile gas prices, imperfect market mechanisms, and competition from energy storage technologies. The study suggests improving profitability by integrating gas-fired power with new energy projects (e.g., a 1:1 ratio of green power supporting projects), promoting the optimization of the electricity pricing mechanism, and ensuring gas supply to facilitate the sustainable development of gas-fired power projects in the Sichuan-Chongqing region.