Energy Handbook 2011 - GBR

P o w e r S u m m i t - T h e E n e r g y H a n d b o o k 2 0 1 1
F o c u s : C o a l P o w e r
As if the economics of coal, typically
the cheapest source of energy, were not
compelling enough, all three of these
countries value energy security and are
net importers of fuel. Additional coal-fired
capacity is thus a geopolitical reality as
well as an efficient route to economic
development.
Technical Advances
Recent years have seen substantial
developments in coal burning technology.
Many modern coal-fired generating
plants have thermal efficiencies of up
to 40 percent, compared to typically
25 percent for older plants. They achieve
this primarily by producing steam
at very high temperatures, because
thermodynamics dictates that efficiency
increases with temperature.
So-called “supercritical” plants use steam
at pressures and temperatures beyond
the phase transition known as the critical
point (374°C and 220 bar). Supercritical
technology can in many cases be
retrofitted to older plants, reducing
capital expenditure compared to new
plants and avoiding the need for complex
and controversial planning permits. The
International Energy Agency estimates
that modernising the world’s existing
coal-fired power plants could reduce total
man-made greenhouse gas emissions by
5.5 percent.
The World Coal Association estimates
that a 1 percent improvement in coal
plant thermal efficiency results in a 2–
3 percent reduction in CO2 emissions.
Aside from reduced greenhouse gas
emissions, there is a strong business case
for employing supercritical technology:
increased power output relative to coal
consumption provides wider operating
margins and helps to insulate operators
from the volatility of international coal
markets.
of Germany supplied boilers producing
steam at 300 bar and 600°C to drive
the four 1,000 MW generating units.
Yuhuan operates at a thermal efficiency
of 46 percent. Even more advanced
boilers now under development should
see thermal efficiencies of 50 percent.
For example, Indian firm BHEL, in a joint
venture with French firm Alstom, is
currently developing a 350 bar, 700°C
boiler.
Environmental Aspects
In Europe, where the campaign to reduce
global warming is most established, coal
is deeply out of favour. However, many
countries in the region face a looming
energy crunch and have limited options to
deal with this. While nuclear is enjoying
improved support from politicians and
the public in many countries, it still has
considerable hurdles to clear. Europe has
led the pack in developing and adopting
renewable technology, but this is currently
still a marginal contributor to the energy
matrix. Most of Europe’s leadership in
managing greenhouse gas emissions from
power generation has been achieved
through the increased use of natural gas.
With North Sea gas reserves in decline
and Russia proving itself ever less reliable
as a source of gas, the continent has
turned to imports of liquefied natural
gas (LNG) – the UK currently imports
32 percent of the gas it consumes
– whose environmental credentials are
questionable. Refurbishment of existing
coal capacity and the construction of
new coal-fired plants is therefore likely,
given that Europe’s electricity demand
continues to grow.
Subcritical, supercritical and ultrasupercritical
plants all fire their boilers with
pulverised coal. Integrated gasification
combined cycle (IGCC) plants, on the
other hand, react coal or other solid fuels
with steam and oxygen to produce a
fuel gas known as syngas which can be
handled in the same way as natural gas
in a modern gas-fired plant. In an IGCC
plant, syngas is burned in a gas turbine
which drives a generator. The waste heat
from the gas turbine is used to produce
steam; this drives a steam turbine which
also generates power, giving high overall
IGCC is seen as a cleaner method of
generating electricity from coal, partly
because many experts argue that it is
easier to integrate carbon capture and
storage (see below) into IGCC plants than
conventional coal-fired plants.
Thermal efficiencies of 40–50 percent
are achievable, and IGCC produces fewer
particulate and other emissions than
conventional plants, though both types
of plant typically use scrubbers and filters
to reduce emissions. IGCC pilot plants
in the USA, the Netherlands and Poland
have been running for up to 17 years, but
issues of cost and reliability mean that the
technology has still not found widespread
commercial acceptance.
In the UK, the Government’s energy
strategy includes carbon capture and
storage (CCS) technology to remove
and dispose of CO2 emitted from large
generating plants, though no actual
CCS scheme has yet been approved. UK
Energy Secretary Chris Huhne has stated
that “the lights will not go out on my
watch” but has implied that the no new
coal-fired stations will be permitted in the
UK without CCS. While a CCS scheme
has been under trial in the Canadian
province of Saskatchewan for ten years
and oil companies have been using CO2
to enhance oil recovery rates for many
years, it has not been comprehensively
demonstrated that the technology can put
greenhouse gases beyond harm’s way.
Current CCS technology also significantly
reduces the overall efficiency of the
power plant.
USA, India and China
In the USA coal generates 49 percent
of the nation’s electricity and although
debate rages about the future of the black
rock, this figure looks set to fall. The
emergence of new technologies facilitating
the extraction of natural gas held in shale
bed formations have dramatically changed
North America’s gas supply situation.
During 2009 proven reserves went up by
10 percent and prices, which hit a peak of
$13 per million BTU in 2008, have fallen
to the $5/MMBTU mark today. Industry
pundits seem confident that prices will
hold below $6/MMBTU in the medium
Low gas prices make the replacement of
coal-fired stations with cleaner gas-fired
capacity an attractive option. President
Obama has generally been negative
toward the coal industry and his move to
impose limits on America’s greenhouse
gas emissions would place severe
constraints on the development of new
coal-fired capacity.
Set against the environmental logic
and economic viability of increasing
gas-fired capacity are hard political
realities, however. America’s coal
mining heartland in the Appalachian
mountains is traditionally Democrat, and
mining unions and industry lobby groups
hold considerable political sway. The
Democrats risk losing control of crucial
states if they pursue an anti-coal agenda,
and on this basis the future of coal power
in America looks more secure than it
otherwise might.
The US notwithstanding, India and China
will account for the bulk of capacity
additions to the world’s coal-fired fleet in
the coming decades. 79 percent of China’s
electricity comes from coal, almost double
the global average, while coal provides
65 percent of India’s power. India and
China have abundant coal reserves but
very limited supplies of domestic gas;
with this and environmental concerns in
mind, both countries are pursuing largescale
underground coal gasification pilot
projects in a bid to increase indigenous
gas supply, diversify their energy matrices
and utilise reserves that might otherwise
not be economically viable. In 2030 it is
predicted that coal will be only marginally
less important to China and India than it
is today; the question for energy investors
is how the coal will be used.
Over the last decade, consumption of
coal grew faster than any other type of
fuel and this trend is set to continue.
Coal consumption is predicted to grow
by 54 percent in the next 20 years, and
power generation will account for the
lion’s share of that growth. The abundance
of coal reserves in the world’s largest and
fastest-growing markets, plus the low
cost of coal, mean that this resource will
remain a dominant source of energy for
The new frontier of coal-fired capacity
is “ultra-supercritical” technology, and
the industry is witnessing unprecedented
international cooperation as governments
work with each other and the private
sector to bring the technology online as
fast as possible. An example is the Yuhuan
18
power plant in China, for which Siemens thermal efficiencies.
term.
the foreseeable future.
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