• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

The Wall Street Journal has carried numerous reports of gas-fired plants closing or being under pressure of closure in Europe, as high gas prices and lower coal prices keep the fuel balance shifted towards coal. In the Czech Republic, utility CEZ has announced that it will not commence operation of a new gas-fired plant which had been scheduled to begin in the northern hemisphere summer, as it would immediately be unprofitable. Meanwhile, E.ON (which recently announced a fall in earnings in the first quarter of the year) has stated that it is seriously considering mothballing its 430 MW Malcenize gas-fired power plant in Slovakia, which was commissioned in 2010. In the UK, SSE has announced it has no plans to commission any new gas-fired power plants for several years. However, in countries with financial schemes in place to compensate utilities for keeping base power generation capacity online, such as Italy, such closures or potential closures have not occurred. Calls for such schemes in Germany and other countries continue.

The privatisation of Nigeria’s power sector has moved a step closer, with most of the preferred bidders for some of the nation’s power plants having signed sales agreements. Six power plants had been put up for sale during the current round of privatisation, and five of the preferred bidders (selected from over 100 bidders) signed the sale agreements in February of this year. All five recently paid 25% of the sale price, with the rest to come next year. Three of the plants are gas-fired plants and two are hydropower plants. The government hopes that privatisation will help to increase output from the plants, many of which run far below capacity (the 1020 MW gas-fired Sapele Power plant currently runs at ~20% capacity, for instance). Nigeria’s power shortages mean that the power sector is seen as a strong investment opportunity, and privatisation has also enabled new companies to enter the sector by building their own plants. The 141 MW Aba Integrated Power Project is one example; it will commence operation in late May, having commenced construction in 2008, following legislative changes in 2005. Together with privatisation, Nigeria has been trying to push gas exploration in the country, in the hope that it will generate wealth through exports but also help fuel domestic power plants and increase economic activity. A gas master plan was published in 2008. However, fixed gas prices which do not cover the cost of production and transport currently discourage domestic sale of gas, and gas pipelines are currently inadequate, although some private companies are building their own pipelines in order to supply customers. Further work remains for the government.

The Financial Times has reported on an interview with Khalid al-Falih, the head of Saudi Aramco, Saudi Arabia’s national oil company, in which he welcomed the North American shale oil and gas boom. Rather than seeing it as a threat, he sees it as complementing the Middle East’s oil and gas producing industries, giving a resilience to worldwide production, helping to sustain the use of oil and gas throughout the world, which will in turn sustain the industry in Saudi Arabia. He expects worldwide demand for oil to grow, such that there will be room for all producers to supply. While there are concerns that export of oil from the country will diminish as domestic use grows, Mr al-Falih believes the export portion will stabilise as urban development decelerates. He was quoted as saying “We always look at ourselves being in this business for generations to come, and want to position the industry for that long-term prosperity and harmony with society”.


The Mauna Loa CO2 sampling station in Hawaii, USA, which has recorded CO2 concentrations in the atmosphere since 1958, was widely reported to have recorded for the first time a symbolic daily average concentration of 400 ppm in early May.  However, a few days later the US National Oceanic and Atmospheric Administration revised its figure to 399.89 ppm as it made some adjustments to the categorisation of the timing of the data. While the small difference means the symbolic point was not reached, the picture is nevertheless the same – that atmospheric CO2 levels continue to rise substantially. Former Intergovernmental Panel on Climate Change chair, Professor Bob Watson, said: “The world is now most likely committed to an increase in surface temperature of 3 – 5 oC compared to pre-industrial times.” The pre-industrial revolution CO2 level is estimated as being 280 ppm.

Research, Development and Technology

Norwegian firm Aker Solutions has won a contract to perform the world’s first tests of solvents for the capture of carbon from cement making processes. The contract was awarded by HeildelbergCement’s Norwegian subsidiary Norcem in conjunction with the European Cement Research Academy, and the tests are to take place at Norcem’s cement factory in Brevik, in the south of Norway. According to Reuters, cement production accounts for around 5% of anthropocentric carbon emissions, but solvents for carbon capture from the industry have not yet been investigated at an industrial scale. Aker Solutions released a statement saying that it hopes the tests will “help the European cement industry understand the use of technology for future full-scale carbon dioxide capture from cement production plants.” Aker Solutions also carries out solvent experiments at Technology Centre Mongstad for fossil fuel combustion.

In related news, Technology Centre Mongstad has recently completed a year since inauguration. The Centre currently has the capability of simulating up to 100,000 tonnes annually of gas, coal and oil-firing flue gases, via its gas-fired power plant and a refinery cracker, and has run test operations for 5,000 hours since July 2012. Of the work so far, the main focus has been on solvents to capture carbon from these flue gases, and two adsorption plants have been run. Aker Solutions has focused on amine-based solvents, while Alstom has focused on ammonia-based solvents. This work has tested the performance of different solvents and operating conditions, and also included air sampling and analysis to investigate the solvents’ effects on the flue gases. There are over 4000 separate sampling points for online analysis, and the laboratory has analysed over 100 samples per day. Some of the work has also been to verify sampling and analysis instruments. The Centre will soon start testing a solvent mix of an amine, MEA and water to provide a new baseline to evaluate capture tests against in the future.

Company News

In early May, ArcelorMittal announced they had recorded a first-quarter underlying profit (before taxes etc) of $US 1.57 billion (€1.22 billion), around 20% higher than the market had expected. The company attributed the good financial result to its focus on utilising its most productive assets, a strategy it has taken up during the great recession.

Keeping with steel industry news, Tata Steel has announced a $US 1.6 billion (€1.24 billion) write-off of its assets, sparking rumours it is looking to sell some or all of its UK operations. The company has also been focusing on increasing competitiveness, having laid off a ninth of its 4,500 strong workforce at its Port Talbot plant in south Wales, despite having installed a new blast furnace in December last year. While there are selloff rumours, there are also stated plans to upgrade the company’s Scunthorpe plant, which is currently among its least efficient. While the industry has been expecting a lift in the second half of 2013, the Financial Times reports that as yet, there have been no signs of one.

The UK’s Green Investment Bank, established in November 2012, has reported on its first five months of operation. It has invested a total of £635 million (€751 million/$US 967 million) in 11 projects, and each £1 of Green Investment Bank money has on average attracted £3 of private investment, meaning the total investment in projects has been £2.3 billion (€2.72 billion/$US 3.5 billion). Amongst the projects has been the Drax biomass-fired power plant and an energy-to-waste plant at Wakefield, West Yorkshire. The Bank has also formed an investment alliance with Masdar, the Dubai-based clean energy firm, for investment in projects in the UK.