• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Meeting climate change goals in the coal sector a task of CCS and raising efficiency through modernisation and materials advances, according to opinion piece

Reuter’s John Kemp has continued his series of articles on the future of coal-fired power generation, looking at the ways in which it can reduce its greenhouse gas emissions. Starting with the base assumption (deduced in a previous article) that coal will play a significant part in the energy sector for the next fifty years, and pitting it against the fact that coal-fired plants make the largest single anthropogenic contribution to climate change, Kemp looks at the potential means of reducing GHG emissions from the sector. The long-term means is carbon capture and storage, but with the technology not yet commercially proven (in Kemp’s estimate one to two decades away), improving efficiency is the available short-term means. A 1% increase in thermal efficiency is equivalent to a 2-3% reduction in CO2/kWh; as many plants around the world are of a small size and use sub-critical boilers, there is a huge potential to raise efficiency and reduce emissions through modernisation. The worldwide average efficiency is 33% (meaning many in the 20-30% region), whereas modern plants can achieve up to 46% efficiency, suggesting that emissions could be cut by 25-30% worldwide using currently available technology, excluding CCS. However, higher efficiency also makes the economic case for CCS better, as the ‘energy penalty’ of installing CCS is a smaller proportion of the efficiency of the overall plant. Raising the highest conventional efficiency higher (above 46%), using ultra-supercritical boilers (which would require materials advances) would help reduce emissions further. Although not mentioned in Kemp’s article, increased use of combined-heat-and-power plants (and municipal heating schemes) would also presumably lower emissions. Finding the political support for a modernisation program may be difficult in developed countries, however, and economically difficult the world over – an economic analysis would be of interest.

UN Sustainable Development Network report sketches pathways to decarbonisation

The UN Sustainable Development Network has produced a report into pathways to decarbonise the global economy, necessary for limiting the extent and impacts of climate change. The report offers various means of decarbonising, giving countries/regions some flexibility in choosing which paths to follow. The means themselves are nothing new – fossil fuel power plants to have CCS, more renewables, and some nuclear; a shift to electric vehicles; improved building design to reduce energy consumption; and much improved energy efficiency across the board. More novel is that the director of the Network, economist Jeffrey Sachs, has written that it is pivotal that at the 2015 Paris climate change talks, climate goals are set not just for the medium term (i.e. to 2030) but for the long term, as it will influence the medium-term pathways chosen.

Australian government repeals carbon price

A step backwards in respect to a global climate agreement has come from Australia, where a repeal of the fixed carbon price (in effect since July 2013) was passed by the Senate last Thursday. The Prime Minister, Tony Abbott, has estimated that households will save $AU 550 ($US 516/€381) annually, with gas prices to fall 7% and electricity 9%, and knock-on price-lowering effects to other products within the economy. The repeal required the votes of a number of senators belonging to the recently established Palmer United Party, led by mining billionaire Clive Palmer, a rather colourful and unpredictable character. For over a year, Mr Palmer had backed the scrapping of the previous government’s climate package, which consisted of the carbon price, a Clean Energy Finance Corporation (which can invest up to $AU 2 billion/$US 1.88 billion/€1.39 billion annually), a renewable energy target of 20% by 2020 (in 2013 Australia had 13.8%), an independent Climate Change Authority (to assess and disseminate information), as well as a Land Sector Package (aimed at encouraging certain farming practices). Just a month ago, however, Mr Palmer held an unexpected press conference with climate campaigner Al Gore to announce his support for an emissions trading scheme (as opposed to a fixed price), as well as the continuation of the Clean Energy Finance Corporation and the renewable energy target. This seems to have affected government strategy, which has repealed only the carbon price, leaving in place (at least for the time being) the Clean Energy Finance Corporation and the renewable energy target. Mr Palmer’s support for an emissions trading scheme rests on other nations, such as China and India, also introducing such schemes. Given Mr Palmer’s position (and his party’s current power in the Australian Senate), the opposition Labor Party’s support for an emissions trading scheme, and the fact that Mr Abbott has refused to rule out a future emissions trading scheme (which may have been a part of a backroom deal with Mr Palmer), the repeal of the carbon price may not be the landmark reverse presented in the Australian press. Rather, it may be a temporary, politically-beneficial situation (Mr Abbott came to power promising the repeal) preceding a future emissions trading scheme. Time will tell. It is hard to escape the conclusion, however, that it will weaken to some extent the position of developed nations in negotiations in Paris in December 2015.

US House Energy and Commerce Committee may subpoena EPA over power plant regulations

The recently proposed federal US rules for carbon emissions from fossil-fuel fired power plants, produced by the Environmental Protection Agency, have become the subject for a dispute between the House [of Representatives] Energy and Commerce Committee and the EPA. The Committee requested that the EPA provide documents related to the production of the rules, which the EPA has not done, and now the Committee may act to force the EPA to deliver the documents through a subpoena if they are not received by 23 July. The members of the House spearheading the move are Republicans, who oppose the new rules on the grounds that they force coal-fired plants to adopt carbon capture and storage technology, a technology which is not commercially proven. The EPA’s position is that CCS has been adequately demonstrated, and is thus the best available control technology, raising an interesting question about what defines ‘best available technology’. The EPA responded to an earlier information request saying that it would withhold deliberative documents until after the rules had been formally passed. It seems the story is set to continue.

Gas prices fall, putting pressure on future LNG projects

Gas price falls in European and Asian markets over the course of the year have put future major LNG projects in doubt, as the economic picture for them deteriorates. In Britain, gas prices have fallen by almost half this year, while in Asia, prices have fallen around 40%, the causes being a mild northern hemisphere winter, improved energy efficiency, an increased availability of renewables and use of coal (cheaper than gas in Europe), and greater supply of LNG in the Asia-Pacific region. In Europe, gas demand fell by over 10% between 2008 and 2013, according to the International Energy Agency, a major factor being the power industry using less gas. While North Sea gas output has fallen, gas demand has fallen faster, meaning lower prices. It is uncertain whether the low prices will continue – geopolitical instability threatens the production and/or supply of gas in North Africa, and events in Ukraine also cast doubt on supply from Europe; a harsher European winter would also lead to more demand. These factors would tend to push prices up; on the other hand, export from the US may pick up (which may increase prices in the US, but lower them in the rest of the world), and Japan may throttle down its use of gas as it restarts some of its nuclear reactors. Regardless, the current low prices threaten planned LNG projects around the world from going ahead, including in East Africa, North America and Australia. As Royal Dutch Shell’s director of projects and technology, Matthias Bichsel, said last month: “Gas projects are extremely price-sensitive because the margins are so thin … and only a small fraction of them (large LNG export projects) will get built.”

GE’s Alstom bid accepted by board; deal won’t be completed until 2015

The Combustion Industry News has been a little slow in reporting on the final acceptance by Alstom’s board of GE’s bid to buy Alstom’s turbine business. The $16.9 billion (€12.5 billion) deal was approved by the board at the end of June, having been approved by the French government the week before. The deal will not be completed until 2015, subject to some matters being finalised.

Thailand’s Egat-I to build 1.2 GW coal-fired plant in Vietnam

Thailand’s Egat International (Egat-I) has signed a memorandum of understanding with the Quang Tri Province People’s Committee to build, operate and transfer a 1.2 GW thermal power plant in Quang Tri Province in the central part of Vietnam, roughly halfway between Hanoi and Ho Chi Minh City. The $US 2.26 billion (€1.66 billion) project will begin construction in 2018, to be completed in 2021. It will consist of two 600 MW units, both coal-fired. The plant is part of Vietnam’s 25-year seventh master power development plan, and will have to gain environmental and other approvals before construction begins. Egat-I is the international arm of Thailand’s state-owned Electricity Generating Authority of Thailand.

South African metalworkers’ strike affecting construction of Eskom power plants

A strike by the South African metalworkers’ union, NUMSA, involving 220,000 workers, has led to disruption in the construction of two new power plants for the national electricity utility, Eskom. Murray & Roberts, and Aveng Ltd are both working on the construction of two large new coal-fired Eskom plants – Medupi and Kusile, each in the 4-5 GW region – and have both been affected by the strike. A dispute over future pay increases has sparked the strike, which may escalate if the requested increases are not agreed. Given that there was a five-month strike in the platinum sector in the first half of 2014, the current two-week strike has the potential of significantly delaying the construction of the new plants.