• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

The Financial Times has carried an article on the strength of China’s power generation manufacturing sector in relation to that of India and to the wider world.  The article uses the case of CLP Holdings, a Hong Kong utility, which sources power generation equipment from companies from China’s mainland when building power plants around the world, and argues that it does so because of the quality of the equipment as well as its price competitiveness.  A comparison is made to India, whose heavy manufacturing industry is so far behind it “may never close the gap”.  The article claims that the big three Chinese makers, Dongfang Electric, Harbin Electric and Shanghai Electric, can provide equipment to India for half the price of any Indian or other international firm.  In addition, the speed at which the Chinese firms provide equipment is another competitive advantage.  The scale of Chinese industry is given as one factor in its competitiveness, and it is suggested that international firms will only be able to compete with China if they are able to match this scale.

Japan is to end its total nuclear power generation shutdown by restarting two nuclear reactors at the Oi station in Fukui prefecture in the country’s west.  Japan gradually closed all of its 54 nuclear power plants, which provided around 30% of its power, to conduct safety inspections following the Fukushima nuclear disaster in 2011;  the Oi station restarts have been approved and will take place in July.  The restarts will ease summer power shortage fears held by industry, though opinion polls suggest that the majority of the public are against the restarts.

Cement makers in India have been hit with a record fine for price fixing, Reuters reports.  Eleven cement makers, including UltraTech, ACC and Ambuja, were hit with fines totalling $US 1.1 billion/€ 875 million, but are likely to appeal the fines.  The Competition Commission of India found that the companies colluded to underuse their plants to create an artificial shortage of cement.  The companies deny the charges.

In Germany, wholesale prices for electricity delivery in 2013 have dropped to 2009 levels, an indication that manufacturing in the country expects 2013 to be a year of low demand for their products.  A range of economic indicators show an expectation of reduced demand, and sales of cement have been down within the country.  However, there are suggestions that industry may be waiting for additional renewable power generation to come on line in 2013, to see how energy prices are affected, according to Reuters.

Myanmar (Burma) is planning to build several new power stations, according to Xinhua.  One, a 600 MW coal-fired power plant, will be built close to the former capital Yangon by J Power Co of Japan, and another will be a 500 MW gas-fired plant, to be built by BKB Co of South Korea.  Other plants will be built by General Electric and Caterpillar.  Demand for power currently stands at around 1900 MW across the country, while the supply capacity is only around 1500 MW, rising in the monsoon season when the country’s hydroelectric plants run at a higher rate.  After economic sanctions on the country were lifted following the transition to partial democracy, foreign investment has begun to pour in, and electricity demand is likely to increase sharply.  The country has recently experienced power shortages, after damage caused by a Kachin Independence Army bombing.

Legislation and Regulation

Poland has blocked the unanimous EU endorsement of a European climate change strategy document, according to The Wall Street Journal.  The strategy’s focus was deep carbon emissions reductions of up to 95% of 1990 levels by 2050; Poland, which relies heavily on coal for its power generation, was the only one of the twenty-seven European Union countries to veto the endorsement.  Poland’s stated reasoning was that such a strategy should be made in the context of a global agreement on reduction targets, without which Europe would face an industry drain to other countries.

Research, Development and Technology

The Wall Street Journal has carried a disappointingly brief and somewhat belated article on three ‘emerging’ technologies that it believes will lead to cheaper carbon capture.  The first is improvements to wet scrubbing, being researched by Linde Group and Southern Co, involving new, more efficacious amine chemicals, and being applied at a 1 MW pilot plant at the (US) National Carbon Capture Center.  The second is dry scrubbing, being researched by ADA Environmental Solutions, using dry or solid powder sorbents to separate CO2 from flue gases.  The third is oxy-fuel combustion, with one researching company being NET Power.

In more solid technology news, General Electric is to partner with Norway’s Sargas to develop a 250 MWe gas-fired power plant with enhanced oil recovery (EOR) technology.  General Electric will supply the gas turbine, while Sargas’s contribution will be the high-pressure carbon capture and EOR technology.  The partners believe that their technology will provide for financially attractive carbon capture and storage, with the revenue from the additional oil extracted helping to make the financial picture better.  Korean company DSME will be the contractor building the facility.

Enel has announced funding for three new programs to encourage energy innovation. ‘Enel Lab’ is a €15 million/$US 18.8 million, to be spent over the next three years, to sponsor innovative energy start-up businesses in Italy and Spain.  In the first round, six start-ups will be selected and will each receive up to €650,000/$US 817,000, using a business laboratory provided by Enel and Endesa.  The ‘Energy for Research’ program will award twenty study grants of €15,000/$US 18,800 to young energy researchers for work to be conducted over a period of ten months.  The possible aspects are broad: “renewable sources, energy efficiency, air quality, electric mobility, smart grids, access to energy, energy policy, business and economics, corporate social responsibility and safety at construction sites”.  Masters and PhD graduates are eligible to apply.  It is being run in conjunction with the Conference of Italian University Rectors.  The ‘Enel Foundation’ is a not-for-profit institution founded by Enel to facilitate and support study and research into energy, socio-economics, sustainable development and innovation.


The co-head of the Sustainable Energy For All initiative at the UN’s Rio+20 summit has said that natural gas, including non-conventional natural gas from shale deposits, will be vital in ensuring access to energy for all people, as well as protecting forests.  In many countries, forests are harvested for firewood for indoor heating, leading to two million deaths per year from smoke inhalation.  The World Wildlife Fund described natural gas as a good stop-gap measure, but a not a viable long-term solution, while Friends of the Earth were critical of the make-up of the panel, which included the chairman of the Bank of America, the chairman of the China Development Fund, and the chairman and CEO of Renault-Nissan.

Company News

UK based Energy Financing Team (EFT) has secured a €350 million/$US 440 million loan from China Development Fund to build a 300 MW coal-fired power plant in Bosnia.  In a sign that corroborates the Financial Times’ article described above, Chinese firm Dongfang Electric are to provide the equipment and construct the plant, to be built in Stanari, northern Bosnia. EFT had won a 30-year concession to build the plant in 2008, but had problems financing the plant until making the current deal.  According to Reuters, China is more willing than other nations to invest in the Balkans, as they anticipate future higher electricity tariffs as worth the perceived higher risk of investment.

RC May Holdings, owners of the coal and oil-fired ‘BL England’ plant in New Jersey, USA, are to close one of its units and convert another two to gas in order to meet US Clean Air Act obligations.  The overall plant capacity will remain at 450 MW after the conversion, though it may increase up to 570 MW.  The coal-fired Unit 1 will be shut for good around autumn 2013, while Unit 2 will be taken off-line in May 2015 and converted to a combined-cycle natural gas, for a restart in May 2016.  In line with this, the third unit, which is currently fuel oil-fired, will be swapped to gas in May 2016.  The conversions will dramatically reduce emissions of NOx and SOx, while taking advantage of the cheap natural gas prices in the US.