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World Energy Situation and 21st Century Coal Power

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An overview of the current power market in the US and the impact it may have on other parts of the world. This was first presented at a workshop held at the University of Tokyo in Japan on Feb 25, 2014

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World Energy Situation and 21st Century Coal Power

  1. 1. World Energy Situation and 21st Century Coal Technology Dr. Jeffrey N. Phillips Senior Program Manager 11th AECE Technical Forum February 25, 2014
  2. 2. Average Cost of Fossil Fuels Delivered to US Power Plants ($/MMBtu, no inflation adjustments) Coal Petroleum Liquids Pet Coke 25 20 15 10 5 0 © 2014 Electric Power Research Institute, Inc. All rights reserved. 2 Natural Gas
  3. 3. US Power Demand is Flat – No Need for New Coal 4,500,000 4,000,000 Total 3,500,000 Coal 8 years, no load growth GW-hr 3,000,000 Natural Gas 2,500,000 Nuclear 2,000,000 Conventional Hydro 1,500,000 Wind 1,000,000 Other Renewables 500,000 © 2014 Electric Power Research Institute, Inc. All rights reserved. 3 2013 2011 2009 2007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 0
  4. 4. US Power Generation Predictions – EIA Annual Energy Outlook 2014 Get info from AEO 2014 Millions of MWhr per year Billions of MWhr per year © 2014 Electric Power Research Institute, Inc. All rights reserved. 4
  5. 5. Most new US capacity additions predicted to be natural gas and renewables (gigawatts) Source: EIA, Annual Energy Outlook 2013 © 2014 Electric Power Research Institute, Inc. All rights reserved. 5
  6. 6. Key Question: What is the future of IGCC for coal power? © 2014 Electric Power Research Institute, Inc. All rights reserved. 6
  7. 7. “It was the best of times, it was the worst of times” – Charles Dickens Buggenum, The Netherlands Tianjin, China Shell coal gasifier for IGCC – permanently stopped in 2013 Two Shell coal gasifiers for chemicals production – still operating © 2014 Electric Power Research Institute, Inc. All rights reserved. 7
  8. 8. IGCCs face strong headwinds in Europe • Vattenfall permanently closes its 250 MW IGCC located in Buggenum, The Netherlands – Cites decrease in power demand in EU and high fixed costs of the comparatively small coal power plant • The Elcogas IGCC in Spain has seen a similar lack of demand for power – Did not operate for 5 months in 2013 © 2014 Electric Power Research Institute, Inc. All rights reserved. 8
  9. 9. Capital Cost Increases Hit US IGCCs • Duke Energy’s Edwardsport IGCC: $3.5 billion or $5663/kW “total project cost” – Estimated cost at beginning of project (Oct. 2006) was $1.9 billion – actual was 184% of this estimate • Mississippi Power’s Kemper County IGCC has reached $4.0 billion or $7670/kW “total project cost” – Estimated cost at beginning of project (April 2010) was $2.4 billion – current cost is 167% of that estimate © 2014 Electric Power Research Institute, Inc. All rights reserved. 9
  10. 10. Mississippi Power’s Kemper County IGCC Summer 2013 Photo courtesy of Southern Company © 2014 Electric Power Research Institute, Inc. All rights reserved. 10
  11. 11. The Cost of First-of-a-Kind? • Both the US Dept of Energy and EPRI have predicted costs for “nth-of-a-kind” IGCCs which are much lower than Edwardsport or Kemper • DOE/NETL-2011/1498 report cites an IGCC with 60% CO2 capture having a “total overnight cost” of $3024/kW – This report is cited in EPA’s Greenhouse Gas New Source Performance Standard proposal – Sept 2013 • Adjusting Kemper’s costs to “total overnight” results in a current estimate of $7190/kW – 238% higher than DOE’s How do you get to the “nth” project when the 1st is so costly? © 2014 Electric Power Research Institute, Inc. All rights reserved. 11
  12. 12. Asia IGCC Projects (1400 + MW) • China China - GreenGen - 250 MW – TPRI 5 other IGCCs in planning 300 more gasifiers by 2020 Korea KOWEPCO IGCC - 300 MW – Shell/ GE Start up – 2015 POSCO Coal to SNG – E-GasTM Japan Osaki CoolGen - 170 MW IGCC with EAGLE Gasifier, TEPCO&MHI - 2 x 500 MW © 2014 Electric Power Research Institute, Inc. All rights reserved. 12
  13. 13. Reliance Jamnagar Polygen, India Project Highlights E-Gas technology Gasifiers 8+4 = 12 x 2,900 tpd petcoke, SRU/ TGTU Oxygen 4+2 = 6 x 5,250 tpd, 99% (Linde) AGR SFU CO2 Acid gas 272,000 Nm³/h syngas per gasifier Sulfur Linde Rectisol PSA Schedule Kickoff meeting May 2012 1,300 t/dH2 Start up Q2 2015 - (3 Years) Syngas ASU O2 LTGC AGR Gasification Shift & GC Methanation CO Recovery 3,500 Gcal/hr SNG CO to Chemicals Petcoke and/or coal SWS CCP OSBL Offsites Source: Thomas Matthew, CoalAsia New Delhi, 2013 © 2014 Electric Power Research Institute, Inc. All rights reserved. 13 1,510 MW
  14. 14. Key Question: Can the Asian IGCC and Polygen projects avoid the large cost overruns of the US IGCC projects? © 2014 Electric Power Research Institute, Inc. All rights reserved. 14
  15. 15. Conclusions on Gasification • The commercial application of gasification technology is very robust in Asia • At the same time it has lost its appeal in North America and Europe • If demand for energy picks up in Europe, interest in gasification may return • In North America, unless natural gas prices return to >$810/MMBtu, demand will be limited to niche applications • The future of IGCC technology will be determined by the current projects under construction in Asia © 2014 Electric Power Research Institute, Inc. All rights reserved. 15
  16. 16. Key Question: Can US Shale Gas Continue to Keep US Natural Gas Prices Low? © 2014 Electric Power Research Institute, Inc. All rights reserved. 16
  17. 17. Impact of Natural Gas Prices on Drilling in North America (July 2004 to November 2013) 1,800 Number of Active Drilling Rigs 1,600 1,400 1,200 1,000 800 Oil 600 Natural Gas 400 200 0 70% Decrease in Natural Gas Drilling Since 2008 © 2014 Electric Power Research Institute, Inc. All rights reserved. 17
  18. 18. Spot Prices for LNG - Worldwide Prices are not the same around the world! © 2014 Electric Power Research Institute, Inc. All rights reserved. 18
  19. 19. US LNG Export Facilities • Approved for Construction – Five LNG export facilities – Total capacity 6.7 billion cubic feet per day – Total capacity 50 million tons per year – Approximately 10% of total US natural gas production • Construction Permits Under Review – Approximately 20 additional LNG export projects have filed with the US government for approval – Total LNG capacity could be as high as 20 billion cubic feet per day or 150 million tons per year © 2014 Electric Power Research Institute, Inc. All rights reserved. 19
  20. 20. US Government Predictions for US Fuel Prices, $/MMBtu Source: www.eia.doe.gov 2014 Annual Energy Outlook 9 8 7 6 5 Coal Natural Gas 4 3 2 1 0 2012 © 2014 Electric Power Research Institute, Inc. All rights reserved. 2025 2040 20
  21. 21. Key Question: How will the new US CO2 emission standard for new power plants impact coal power? © 2014 Electric Power Research Institute, Inc. All rights reserved. 21
  22. 22. Proposed US rules for CO2 emissions from new power plants Separate limits are set for coal and gas: – Coal: 500 kg CO2/MWh, gross, rolling 12 month average – Gas turbines ≥ 250MW: 455 kg CO2/MWh, gross, 12 month average – Gas turbines 73-250MW: 500 kg CO2/MWh, gross, 12 month average • Will require new coal plants to include ~50% CO2 capture – More efficient plants will need less CO2 capture © 2014 Electric Power Research Institute, Inc. All rights reserved. 22
  23. 23. Impact of CO2 Emission Standards for New US USC Coal Power Plant 100.00 Nat. Gas Price, $/MMBtu 90.00 $9 Levelized Cost of Electricity, $/MWh Fuel & O&M COE Capital COE CO2 T&S COE 80.00 70.00 $6 60.00 50.00 $3 40.00 30.00 NGCC LCOE 20.00 10.00 0.00 No CCS © 2014 Electric Power Research Institute, Inc. All rights reserved. MEA MEA + $0 23 Best + $0
  24. 24. Legend for chart in previous slide Case Description No CCS No CO2 capture MEA 37% CO2 capture using MEA solvent MEA + $0 Same as “MEA” case but assumes MEA system adds zero capital cost Best + $0 CCS system consumes 3.6% of the net power of “No CCS” case and is available at no capital cost – the best one could hope for! • All plants are based on 600°C supercritical steam cycle, burn Powder River Basin coal sub-bituminous coal, and pay $10/ton CO2 for transport & storage © 2014 Electric Power Research Institute, Inc. All rights reserved. 24
  25. 25. Impact of Proposed CO2 Standard on Coal Power in the US • To be competitive, new coal power plants will need: – A significant improvement in CO2 capture technology, and – A significant improvement on coal power plant technology, or – An increase in natural gas prices to approximately $9/MMBtu © 2014 Electric Power Research Institute, Inc. All rights reserved. 25
  26. 26. Key Question: Is CCS Ready for Use on Commercial Coal Power Plants? © 2014 Electric Power Research Institute, Inc. All rights reserved. 26
  27. 27. Largest CO2 Capture System Ever Operated on a Coal Power Plant • 400,000 ton/yr CO2 from 100 MW Lubbock Power & Light power plant • Operational 1983-1984 for EOR Floods • Dow Amine Technology Photo courtesy Gas Processing Solutions LLC © 2014 Electric Power Research Institute, Inc. All rights reserved. 27
  28. 28. CO2 Capture System on a Natural Gas Combined Cycle Plant – Bellingham, Mass. Photo from Google Maps Tanks for storing liquid CO2 Fin-fan coolers for capture system CO2 absorber vent Exhaust duct going to capture system Combined exhaust stack for two W501D gas turbines Captured ~100,000 tons/year for carbonated beverages – no longer in operation © 2014 Electric Power Research Institute, Inc. All rights reserved. 28
  29. 29. AEP-Alstom CCS Demo Project Overview • Alstom’s chilled ammonia CO2 post-combustion capture – ~20-MWe demonstration at AEP’s Mountaineer Plant in WV Alstom’s Chilled Ammonia Process at AEP’s Mountaineer – Designed for ~100,000 Property of Alstom Power and/or AEP tons-CO2/year – Injection occurred in saline reservoir using two on-site wells – Capture started in September 2009 and storage in October 2009; ~57,000 tons were captured and ~42,000 tons stored – Capture project was completed in May 2011 – Location of the injected CO2 continues to be monitored per AEP’s injection permit Power consumption was 22% less than generic amine technology © 2014 Electric Power Research Institute, Inc. All rights reserved. 29
  30. 30. Southern-MHI CCS Demo Project Overview • MHI KM-CDR advanced amine CO2 combustion capture post- – ~25-MWe demonstration at Alabama Power’s Plant Barry in AL MHI’s KM-CDR Process at Plant Barry – ~550 tons-CO2/day Property of MHI and/or Southern – Capture started on June 3, 2011; over 100,000 tons captured so far – Injection is occurring in the Citronelle dome ~10 miles away and started on August 20, 2012; goal of 100,000 tons reached in 2013 • EPRI’s role: – Manage collaborative, select and manage test contractors, develop test plan to perform capture testing, and document results – Leading the storage effort for DOE with ARI and Denbury © 2014 Electric Power Research Institute, Inc. All rights reserved. 30
  31. 31. Large CO2 “Capture-to-Storage” Projects in Operation Map courtesy Global CCS Institute (with additions by EPRI) ~10 projects worldwide – None at a power plant © 2014 Electric Power Research Institute, Inc. All rights reserved. 31
  32. 32. Large-scale CCS projects operating in North America 1. Weyburn EOR – CO2 from coal gasifier in ND, 2.8 million ton/yr Map & data from Global CCS Institute 2. Shute Creek EOR – CO2 from natural gas processing, 7 million ton/yr 1 3. Enid EOR – CO2 from fertilizer production, 0.7 million ton/yr 2 3 4. Val Verde EOR – CO2 from nat. gas processing, 1 million ton/yr 4 5 6 5. Century Plant EOR – CO2 from nat. gas processing, 8 million ton/yr All the current large-scale CCS projects use CO2 for Enhanced Oil Recovery (EOR) © 2014 Electric Power Research Institute, Inc. All rights reserved. 32 6. Port Arthur EOR – CO2 from steam methane reformer (US DOE project), 1 million ton/yr
  33. 33. Starting up in 2014 • Boundary Dam: 90% CO2 capture retrofitted to 150 MW coal power plant, ~1 million tons CO2 per year for EOR Map from Global CCS Institute Boundary Dam • Kemper County: new 582 MW IGCC with ~65% CO2 capture, ~3 million tons CO2 per year for EOR Kemper Both receiving large government subsidies. Will give power industry “real life” experience in operating large-scale CCS © 2014 Electric Power Research Institute, Inc. All rights reserved. 33
  34. 34. Summary of Issues Impacting Coal Power Around the World • Several countries now proposing CO2 emission limits for power plants that (nearly) match those of a natural gas fired combined cycle • Many Asian countries are strongly committed to continued use of coal for power and more inclined to try coal gasification • Several important coal-using nations have not found suitable storage sites for large amounts of CO2 • Public distrust of nuclear power may create demand for more coal power in some countries • Global economic slump has decreased electric power growth in developed countries – This limits opportunities to demonstrate new coal power technology including CCS © 2014 Electric Power Research Institute, Inc. All rights reserved. 34
  35. 35. Final Conclusion • In order to develop coal power technologies for the 21st Century, more collaboration is needed among the OECD nations and between OECD nations and the rapidly growing economies of the developing world – The developing economies need new coal power plants but are unwilling to pay extra for advanced technologies – Developed countries are willing to pay extra, but do not need new coal power plants – We all need to find secure places to store captured CO2 © 2014 Electric Power Research Institute, Inc. All rights reserved. 35
  36. 36. Together…Shaping the Future of Electricity © 2014 Electric Power Research Institute, Inc. All rights reserved. 36
  37. 37. Background Information
  38. 38. The View from China • 733 GW of installed coal power generation at end of 2011 • 890 GW planned by 2015 • 1500 GW anticipated by 2030 – This would be ~5 times current US coal power capacity • 222 coal gasifiers now installed in China – Almost all for non-power applications – 250 MW GreenGen IGCC is first gasification facility for power only – See polygen as way to meet variable demand for power • Higher efficiency is their CO2 “solution” for today – Goal of building 700ºC USC demo plant has been announced – Looking for “developed” countries to provide funding for CCS demos in China © 2014 Electric Power Research Institute, Inc. All rights reserved. 38
  39. 39. The View from Korea • World’s 2nd largest importer of coal for power (2010 data) • Increasing interest in coal gasification due to very high cost of LNG – Korea Western building a 300 MW IGCC (no CO2 capture) – IGCCs get 25% credit in renewable portfolio standard – POSCO building an SNG plant that will use sub-bituminous coal • Concerned about rising cost of internationally traded bituminous coal – Have significantly increased imports of sub-bituminous coal to try to offset cost increases – Interested in upgrading technologies for low rank coal (drying, briquetting, cleaning) • Official plan calls for coal power generation capacity to level out at 28 GW (~25 GW now) – However, “huge” public resistance to building more nuclear power plants, so more coal may to be added • Only suitable CO2 storage capacity appears to be offshore © 2014 Electric Power Research Institute, Inc. All rights reserved. 39
  40. 40. The View from Taiwan • With few domestic fuel options, Taiwan is dependent on energy imports including coal • Awarded contract for three new 800 MW SCPC units to replace two older (built in 1968) 300 MW coal units • Have roadmap to implement a CCS demo project – Currently characterizing site for storage – 10,000 ton pilot injection in 2014-15 – 100,000 ton demonstration in 2018-2020 – Goal to be ready for commercial scale CCS by 2025 © 2014 Electric Power Research Institute, Inc. All rights reserved. 40
  41. 41. The View from Australia • “Love-Hate” Relationship with coal – CO2 emissions price of A$23 per tonne began in 2012 for large emitters, but new prime minister wants to scrap the CO2 tax • Lack of growth in power demand means no one is building new power plants, so little opportunity for demonstrating CCS in near term • “Flagship” CCS projects have mostly stalled. No large scale coal CCS project under construction (though Gorgon LNG is a large CCS project) • Desire by coal-rich states to find new markets for their coal – Victoria intends to issue new allocations for brown coal mines, with no new power plants being built this means CTX or upgrading to briquettes © 2014 Electric Power Research Institute, Inc. All rights reserved. 41
  42. 42. The View from India • Ambitious plans for more generation capacity – Just under 200 GW now, want 600 GW additional by 2032 – Much of that will be coal • An extreme shortage of coal supply – Demand for coal growing at 10%/yr, domestic production growing at 5%/yr – Many power plants have only 1 day coal supply on site • Government has announced goal to build an 800 MW USC with 700ºC steam conditions – Will start testing components in existing PC soon • No plans for CCS demonstration © 2014 Electric Power Research Institute, Inc. All rights reserved. 42
  43. 43. The View from South Africa • Power generation shortfall remains very tight – Three mothballed power stations have been brought back into service – First unit of Medupi 6 x 700 MW SCPCs is expected to be commissioned in 2013 – Work on second 6 x 700 MW SCPCs has started • Government has announced aggressive goal for reducing CO2 emissions – 34% emission reduction below business as usual by 2020 and 42% by 2025.* – Published CO2 storage “atlas” in 2010. Small potential for storage inland. Majority offshore. All unproven. – No announced plans for a CCS demonstration. The South African Centre for Carbon Capture and Storage is considering a storage demonstration but nothing officially announced. • Work on underground coal gasification continues. – First gasifier has been successfully shutdown. Second gasifier started in 2012 and co-fires the gas into Majuba power station. *Note that these commitments were conditional on a fair, ambitious and effective outcome in the international climate negotiations in Copenhagen and on financial and technical support from the international community. © 2014 Electric Power Research Institute, Inc. All rights reserved. 43
  44. 44. The View from Germany • In July 2011 ~10 GW of new coal-fired power plants were under construction • “It is illegal to have a CCS project in Germany” – Lars Stromberg, former VP of R&D for Vattenfall – You cannot legally inject CO2 under German soil • No Nukes! • Strong subsidies for wind & solar – only provide 10% of generated power but represent ~50% of price of the “full basket” of electricity © 2014 Electric Power Research Institute, Inc. All rights reserved. 44
  45. 45. The View from UK • On-again, off-again large CCS demonstration program is “on again” – Last of the original candidates, Longannet, dropped out citing high cost of offshore transport & storage – Drax’s White Rose oxy-combustion project and a Shell/SSE natural gas combined cycle are the currently “preferred” projects – One billion pounds may be available for one of the projects • Any CO2 storage will occur offshore – At least one project looking at feasibility of EOR offshore • Proposed limit of 450 kg CO2/MWhr for new power plants © 2014 Electric Power Research Institute, Inc. All rights reserved. 45
  46. 46. The View from Canada • CO2 emission limit for new coal plants: • 420 kg/MWhr net • SaskPower’s Boundary Dam CCS project will be world’s only commercial coal power plant with 90% CO2 capture • Alberta’s ambitious CCS demo program has encountered difficulties – TransAlta’s Pioneer Project was canceled, $800 million subsidy & $15/ton CO2 emission “tax” not sufficient, Shell Quest oil sands upgrader a “go” • Ontario moving forward with phasing out coal power © 2014 Electric Power Research Institute, Inc. All rights reserved. 46

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