• Combustion Industry News

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      Patrick Lavery

      Combustion Industry News Editor

Business Trends

The Wall Street Journal has reported on the decision by the Obama re-election campaign team to add clean coal to their future energy mix strategy. The addition was unannounced but appeared on the campaign team’s website sometime between Wednesday 9 May and Friday 11 May. A spokesman for the campaign was quoted as saying that clean coal is “an essential part of the president’s all-of-the-above energy strategy”. The move is surely designed to soften Obama’s perception as being anti-coal.

Obtaining land, shortages of coal and natural gas, and other issues are increasing problems for industry in India. The Indian state-owned National Thermal Power Corporation (NTPC) has reduced its planned additional capacity for the next five years by more than half. The downward revision, from 29 GW to 14 GW, is mainly to do with issues in obtaining land on which to build power plants. ArcelorMittal, the world’s largest steel company, has faced regulatory problems for three planned steel plants in India, and its chairman, Lakshmi Mittal, said last month that India is not high on the company’s list of investment destinations. The Indian government is working on legislation aimed at awarding higher compensation and better rehabilitation to those who lose their land to industry, which may smooth the process of acquiring land. It also recently issued a directive to Coal India, the state-owned coal supply company, in a bid to improve the supply of coal.

Japan is to face a significant power shortfall during its coming summer, according to a draft government report. The report assumes a summer as hot as 2010 (a record) and that no nuclear reactors in the country will have resumed service. In the Osaka area, the shortfall could be as much as 18.7%. The re-starting of power generation from nuclear power plants after their gradual phase-out from service for safety checks after the 2011 Fukushima disaster requires local authority consent, which has not yet been granted anywhere across Japan. The last nuclear reactor, Tomari, on the northern island of Hokkaido, was stopped 5 May 2012, resulting in Japan being without nuclear power generation for the first time in 40 years. Last summer, Japan managed to avoid power shortages through a reduction in consumption and spread in the times of consumption. Meanwhile, Xinhua reports that Chinese solar cell makers are eyeing the nuclear-free, power-short Japanese market.

Chinese steel production hit a record peak in early April, according to the Financial Times. The large volume was attributed to a picking up in the construction industry in China, which had been dampened by government efforts to supress rising property prices. A spokesman for a construction industry group said that they did not forecast demand for steel to rise in the future.

A Wall Street Journal report has focused on the German solar photovoltaic industry’s struggles after the withdrawal of government incentives. Utilities no longer have to pay above-market rates for renewable energy electricity after a federal government decision last year, and subsidies to the industry have also been cut. The combination of these moves has forced several solar PV companies into bankruptcy or into profit-warnings.

Legislation and Regulation

The South Korean parliament has approved legislation that will introduce a cap-and-trade system for carbon emissions by 2015. The country is the world’s seventh largest carbon polluter, with emissions having doubled over the last two decades to 600 million tonnes per annum. The system will apply to companies with annual emissions of 125,000 tonnes or workplaces of 25,000 tonnes per annum, but other details are yet to be determined. The system was originally scheduled to come into being in 2013, but debate during the passage of the bill forced the delay.

The UK’s Department of Energy and Climate Change has announced proposals to cut the amount of red tape industry must deal with when complying with EU ETS regulations. The proposals would cut the current 13 sets of regulation down to one, and would apply from 2013 onwards, when Phase III of the system starts. The proposals will also allow for small emitters and hospitals to opt out from the ETS and into a ‘lighter touch’ alternative system, as administrative costs per tonne of CO2 are estimated at £1 for small emitters, while for larger emitters they are only £0.04.

The Indonesian Palm Oil Producers’ Association (Gapki) has disputed the US EPA’s ruling that palm oil is not a renewable biofuel, according to Xinhua. The US EPA has guidelines that mean that a biofuel must reduce carbon emissions by 20% to be considered renewable; it puts palm oil at 17%, while Gapki puts the figure at 50%, claiming it as more efficient than soybean, sunflower and rapeseed oils. The US EPA argues that land clearing pushes palm oil below the 20% benchmark, while Gapki argues that as a perennial plant bearing fruit for up to 25 years, the calculation method used was invalid. In 2010, several major palm oil buyers suspended purchases of Indonesian palm oil because of concerns over deforestation.

Research, Development and Technology

Norwegian Prime Minister Jens Stoltenberg has officially opened Technology Centre Mongstad, a carbon capture and storage test centre near Bergen on the country’s west coast. The aim of TCM is to prove cost-effective ways to capture and store CO2, and is a venture between Statoil (the major shareholder), Shell, and a number of other companies. The cost of the centre was around $US 1 billion/€775 million, ten times the original estimate.

China Shenhua Coal to Liquid and Chemical Co and General Electric China have joined forces to form the General Electric Shenhua Gasification Technology Co, owned 50 per cent by each company. The purpose of the new venture is to research and promote power generation through coal gasification, and also to enhance the development of clean coal in China. The president of thermal products for GE Energy, Paul Browning, stressed the importance of coal gasification to China, which is coal rich but relatively oil poor.

Company News

Lafarge and Anglo American will be forced to sell some cement plants and quarries in Britain as part of the UK Competition Commission’s approval of their £1.8 billion/$US 2.89 billion/€2.24 billion merger, according to the Financial Times. The Commission has recommended that a single buyer purchases the assets so that there is another player in the cement industry of a large scale. Lafarge and Tarmac, the UK arm of Anglo American, have expressed confidence that the conditions will be met. Not all cement plants and quarries are to be sold. Holcim and the UK’s Breedon Aggregates are among the potential buyers.

Chevron has signed a preliminary agreement with Tohoku Electric for the supply of 1 million tonnes of LNG per year for a 20 year period, according to Reuters. The gas will come from the Wheatstone plant in Australia, which is currently under construction.

And Finally…

In the Finnish town of Mariehamn, in the Aland archipelago, residents have been riding on a free bus powered by biodiesel made from oil taken from waste fish intestines. The factory, which received European Union subsidies amounting to €30,000/$US 23,255, currently produces 200 litres/day of fish diesel, but will soon be able to produce 700 litres/day. The bus operator estimates that there are enough waste fish intestines in Aland to power all public buses in the archipelago.

A team of UK scientists have reported in the journal Current Biology that dinosaur flatulence was responsible for so much methane production that it may have contributed to the warming of the climate tens of millions of years ago. The team looked at one group of dinosaurs, sauropods, and estimated that their methane production would have been the equivalent of the methane produced today from all natural, agricultural and industrial sources.