• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

University of Oxford examines companies holding most potential stranded coal-fired power generation assets

The Stranded Assets Program at the University of Oxford has released a report on companies most vulnerable to having their coal-fired power plants ‘stranded’ – that is, forced to close through environmental legislation. The three chief pressures for closure are identified as carbon emissions, other emissions (particulates, NOx, SOx, heavy metals), and water use, and the most vulnerable plants being older subcritical ones with a low efficiency. These are the most polluting and water-intensive plants, but also the easiest to close from an economic point of view, because their useful lives are typically approaching an end. In some interesting data, the report estimates that an average old, inefficient subcritical plant emits 75% more CO2 and uses 67% more water than an average advanced supercritical plant (with figures probably similar for other air pollution). The report also references the International Energy Agency estimate that 290 GW of old subcritical generation capacity needs to be closed by 2020 for the world to be on target to meet the goal of limiting the global average temperature rise to 2oC. Of the top ten most exposed companies in terms of total capacity fired by subcritical plants, seven are Chinese (all state-owned), and there is one from each of India (NTPC), the US (AES Corp), and South Africa (Eskom). The report also lists the 20 least carbon-efficient companies, with three of the top five being from India, and GDF Suez being third. The report suggests that these companies’ credit ratings should be re-evaluated, and that investors should also reconsider the risks they are running with their investments. The report contains a wealth of interesting data.

Chinese government declares war on smog; warns of action against oil companies

The Australian Broadcasting Corporation has run two stories on the press conference held by Chinese Premier Li Keqiang on 13 March. Premier Li holds a press conference only once per year, and questions put to him are pre-approved, meaning that he generally speaks only with intention. The emphasis that was placed on air pollution, therefore, was seen as highly significant, and a question specifically mentioned the roles of state-owned Sinopec and Petrochina in causing pollution, meaning that the government foresees action against them. Premier Li stated “For all illegal production and illegal emissions they will be held accountable. We need to make the cost of these too high to bear.” More generally, Premier Li declared that the government would fight smog with an iron fist, suggesting that there will be serious action against industrial polluters in the year to come. Some commentators see air pollution as the biggest domestic issue facing the government, with only three Chinese cities below national air pollution standards last year.

Disagreement surrounding medium term growth prospects of Chinese steel industry

Keeping with China, an article in the Financial Times has looked at the differing views on the future of the Chinese steel industry, the country being the biggest producer in the world. While mining companies such as Rio Tinto and BHP Billiton predict that Chinese production will grow by around 2.5% annually until 2025, UBS bank recently cut its expected annual growth rate from 1.4% to zero for the next five years, with a recent report saying “Our analysis shows that its steel production has already reached a turning point.” This is supported by a statement by the deputy secretary-general of the China & Iron Ore and Steel Association, who said that steel output in China will this year contract to 814 million tonnes from 824 million tonnes last year. While the future is always difficult to predict, it seems that there may be some wishful thinking at play in the minds of the mining companies.

Egypt pushes to expand power generation through coal-fired plants

Egypt is making moves to expand its power generation capacity amid blackouts across the country, as two stories from Reuters illustrate. In the first, Orascom Construction, owned by Egyptian billionaire Onsi Sawiris, has announced plans to raise $US 1.95 billion (€1.80 billion) to partially fund a $US 3 billion (€2.77 billion) coal-fired power plant in a joint venture with Abu Dhabi state fund International Petroleum Investment Company. In the second, Siemens is to supply four E-Class turbines to help expand the coal-fired Attika Power Plant, near Suez City, by 650 MW. Rising demand for electricity from a growing population (now at 87 million), mixed with diminishing domestic gas production has turned Egypt into a net energy importer in recent years, after a long period of being a net exporter. Blackouts have made electricity a highly political issue, and the Egyptian government has been encouraging investment in the sector.

IEA set to report no increase in CO2-equivalent emissions in 2014

The BBC has reported on forthcoming International Energy Agency data that global CO2-equivalent emissions did not rise in 2014 compared to 2013. The surprising and welcome result has been attributed to a combination of weather effects, changing energy consumption patterns, a fall in total coal use in China, and changes in the relative prices of oil, coal and gas, though the language around these statements reflects some uncertainty. It marks only the fourth time in 40 years that emissions have been stable or have fallen over a year, the other three occasions the result of economic downturns – the US recession in the early 1980s, the collapse of the Soviet Union, and in 2009 after the worst of the global financial crisis. The IEA is cautioning that the steady emissions should not lead to complacency in the lead up to the Paris climate change talks later this year. An IEA report will be released in June.

Laborelec-GDP Suez publish short article on risks from wood pellets

Researchers from LaborelecGDF Suez have published a short piece in Bioenergy International (in its ‘pellets special’) about health and safety risks from using wood pellets as a combustion fuel. Between 2004 and 2010, there were at least 15 serious fires, explosions and carbon monoxide poisoning incidents at pellet plants, storage silos, docks, and at combustion plants, pointing to the seriousness of the risks. Those risks come from a variety of sources, including very fine dusts (which are highly combustible, even more so than coal dust) and off-gases (which have caused fatalities in the Netherlands, Sweden, Germany, Ireland and Switzerland). The short piece is well worth reading.

Eskom board launches inquiry into poor performance but unlikely to uncover fresh reasons

Following the suspension of four members of the Eskom executive management team, including CEO Tshediso Matona, by the board for failing to provide credible information for poor performance of the South African power utility, Engineering News has run an opinion piece speculating about the situation. In recent years Eskom plants have been operated without the usual maintenance so as to increase output in the short term while new plants are built, with the plan being that maintenance on the older plants would be carried out when new plants came online. However, the new plants have been delayed, and Eskom has instead been forced to resume maintenance and reduce output, and that, coupled with unplanned outages because of the previous lack of maintenance, has resulted in blackouts. Until recently, the Public Enterprises Minister, Lynne Brown, had backed Eskom’s management, but in mid-March this support stopped as the Eskom board announced the suspensions and an inquiry into the poor performance. In the opinion of Engineering News, the inquiry (due to finish at the end of the month) is unlikely to dig up any fresh material, except in the case of the concerted effort to conceal information on the part of the executive. In addition, Engineering News does not expect the situation to improve until the end of 2016, in spite of schemes to reduce demand and to have other industry co-generate power, meaning continuing hardship in South Africa.

Bharat Heavy Electrical commissions three 270 MW units in 42 days

New IFRF member Bharat Heavy Electrical Limited recently made news in India, after commissioning three 270 MW units within 42 days at the same site, RattanIndia Power Limited’s Amravati project in the western state of Maharashtra. The coal-fired Amravati power station will be very large, consisting of two 1,350 MW phases, each made up of five 270 MW units. The recently-commissioned three units join two other units previously commissioned, making Phase 1 complete.