• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

US President Barrack Obama gave a speech in late June outlining his administration’s approach to limiting greenhouse gas emissions from existing power plants. “We limit the amount of toxic chemicals like mercury and sulphur and arsenic in our air or our water, but power plants can still dump unlimited amounts of carbon pollution into the air for free. That’s not right. That’s not safe. And it needs to stop,” he said.

Mr. Obama went on to state that he had directed the Environmental Protection Agency to draft new emissions rules for power plants, and to have them finalised by June 2015. These rules will apply to existing power plants; the EPA has for some time been working on rules for new power plants, which continue to attract dispute, and it is likely that the rules for existing power plants will also attract legal action, meaning they may not come into force for some years.

India’s government has decided it will allow power companies to charge customers an additional amount for the costs they incur from importing coal. The decision will apply only to electricity from power stations that predominantly fire domestic coal, but that rely on imported coal for shortfalls. While some power producers welcomed the move, others, such as Tata Power Co, have urged the government to extend the ruling to all power plants firing imported coal.

The government is nevertheless hopeful that the ruling will boost power generation in the country, with the power ministry said to be expecting as much as 78,000 MW of additional capacity to come on-line, though this figure seems rather optimistic. Individual states are still to approve the new pricing. While the coal ruling brings some relief to the coal-fired power sector, there has been little for the gas-fired sector, with the government deciding against raising gas prices, and hence dampening the prospect of additional investment in gas-fired plants.

Recent discoveries of recoverable natural gas reserves offshore of the East African countries of Tanzania and Mozambique have led to suggestions that the region could become the world’s third largest exporter of natural gas, according to Reuters. Tanzania is reported to have 1.18 trillion cubic metres of recoverable natural gas, an appreciable amount, but uses little of it, with the country’s total installed power generation capacity at only 1,438 MW (35% being gas-fired).

The country’s chronic power shortages mean that the government are keen to increase the installed capacity, and have agreed a deal with General Electric and Symbion Power Tanzania for the development of a 400 MW gas-fired power plant in the southern region of Mtwara. The gap between domestic use and recoverable reserves will remain large, however, leading to the prospect of export. The associated investment in the country has already resulted in social tensions, with at least three people killed during riots in the Mtwara region in May over a perceived lack of local benefit from a pipeline being constructed from Mtwara to the capital Dar Es Salaam.

Legislation and Regulation

The Chinese city of Shenzhen launched the country’s first carbon market in mid-June, with the first transaction occurring on the same day. Shenzhen Energy Group sold permits to emit 10,000 tonnes of CO2 from PetroChina (a state-owned oil company) and to Hanenergy (a private power generator and solar panel maker) for 28 Yuan per tonne ($US 4.55/€3.47). The Shenzhen scheme is a pilot, one of seven being used as a test from which the government can learn before deciding upon introducing a nation-wide scheme in 2015. The Shenzhen Carbon Exchange says it expects the market to reduce the average carbon intensity of the 635 participant companies by 7%.

As referred to above, the on-going dispute over the US Environmental Protection Agency’s rule to control greenhouse gas emissions from new power plants has taken another step, with the state of West Virginia joining 20 more states in urging the EPA not to enter settlement negotiations with a group of 10 other states, the District of Columbia, New York City, and several environmental organisations.  The latter group wish to sue the EPA for not dealing with the issue of greenhouse gas emissions control as scheduled, saying that failing to do so has meant a breach of the Federal Clean Air Act.

On the other side, the 21 states argued in a letter of 18 June that the bringing of a lawsuit represents unjustified interference in the normal course of policymaking on the part of the EPA.  This argument is coupled with a sense of economic unfairness on the part of the 21 states. The Attorney General of West Virginia typified this feeling, saying “The proposed regulations will directly impact coal-producing states such as West Virginia. We cannot sit idly by and let other states and the federal government dictate our economic future.”

Research, Development and Technology

The Lawrence Livermore National Laboratory in the US has set a new record for the depth in tracking the movement and concentration of CO2 in a geological formation, according to Carbon Capture Journal. Using electrical resistance tomography (ERT) in the porous sandstone of an oil and gas field in Cranfield, Mississippi, the laboratory reached a depth of more than 3 kilometres, around five times the previous record set by the CO2SINK Project Consortium in Ketzin, Germany. The images recorded provide direct empirical information on the movement of CO2 at huge depths (and pressures), and will be of benefit for future carbon storage projects.

There is also a possibility that ERT systems might be installed in geological carbon storages as a monitoring tool. A movie of the expanding CO2 plume in the sandstone at the Cranfield site is available here.

The British Geological Survey and The Crown Estate have launched a database of potential carbon storage locations in the UK, CO2 Stored.  With information on around 600 depleted oil and gas fields and saline aquifers around the UK, it is hoped that the database will aid both industry and government in developing CCS within the kingdom, which is seen as a vital part of decarbonising the energy sector and meeting carbon reduction targets.  The total listed storage capacity is 78 billion tonnes of CO2, and the database contains a variety of geological information, including pore volume and injectivity.

The government of South Korea has announced that it will provide 23 billion won ($US 20.3 million/€15.49 million) for development of carbon capture and storage technologies this year.  The country’s Ministry of Science, ICT and Future Planning estimates that by 2050, the CCS market will be worth $US 75 billion/€57 billion, and it is this potential which the South Korean government wants its industry to drive towards.

South Korea has also set itself a target of reducing its carbon emissions by 30% from business-as-usual levels by 2020, and hopes this will give an additional spur to the development of CCS technology in the country.

Company News

The biggest power utility in Bosnia and Herzegovina, EPBiH, has announced that there are three bidders on its shortlist to build a new 450 MW coal-fired unit at its Tuzla plant, in the country’s north-east.  Eleven companies had tendered for the $US 1.1 billion (€840 million) project; the three shortlisted are Hitachi, a Spanish led consortium (consisting of Spain’s Cobra, Toshiba, Hungary’s MVM, Poland’s RAFACO, and Alstom), and a Chinese consortium (consisting of Gezhouba Group Corp. and Guandong Electric Power Design).  The Tuzla plant currently has a capacity of 715 MW across four units.

Reuters reports that the consortium developing Saudi Electricity Co’s planned 1800 MW power plant, to be built on the west coast of the kingdom, has said it expects to retain its role, despite Saudi Electricity Co. deciding to switch the fuel from heavy oil to natural gas.  The consortium of Saudi Arabia’s ACWA Power, Samsung C&T and the MENA Fund was awarded the contract in January this year, and following the recent announcement of the fuel change, there had been speculation that Saudi Electricity Co. could put the project back out to tender, as major redesign was required.

However, the chief executive of ACWA Power is reported as having said he did not expect a re-tender, that they had  an agreement and that they were working towards it.  Saudi Arabia’s water and electricity ministry says that the country requires $US 133 billion (€102 billion) of investment in power infrastructure over the next ten years to meet rising demand.