• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

World Bank report ‘Decarbonising Development’ sets out steps to meeting 2 oC target

The World Bank has released a report, Decarbonising Development, which describes the steps the bank believes are required to limit global average temperature rises to 2 oC by the end of the century, the internationally-agreed target (which is nevertheless being questioned). Working on the basis that net emissions (i.e. emissions and sinks cancel each other out) need to be zero by 2100, with most emissions reduced by mid-century, the report develops an approach based on three principles. They are: planning ahead with an eye on a long-term goal; supporting carbon prices with policies; and minding the political economy – that is, implementing measures that appeal to a majority of voters, possibly by using revenue from carbon pricing and a reduction in subsidies to “improve equity, to protect those affected, and, when needed, to appease opponents.” The report notes that carbon pricing without policy support – such as sponsoring technological development – can fail to deliver lower-carbon development because prices are subject to market failures and behavioural biases. It urges an eye on long term targets (when meeting intermediate goals) because it encourages decisions that are cost-effective over a longer time period. In more practical terms, the report recommends that carbon taxes and/or markets be strengthened or introduced across the world; that technologies such as carbon capture and storage are developed by richer countries so that they may be rolled out world-wide; and that better management of land use (for example agricultural practices) and carbon sinks (such as forests) is practiced.

Chevron CEO opposes Shell and BP’s support of global carbon price

The head of Chevron, John Watson, has given a speech to an Opec seminar in Vienna that has exposed a difference in views between American and European oil and gas producers. While Shell and BP have written to the UN to offer their help in setting up a global carbon price, Chevron and ExxonMobil declined to sign the letter. Explaining Chevron’s opposition to a global carbon price, with Mr Watson said “It’s not a policy that is going to be effective because customers want affordable energy.” Mr Watson believes that a better means of reducing global carbon emissions is increasing production of shale gas and maintaining the use of nuclear power, presumably in conjunction with a higher use of renewables. He also stated that “I am not aware of a company that has done more to address greenhouse gas emissions than my company.”

Technavio report predicts trebling of CCS market by 2019

London-headquartered technology forecasting firm Technavio has released a report giving predictions about the medium-term future of carbon capture and storage technology. According to BusinessWire, the report (for sale from $US 3,000/€2,740) estimates that fossil fuels will account for 67% of energy sources for electricity generation by 2020, and that the compound annual growth rate of the market for CCS will be 31.63% over the period 2015-2019 (i.e. the market will treble by 2019). The main vendors for the technology will be GDF Suez (now ENGIE), GE Energy, Schlumberger, Shell Cansolv, and The Linde Group, while others will include Aker Clean Carbon, Alstom, Chevron, Fluor, Hitachi, Mitsubishi Heavy Industries, Siemens Energy and Southern. While the BusinessWire article somewhat misleadingly claims “integrated gasification combined cycle (IGCC) plants equipped with carbon capture and storage technologies are proving to be cost-effective and profitable in terms of efficiency, capacity, and return on investment,” Technavio don’t appear to be claiming the same on their website.

Ukrainian conflict leads to huge fall in industrial output

The Financial Times has looked at the effect of the Ukrainian conflict on industrial output and the wider national economy. Year on year, industrial production declined 20% in the first quarter of 2015, with coal mines shut down due to a lack of electricity available to operate pumps to drain water from pits. The Donetsk Metallurgical Plant, which played an important supply role in the Second World War, and which now has an annual capacity of over 1 million tonnes of liquid steel, is currently operating at 10% capacity at best. Other industry has also been affected, some directly from shellfire, for instance the Avdiivka Coke Plant. The national government, though it claims to be in control of 96% of Ukrainian territory, says it is in control of only 35 of the country’s 95 coal mines – the territory held by rebels is highly strategically important. For the people of Ukraine, the decline in industrial output has added economic stress to the turmoil of the conflict, with the country’s GDP expected to contract 9% this year, and inflation at the end of the year expected to be running at 46%, down from the current 61%. The high inflation rate is due in part to the government’s decision to devalue the hryvnia, and to enforce a five-fold increase in utility prices which was a condition of an IMF loan. The economy minister, Aivaras Abromavicius, has tried to be optimistic, saying “if the military conflict in the east does not escalate, the worst is behind us.”

E.ON CEO calls for standby capacity market to compensate German utilities

The CEO of E.ON, Johannes Teyssen, has used the forum of the Eurelectric conference in Berlin to call for a prompt intervention in the German electricity market to compensate providers of standby generation capacity. German utilities have been making losses on their standby generation capacity, which the German grid is in need of, because they are operated for an insufficient time to recover expenses (renewable electricity is given priority in the grid). In total, German utilities have written off €12 billion ($US 13.1 billion) over the past year as a result of these losses and the consequent drop in value of their conventional power plants. To make the plants profitable and maintain their provision of standby generation capacity, utility owners are urging the government to introduce a capacity market, as the UK government has done through an auction system. “The question is should we heal the problem while it’s still cheap, like the British did, or do you run it down the drain and when it’s almost broken then you interfere,” Dr Teyssen was quoted by Reuters as saying.

Croatian government hopes to emulate Norwegian oil wealth

Reuters has reported on the Croatian government’s plans to step up offshore oil and gas production as it endeavours to grow its economy. Croatia produces 20% of its domestic oil needs and 66% of its domestic gas needs, but the government believes that it could follow the example of Norway and Scotland in becoming net oil and gas exporters. Exploration is currently taking place. In a country famous for its coastline and islands, and with the economy taking 17% of GDP from tourism, there is significant hostility to the plan, with opposition groups hoping to force a referendum on the issue. Mirela Holy, the head of Orah, the Croatian green party, has said pointed out the Adriatic is different to the North Sea and the Gulf of Mexico in that it is a shallow, closed sea, meaning any spill would have greater consequences. In contrast, Igor Dekanic, an oil engineering professor at Zagreb University, has said “Realistically, I think the danger level is low and, if some quantities of hydrocarbons are found, the benefits will outweigh the risks.” Opinion may change as exploration continues.

University of Texas researchers find CO2 trapped in geologic formation more than a million years

An investigation by scientists at the Center for Frontiers of Subsurface Energy Security at the University of Texas has for the first time confirmed that geological formation are able to store CO2 for very long periods of time. The scientists studied the Bravo Dome gas field in New Mexico, where CO2 was deposited in deep rock over a million years ago by volcanic activity. It was found that over the million-year period around 20% of the CO2 dissolved into the field’s saline brine, with the remaining 80% remaining gaseous, trapped in the rock. According to phys.org, this “illustrates the feasibility of geological CO2 storage and informs policy makers on the requirements for carbon capture and storage technologies.” The researchers stressed, however, that it is extremely difficult to determine short-term dissolution rates of CO2 into saline water. Regardless, the news will be welcomed across the CCS industry.

GdF Suez becomes ENGIE

Late April saw the launch of the renaming of GdF Suez as ENGIE, in what the company says reflects the changing nature of the energy sector. In its press release, it said “The energy transition has become a global movement, characterized by decarbonization and the development of renewable energy sources, and by reduced consumption thanks to energy efficiency and the digital revolution.” The company has adopted a rising sun as its new logo, symbolising a new day in the world of energy, and it is clear the company is repositioning itself in public relations terms for a low-carbon future. The changes will be most prominent in France and Belgium, where the company has traditionally done its business.