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Combustion Industry News
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espadmin
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Saudi Arabia scuppers production deal between oil-producing nations
World oil prices are set to remain low after Saudi Arabia scuppered a plan by other major oil producing nations to curb production volumes. OPEC nations, along with other nations such as Russia, Iraq, Nigeria, Angola, Ecuador, Venezuela and Azerbaijan, met in Doha in mid-April to come to an agreement that was desperately sought by many of them, with close to half the countries currently seeking international financial support as their economies buckle from reduced revenues. However, for reasons that can only be speculated upon at present, Saudi Arabia, while signalling before the meeting that it would make an agreement, declined to do so when it came to putting pen to paper. Some of the speculation surrounds the regional rivalry with Iran (Saudi Arabia refusing to cut production if Iran did not make a similar promise), while other speculation focuses on OPEC losing some of its power by making deals with non-OPEC countries. A further possibility is that Saudi Arabia believes that its strategy of holding or gaining its market share is working – many of the financially more vulnerable oil producers now do not have the funds to reinvest in the sector, such that their production is beginning to fall (leading supply to be close to demand at present), while globally, because of the failed meeting, production is expected to increase, mainly via Saudi Arabia. Following the meeting, Russian oil minister Alexander Novak said that he now expected that oil prices would not recover until mid-2017.
US energy secretary says China and US should develop clean coal technology
The US Energy Secretary, Ernest Moniz, has said that the US and China should pursue clean coal technology in order to save job losses, where in both countries the coal industry has shed thousands of jobs (in China, hundreds of thousands, possibly millions). Like many countries around the world, both the US and China generate substantial portions of their power through coal-firing, and this is expected to continue for decades to come. With carbon emissions an increasingly big issue, the need to move to cleaner coal-firing is clear. Mr Moniz said “For a carbon-constrained world, we feel we must develop the enabling technologies for all sources, including coal. The marketplace will then decide.” The US is currently supporting clean coal projects domestically and in China (the first large-scale demonstration of which is to come online in 2020), while China also some has involvement in US clean coal projects. CCS even forms part of China’s 13th five-year plan. While Mr Moniz’s statement appears rather pedestrian, it does signal a measure of federal support for an industry which has struggled in the US in recent times, as can be read about in this edition of the Combustion Industry News.
US EPA releases updated cost analysis for implementation of mercury rules
The US Environmental Protection Agency has released an updated assessment of the costs to utilities in complying with rules to limit mercury emissions from power plants, after the Supreme Court decided in June last year that the agency had not properly taken such costs into account. Having previously estimated a cost to industry of US$9.6 billion (€8.5 billion), and public health benefits of US$36 billion (€32 billion), in its reassessment, the EPA has estimated that compliance will have an operating cost of 2.7-3.5% of annual electricity sales, while the capital cost will be 3.0-5.9% of typical annual capital expenditure (from an average over the last 10 years). Finally, the imposition of the rules was estimated as raising electricity prices for consumers by 3.1% over the next ten years, an amount considered acceptable to consumers. As the Wall Street Journal reports, most utilities have already complied with the rules, meaning there was relatively little interest in the process of the reassessment – only 39 comments were received, in comparison to over one million when the rules were first being written prior to 2012.
Boundary Dam Unit 3 CSS performance strong in 2016
Recent operating results of the carbon capture and storage system at Unit 3 of SaskPower’s Boundary Dam Power Station, the world’s first large-scale CCS system applied to a coal-fired power plant, have been encouraging of late. Having opened in October 2014, during no month in 2015 did the system operate every day, and over the whole year it was in operation only 56% of the time. Of the 91 days from 1 January 2016 to 31 March, however, the system was in operation for 82, with the other 9 days being planned maintenance. Both January and March were months in which the system was continuously in operation. Of the target capture of 800,000 tonnes of CO2 this year, 217,000 were captured in the first quarter. On the firing side, the unit was experiencing slagging issues (not clearly related to the CCS process) up until early April, when the problem was corrected. In March, the average power output was 105 MW, down slightly from the 2015 average of 107 MW, which suggests (without demonstrating) that a lower firing rate has been associated with more consistent performance. Overall, the results are a boost not only for SaskPower but for CCS more generally. Recently, SaskPower said that if it was to install a CCS system today, it would cost 30% less than it first did, a significant learning curve.
Nuon and Delft University of Technology start work on “Power to Ammonia” research program
Nuon and Delft University of Technology are planning to research the potential to turn gas-fired power plants into ‘super batteries’. The idea is that solar and wind energy will be used to produce liquid ammonia (via hydrogen production from water, then the addition of nitrogen under high temperatures and pressures), which will be stored, then combusted when renewable energy production is low. Burning ammonia produces mainly nitrogen and water, with some NOx, but no carbon dioxide, hence its future allure. The goal of the “Power to Ammonia” program is to have a demonstration facility within five years, and Nuon hopes it can convert its Magnum power plant to fire ammonia inside ten years. As Geert Laagland of Nuon said, “We are examining the opportunity to endow our gas-fired power plants with a sustainable future.” It appears a very interesting research program.
Peabody Energy files for bankruptcy protection
US coal mining giant Peabody Energy filed for bankruptcy protection in mid-April, a result of crippling debt, the fall of coal firing against the rise in gas firing in the US, and more stringent environmental regulations. The announcement came a month after the company had warned of the prospect, having invested heavily several years ago in the belief that coal demand and prices would rise. The fall of the company, the largest publicly-owned coal producer in the world, has been seen as symbolic of the struggles of the coal industry, although some argue that other companies without such high debt burdens will continue to survive, given that coal firing will remain significant for some time across the world.
Engie to sell Polish power assets
Engie has confirmed that it wishes to sell its Polish assets, including the 1,800 MW coal-fired Polaniec plant in the country’s south. While the company invited bidders at the end of January, it has only been in the last weeks that a spokesperson from Engie confirmed that the assets were for sale, with the strategy being to raise funds for investments in gas-fired power generation capacity, as well as renewables. A price tag of €500 million (US$566 million) has been set, which would be a first step in Engie’s plan to sell €10 billion (US$11.3 billion) across its asset base by 2018. The Polish assets have been chosen for sale because generation from coal in itself is generally loss-making in Poland, with utilities making their money through distribution networks, which in Poland Engie does not have. It is speculated that one of the state-run Polish utilities such as PGE could buy the assets.
Vattenfall sells lignite business to Czech partners EPH and PPF
Another company selling European coal assets is Vattenfall, which on 18 April sold its entire lignite business to Czech companies EPH, an energy company, and PPF Investments, an investment company. EPH has mining and power generation operations in the Czech Republic, Slovakia, the UK, and Germany, and hence goes into the deal wide-eyed, as many of the purchased assets are located in Germany. In selling, Vattenfall raises its share of renewable and low-carbon power generation from 50% to 75%, in line with its strategy of decarbonising. While the deal is still subject to approval by the Swedish state, this would appear a formality.
Siemens gains German competition approval for planned Bavarian gas-fired plant
Siemens has gained clearance from Germany’s competition authority for the building of a new 600 MW gas-fired power plant in Leipheim, Bavaria. It is to be a ‘reserve’ plant, providing peak generation capacity, a means of operating that makes the plant financially viable, despite relatively expensive gas prices compared to coal in Germany. Normally, according to Reuters, coal-fired plants in Germany make €7.70 (US$8.70) per MWh, whereas gas-fired plants lose €3.70. Approval from the European competition watchdog is still required for the plant.