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Fossil Fuel Foundation/Exxaro Waterberg Coal Conference
15 October 2014
Brian North, André Engelbrecht and Bilainu Oboirien
Materials Science and ManufacturingCSIR, Pretoria, South Africa
Techno-Economic Assessment of Electricity Generation from Discard Coal
Slide 2 www.csir.co.za
Outline of Presentation
Background
South African Coal Situation
Fluidised Bed Combustion
Potential of Discard Coal
Economic Assessment of Electricity Generation
• Base Case
• Sensitivity Analyses
Conclusions
Recommendations
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BackgroundSignificant and growing “stockpiles” of discard coal
Discard coal:X Pulverised Fuel (PF) √ Circulating fluidised Bed Combustion (CFBC) boilers
CFBC boilers now comparable to PF boilers
Cost parity is largely due to “in-situ” (Dry) SOx capture in CFBC
Generating electricity from discards attractive for (potential) cost-saving and supply reliability reasons
The Integrated Resource Plan (IRP) envisages Independent Power Producers (IPPs) producing electricity from discard coal using CFBC power stations
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
AIR
PLENUMCHAMBER
FREEBOARD
ROTAMETER
U-TUBEMANOMETER
FLUIDISATIONMECHANISM
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FBC Development Internationally (Koornneef et al)
Year Event
1922 Winkler patent
1976 Start of large-scale R&D program by ERDA (US)
1981 First coal-fired commercial FBC supplied by Alstrom (now Foster Wheeler)
1988 First commercial CIRCOFLUID by Babcock
1994/96 First CYMIC® Kvaerner (CFB), first B&W IR-CFB
1999 IEA FBC Implementing agreement started
2003-09 First 450 MW Supercritical CFB boiler in Lagiza, Poland. (FW, with Siemens OTU design)
2013 600 MW Supercritical CFB in Baima, China (Dongfang)
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FBC Development in SAYear Event
1979 Concept of centralised FBC power station (MacGillivray)
1983-89 Bench and industrial scale R&D (CSIR)
1988 Evaluation of sorbents in FBC (Petrie)
1988 HTW gasifier at HSVC (unsuccessful)
1980s/90s Babcock FBCs (Flyash at AECI, SABot)
1990s CSIR-designed FBCs (HGG, Coal/Biomass, HSP, deodoriser)
On-going Scientific Design Hot Gas Generators
2010 Babcock multi-fuel FBC
Recent FBCs for steam generation from low-grade coal
17
BENCH 11
BENCHBENCH 1
BENCH 2
BENCH 3
BENCH 4
BENCH 5
BENCH 6BENCH 7aBENCH 8
BENCH 9a,b
EskomMatimba
SaldanhaSteel
LocalSmall Nuts
DuffPeas
BENCH 7b
GG2
GG6
GG3 ArcelorMittal
GG4/5
PCI11% Ash
Small nuts15% Ash
Other Met.15% Ash
Export
ArcelorMittal
Other local
Grootegeluk Current Operations
BENCH 10
Power Station Coal
35% Ash
GG1 SSCC 10.3% Ash
35% Ash
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Potential of Discard Coal (1)
Scenario A: Utilising existing stockpiles
Input data Source
Discard coal stockpiled 1500 Million tonnes Prevost, 2010Utilisation period 40 Years Assumption
Average CV of discards 13 MJ/kg Du Preez, 2001Plant availability 95 % EstimateEfficiency (coal to electricity) 40 % Estimate (SC)
Output results
Rate of use of discards 37.5 Million tonnes/yrPower plant capacity 6.5 GW Electricity produced 54 TWh/yr
Value
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Potential of Discard Coal (2)
Scenario B: Utilising discard arisings
Input data Source
Discard arisings 67 Mt/y Prevost, 2010Lifetime of plant 40 Years AssumptionAverage CV of discards 13 MJ/kg Du Preez, 2001Plant availability 95 % EstimateEfficiency (coal to electricity) 40 % Estimate (SC)
Output results
Power plant capacity 11.6 GW Amount of electricity produced 97.0 TWh/y
Value
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Potential of Discard Coal (3)
Summation of generating capacity
GW TWh/yStockpiles 6.5 54.0Arisings 11.6 97.0
Totals 18.1 151.0
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Economic Analysis – Plant, fuel, sorbent
Parameter Value SourcePlant size 450 MWe IRPEfficiency 40% VariousCapacity factor 85% EPRI, 2010Fuel CV 13 MJ/kg Du Preez, 2001Fuel ash 45% Hall, 2011Fuel Sulphur 2.77% Hall, 2011Ca/S ratio 2.9 to 5.3 Aziz, 2011CaCO3 content 30% to 96% Agnello, Haripersad
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Economic Analysis – Operational
Parameter Value SourceFixed Opex RM 202/y EPRI, 2010Variable Opex RM 258/y EPRI, 2010Water cost R 434/y EPRI, 2010Fuel cost R 129/t KoornneefFuel transport distance 0 kmFuel transport cost R 0.93/km.t Blenkinsop, 2012Sorbent cost R 448.5/t Idwala, 2012Sorbent transport 700 km Idwala, 2012Sorbent transport cost R 0.93/km.t Blenkinsop, 2012Electricity value 57.2 c/kWh Eskom, 2014Specific capital cost RM 20.49/MW EPRI +Plant lifetime 30 years EPRI, 2010
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Economic Analysis – Financial Indicators
Parameter Value SourcePlant lifetime 30 years EPRI, 2010Discount rate 9% Various, estimateTax rate 28% SARSInflation (CPI) 0.055 Bruggemans, 2011Coal, water, transport CPI + 2% EstimateSorbent, Opex CPI Estimate
Electricity value 16% 5 years, CPI+2 NERSA, estimate
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Economic Analysis – Requirements, cost and income
ParameterFuel required 2.3 Mt/yrSorbent required 0.6 Mt/yrFuel cost 300 RM/yrFuel transport 0 RM/yrSorbent cost 272 RM/yrSorbent transport 393 RM/yrTotal sorbent cost 665 RM/yrElectricity value 57.2 c/kWhElectricity income 2000 RM/yr
Value
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Economic Analysis – DCF
Year 0 1 2 3 4 5 10 15 20 25 30CostsCapital 9221Coal 300 323 347 373 401 575 826 1186 1702 2444Coal Xport 0 0 0 0 0 0 0 0 0 0Limestone 272 287 303 319 337 441 576 752 983 1285LS Xport 393 422 454 488 524 753 1080 1551 2227 3197Water 0 0 1 1 1 1 1 2 2 4Fixed Opex 202 213 225 238 251 328 428 560 731 956Var Opex 258 272 287 303 319 417 545 713 931 1217Total costs 1425 1517 1616 1721 1833 2514 3457 4763 6578 9103RevenueElectricity 2000 2320 2692 3122 3622 5967 9830 16195 26680 43954Before tax Pr -9221 575 803 1076 1402 1789 3453 6373 11431 20102 34851Tax 161 225 301 392 501 967 1785 3201 5629 9758After tax Pr 414 578 775 1009 1288 2486 4589 8231 14474 25093Depreciation 516 516 516 516 516DCF -9221 854 921 997 1081 1173 1050 1260 1469 1678 1891NPV (Rm) -9221 -8367 -7446 -6449 -5368 -4195 632 6512 13438 21409 30439
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Economic Analysis – Financial Indicators
Indicator Value UnitsNPV (10 years) 631 RMNPV (20 years) 13400 RMNPV (30 years) 30400 RMIRR (30 years) 21.4 %
Base Case
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Economic Analysis – Sensitivity analysesSpecific Capital cost
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Economic Analysis – Sensitivity analysesSorbent Transport Distance
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Economic Analysis – Sensitivity analysesElectricity Price
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Economic Analysis – Sensitivity analysesSorbent Source
Source Cost, R/t Distance, kmCaCO3, % Ca/S
S1 Idwala High Ca/S 449 700 96 2.9S2 Idwala Low Ca/S 449 700 96 2.5S3 Bredasdorp 111 1611 85 2.2S4 Lyttelton Dol (Cent) 111 120 30 5.3S5 Lyttelton Dol (MH) 167 142 85 5.3So
rben
t sce
nario
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Economic Analysis – Financial IndicatorsSorbent Source
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ConclusionsThere is significant electricity generation potential (Dte-)in discard coal:
• 18 GW of installed capacity (twice planned nuclear build)
CFBC technology has developed to the point where it is on a par with PF in terms of efficiency and cost
Production of electricity from discards looks favourable under most scenarios – but it is a very large investment
IPPs are considering Dte- but have not yet committed
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Gaps/questionsDiscard inventory information is old
Modern coal preparation techniques result in very carbon-lean discards
Is Dte- sustainable?• Economic development √• It still produces CO2• But, so do the discard stockpiles• Removal of eyesore and leachate
Dte- vs re-working?
Will new SO2 emission regulations “kill” CFBC?
Can finance be raised for a coal-fired power station?
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RecommendationsEstimate mass and CV of discard piles (major)
Estimate of “S cut-off”, and which discards comply
Establish sorbent efficacy database, link to economic calculations
Cost sorbents ito. efficacy, e.g. R/t SO2 removed
Cost fuels ito. R/GJ (or useful energy)
Evaluate SA discards in CFBC
Get a good economist on board….
Slide 36 www.csir.co.za
The Cheeky Plug
Industrial Fluidization SA 2014Glenburn Lodge: 18 to 20 November 2014
www.IFSA2014.com
Do you want to hear more about the application of Fluidised Beds?
