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Combustion Industry News
Date posted: 30th Oct 2017
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  Patrick Lavery
  
  Combustion Industry News Editor

US EPA chief announces intention to repeal Obama administration’s Clean Power Plan

The head of the US Environmental Protection Agency, Scott Pruitt, has announced his intention to repeal the Obama administration’s Clean Power Plan, saying “Here’s the President’s message: the war on coal is over.” While the repeal has not yet formally taken place, the EPA itself argues that the Plan was illegal on the grounds that it was anti-competitive, marginalising coal-fired power generation. Some industry groups have welcomed the move, while environmental groups have opposed it, the Sierra Club executive director saying that the Clean Power Plan was an “achievable and affordable means of reducing carbon pollution”. It is unclear if the EPA will replace the Clean Power Plan with a different rule designed to reduce emissions. One of the peculiarities of the repeal will be that the Plan will have never been in force, having been suspended by the Supreme Court last year after a legal challenge, and this fact suggests that its repeal will do little to change the situation of the US coal industry, except perhaps psychologically.

Arguments based on competitivity of different means of power generation is a fine line for the US administration to be treading at the moment. Energy Secretary Rick Perry wrote to the Federal Energy Regulatory Commission late last month to request that it develops regulations “to ensure that certain reliability and resilience attributes of electric generation resources are fully valued”. Mr Perry wishes for coal-fired and nuclear power generation receive more of a financial incentive for being part of the energy grid, hoping to stave off any closures brought about by economic considerations. For the Trump administration, it is an attempt to protect the struggling coal and nuclear industries, the ‘reliability’ rationale being a sound one in principle. However, the reasoning suffers from not being highly applicable at present – while in future reliability may become an issue if much more renewable energy is added to the grid, at present the levels do not threaten reliability. For this reason, the Rhodium Group describes Mr Perry’s request as being “a solution in search of a problem”. The request has separately been criticised (by oil and gas and renewable companies) for being anti-competitive, something the administration will be at pains to deny. For its part, the Federal Energy Regulatory Commission, which is independent, has said that it will “not destroy the marketplace”.

The Australian government has released a new energy policy, with the previously mooted ‘Clean Energy Target’ being replaced by the ‘National Energy Guarantee’, which carries a rather unfortunate acronym. The new policy obliges electricity retailers to guarantee a reliable supply of electricity by ensuring there is dependable power generation (for example coal, gas, hydro and batteries) ready at short notice to prevent situations such as the blackout of the entire state of South Australia that occurred last year. Long-term contracts for such reliable energy are to be made to allow for assured financial returns. At the same time, the NEG policy requires electricity retailers to reduce emissions from generated power, forcing the purchase of a certain portion of cleaner electricity while also eliminating incentives and subsidies for the production of clean electricity. This is a more free-market mechanism for reducing emissions, as it does not pick specific generation technologies, but only focuses on the amount of emissions. The amount of reduced emissions required through the policy will be enough to meet Australia’s commitment to the Paris Agreement of cuts in carbon dioxide of 26-28% from 1990 levels by 2030. There has been a mixed, but mostly positive reaction to the policy, the general feeling being one of relief that there is a policy that seems to address competing interests after years of political fighting over a price for carbon and a decade during which electricity prices rose 80-90%. One side effect of the policy has been a boon for owners of coal-fired power stations, with Engie seeking new, higher offers for its lignite-fired Loy Yang B plant, which it had already been in the process of selling.

Utility Dive has looked at the operational challenges that the expected rise in electric vehicles will pose to power utilities, following a new report by the Rocky Mountain Institute which suggests that 2.9 million electric vehicles could be on US roads within five years. Such a prevalence would consume around 11,000 GWh annually, a demand that the authors of the RMI report say utilities must plan for, and quickly, comparing it to the rise in demand from air conditioning. Apart from planning for sufficient generation capacity, utilities may have to design rates to encourage charging at specific times of day, seeing as though most charging is carried out either at home (after returning from work) or at work (after arriving). Alternatively, or in combination, more peaking plants may be required. The largest barrier to the uptake of electric vehicles, according to the report, is the paucity of charging infrastructure, something in which utilities may play a leading role in providing.

Installed power generation in Southeast Asia is expected to increase from around 240 GW today to more than 565 GW by 2040, according to a new report from the International Energy Agency. The enormous increase is due to consist of 40% coal-fired capacity and a little under 30% of renewables capacity, the rest presumably being mostly gas. Rising incomes in the region will result in more demand from devices such as air conditioners, and the rising population will also add to demand. One coal plant which may contribute to the total is a new 1,000 MW plant near Luzon in the Philippines to be built by a South Korean firm, at a purported price of US$2 billion (€1.7 billion).

Scotland has extended its moratorium on fracking indefinitely, its energy minister has announced, citing the fact that 99% of the 60,500 responses to a public consultation on the issue was against allowing the practice. In coming to the decision, the Scottish Government was also mindful of a report by consultancy KPMG which estimated that allowing fracking would increase gross domestic product by 0.1% per year, meaning there was no large economic incentive for the government to try to establish an industry. The decision is bad news for petrochemical company Ineos, which had invested £50m (€56 million/US$66 million) in gaining fracking licences in Scotland.

The New Climate Institute has published an interesting overview of pathways to decarbonise the steel- and cement-making industries. For the steelmaking industry, the global carbon emissions for which more than doubled between 1990 and 2015, emissions could fall through more use of electric arc furnaces, the decarbonisation of electricity production, other technological improvements, and the introduction of carbon capture and storage. Electric arc furnaces, which use around one third of the energy of blast furnace-basic oxygen furnaces, are currently generally used for making ‘secondary’ steel from other scrap steel; as it is expected that three times as much scrap steel will be available by 2050 compared to today, much greater use of electric arc furnaces in the future will substantially reduce overall carbon emissions. This is part of a move towards ‘circularity’ in the steel industry, circularity being the ‘reduce, reuse, replace, recycle’ value chain which better conserves resources than the more common ‘take, make, waste’ chain. Other potential technologies to decarbonise primary steel production are an electrolysis reduction process route, and direct reduction of iron ore using renewables-based hydrogen (as previously covered in the combustion industry news). Without the use of CCS, total yearly EU steelmaking emissions are expected to reduce by ~10-45% by 2050 (as current production is relatively efficient), while total yearly Chinese steelmaking emissions are expected to reduce by ~65-85%.

Emissions from the cement industry more than doubled between 1990 and 2010, but could fall through decarbonisation of electricity production, electrification measures, a reduction in clinker/cement ratios, other efficiencies, and material substitution (which may be limited because of reduced available fly ash and blast furnace slag from the decarbonisation of the power production and steelmaking sectors). Some efficiencies may be gained by operating plants at full capacity and replacing wet kilns by dry ones, and switching fuels from fossil fuels to biomass or waste. Yearly total global emissions may decrease by 20-50% by 2050 without the use of carbon capture and storage. The paper is worth reading in full.

The world’s first research station dedicated to tracking the geological storage of carbon dioxide has opened in Newell County in southern Alberta, Canada. The Containment and Monitoring Institute’s Field Research Station is a partnership between Carbon Management Canada Research Institutes and the University of Calgary, and will be dedicated to finding “the best technologies to ensure that after injecting CO₂ it doesn’t bubble up, but stays underground and we know where it is,” in the words of the head of the institute, geophysicist Professor Don Lawson. Its research is sure to be of keen interest to the global carbon capture and storage industry.

Indian power equipment maker Bharat Heavy Electricals is to commence construction of the 4 GW Yadadri supercritical thermal power project in the central-southern state of Telangana. Environmental approval for the US$3.1 billion (€2.7 billion) plant has already been granted by the Ministry of Environment, Forest and Climate Change, and Bharat Heavy Electricals will be in charge of design, equipment supply, engineering, construction, testing and commissioning of the five 800 MW units that will constitute Yadadri. The plant, to be run by Telangana State Power Generation, will go a small way to supplying more of the 400 million Indians that currently do not enjoy a supply of electricity.

Advocates of carbon capture and storage dismayed by the long delays to the Kemper County coal-gasification CCS plant in Mississippi, state support for which was withdrawn earlier this year, may take some small comfort from the case of the Olkiluoto-3 nuclear plant being built in Finland. The plant is now one decade off schedule and around three times over budget.

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