• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

The Wall Street Journal has carried a report into the energy shortage crisis facing India. The country suffers from domestic shortages of coal, oil and natural gas, meaning that costly imports are required to feed its growing power demand, leading to inflation. State-run energy companies are accumulating huge debts as they protect consumers from higher fuel prices, but the government realises such debts cannot be sustained. Demand comes from rural households which have previously been without power, growing commerce and industry, and the 1.5 million new cars which are added to Indian roads each month. The cost of coal imports rose 80% over the year to March, while those of oil increased 41%. Some 32 coal-fired power plants report critical stocks of coal, and some new plants are running under capacity due to fuel shortages, while power plant investors are becoming wary. The report points to the growing energy crisis as a contributor to India’s recent economic slowdown; 5.3% growth in the first quarter of this year was the lowest in a decade.

At a meeting of the Council of Foreign Relations, ExxonMobil CEO Rex Tillerson has spoken out about what he sees as excessive fears over energy dependency, climate change and drilling. On energy dependency, he said “No one, anywhere, any place in the world has not been able to get crude oil to fuel their economies,” and pointed to the rising production of oil and gas in North America, though he countered this by stressing that even if the US produced the bulk of its own oil, instability in other oil producing regions would push global prices up, affecting Americans. On climate change, he stated his belief in humanity’s ability to adapt through engineering solutions. In regards to drilling, he criticised the press for failing to investigate claims made by anti-drilling advocacy groups, and for not understanding engineering or science in general, while also saying that the impacts of drilling were well understood and the risks manageable. The collected views are an interesting reflection of the position of one of the world’s major oil and gas companies. He added that one of his industry’s major challenges was to better educate the public and the media about how the industry is capable of managing risks.

There has been mixed news for the liquid biofuel industry. In the US, the largest ethanol producer, corn ethanol production is facing rising costs, meaning the profit margins, which have in recent years been tracking with oil profit margins, have declined in comparison to oil. Some analysts are predicting a fall in demand for ethanol. Brazil, the second largest producer, has seen petrol prices flat since 2006, aided by subsidies, meaning ethanol, which is facing rising costs, is becoming less competitive. However, there appears to still be fairly strong demand in Brazil. The CEO of Petrobras, Maria das Gracas Foster, announced recently that limited opportunities have been restricting her company’s investment in ethanol production. Meanwhile, the Financial Times has reported that Brazilian mining company Vale has announced plans to build the world’s largest single processing plant by 2015 to turn 600,000 tonnes of palm oil into biodiesel per year. It is a $US 500 million/€400 million project, and the biodiesel will be used to run the company’s trucks, machinery, ships and trains. In Europe, grain shortages have curtailed biofuel production, but the biodiesel market is still suffering from over-capacity.

Research, Development and Technology

Alstom and Mitsubishi Heavy Industries have both reported progress at Technology Centre Mongstad. The Norwegian carbon capture and storage (CCS) research centre has been running a technology qualifying programme; Alstom advanced to the next stage with its chilled ammonia technology (CAP), while Mitsubishi has been awarded a contract for 3,000 hours of verification testing of a 3,400 tonne/d CO2 recovery system (known as the KM CDR process), which is has developed with Kansai Electric Power Co, and which uses a propriety solvent. Some of the testing will be performed in Osaka, Japan.

In not so positive news for CCS, the Hunterston demonstration plant in Ayrshire, Scotland, has been shelved due to financial considerations. The 1,852 MW plant was a project of Ayrshire Power, who expressed concern the project would not receive support from the European Commission. The Guardian newspaper reports that the project had the reputation of being the most controversial in planning permission terms in Scottish history. Hunterston is Scotland’s largest coal terminal.


A decade-long study of loons, a type of bird, in the Adirondack Mountains in the US state of New York, has found that mercury, coming mainly from coal-fired power plants, reduces the fertility of the birds by around 40 per cent. In the study, which was carried out between 1998 and 2007, female loons with higher mercury concentrations in their body produced fewer chicks than those with lower concentrations. The reason was found to be that higher-mercury loons lacked the energy to properly incubate their eggs and then take care of their young. The power plants responsible were mostly located in the Midwest of the US. The finding lends support to the US EPA’s more stringent standards for mercury pollution controls for power plants, which were updated December 2011.

Staying with the US, the US Court of Appeals for the District of Colombia Circuit, a federal appeals court, has unanimously ruled that the EPA were justified in finding that greenhouse gases endanger public health and have been responsible for global warming over the past century. Although the ruling may appear unremarkable, given the widespread global acceptance of the finding, one of the subtleties of the ruling was that it endorsed the EPA’s authority over the matter through the federal Clean Air Act, which some industry groups opposed, arguing for state authority over the matter, which would likely be more variable in terms of strictness and application. It also supports the EPA’s efforts to implement new standards for greenhouse gas emissions from power plants, first proposed in March.

Company News

Dutch utility Nuon, owned by Vattenfall, has announced it will begin to operate its new 1,311 MW gas-fired power station in September. The plant is located in the port town of Eemshaven, and will start operation with just one of its turbines, followed by a second in October and the third in November. Nuon commenced operation of a 435 MW gas-fired plant in Amsterdam in May.

Canadian firm EnviroResolutions has appointed Australia’s Cresendo Partners to assist them to raise $US 5 million/€4 million in additional capital. The firm’s chief technology is its ENVI-Clean wet scrubber, which utilises turbulent mixing to produce bubbles for scrubbing out SOx, NOx, unburned hydrocarbons and particulates. The firm has the scrubber patented until 2030 in 127 countries, and recently completed its first sale to a 6 MW biomass boiler in the US. According to Deal Journal Australia, the firm claims its technology is five times cheaper than comparable technology.

The Nabucco Consortium, a joint venture of which RWE is a member, has welcomed the choice of route for the Nabucco pipeline, to run from the Turkish-Bulgarian border, through Bulgaria, Romania, and Hungary to Austria. The 1.2 metre diameter, 1,300 km long pipeline will transport natural gas from the Shah Deniz II field in Azerbaijan, and will be capable of carrying 23 billion cubic metres of gas per year, giving it a strategic importance. The route does not include the Turkish section of the pipeline, which was included in a separate proposal.

An article in the Financial Times has described the growing ties between Russia and China, characterised by a recent power generation project. The Industrial and Commercial Bank of China has agreed to finance a $US 1 billion/€800 million power plant project in Yaroslavl, on the outskirts of Moscow, a joint venture between China’s Huadian and Russia’s Territorial Generation Company. Equipment will be supplied from China, because of the speed and relative cheapness, according to the report. Although mutual investment between the countries remains low, a package of investments between the two countries was agreed in June, and significant growth is expected.

Polish fertiliser producer Pulawy has announced it will seek bidders for an 840 MW gas-fired power plant, according to Reuters. The tender will go out in late July or August, and the plant should be in operation by 2015 or 2016. Pulawy is half owned by the Polish government and half owned by utility PGE, and is currently the target of a takeover bid from a synthetic rubber company, Synthos, which says it would switch the plant from gas to coal.