New US EPA carbon emission standards for power plants due

The US Environmental Protection Agency is due to release new carbon emissions standards for new-build power plants by 20 September, with the national power generation industry in keen anticipation. The new standards are expected to set a carbon emissions limit of between 590 and 726 kg CO₂/MWh, and in addition, there may be a requirement for new coal-fired plants to be fitted with carbon capture and storage technology, which is still considered to be some years away from commercial viability. One of the country’s cleanest coal-fired power plants, Longview, in the state of West Virginia, is being used as a example for debate. Operating at around 863 kg CO₂/MWh, it was recently forced to declare bankruptcy due to design issues that led to outages, but also because of low electricity prices as a result of the supply of cheap shale gas. With the expected new emissions limits lower than what Longview is able to achieve, it is argued that no new plants will be built under the new standard. Commentators are split as to whether this will spur or retard the development of carbon capture and storage technology. On one hand, if CCS is required to build new coal plants, or to meet the new emissions limits, it is argued that there will be an incentive to develop it to a technically adequate and cost-efficient standard. On the other hand, it is argued that if there is no short-term prospect of economic returns from a coal-fired plant, and none are built, then CCS technology will not be deployed and therefore not develop (assuming, as is reasonable, that older plants will not install CCS). It is sure to be an interesting week for the industry.

China unveils air pollution action plan

China has announced its plans to cut air pollution throughout the country, after ongoing health impacts and a high degree of publicity about the problem. The plans involve cutting the use of coal, closing heavily polluting facilities, encouraging cleaner technology, and reducing the number of heavily-polluting vehicles on the road. Some of the aims of the plans are to, by 2017, reduce inhalable particulate matter in cities by 10% and reduce PM 2.5 in Beijing by 25%, in the Yangtze Delta region by 20%, and in the Pearl River Delta region by 15% (of 2012 levels). Amongst the measures proposed are to cut the use of coal in the energy mix to less than 65% by 2017, banning new coal-fired power plants in certain areas under certain circumstances, using more natural gas, more nuclear energy (up to 13% of the total energy mix by 2017), improved energy efficiency measures, a shift to more combined heat and power plants for industries such as papermaking, dyeing, and tanning, and more desulphurisation, denitrification, and dedusting facilities in coal-fired power plants, steel mills and cement plants. Such measures raise the prospect of rather good business for air pollution control technology manufacturers, as well as other clean technology businesses, with the Ministry of Environment estimating the cost at 1.75 trillion Yuan (€215 billion/$US 286 billion).

Philippines looks to grow power generation capacity as reserves run low

The Philippines government is concerned that the country’s rapid economic growth in recent years means has eaten too far into available power generation capacity, and that power outages will be experienced in the near future. While the government has been relatively prudent in planning for power generation growth of around 6.6% per year, the economy has of late been growing at a rate of 7.5%, beyond government expectations. While this is a problem many other countries would like to have, it is causing headaches for those who work in the Department of Energy. It believes that the looming problems can be averted if the public and private sectors both act promptly, however. One initiative that is being pushed is to set up a reserve electricity market, which would help to stimulate private investment in power plants. It is a proposal that’s been around since 2009, languishing without a sense of urgency, until now. An alternative is for the government to invest directly in building gas-fired plants, and another idea is for government intervention in the staging of maintenance works to smooth out available capacity. Electricity prices are higher in the Philippines compared to its neighbours, as the last shortage crisis led to power plants being built quickly, at inflated cost.

Macedonia struggles to find investment for domestic power generation

Another country struggling with its domestic power generation industry is Macedonia, as the Financial Times has reported. Importing around 30% of its gross power consumption, it is seeking to become more energy independent, and wishes to develop further thermal and hydro-power generation capacity, while refurbishing aging plants. At the same time, it plans to invest in upgraded transmissions lines, including links to neighbouring countries such as Albania and Serbia. The lignite-firing Bitola plant, which generates 80% of domestic electricity, is in the middle of a €88 million ($US 117 million) refit, for which funding has been secured. However, the government is seeking a foreign buyer for a 49% stake in Elem, the state-owned power utility, which would enable investment in the planned 300 MW coal-fired Mariovo plant, which is priced at €350 million ($US 465 million). Discouraging foreign investment is the precedent of the purchase of the state distribution company by Austrian utility EVN in 2006. After investing in the modernisation of equipment, EVN was told that the Macedonian regulator had cut the tariffs that were allowed to be charged to customers, while raising the fee paid to generators.

Mauritian sugar industry powering country forward

The Financial Times has also carried an interesting report into the modernisation of the sugar industry in Mauritius. Studied as a model around the world, the Mauritian industry integrates cane growing, sugar refining and bagasse firing, and is soon to include ethanol production. By utilising the chief and by-products of the industry, and refining, higher value products are produced, while the majority of electricity used on the island is generated. One plant alone, Omnicane’s La Baraque, redeveloped in 2006 at a cost of €200 million ($US 266 million) generates one quarter of the country’s electricity needs through the firing of bagasse. The industry, once supported heavily as an associate of the European Union, has had to push itself into its more modernised form as support was withdrawn. Raw sugar production peaked in 1973, and these days is 40% lower than that peak, but with increasing sugar consumption and demand in Africa, and modernised equipment, the industry is enthusiastic about the future.

Australian governmental support for Chevron’s Gorgon carbon capture and storage project to be retained

As flagged in the last edition of the Combustion Industry News, on 7 September Australians elected a new government, whose pledges included to remove the carbon pricing system and to cut $AU 300 million (€209 million/$US 277 million) of carbon capture and storage research grants. While the Australian senate may or may not attempt to block such moves, government support has not been cut for what will become the world’s largest carbon capture and storage project. The federal government and the government of the state of Western Australian agreed in 2009 to accept long term liabilities arising from the storage of CO₂ in a 2.5 km-deep saline aquifer beneath Barrow Island, a nature reserve off the coast of Western Australia. Chevron and its joint venture partners are to spend $AU 2 billion (€1.39 billion/$US 1.85 billion) on the capture and storage facility, which will take 3 million tonnes of CO₂ per year, by far the largest storage project in the world, according to Reuters. The CO₂ will be separated from raw natural gas being extracted in Chevron’s Gorgon project, in which the CO₂ concentration is 14%. The project is due to last 40 years, beginning in 2014/15, and Chevron and its partners will be responsible for any damages arising from it for at least 15 years after its end. Beyond that period, the governments will accept liabilities, providing they are satisfied the CO₂ has been safely stored. Chevron has agreed to set up monitoring to observe the movement of the CO₂ once stored, using four-dimensional seismic survey. The acceptance of liability on the part of the governments is of particular legal interest because CO₂ needs to be stored for thousands of years, much more than the typical lifetime of a company. Technically the project is also interesting, not only because of its size – relatively few projects to date have stored CO₂ in saline aquifers, which have been identified by the US Department of Energy as a vital resource if CCS is to become widespread.

Jindal Power & Steel to build power plant in Liberia

Jindal Power & Steel is to build a 350 MW coal-fired power plant, consisting of two 175 MW units, in the West African country of Liberia, the company has announced. The Liberian president, Ellen Johnson Sirleaf, visited one of Jindal’s facilities in India in early September, when a memorandum of understanding was signed between the country and the company. The power plant is part of JP&S’s wider strategy to invest in Liberia and tap its natural resources (particularly iron ore), in which it faces competition with a number of large industrial and mining companies from around the world, particularly China. JP&S is to source coal for the plant, a site for which has not yet been finalised, from its other interests in Africa. A cost estimate has not been released, but as the Hindu Times points out, it will depend on water desalination and coal supply logistics, which site selection will influence.