Clean Coal Technology Transfer (STeLA)


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  • Dominant fuel for new capacity which is currently being added at 20GW per year A lot of inefficient smaller boilers and turbines being used  If replaced or upgrade, can lead to significant decrease in emission
  • Coal-use technology that offer an improvement over those currently used Relative concept based on context used—‘Cleaner’ technology Encompasses range of technology—Preparation of coal (Eg washing and briquetting), Combustion (Fluidised beds and gasitification), Clean up of waste gases (Eg flue gas desulpharisation and dentrification), non-hardware measures to improve overall efficiency of coal use (Eg Thermal efficiency of boilers and power plants)
  • From: Clean coal tech in China and India.pdf (Page 17, Figure 4)
  • From: Clean coal tech in China and India.pdf (Page 13, Figure 3) Washing coal generally describes a water based process where the denser material (rocks and high ash coal particles) is separated and removed from coal. Coal washing involves grinding coal into smaller pieces and passing it through a process called gravity separation.21 The process involves feeding the coal into barrels containing a fluid that has a density which causes the coal to float, while unwanted material sinks and is removed from the fuel mix. The product from this process, cleaned or washed coal, has less ash and more moisture than the raw coal product. The coal is then pulverized and prepared for burning. This process reduces the amount of ash in raw coal to facilitate combustion and increase the energy content per tonne. It also helps to curb SO2 emissions and increase thermal efficiencies, which also leads to lower CO2 emissions. Coal washing is quite widespread around the world. India washes only about 16 per cent of its coal production.22 By law, in China, every coal mine must have a washing facility—but only around 30 percent of China's coal is properly rinsed of ash (which adds to pollution) and tailings (that reduce energy efficiency).23 However, enforcement of these regulations is poor.
  • From: Clean coal tech in China and India.pdf (Page 17, Figure 4) IGCC gasification of coal is a cleaner alternative to coal fired power plants. In IGCC systems, coal is gasified by making it react with oxygen at a high temperature to form a syngas. The syngas is a mixture composed primarily of hydrogen, carbon monoxide and other gaseous constituents. The syngas is then treated for the removal of hydrogen sulphide, ammonia and particulate matter. It is then burned in a gas turbine to generate electricity which in turn is used to produce steam to power a steam turbine. Residual heat in the exhaust gas from the gas turbine is recovered in a heat recovery boiler as steam, which can be used to produce additional electricity in a steam turbine generator. This dual system is commonly known as a combined cycle, which allows for a more efficient process of generation. This higher efficiency leads to an increase in financial savings, as well as reduces the waste of coal resources. Figure 4 is a schematic showing the process involved. IGCC systems are among the cleanest and most efficient of the emerging clean coal technologies: sulphur, nitrogen compounds, and particulates are removed before the gas is burned in the gas turbine and thermal efficiencies of over 50% are likely in the future. Coal-fueled IGCC plants currently exist in Europe and the United States. One IGCC plant started up in 1993 in Buggenum, Netherlands, with an electrical output of 250 megawatts (MW). A similar plant in Puertollano, Spain, uses a mixture of coal and petroleum coke and has an output of 320 MW. In the United States, Polk Power Station in Polk County, Florida has an output of 250 MW, while the Wabash River plant in Terre Haute, Indiana, has an output of 262 MW. Currently, IGCC technology is considered to be the most effective means for eliminating coal-plant CO2 emissions.
  • Commercial technologies in which Chinese firms have a significant capacity Basic coal washing technologies well-established (1500 coal preparation plants with capacity to wash 1/3 of China’s coal output). Chinese coal has ash content of 25% (Most US coal is 5-10%). Need to increase ‘washing rate’ Coal Briquetting—Converts raw coal into small processed pellets using a variety of processes (captures sulphur and reduce ash content) Coal combustion technologies Eg Fludised Bed boilers (Allows combustion of fuel at much lower temp)
  • Perhaps the most important group of clean coal technologies which can be readily transferred to China are those which seek to improve the performance of existing power stations, industrial boilers and other facilities. In many cases, the transfer of skills and techniques for incremental improvement can lead to a significant reduction in emissions from coal-fired facilities. For example, Chinese fossil-fuel electric power plants have an average thermal efficiency which is significantly lower than the typical figure for plants in more ‘ industrialised’ countries such as the UK (see Figure 1). Whilst the Chinese average is affected by the large number of small power plants in use, it also reflects the use of less advanced turbine designs, control systems and a lack of preventative maintenance12. Outside the electric power industry, other examples of this 6 ‘ efficiency gap’ may be found by comparing Chinese industrial facilities with those in OECD countries. The average industrial boiler in China operates at an efficiency of 65% whilst boilers in OECD countries have efficiencies of over 80%13. Similarly Chinese cement kilns consume 70% more coal than their OECD counterparts to produce the same quantity of output. It is clear that there is ample scope for inward technology transfer to improve the performance of China’s existing facilities in the industrial and power generation sectors in a number of different ways. Examples include the provision of training, the installation of advanced control systems, the refurbishment of existing steam turbines (e.g. by retrofitting new turbine blades with advanced profiles) and the implementation of better maintenance regimes. For older vintages of plant, the scope for such improvements is limited. So, the preferred course of action may be to replace them completely with modern facilities. There is some evidence that many of these activities are already being carried out to a limited extent by international firms and consultants (see the case studies later in this report). However, this aspect of technology transfer will require much more attention in the future. One of the more advanced ways in which existing Chinese facilities can be improved involves the replacement of old coal-fired boilers with new fluidised bed boilers. Fluidised bed boilers based on imported technology have already been installed at a number of sites in China. As mentioned previously, the need for imported technology has been driven by the limited size and poor environmental performance of Chinese fluidised bed designs. A number of ‘industrial-scale’ fluidised beds have already been built in China as a result of licensing agreements between Chinese and international suppliers14. Examples include: • The 100MWe Neijiang power plant was constructed by Ahlstrom (a division of Foster Wheeler, USA), with China’s Dongfang Boiler Works being responsible for the manufacture of some components. It entered service in 1996. • A series of Deutsche Babcock (German) design ‘Circofluid’ fluidised bed boilers have been constructed by Beijing Boiler Works. At least 14 units went into service between 1993 and 1996 (approximate sizes vary from 20MWe to 40MWe). • A 50MWe fluidised bed plant is currently being constructed for the Sichuan Fuling Aixi Power Generating Company by Shanghai Boiler Works (a subsidiary of Shanghai Electric Corp.). The plant was built under a license agreement with Foster Wheeler of the USA, and was due to enter service last year.
  • In addition to these incremental clean coal technologies, a number of more advanced alternatives have been developed by international suppliers. Despite a considerable amount of enthusiasm for such advanced technologies both inside and outside China19, it is not realistic to expect that these options will have a large Chinese market in the short and medium term. This is largely due to the fact that commercial success has been limited, even in North America, Europe and Japan. Despite this lack of success, there has been a lot of effort to find ways of transferring such technologies to China, particularly by academics and officials in the United States. As many observers have pointed out, this effort largely stems from the US Government’s desire to see a financial return from its multi-billion dollar clean coal technology demonstration programme20. There are two main varieties of advanced clean coal technology, both of which have been primarily developed for electric power generation - pressurised fluidised beds and integrated gasification combined cycles (or IGCCs)21. Pressurised fluidised beds are an advanced version of the standard ‘atmospheric’ fluidised bed boilers which are now installed in many countries including China. The main differences are the pressurisation of the boiler, and the addition of a small gas turbine to burn the fuel contained in the boiler exhaust gases. As a result of these modifications, pressurised fluidised beds can theoretically operate at thermal efficiencies of over 40%, and achieve further reductions in sulphur dioxide emissions. In practice, however, experience has been mixed. The existing plants in the USA, Europe and Japan all have efficiencies of 39% or less. They have also proved to be less reliable and more expensive than equivalent conventional coal-fired plants. Whilst discussions have taken place between the dominant supplier of this technology (ABB Carbon of Sweden) and Chinese officials, there are no firm plans to build a plant in China at this stage. 8 Integrated gasification combined cycle (IGCC) technology offers greater environmental benefits than most of the other advanced clean coal options. The coal is gasified and then burned in a large gas turbine. The hot exhaust gases from the turbine are then recycled to produce steam to drive an additional steam turbine. Overall efficiencies of 45% have been demonstrated, and further improvements are possible as gas turbine technology develops. Whilst the main building blocks of IGCC plants are in operation in a large number of facilities worldwide (as gas-fired ‘combined cycle gas turbines’ or coal gasifiers for the chemical industry), the number of integrated plants is small. At present five ‘utility-scale’ demonstration plants are burning gasified coal in the USA, the Netherlands and Spain. As with the pressurised fluidised bed, capital costs are high and reliability is mixed. Therefore, it is difficult to see how the plans to introduce the technology in China will become a reality within the next few years22. An even more distant commercial prospect for both China and other countries are so-called ‘ hybrid’ technologies which combine elements of the IGCC and the pressurised fluidised bed. Projected efficiencies of at least 46-47% have been mentioned. However, a full-scale demonstration plant has yet to be built. It is likely that such a demonstration plant will be constructed within the next few years in the USA23 or Europe, but the transfer of this technology to China will not be possible for a considerable period of time.
  • Shell aim to complete a ‘managed’ transfer of coal gasification technology to Chinese manufacturers. These manufactures already have the capability to make some gasifier components. Two main applications for Shell’s coal gasification technology Fertilizer manufacture and electric power production in an IGCC plant Fertiliser manufacture has the most immediate commercial potential  coal China is world’s largest fertilizer consumer and has desire to avoid import dependence Licensing: Main incentive of Shell is financial  Make money through licensing fees and return from joint ventures. In long run, hope to export low-cost gasifiers from China Thus, Shell maintains its technological position by retaining manufacture and design of key components
  • China’s pricing mechanism for energy is imbalanced: while coal prices are more or less marketbased, the electricity prices are heavily subsidized. China sticks to the policy of reform and opening-up, gives full play to the basic role of the market in allocating resources, encourages the entrance of entities of various ownerships into the energy field, and actively facilitates market-oriented reform related to energy. According to the Energy Working Group (2008), market competition has been already introduced into the production and distribution of coal . The price control of the Chinese Government leads to serious problems: “With rising prices of coal and crude oil and Government’s control of prices for electricity and oil products at artificially low levels, both Chinese power producers and oil refiners suffer significant losses. This distortion leads to energy supply insecurity, energy waste, environmental pollution and subsidies to the rich instead of the poor. A stable and predictable market is essential to encourage investment in any sector. For the coal generation sector this is particularly true in terms of the current tariff system. Although coal prices were entirely market based (acknowledged by the Shenhua Group during an interview), both the tariff and the yearly operating hours are still Government regulated. The result of this imbalance is that power producers are being squeezed. This is affecting not only long terms investments but also day-today operations. In the absence of financial market mechanisms to hedge the risks (e.g.: futures, forwards or options contracts), this uncertainty makes the game even more difficult for foreign companies. (Energy Working Group, 2008)
  • Structure of the Chinese energy sector The Chinese Government has been trying hard to privatize many of the former State Owned Enterprises (SOE’s) by encouraging them to sell their shares to both domestic and foreign investors. Despite moves toward privatization, much of China’s energy sector remains under control of large SOE’s, many of which are inefficient and unprofitable. Restructuring of the SOE sector, including the privatization of some enterprises, is one of the government’s major priorities. (Bekker, 2007) The State Power Corporation of China (SPCC) was the government’s own power utility. The SPCC controlled 90 percent of the country’s transmission assets, and accounted for 46 percent of China’s total power output. In the year 2000, reforms were carried through to split the plant- from the grid- activities. (International trade Canada, 2007) To encourage more competition, the central Government decided to divide the holdings of the SPCC among 11 different companies. This radical change resulted in two power grid companies, Five electricity producers (referred to as “the big five”), and four energy service companies. (International trade Canada, 2007) The “big five” include: Datang Group, Huaneng Group, China Huadian Group, China Guodian 42 Group and China Power Investment Corporation. They make up the lion share of energy production in China. Power transmission and distribution is controlled by two regional monopolies: South China Grid Corporation (the five southern provinces) and the State Grid Corporation (covers the remaining provinces including the administration of the Lhasa Power Grid in Tibet.) (International trade Canada, 2007)
  • Consequently, China is now eager to adopt CCTs. The development and implementation of CCTs, however, requires considerable investment. China, like most developing countries, has limited investment reserves, which will no doubt slow down the rate of development, introduction and use of CCTs. IGCC technology is often regarded as the best technology when it comes to reducing emissions and increasing efficiency. The main barriers of using this technology, in China, are that the “cost and risk” disadvantages are substantially higher in China when compared to developed countries. According to the Nautilus Institute, in 1999, “the average cost of power generation from an IGCC plant would be 32% higher than power from a PC plant and the overall risk factor would be 23% greater” in China.43 In 1999, the Nautilus Institute noticed that “ many of the new plants being built by the local governments are in unit sizes of 50MW or less. The main reason is that these small units are easier to finance.”42 As a result, most of the new plants that are being built continue to be small sub-critical PC powered plants.
  • National policies China’s dramatic economic growth is literally fuelled by electricity, and demand for energy has outstripped supply since 2002. (International Trade Canada, 2007) Shortages peaked with a 40 million kilowatt shortfall, which resulted in widespread rolling blackouts in 2004 that shut down some factories for days at a time. China’s extended economic growth is completely dependent on an abundant energy supply and the number one concern has been to keep the lights on.(Liu, 2007) While China’s electricity industry is still regulated, the government has started to introduce more competition into this industry with an eventual goal of full deregulation. More importantly, given the crucial role of electricity in the economy, the power industry always has tremendous political power to influence the decision-making process, and thus is less worried about policy changes.(J.F.K. School of Management, 2004) China’s weak protection of intellectual property rights (IPR) and its history of replicating imported equipment is cause for concern for western companies that want to invest in China. This in turn, results in reduced foreign direct investment and collaboration between researchers from developed countries. Reduction in trade barriers to joint ventures between international and Chinese companies, and better legal framework and arbitration processes. However, technological licensing is still problematic (copying of technological information) Environmental controls: Environmental policies encouraging chinese companies to take interest in technology. Eg. Limits on NOx necessitate use of low NOx burners; as a result of sulphur dioxide limits, Chinese companies are also taking interest in direct methods of sulphur control. However, Chinese companies are not necessarily acquiring capabilities of their own. Foreign companies still view technology as personal assets. Further tightening of environmental policies needed. Presence of foreign technology discriminating policies The Chinese Government has abandoned withholding tax on technology licenses. This effectively means a 10 percent penalty for foreign companies regarding Chinese companies. This form of unannounced price discrimination means that if a Dutch organization and a Chinese organization have exactly the same technology to offer, the Chinese company can offer the technology 10 percent cheaper. An organization can only apply for an Advanced Technology Status (for tax exemption) if it owns the technology. This means that the Chinese company has to own the technology. This would mean that foreign companies would give up their technology completely which is very exceptional
  • Managerial Practices—Chinese power companies usually run two plants at 50% load rather than shutting one down. Power plants maintainence practices are more problematic. Chinese operators will often leave a plant to run until it breaks since there is no culture of preventative maintenance.
  • Managerial Practices—Chinese power companies usually run two plants at 50% load rather than shutting one down. Power plants maintainence practices are more problematic. Chinese operators will often leave a plant to run until it breaks since there is no culture of preventative maintenance.
  • Clean Coal Technology Transfer (STeLA)

    1. 1. CLEAN COAL TECHNOLOGY TRANSFER STeLA 2010 Beijing Role Play
    2. 2. TO BE IMPROVED <ul><li>The logic sequence of this ppt and the content should be enhanced. </li></ul><ul><ul><li>Some sentences should be more concise. </li></ul></ul><ul><li>More figures, less words </li></ul><ul><ul><li>The development of coal. Clean coal, price, and etc. </li></ul></ul><ul><ul><li>The logic figures </li></ul></ul><ul><li>The data should be added with citations. </li></ul><ul><li>List a table and compare the conditions, policies and laws that promote clean coal TT and block it. </li></ul>
    3. 3. WHY FOCUS ON COAL? <ul><li>China major producer of CO2 </li></ul><ul><li>Coal major source of energy  75% </li></ul><ul><li>Large scope for improvement </li></ul>
    6. 6. <ul><li>Coal Washing Process Diagram </li></ul><ul><li>BBC news, Clean Coal technology, </li></ul>CLEAN COAL TECHNOLOGY
    7. 7. <ul><li>IGCC process </li></ul><ul><li>BBC news, Clean Coal technology, </li></ul>ADVANCED AND COMBUSTION TECHNOLOGY– IGCC INTEGRATED GASTIFICATION COMBUSTION CYCLE
    8. 8. TERMS
    9. 9. CLEAN COAL TECHNOLOGY IN CHINA <ul><li>3 Categories </li></ul><ul><ul><li>Commercial technologies C hinese firms have significant capacity </li></ul></ul><ul><ul><ul><li>Basic coal washing technologies well-established </li></ul></ul></ul><ul><ul><ul><li>Coal Briquetting </li></ul></ul></ul><ul><ul><ul><li>Coal Combustion Technology </li></ul></ul></ul>
    10. 10. <ul><li>Commercial technologies that can be transferred </li></ul><ul><ul><li>Improve performance of power station </li></ul></ul><ul><ul><ul><li>Example: Fluidised bed boilers, supercritical boilers </li></ul></ul></ul>CLEAN COAL TECHNOLOGY IN CHINA
    11. 11. <ul><li>Technologies still being developed </li></ul><ul><ul><li>Pressurised fluidised beds </li></ul></ul><ul><ul><li>IGCC </li></ul></ul>CLEAN COAL TECHNOLOGY IN CHINA
    12. 12. DEFINITION OF TT
    14. 14. GIVER— PERSONAL INTEREST <ul><li>Personal Agenda: Maximise profit </li></ul><ul><li>Erosion of technological position  Loss of revenue </li></ul><ul><li>License technology </li></ul>Example Shell’s coal gastification technology  Fertiliser manufacture  Retains manufacture and design of key component
    15. 15. RECEIVER— ECONOMIC: ELECTRICITY MARKET <ul><li>Pricing mechanism imbalanced </li></ul>COAL PRICE Market based High ELECTRICITY PRICE Heavily Subsidised Low <ul><li>Energy supply insecurity </li></ul><ul><li>Energy Waste </li></ul><ul><li>Environmental pollution </li></ul><ul><li>High cost for producer  Profit margin squeezed </li></ul><ul><li>Local and foreign unwilling to produce </li></ul>
    16. 16. RECEIVER— ECONOMIC: ENERGY MARKET <ul><li>Lack of open & competitive energy market </li></ul><ul><ul><li>Energy Law tighten control by government </li></ul></ul><ul><ul><li>“ Big five” monopolises energy production </li></ul></ul><ul><ul><li>Power transmission controlled by two regional monopolies </li></ul></ul><ul><ul><li>No incentive to be more efficient </li></ul></ul>
    17. 17. RECEIVER— ECONOMIC: LIMITED INVESTMENT RESERVES <ul><li>High transaction costs due to formalities and procedures </li></ul><ul><li>IGCC technology  best technology; high cost </li></ul><ul><li>Small plants being built (Nautilus Institute, 1999) </li></ul><ul><li>More easily financed </li></ul><ul><li>Small, sub-critical PC powered plants </li></ul>
    18. 18. RECEIVER— POLITICAL: GOVERNMENT POLICIES <ul><li>Intellectual Property Rights </li></ul><ul><ul><li>Reduce FDI </li></ul></ul><ul><li>Government cost sharing programs insufficient </li></ul><ul><li>Foreign technology discriminating policies </li></ul><ul><li>Failure of international policies </li></ul><ul><ul><li>World Bank $33million efficient industrial boilers </li></ul></ul><ul><ul><li>International boilers refuse to participate </li></ul></ul>
    19. 19. RECEIVER— SOCIAL: MANAGERIAL PRACTICES <ul><li>Chinese companies run plants inefficiently </li></ul><ul><ul><li>2 at half capacity </li></ul></ul><ul><ul><li>No culture of preventive maintenance </li></ul></ul>
    20. 20. CONCLUSION <ul><li>Why coal technology? </li></ul><ul><li>What is Clean Coal Technology? </li></ul><ul><li>What is Technology Transfer </li></ul><ul><li>What are the problems of TT </li></ul><ul><ul><li>Giver </li></ul></ul><ul><ul><ul><li>Personal Interest </li></ul></ul></ul><ul><ul><li>Receiver </li></ul></ul><ul><ul><ul><li>Political, Economic, Social </li></ul></ul></ul>