Norwegian government calls time on development of full-scale CCS facility at Mongstad

In a major development that will ripple across the industry, the outgoing Norwegian government announced in late September that it is to terminate the project to build a full-scale carbon capture and storage facility connected to Technology Centre Mongstad, instead looking for alternative sites to develop a full-scale facility by 2020. The Mongstad facility was to capture carbon dioxide from Statoil’s catalytic cracker and 280 MWe natural-gas fired combined heat and power plant at the site, piping it to deep offshore saline aquifers, where it would be used for enhanced oil recovery. When it was first agreed in 2006, the Prime Minister described it as Norway’s equivalent to the US’s moon landing project of the 1960s, but major cost and time blowouts due to technical difficulties associated with the specifics of the project, as well as perceived future risks, have led to its scuppering. The country’s Auditor General last month released the findings of his investigation into the project, which showed that Technology Centre Mongstad (the CCS research and development centre) and the work on the full-scale facility together were 1.7 billion krone (€210 million/ $US 285 million), or 31%, over budget. The final decision on the full-scale facility was due in 2016, but the government has brought it forward, citing risk factors such as the low European Emissions Trading System carbon price, the hard times facing the refining industry in Northwest Europe, and the generally subdued European economy, which has reduced the commercial potential for CCS technology. The Oil and Energy Minister, Ola Borten, said “At both the national and international level, the development of technologies to capture and store CO₂ has taken longer, been more difficult and more costly than expected”. The revised government strategy for CCS will look at incentive structures to encourage a full-scale facility which better takes into account the risks involved. Technology Centre Mongstad will continue, boosted by an additional 400 million krone (€49 million/$US 67 million), and the research partners at the centre – Gassnova, Shell, and Sasol – will maintain their involvement.

Advanced biofuels facility opened in Italy

Beta Renewables, a joint venture between Biochemtex, Texas Pacific Group and Novozymes, has opened a €150 million ($US 203 million) advanced facility for the production of second-generation biofuels in Crescentino, in the north-western Italian province of Piedmont. It will use non-food substitute feedstocks such as giant reed, miscanthus and switchgrass, as well as agricultural wastes such as sugarcane, bagasse and straw to produce around 75 million litres of bioethanol per year. The joint venture says that the plant is innovative in that it uses a novel enzyme produced by Novozymes which reduces greenhouse gas emissions by 90%. The partners have already signed agreements to use their technology in other countries.

Texas building ‘peaking’ power plants to cover summer demand

The Combustion Industry News has previously reported on potential power shortages facing the US state of Texas, a problem of particular concern for the summer, when air conditioning demand is high. In early October, Texan environmental regulators issued an air permit for a proposed 470 MW of simple-cycle gas-fired ‘peaking’ units to be added to an existing 1070 MW combined-cycle power plant near San Antonio. While it must still receive a greenhouse gas permit from the federal Environmental Protection Agency, the project could be in operation as early as mid-2015. It is one of around 10 similar projects under development in the state, which together will provide an additional 4.2 GW of generation capacity to be utilised during peak times. Furthermore, an extra 8.2 GW of gas-fired power generation is under planning, painting a picture of significant capacity growth in the state which will allay shortage concerns.

Nigeria plans second phase of power sector privatisation

Nigeria has recently finished the privatisation of its older power plants, and is set to embark on the sale of its newer power plants. While the sale of the older plants was open to international firms, the sales eventually were made largely to what Reuters describes as ‘local oligarchs’, amongst them a former military president, a regional military governor, and two tycoons. But the government expects that the new round of sales will attract firmer international bids, after a demonstration of profit being made from the privatised older plants. Explaining the reluctance of foreign firms to bid for the older plants, the chairman of the presidential taskforce on power, Bekindo Dagogo-Jack, said “The so-called local oligarchs were born here, they grew up here. What others call risk, they call opportunity”. There are 80% stakes in ten newer plants being put up for sale in the new round, each for $US 500 million, (€369 million), five times the average price of the older plants. Nigeria sees the privatisation as a means to attract more investment in the sector to expand capacity in the power-short country.

Kenya invites bids for two power plants that will double country’s total generation capacity

Over in East Africa, Kenya has invited bids from investors for the development of a 700-800 MW gas-fired power plant and a 900-1000 MW coal-fired power plant, as the government of the largest East African economy looks to grow its power generation capacity. The gas-fired plant is to be built near the port city of Mombasa, while the coal-fired plant is to be located near the port of Lamu, which the government plans to develop into a mega-port servicing South Sudan and Ethiopia. The two plants would effectively double Kenya’s total generation capacity (which stands at 1.66 GW), meaning they are hugely significant to the country.

Bangladeshi plant has foundation plaque unveiled

In an update to the story in the last Combustion Industry News, the Bangladeshi and Indian prime ministers unveiled the foundation plaque of the coal-fired Rampal power plant on 5 October, despite the protests that had taken place against the plant in September. Indian Prime Minister Manmohan Singh, who ‘attended’ via video link, called on the Bangladeshi authorities to maintain the highest environmental standards for the plant, stating that the Sundarbans mangrove forest, next to which the plant is being built, was a joint Indian and Bangladeshi natural heritage.

Polish government and EC to clash over Opole plant expansion

Power Engineering has reported that the Polish government and the European Commission are set to clash over the two planned additional 900 MW units for the Opole coal-fired power plant in Poland’s south. The EC climate commissioner, Connie Hedegaard, says it is against EU regulations not to assess new units for carbon capture and storage readiness – i.e. the ability for the employed technology to incorporate CCS at a later date. Poland has not yet passed the EC directive into its own laws, as it was required to do by June 2011 and it appears the Polish government’s position is that because it is not yet a domestic law, they are not obligated to follow the directive. It also appears that no assessment has yet been carried out, with construction due to begin in December. The issue is sure to receive more future attention.

RWE says it must do with fewer workers in future

In late September, RWE CEO Peter Terium conducted an interview for German daily newspaper Die Welt in which he expressed his belief that the company would have to do with fewer German workers in the future. It coincided with an announcement that the company would halve the dividends it pays to shareholders (down to €1/$US 1.36 per share), which resulted in a lowering of the share price. Facing difficult business circumstances with a sluggish energy demand in Europe, RWE is also considering selling some unprofitable coal-fired plants in order to pay down some of its €33 billion ($US 45 billion) debt. Mr Terium was unable to say how many jobs would be cut, saying it would depend on the success of new business arms and the number of early retirements, as well as decisions to move jobs to lower-wage countries.

Babcock & Wilcox to supply engineering design and equipment to FutureGen 2.0 project

Babcock & Wilcox are to supply front-end engineering and design for the FutureGen 2.0 carbon capture and storage project after signing an agreement with the FutureGen Industrial Alliance. The agreement, approved by the US Department of Energy, is worth up to $US 49 million (€36 million), and includes design and supply of the boiler island and oxy-coal combustion system (technology developed jointly with Air Liquide) and the gas quality control system. The plant is to capture around 90% of produced CO₂ from an existing coal-fired plant in Meredosia in the state of Illinois, and is due to commence construction in June 2014, with full completion by 2017. It is expected to be the world’s first near-zero emissions commercial-scale coal-fired power plant.

Foster Wheeler to provide consultancy services in Peru

September saw Foster Wheeler being awarded two contracts for consultancy services in Peru. One, the Energy Security and South Pipeline Project, involves gas pipelines, and the other, the Energy Node project, involves a series of power plants, each up to a size of 2,000 MW, in the country’s south. The first contract is designed to improve gas transport around the country, while the second aims to decentralise power generation in the country, which is currently concentrated in its central area. It will also service a major petrochemical development planned for the south. Foster Wheeler’s consultancy is expected to be complete this year.

Alstom secures Saudi Arabia deal and North American servicing contracts

Meanwhile, Alstom have recently secured three major pieces of combustion-related work. In September, it was awarded a contract to supply four 720 MW steam turbine generator sets to lead contractor Hyundai Heavy Industries for the 2,650 MW heavy fuel oil-fired Shuqaiq power plant on the west coast of Saudi Arabia, which is set to commence commercial operation in 2017. The contract is worth around €170 million ($US 231 million), and will mean that Alstom supplies equipment for around one fifth of the entire country’s power generation capacity, including the giant 5,600 MW Shoaiba plant. This month, Alstom won two long-term contracts to service gas-fired power plants in North America. One contract is for EquiPower’s Milford combined cycle power station in Connecticut, USA, and the other is for two of TransAlta’s plants in Canada – the Sarnia Cogeneration Power Plant in Ontario, and the Poplar Creek Cogeneration Power Plant in Alberta. Both contracts involve “parts replacement, reconditioning services, outage management, labour and on-site support staff, and optional gas turbine upgrades to increase performance and reduce maintenance costs by extending time between inspections”.