• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

University of Cambridge academic Dr David Reiner, a senior lecturer in technology policy, has given an interview to Power Engineering International in which he has stressed the need for the development of carbon capture and storage technologies. An adviser to governments on energy and environmental policy, Dr Reiner is critical of present policies, saying they have not properly addressed the commercial, economic and technological problems associated with CCS, nor the reality that carbon emission curbs in the developed world are dwarfed by emission increases in developing countries (which he recognises as understandably reluctant to curb economic growth). He was quoted as saying “If you look at the perspective of China which adds the equivalent of the entire UK electricity fleet every year, adding 50 to 100 GW of new coal-fired generation per year, and they have done that every year for the last 15 years, if we can’t enable CCS we’re pretty much out of luck [in terms of climate change]. That’s my perspective.” Dr Reiner went on to state that oil and gas companies should be encouraged by policy to lend their technological expertise to CCS development, with governments investing more heavily in sponsoring development. In defence of the technology, he said “As one of our colleagues at the British Geological Survey likes to say, CO2 might leak out. Yes, but currently leakage is 100 per cent. If we are talking about a leakage rate that’s .1 per cent or .01 per cent, if we are hoping to successfully store something like 90 something per cent, then compared to where we are today that has to be better.” The full interview makes interesting reading.

A new report by the IEA has revealed that between 2011 and 2012, gas-fired power generation decreased 15% in Germany, 12% in Spain and 33% in the UK, while coal-fired power generation increased 8% in the Germany, 65% in Spain and 35% in the UK. The changes reflect higher gas prices and lower coal prices in the region. Meanwhile, in North America, a trend is being observed not just with a shift from coal to gas-fired generation, but with gas replacing some of oil’s traditional functions. Shell this year will produce more natural gas than oil for the first time in its history, while the $US 41 billion (€31.3 billion) acquisition of XTO Energy by ExxonMobil in 2010 was seen as a major signal in the shifting energy landscape, demonstrating the large oil and gas companies’ belief in the long term future of gas, according to the Financial Times. The abundance of gas means it is increasingly being used as a transport fuel (including in motor vehicles) and a feedstock in petrochemical industries, replacing oil.  Some industry watchers believe that demand for oil will plateau because of its replacement by gas.

The Southern African Power Pool, which comprises Angola, Botswana, Democratic Republic of the Congo, Lesotho, Mozambique, Malawi, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe, has announced that its members expect to add 18 GW of additional power generation capacity by 2016. By doing so, it would turn the current deficit in power generation capacity of 4.6% into a surplus of around 10%, which is its target. The announcement was made at the Power & Electricity World Africa conference in early April, where a SAPP spokesperson emphasised the need for a regionally coordinated approach to the increase in capacity and cross-border transmission. The necessary transmission projects were estimated as costing $US 5.6 billion (€4.3 billion).

In the last edition of the Combustion Industry News, Polish utility PGE’s decision to scrap a proposed $US 3.6 billion (€2.75 billion), 1.8 GW coal-fired power plant was unofficial. In the last fortnight it has been made official, and has contributed to a sense of fragility in Poland’s medium-term energy future. The national grid operator, PSE, expects 6.6 GW of the present 37 GW of generation capacity to be taken off line by 2020, but the present low electricity prices brought about by slack demand during the economic downturn means that PGE is not the only company thinking twice about investment in new generation capacity. This led PSE to state “In a few years there will be real difficulties in balancing the system”. Local Polish media has been reporting that Tauron and KGHM are considering calling off their planned 850 MW gas-fired power plant.

Legislation and Regulation

The European parliament has voted no in a non-binding vote to a plan to boost carbon prices in the EU Emissions Trading System, resulting in a fall in the price to a record low of €2.81 ($US 2.15) (which later recovered to €4.41). The plan had been to postpone the scheduled auction of more carbon permits, thereby limiting their supply and driving up the price. According to the Financial Times, the no vote has led some analysts to consider the permits now virtually worthless. The low price and no vote create a problem for the European Commission, for which the ETS is an essential part of its strategy to lower carbon emissions to mitigate climate change. With prices at their present low levels, the trading scheme does little to create an economic incentive for a switch to low carbon power generation. However, the no vote may have a reverse effect of strengthening the scheme. Connie Hedegaard, the EC climate commissioner, said that “recent events show that something has to be done urgently” about the system, and supported the auction postponement as well as suggesting longer-term structural adjustments to the system, such as stronger emissions reduction targets and an accompanying permanent withdrawal of permits. This would require broad political support that presently does not seem to be present, with Poland one of the countries insisting the market is simply functioning as a market.

Research, Development and Technology

A meeting of the American Chemical Society has heard of two technologies in development applicable to carbon in the combustion industry. In the first, captured carbon dioxide is converted into syngas (carbon monoxide and hydrogen) using concentrated sunlight and water, which could lead to ‘carbon neutral’ energy production. The second is a capture technology, with calcium oxide used in a flue gas stack to capture carbon dioxide, reacting with it to form calcium carbonate. The calcium carbonate is then regenerated to calcium oxide, using sunlight, stripping out the carbon dioxide. Both technologies were discussed and have been developed by Dr Wojciech LipiÅ„ski and his team at the University of Minnesota.

The UK’s Carbon Capture and Storage Research Centre (UKCCSRC) and Carbon Management Canada (CMC) have announced that they are to sponsor an exchange program for early career researchers (graduate and post-doctoral researchers). Up to £5,000 ($US 7,665/€5,863) is available for each successful applicant to fund up to one month of travel for the purpose of sharing experimental facilities, building relationships and sharing knowledge. It is expected that up to four UK and four Canadian researchers will be given grants; Canadians must be currently working on CMC projects, UK researchers must have an arrangement to collaborate with researchers working on CMC-funded projects.

Company News

ExxonMobil and Rosneft have announced they will study the possibility of a $US 15 billion (€11.48 billion) LNG plant in Russia’s far east, either on the island of Sakhalin, to the north of Japan, or on the nearby Russian mainland, that would process gas from their existing oil and gas project in Russian waters. It would supply the Asia-Pacific with gas and would be a competitor to Gazprom’s planned LNG plant near Vladivostok, also in Russia’s far east. Russia’s president, Vladimir Putin, reacted cautiously to the announcement, warning against a monopolisation of Russia’s oil and gas industry. Rosneft, which is mostly state owned (BP owns 20%, however), last year bought oil firm TKN-BP for $US 55 billion (€42.1 billion), which may be a factor behind Putin’s response. The Russian government plans to sell a 19% stake in Rosneft as part of a broader program of privatisation.