4 Coal

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 1 Coal Introduction Coal is the most abundant fossil fuel found on earth, both in terms of resource base as well as consumption. Coal is used throughout the world mostly for generating electrical  power except for some percentage in steel making. USA, PRC and India a re three largest users of coal based electrical power, respectively, 33%, & 55%, and 67% of their installed electric capacity being based on coal. Coal is the most abundant source of energy on earth, after renewable energy. World coal supplies are expected to last for several centuries, at the current rate of consumption and growth. Coal’s share in total energy supplies stood at 24.7% immediately after oil which has a share of 35.82%. However coal’s share in electric power production is the highest i.e. 41%, followed by natural gas at 20%; growth rate of world consumption has also  been one of the highest i.e. 31% p.a. or the last three de cades. Despite pollution and CO2  problems combined with mining issues, coal is still projected to remain an important component of energy supplies for the world for the next three to five decades, after which renewables may acquire more significance. Thar coal deposits in Pakistan are also one of the largest in the world; some 185-200  billion tons, sufficient for several centuries of consumption and growth. Thar coal however is brown coal or lignite, which is considered an inferior kind of coal, having a low calorific value and high volatile matter and moisture content. However this type of inferiority is not unique to Thar coal. 20% of world coal resources are in the form of  brown coal or lignite. In Europe, lignite is widely mined and used for electrical power and fuel briquettes production for industrial heat. In the US, North Dakota and Texas are famous for their lignite. Cheapest electricity is in  North Dakota, due to its lignite based electric power generation. Despite green movement’s opposition, Germany is carrying ahead with lignite mining, although it has launched massive plans for solar PV and wind power. Global Coal & Lignite 33% of the US electricity (327,551 MW) comes from coal. In the US, 7.2% of total coal reserves (1100 Millions/Tons) are of lignite (84.248 Million Tons) Lignite is found in USA in the following states, North Dakota, Wyoming, Montana, and Texas. In Europe, 10-12 countries have li gnite deposits, and all of them are produ cing electricity from lignite. Germany is the largest user. In central Europe most power generation is on lignite e.g. in Poland, Czech, Slovak, Bulgaria and Romania. Infact Poland is the second after Germany in lignite mining, its expertise and knowledge base. 4 04 Oct 2009

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Coal 

Introduction

Coal is the most abundant fossil fuel found on earth, both in terms of resource base aswell as consumption. Coal is used throughout the world mostly for generating electrical power except for some percentage in steel making. USA, PRC and India are three largestusers of coal based electrical power, respectively, 33%, & 55%, and 67% of their installed electric capacity being based on coal.

Coal is the most abundant source of energy on earth, after renewable energy. World coalsupplies are expected to last for several centuries, at the current rate of consumption andgrowth. Coal’s share in total energy supplies stood at 24.7% immediately after oil whichhas a share of 35.82%. However coal’s share in electric power production is the highesti.e. 41%, followed by natural gas at 20%; growth rate of world consumption has also

 been one of the highest i.e. 31% p.a. or the last three decades. Despite pollution and CO2  problems combined with mining issues, coal is still projected to remain an importantcomponent of energy supplies for the world for the next three to five decades, after whichrenewables may acquire more significance.

Thar coal deposits in Pakistan are also one of the largest in the world; some 185-200  billion tons, sufficient for several centuries of consumption and growth. Thar coalhowever is brown coal or lignite, which is considered an inferior kind of coal, having alow calorific value and high volatile matter and moisture content. However this type of inferiority is not unique to Thar coal. 20% of world coal resources are in the form of  brown coal or lignite. In Europe, lignite is widely mined and used for electrical power 

and fuel briquettes production for industrial heat.

In the US, North Dakota and Texas are famous for their lignite. Cheapest electricity is in  North Dakota, due to its lignite based electric power generation. Despite greenmovement’s opposition, Germany is carrying ahead with lignite mining, although it haslaunched massive plans for solar PV and wind power.

Global Coal & Lignite

33% of the US electricity (327,551 MW) comes from coal. In the US, 7.2% of total coalreserves (1100 Millions/Tons) are of lignite (84.248 Million Tons) Lignite is found in

USA in the following states, North Dakota, Wyoming, Montana, and Texas.

In Europe, 10-12 countries have lignite deposits, and all of them are producing electricityfrom lignite. Germany is the largest user. In central Europe most power generation is onlignite e.g. in Poland, Czech, Slovak, Bulgaria and Romania. Infact Poland is the secondafter Germany in lignite mining, its expertise and knowledge base.

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04 Oct 2009

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Fig 4.1: Coal in Lignite production in Europe

Courtesy: Eura coal

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Table 4.1: Coal in Lignite production in Europe

Cost production and Imports in EU-27 in 2007 in Mt

Hard Coal

Production

Lignite Production Hard Coal Imports

Austria -- -- 4.0

Belgium -- -- 8.0

Bulgaria -- 28.4 1.0

Czech Republic 13.1 49.3 2.5

Denmark -- -- 8.0

Finland -- -- 7.0

France -- -- 18.2

Germany 21.9 180.4 45.9

Greece -- 65.8 0.8

Hungary -- 9.8 2.0

Ireland -- -- 3.0

Italy -- -- 24.6

  Netherlands -- -- 13.0Poland 87.4 57.4 5.8

Portugal -- -- 5.5

Romania 2.5 35.1 4.0

Slovakia -- 2.2 5.3

Slovenia -- 4.7 0.1

Spain 11.0 8.2 24.9

Sweden -- -- 3.2

United Kingdom 17.0 -- 42.8

EU-27  152.9  441.3  229.6 

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Fig 4.2: Process flow diagram of a Coal power plant (IGCC)

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Coal is transported from the storage to the coal grinding mills by way of transportsystems where it is ground to finest dust. By way of hot air, the dust is blown into thecombustion chamber of the steam generator. In the piping system of the steam generator,the water is converted to steam at high pressures. The steam drives the turbine which inturn powers the connected generator. The steam is, after it has expended its energy in the

turbine, liquified in the condenser at ambient temperature. This water is returned to thesteam generator over the heater and the supply pumps. The cooling water circuit is usedto transmit the heat from the condenser to the atmosphere. The required cooling water isusually exxtracted from a river to be discharged to the river after heating up by c. 10 to15K. If the warming capacity of the river is insufficient, then the discharged heat can betransmitted to the air in part or completely by way of a cooling tower. During thecombustion of coal, products as a result of combustion result (C02, S02, N0x, ash, slag,gypsum). These are the main parts of the power plant.

Combustion material (coaling, oil for the start up and supporting burner)Residue removal (ash removal, slag removal, gypsum treatment)

Water supply (raw water treatment, full desalination)Conventional heat generation (steam generation)Water-/Steam circuitMain machine used (steam turbine, generator)Main cooling water systemWater treatment

Fig 4.3: Another Scheme of a coal power plant

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200000Pakistan

5167312400India

15000Indonesia

111676739900Australia

1383383107922Russia

5288673900Greece

9833593159Poland

9500574614Turke

291671756739German

133338084248USA

Coal Based

Electrical Power,

MW 

Production,

Mn. Tons /yr 

Reserves,

Mn. Tons Countries 

Table 4.2: Top Ten Coal (ala Thar Coal) Countries of the World Lignite

Source: World coal institute (WCI)

Germany is the world’s largest Lignite producer 26% of its electricity need is provided bylignite. Germany’s brown coal / lignite reserves are of 35,000 Mn tons, with an aggregateannual output of 175 Mn tons. The Rhineland Lignite mining covers an area of 2500 km2RWE is the largest lignite power producer employing 11200 persons with an output of 

96/100 Mn tons/yr, with an electrical output of 16,000 MW. Open cast mining is done upto a depth of 500 m. Like Thar coal German lignite has high moisture content i.e. up to50%-60%. Average stripping ratio is 4.9 M3/tonn. Bucket Wheel Extractors (BWE) isemployed each weighing 13000 tons and moving 240,000 m3 of burden per day. A totalof 22 BWE are employed. 11 Mn tons/yr of lignite is briquetted for general industrial use.Lignite coal production is expected to increase, while hard coal production would beterminated due to high cost of production involved in underground mining.

Since in Germany lignite is located just under the surface, it is mined in opencastoperations. In the opencast mines of Garzweiler, Hambach and Inden, gigantic bucketwheel excavators dig the brown gold out of the earth. These excavators are the hallmark 

of the state-of-the-art mining technology used by RWE Power: standing 90 meters talland 200 meters long and weighing some 13,000 tons; these are some of the world’slargest mobile machines.

Greece is the twelfth largest producer of coal with an output of 71.7 million tons per year.Greece has reserves of 6.7 billion tons, almost all brown lignite. Lignite deposits are at adepth of 150-200 meters.75% of Greece’s electricity comes out of coal. Calorific value of Greece’s brown coal varies between 3770-6290 KJ/kg. Open cast mining is used in

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almost 99% of the mines and eight power stations run on brown coal producing 12.8 GW.Lignite is also briquetted in Greece for general industrial use. Greece in Europe is a toptourist country despite coal mining there.

India has also world’s 3rd largest coal reserves at 92 Bn. Tons, after USA and China. In

terms of production, its rank is _______, with an annual output of 397 Mt out of which31.6 Mt was lignite (2005). 83% of India’s coal comes from surface mining, with 575mines employing 460,000 people. Indian coal is not of high quality, although bituminouscoal but with a high ash content. Most coal is located in Jherkand, Orissa & Bengal, fromwhere it is transported through rails and trucks, causing lot of logistics problem andadding to costs. Most plants in India operate on sub critical steam, although a move has been initiated to supercritical steam system which have efficiencies of 40-45% instead of 30% of sub critical. India has limited deposits of lignite in Tamil Nadu, Rajhastan andGujarat.

The power sector will be the main driver of India's coal consumption currently around

69% of India's electricity is generated from coal. The total installed capacity in Indiaincreased to 137,552 MW in 2005 compared to 131,424 MW in 2004. Coal currently provides around 69% of India's electricity demand and will continue to be a major sourceof electricity generation into the future. Improving the efficiency of coal-fired power  plants will be essential in helping to meet some of the demand. 5000 MW of electricitycomes from lignite.

Coal in Pakistan

Coal consumption in Pakistan has increased dramatically over the past five years. Lastyear (2007- 08), the total consumption stood at around 10.11 million tons, doubling itself 

in five years from a level of 4.89 million tons in 2002- 03 (growth rate 15- 6%). Its sharein primary energy supplies increased from 5.4% to 9.2%. It is the fastest growing sector.

However, coal consumption in Pakistan is mostly focussed in Industry (cement and brick Kiln), which account for 95%. Most cement plants have been converted to coal in the lastfive years, enhancing consumption from under one mtpa to 5.70 mtpa, an average growthrate of 43%; consumption in power sector is only in Lakhra with a varying output (25- 75MW) consuming only 162- 200,000 tpa (0.16- 0.2%). However, with Thar Coal’sdevelopment, coal consumption in Pakistan is projected to grow tremendously. 72.8% of coal consumption is met through imports and 24% (1.84 mtpa) come form local production. Coal imports have quadrupled (growth rate 30.6%) in the last five years, and

the local production could only grow marginally at 4.5% p.a. However, with most cement  plants already converted to coal, the growth trend would taper down in the next fiveyears.

In Pakistan small coal deposits have been found at many locations including Lakhra,Jhiruk, etc. Lakhra is a very high sulfur coal (7%). Lakhra coal power plant was installedin the 1980”s, with 150 MW installed capacity. It had a problematic history of operations.Current output of the plant is about 75 MW.

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Fig 4.4: Bucket wheel excavator in Germany on travel

Courtesy: RWE 

Fig 4.5: RWE Bucket wheel excavator in action

Courtesy: RWE 

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In 1980”s, Thar’s coal deposits were discovered, estimated to be of 200 billion tons, thirdlargest in the world. It is brown coal though, which quality is comparable to browncoal/lignite found elsewhere. As mentioned earlier, it is quite suitable for producingelectricity. For the last 25 years, many studies and data collection exercises have beendone, including mining, geological, geotechnical and power feasibility studies. Three

leading foreign companies have been involved in this; John T. Boyd of USA, RWE of Germany and most recently m/s Senhua.

Thar Coal Field

Occurrence 

Thar coal field is located on the south-eastern tip of Pakistan, in the (24o15’ N, 25o45’ N-69o45’ E, 70o45’ E) Sindh province. The northern, upper side of the field extends to theIndian border in Rajhastan, and the lower-southern post extends to Rann of Katch. It is at410 kms distance from Karachi via Mirpurkhas. Closest town to the field is Islamkot.Total area of the field is 9,000 sq km, out of which an area of 400 sq km is under 

development in six blocks. Estimated total resource potential is of the order of 186- 200 billion tons of lignite/ Brown Coal.

The over burden is of dune sand, alluvium, and sedimentary sequence, with a total depthvarying 116- 137 meters, after which coal seam thickness of 7- 32 meter is there. Therelatively soft overburden would be comparatively easier to excavate, as compared toother areas in the region, where hard rock has necessitated esp. drilling, cuttingenhancements. The resource depth is comparatively more. Current depth of good lignitedeposits is less than 100 meters, in various parts of the world, which would contribute tohigher excavation cost. Coal seam thickness is good size if compared to other lignitefields of the world.

About Thar Coal

•  The thickest coal bed called the “Thar Coal Seam” is persistent over most of the areain the six blocks.

•  It is present between 115 and 203 meters depth.

•  The seam attains a maximum thickness of 36 meters.

•  The cumulative thickness in the blocks varies between 7.2 to 36 meters.

•  The thickness of over burden varies from 114 to 137 meters

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Table 4.3: Production, Import and consumption of Coal in various sectors

Production

Unit: Tons

Province/ field 2002- 03 2007- 08 ACGR 

Total Tons 3,311,586 4,123,907 4.5%Annual growth rate -0.49% 13.21%

*Field-wise breakup not availableSource: DG (Minerals), Provincial Directorates of Mineral Development.

Import

Unit 2002- 03 2007- 08 ACGR 

Tons 1,578,169 5,986,940 30.6%

Annual growth rate of imports 46.05% 40.83%

* Includes coal imported by Pak steel for use as coke.

** Include 458,356 tons of metallurgical coke imported by Pak Steel.Source: Federal Bureau of Statistics, Pakistan Steel Mills Corporation.

Consumption by sector

Sector 2002- 03 2007- 08 ACGR 

Domestic 1,111 1,000 -2.1%

Brick-Kiln Industry 2,606,852 3,760,707 7.6%

Cement/ Other Industry 957,169 5,720,972 43.0%

Pak Steel *** 1,121,000 465,968 -16.1%

Power (WAPDA) 203,623 162,200 -4.4%

Total Tons 4,889,755 10,110,847 15.6%

Annual growth rate 10.91 28.08%

  Note: sectoral consumption data of coal is mostly not available, except for power and has, therefore, beenestimated.*Estimated by deducting other uses of indigenous coal from the total production.**Include indigenous as well as imported coal.***Imported coal/ coke used as coke in Pak Steel.Source: Cement Factories, DG (Minerals), FBS, Pak Steel, PMDC, WAPDA.

Chemical Composition 

The four blocks, on which extensive drilling (2,000 wells) has been done, and samplestaken and analyzed, yield the following chemical analysis results.

Fixed Carbon = 19.35- 22%Sulfur = 0.92- 1.34%Moisture = 43- 23- 49.01%Ash = 5.18- 6.56%Volatile Matter = 26.50- 33.04%

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Heating Value (Btu/ lb)

As received = 5,760- 6,398Dry = 10,723- 11,353

DAF = 11,606- 12,013

Table 4.4: Thar Coal Reserves/ Resources as on June 30.2008 

Area(sq. km.)

DrillHoles

Reserves/ Resources (Million Tons)

Block/ Field MeasuredReserves

IndicatedReserves

InferredReserve

s

HypoTheoretic

alTotal

Block-I 122.0 41 620 1,918 1,028 --- 3,566Block-II 55.0 43 640 944 --- --- 1,584Block-III 99.5 41 411 1,337 258 --- 2,006

Block-IV 80.0 42 637 1,640 282 --- 2,559Sub-Total 356.5 167 2,308 5,839 1,568 --- 9,715

Others 8,643.5 50 392 3,556 49,138 112,705 165,791

Total 9,000.0 217 2,700 9,395 50,706 112,705 175,506

Mine-able Reserves: 60% Measured Reserves.Measured Reserves: Having a high degree of geological assurance, coal lies within a radius

of 0.4 km from a point of coal measurement.Indicated Reserves: Having a moderate degree of geological assurance, coal lies within a

radius of 0.4 to 1.2 km from a point of coal measurement.Inferred Reserves: Having a low degree of geological assurance, coal lies within a radius

of 1.2 to 408 km from a point of coal measurement.Hypothetical Resources: Undiscovered coal resources, generally extension of inferred reserves

in which coal lies beyond 4.8 km from a point of coal measurement.

Source: Geological Survey of Pakistan.

Thar coal Initiatives

Sindh Coal Authority had been formed in 1990’s, which could not advance the project tothe required degree. There are issues of provincial autonomy, control of naturalresources, coal pricing and royalty. There are many stake-holders and a number of overlapping institutions. The new PPP government has established a Thar CoalAuthority, under federal jurisdiction. There have been protestations in Sindh, yet due toPPP”s popular base in Sindh, such voices have been muffled. Other political partieswould have shuddered to take such a step. It is hoped that the PPP governments both inthe center and Sindh would be able to deal with the reluctant and opposing sections and a breakthrough may be expected this time. In the mean time the Thar coal Authority has  been converted into a board under Sindh government and headed by provincial chief minister. Federal government is represented in the board by the federal minister for water and power.

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General Musharraf did pay attention to Thar coal and brought in Chinese Senhua.However he was trapped in the quagmire of Kalabagh dam, Baluchistan’s and later theissue of judiciary. Technical assistance could be sought from a number of countriesincluding Turkey, Germany, Poland, USA and China. Indians could have been involvedas Thar is adjacent to Indian border, but after the recent Mumbai episode, not much

should be expected in this respect. Turkey could be requested to host trainers in its coalmines and power plants. Polish consultants and technicians would be quite cheaper, whohave considerable expertise with lignite.

In the current law and order situation, American large scale involvement may not befeasible, although finance and equipment could come from there. RWe of Germany did afeasibility study in 2004 and Senhua of China in 2005. M/S Senhua spent quite some timeon the project and made an offer of 5.75cents/KWhr.Senhua was a serious contender. Itsoffer, however, was not accepted by the concerned departments.

The pie is large enough and many interests can be accommodated in eventual 5,000-

10,000 MW plus of electrical capacity involving 20 Billion US dollars in the next tenyears. However an immediate breakthrough is only possible with China, who has themoney, technology and manpower and enjoys goodwill among general public. They haveinstalled 600 MW coal power plants at the rate of one per week in their own country.

 NEPRA had subsequently announced indicative advance tariff of 7-8 cents/KWh, whichis really liberal indeed. Some ‘smart’ local parties lobbied for an unbelievably high tariff,of the order of 11-15 cents/KWh, which would have locked the country into a verydifficult situation. Fortunately it was resisted. Both Senhua and RWE studies havesomehow identical basic cost estimates.RWE projected 747.21million US dollars for a 6million MT coal output and 1000MW of electricity, while Senhua projected 454.7Million

US dollars for a coal output of 3.5 M tons and 600 MWe of electricity. Both lead to anidentical unit capital cost of 4.15-4.30 $ per ton of coal. Different financial assumptionsand methodologies lead to different coal prices per ton and electricity tariff. At 12%interest rate and Roe, financing cost comes out to be 7.78 $ per ton. Australianoperational cost data provide a figure of AUD 20 per ton or 13.90 US$ per ton, which iscomparable to India and US costs/ prices ; low BTU may fetch a lower market price intrade, but will essentially cost the same as higher BTU coal.

Bids on Thar coal

Sindh government’s mineral department has invited proposals from parties in May 2008,

for investment in coal mines. There is no information on the status of this tender, which prescribed the following coal pricing options;

1) 15% rate of profit/ return on production cost.

2) Coal price to be 75% of Indonesian lignite rates.

3) Coal price to be one third of the lightest furnace oil in Pakistan.

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Fig 4.6: Coals fields in Pakistan

Fig 4.7: Thar Coal spread in Pakistan and India territories

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The adjoining table computes coal prices on these formulae including a few other  possible options. One may conclude from the table, that a coal price of Rs. ---/ton or----Rs/ Mbtu, which may be fairly attractive to investors, earning a 15% ROE and 12%interest.

Table 4.5: Computation of reference price of Thar coal on various assumptions

*As per GOS recent RFP / Tender stipulations regarding reference coal priceBasis: 1 USD = 80 Rs, Heat rate = 10, 000 Btu / kWh, CV Thar coal = 6000 Btu /lb, Imported

Coal CV = 12000 Btu / lb, 1 Mbtu = 1000 kWh, Current crude price = 40$ / bbl ~ 7.30 $ Mbtu

Coal Electricity Pricing

Coal based electricity is the cheapest after hydro and nuclear. Classical coal and nuclear  power have competed with each other. Hard coal based electricity has been quoted at 5-5.6 cents, while lignite based electricity, is cheaper at 4.9- 5.5 cents. Lignite beingabundantly available locally in Germany, Coal Power has become more expensive thannuclear on account of emissions and global warming (CO2) issues. Nuclear power plantsare twice as capital intensive than coal plants. It almost takes 10 years to plan and

implement nuclear power. The interest during construction may account for 25- 30% of the capital cost.

0.02202600010200% of Indian mine mouth

0.0213312.133175% of as Tariff 

0.0285382.85600038Feasibilit Price*

0.031413.1Rs. 251 /Mbtu

At par with Gas tariff for utilities

0.026462.618300308.51/3rd Price of Furnace oil*

0.02402.3120008075% of FOB Indonesia*

0.0450412000100International coal priceLanded cost

$ / kWh$/ton $/Mbtu 

Thar Coal PriceCalorific

Value,

Btu / lb 

Price,

$ / ton Criterion 

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Table 4.6: Comparative Coal, Gas and Nuclear Power Economics

2010 2020 2030 2050

Brown Coal Creek 1.27- 1.89 1.34- 1.92 1.45- 2.00 2.0- 2.25

Lignite Germany 1.14 1.37 1.60 1.94

Lignite SUK 2.91 3.18 3.46 4.09Lignite Turkey 2.72- 2.74 2.72- 2.74 2.72- 2.74 2.72- 2.74

Lignite Bulgar 1.17 1.17 1.17 1.17

Lignite Romaine 2.29 --- --- ---

Gas 4.46- 5.72

•  Lowest price of lignite is for Germany 1.14 USD/ GJ; closer to German lignite isBulgarian lignite 1.17 US/ GJ.

•  Highest price of lignite for power are quoted for Turkey 2.24- 2.74 USD/ GJ;Romanian and Slovak prices are similar, indicating common price structure in central

and southern Europe.

•  There are two price groups; on the lower side 1.14- 1.89 are Germany, Greece andBulgaria; on the higher side 2.29- 2.91 USD/ GJ (Turkey Slovak and Romania),which is almost double of the lower price groups.

Table 4.7: Comparative Fuel price and costs for Coal, Gas and Nuclear for selected

counties (projections 2010- 2050)

Coal Gas Nuclear

2010 2030 2050 2010 2030 2050 Total Front

end

Back 

endCzech 1.27 1.35 2.00 5.63 5.81 6.17 4.70 --- ---

Germany 1.93 2.16 2.16 5.03 6.04 4.78 --- ---Slovak  2.91 3.46 4.09 5.53 6.74 8.22 5.80 --- ---

Turkey 2.72 2.72 2.72 4.67 4.67 4.67 --- --- ---

Bulgaria 1.17 1.17 1.17 --- --- --- --- --- ---

Romania 2.29 2.29 2.29 --- --- --- 2.80 2.00 0.8

South Africa 0.10 0.10 0.10 3.55 3.55 --- --- --- ---U.S.A 1.30 1.37 1.90 4.17 4.17 4.17 4.66 3.56 1.10

Canada 1.41 1.41 1.41 4.46 4.46 4.46 3.57 2.53 1.04

France 1.70 1.70 1.70 4.18 4.18 4.18 5.30 4.80 0.50Coal and Gas prices are in USD/ GJ

 Nuclear Fuel cost is in USD/ MW hCoal (1- 7) is lignite; U.S.A, France and Canada is Heard CoalLignite price in Europe are higher than sub bituminousCoal in U.S.A-Canada, by 50%

Source: IEA, generating cost of electricity 2005

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Table 4.8: Comparative energy economics of Coal, Gas and Nuclear for selected

countries (2003- 2005)

Coal Gas Nuclear

CapacityMW

UCC UCOG$MW h

Capacity

UCC UCOG Capacity

UCC UCOG

Czech 300 1176 37.1 400 584 54.6 1000 1089 31.7

Germany 1050 1316 37.7 1000 503 50.0 1590 1773 42.1

Slovak  114 1298 64.4 391 550 58.3 894 1747 45.5

Turkey 340 1172 52.3 700 424 40.9 --- --- ---

Bulgaria 600 1487 42.6 --- --- --- --- --- ---

Romania 296 1060 5105 --- --- --- 665 1805 49.5

South Africa 3852 1358 25.9 1935* 702 44.8 --- --- ---

U.S.A 600 1160 36.5 400 609 42.8 1000 1894 46.5

Canada 450 1320 41.2 580 589 43.6 1406 1373 37.1

France 900 1393 44.2 900 599 43.0 1590*

* 1556 39.3

UCC__ unit capital cost $ USD/ KWCapacity ____ MWUnit cost of Generation ____ USD/ MW h levelized at 10% discountPlants 1- 7 Czech to South Africa are for lignite coal;Plant 8- 10 U.S $, Canada, France are for hard coal*LNG/ CCGT in South Africa** PWR nuclear Readers

Source: IEA, electricity generating costs, 2005 (update)

Coal electricity costs in Pakistan

Capital costs of $1,500 per KW overnight may be assumed for coal fired power plant, ascompared to 1,380 $/ KW for UCH-2, including interests during construction and other  project expenses. This would convert to 2.25Rs/unit for CPD as opposed to Rs. 2.07 per kWh for UCH-2.

Capital cost of coal power plant depends on the following factors;

(1) Target thermal efficiency and heat rate.(2) Locations and site conditions.(3) Quality of coal (ash, moisture, CV, sulfur)(4) Environmental discharge standards.(5) Water availability and quality.(6) Distance to grid.(7) Choice of coal technology.(pulverized coal, fluidized bed combustion, high

temperature/supercritical, combined cycle etc.,)

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Table 4.9: Thar coal cost of production $ / ton

Author’s estimates based on Senhua / Rwe capital cost data.

Comparative cost of production based on Shovel vs. BWE

Source: Coal Book, PPIB

Table 4.10: Comparative cost estimates by various consultants

Source: Coal Book, PPIB 

Thar coal electricity; cost of production vs. Uch ii Rates in US Cents / kWh1) UCH data as advertised by NEPRA in Dawn2) Senhua data Coal book, PPIB3) EPP for Thar Coal; GOS tender, computation by author 4) RWE figures as given in Coal Book, PPIB.

19.43 - 27.8319.6 - 28.01Total, USD / Ton

22Royalty ($ / Ton)

5.5-13.95.5-13.9Operating Expenses ($ / Ton)

7.787.78Interest + dividend ($ / Ton)

4.154.33Unit Capital Cost ($ / Ton)

747454.71Mine Capital cost Mln$

RWE

1000 MW

6.0 Mln ton/yr

Senhua

600 MW

3.5 Mln ton/ yr

Cost Elements

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Problems of Thar coal

Although Thar coal is not a high quality coal, it is lignite or brown coal, high in water andash content. Fortunately, it is relatively low in sulfur (1%). In many parts of the worldesp. Europe this type of coal is being very efficiently used, namely in Germany, Poland,Greece, Turkey, and in almost all Eastern Europe belt. Recently in Germany a highlyefficient, supercritical steam system based power plant has been built by Alston/ Rwe.However, one of the major issues is its location and lack of water. It is located at theIndian border, some 450 Kms from Karachi, with no worth while metropolis nearby. Thelargest town Mirpur Khas is also 100 kms away. Although there is an aquifer above and below the coal seam, and water quality is brackish. In coal plants, three types of water isrequired; rough water/ brackish which can be used for stabilizing sand dunes and coaldust; industrial water for power plant for mostly cooling; and potable water. Dusty desertenvironment would be another problem for power plant and other facilities. Otherwise, ina relatively cold climate, water is not such a major problem, as air-cooled condensershave been developed where natural or forced draft is used. South Africa has installedsuch a plant recently. If right bank out-fall drainage could be brought to Thar, and usedafter cleaning or osmosis. It is also not uncommon to bring water for such big projectsthrough pipe lines of a few hundred kilometers in length. Sindh government would dowell to implement infrastructural and integrated projects and facilities, which investmentcould be recouped through a number of taxes, user-charges that could be levied on power  projects and coal production.

Although it might be efficient to locate power plants at mine mouth, studies may also beundertaken to bring coal through conveyors or dedicated rails to Thatta/ Gharo area,where some coal power plants may be located. Lignite coal, being less hard and formed,is a good starting material for producing synthetic gas. Such a gas can be producedunderground / inside or above ground. A combined cycle (IGCC) power plant can thus

already be located. Fast progress in the west has been made in this area. A number of such plants are operational in this field. Shell and GE are at the forefronts. India hasalready installed a coal base IGCC plants as a demonstration facility. Although, IGCChas relatively high investment cost, its higher efficiency 50-55% makes the investmenteconomically attractive. However, for us initially the conventional traditional pulverizedcoal power plant, subcritical or supercritical, would be a better and robust operation, esp.due to the remote and inhospitable location and condition of Thar. By comparison, mostcoal of the world is under lush green valleys and mountains. And therefore there is such a  big opposition to coal, as the surface mining destroys such scenic locations. Sitereclamation activities are the norm these days, which attempt to restore and reclaim thearea to its original conditions, if not making it better by making golf course.

Coal economics often depends on coal seam thickness and its depth. For example, inIllinois basin, 50 ft of overburden is removed to reach a 5-10 feet thick coal seam. On theother hand, in power river basin, one has to dig only 5 feet of overburden (earth) to find a50 foot thick seam, reducing coal production cost significantly.

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Coal Pricing

Indonesian Coal, close to lignite/ CV 7000 Btu per lb, Sulfur 0.4% and moisture 40%appears to be slightly better than Thar coal with a sulfur content of up to 0.4%. In August2008, when coal was at 148.9$, Indonesia IV (Lignite) was 48.82 US$ / ton. It is

estimated that at a stable level (80-100$ per ton) of normal coal, Lignite prices would bearound 25$ per ton.

Table 4.11: Coal / Lignite prices of various origins

 ________________________________________________________________________ Australia Coal / RB Coal = 80-94

  NEWC = 79.19DESARA = 84.16

Indonesian Coal IV (4200 Kca/kg) = 48.83$ /ton

Indian Coal A (6500 Kcal) = Rs 1440/tons = US$ 28.88 / tonsIndian Lignite (5500 Btu/lb) = Rs 550/tons=US$ 11/ tonsUSA Powder River Basin ( ) = US$ 11-14 / tonUSA central Appalachian ( ) = 40.3 $ / tonUK, French & Germany = 70-78 $/ton (delivered)Turkey (Lignite) = 27.7 $/ton (FOB)South Korea = 60.00 $/tonCoal Australian 40.45 192-68 98.84 $/TonCoal South Africa 41.25 167.75 89.38 July peak 2008 $/TonAustralia Coal / RB Coal =80-94 US$/Ton

Australia NEWC =79.19 US$/Ton (FOB/FAS)Australia DESARA =84.16 US$/Ton (FOB/FAS)

 ________________________________________________________________________ 

 Note: all prices are FOB, unless otherwise stated

Source: various published sources, referenced elsewhere

Coal Royalties and Provincial Autonomy

Federal government should sort out the royalty issue on the exploitation of natural

resources, so that the lacunae in this respect are removed and the investors feel secure inmaking their investment decisions. Although the 1973 constitution lays down someguidelines with respect to royalty payments, these are either vague or outdated by theevents that have subsequently taken place. Take the example of NWFP royalty in hydro  power. The matter has been a subject of debate and contention for a long time. Therehave been inputs from late Ghulam Ishaque Khan, AGN Kazi formula, Council of Common Interests’ determinations and tribunals.

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The constitution provides for the “net profits” from hydro sales to be given to the province where it is located i.e., for the time being NWFP.Net profit is a vague term.WAPDA is not making any profit. It subsidizes electricity. Government is paying, asrevealed recently by comments of the minister for water and power, a subsidy of Rs.1.67 per unit. It does not mean that the NWFP should not get royalty. The intent of the law

makers should be seen and decisions on specific rates should be left to the administration.There are several approaches which could be adopted, and a rational and just one adoptedthrough consensus.

Table 4.12: Various Royalty Criteria / rates in Coal Producing Countries

Source: Compiled by author from internet data on individual countries. 

 North Dakota/Wyoming; Royalty/coal severance tax used to be 1.25$ per ton. Now it is 75 cents per ton.On 11$ per ton this comes out to be 7%. 50% of the receipt goes to state general fund; 35% to counties and15% to a school/education fund. ND production is 32.2 MT; reserve 35 billion tons. Taxes add 20-33% tothe cost/price of lignite. Montana’s reserves are of 119.3 billion tons at an average depth of lignite at 200-300 feet; depth also goes to 400-600 ft.

Coming to the oil and gas sector, luckily the royalty rates are well defined. But then againthere are issues of well-head prices. For some historical reasons, the well-head prices of PPL-Baluchistan gas are fixed at an incredibly low rate. Baloch leaders are very angryover this as this does not result in just and meaningful revenue. The natural gas prices atwell-head are much higher in other provinces. The royalty could be and should becalculated at the generally prevailing well-head prices in the country, even if the fixedwell-head prices are to be maintained for contractual reasons.

0.75 - 1.25 $ /ton

7% advalorem

 North Dakota /

Wyoming

440.55$ / ton or 1%Canada /Alberta

3206% advalorem at 25$ / ton

16% advalorem at 50$ / tonBangladesh

2305% advalorem + Rs55-90 /tonIndia new

115-250 Rs / ton fixeddepending on coal grade

India old

136

176

1.7$ / ton - underground

2.2 $ / ton - open pit

Australia /

 New Wales

160192

224

5% on deep underground and6% on understand

7% open pit

Australia /

Queensland

Equivalent Thar Coal Royalty

@ 40 $ / Ton, Rs / ton Criterion Country

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Similarly the royalty issue on coal and other natural resources is to be sorted out. At least part of the tussle on Thar coal between the provincial and the federal government comesout from the uncertainties in this respect. Due to a lack of public information system andtransparency, we only hear of rumors in this respect. Vague statements on Sindh to get a big royalty are heard or the news of cajoling on a paltry sum of Rs.60 per ton as royalty

comes out occasionally. We would recommend a royalty rate of 12% at coal mine head prices, as is the case in oil and gas, although the general rates are between 5-8%.as inIndia and Australia. In Bangladesh, it is variable between6-16% depending on the coal prices. Indonesia being a more relevant country, charges 13.5%.of mine head prices. InIndonesia also now there are issues related to mine-head prices, which they are trying totackle through developing a coal price index.

A framework of other provincial taxes on coal such as excise (in American parlanceseverance tax), property and other local taxes should be discussed. In Wyoming, USA inaddition to royalties, additional taxes almost equal to royalty or more are levied. Totalrevenue of 850 million dollars, is levied on a production of 350 million tons. Such taxes

should be fixed and guaranteed for a period of ten years.

Can Thar coal build trade bridges between India and Pakistan?

Let me make an interesting proposal in this respect. Thar Desert is close to Indian border in Rajhestan. India despite large reserves, is importing coal from abroad. It can probablyimport their coal. This is not strange. The US produces a large amount of coal, andexports and import coal. Sometimes sea transport from nearby foreign sources may becheaper than rail or truck transport from the mine to the power plant. India’s coal sourcesare located in central India, and are transported to long distances at the point of consumption. Import of Thar coal by India is one possibility for consumption in the

adjourning areas. As lignite / brown coal of Thar cannot be transported to long distances,it can burn during transportation. How long could it be transported on Thar conveyorswould be question of technical feasibility. However my proposal is an extension of moreimports of coal by India, The scheme is as follows:

Pakistan transports Thar coal through conveyors to Indian Rajhestan border, where India builds a power station on its own, consumes Thar coal, return produced electricity at amutually agreed price. This price could be the prevailing CPP rate plus a margin in Indiafor similar plants. For India building 1000-1500 MW of coal power plant would not be avery difficult task. They add several thousand MW of coal power every year to their goods, having already an install base 95,000 MW of coal power.

Why should India do it. An Indian private company makes a profit, which is what thecommercial world is all about. Pakistan gets relatively cheap electricity saving 50%of theforeign exchange that would otherwise go into local production based on imported fuel or direct electricity import as is being discussed with Iran and other northern countries. Letus now do a risk analysis of the proposition - commercial, strategic and political. Firstly,no commercial risk, as the two countries share each others facilities on other side of the  borders. If things do not work out, no loss of capital investment, except sometimes

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investment on conveyors on the part of Pakistan. If Pakistan is not able to send coal, itdoes not get electricity. If India doesn’t send electricity, it doesn’t get coal. Both sidesfree to use their own investments for internal market. India can use its power plant for itsown needs. It may opt to build alternative coal supply facilities from the very beginningand use a mix of Thar coal and its own coal, and can similarly supply some of the output

to its own region. Coal export transport and electricity imports through electrical wireswould not create any traffic of personnel, thus no risk of espionage or intension. The  border remains closed as in that past. This would involve a trade of around 350-500million US dollars, and could be even more

If Mumbai episode goes in background and the two countries learn to resolve their differences amicably and peacefully, shun the threat of use of force, many similar limitations for mutual benefit could be taken. Alas, they won’t!

Coal Technologies

Coal Mining

Coal is mined by following two methods:

•  Surface or open cost mining

•  Under ground or deep mining

The choice of mining technology depends on coal geology, mainly depth at which coalseams are located and the seam thickness. Environmental reasons also dictate the choice;surface mining being the most environmentally intensive. 60% of world coal productioncomes from under ground mining. However in Australia and the US surface mining is

dominant with respective shares of 80% and 67%.

Open cast / surface mining is done when coal is not very deep down. These days 100meter is the limit of good depth and 100-200 meters depth is also amenable economicallyfor surface mining. In Thar therefore, open-cast mining would be applied as has been thechoice method adopted by RWE and Senhua in their studies. Apart from being cheaper and simpler, surface mining has a higher recovery rate of more than 90% as opposed tothe more expensive and complicated ground mining with a recovery rate of 60% to 90%of coal remains in the mine unexploited and is thus a loss.

The over-burden of soil and rocks is first broken up by explosives; it is then removed byearth moving equipment like draglines or shovels and trucks. Over the coal is then loaded

into large trucks or conveyors for transport to the on-site coal processing plants, where itis usually washed and cleaned, removing extra rocks and sand. From very primitive,manned mining to highly sophisticated automatic mining is being used The case in pointis current mining methods, being employed in Baluchistan coal mines, resulting in lowoutput and high production costs. For a power plant, at least 20,000 tons/day of coalwould be required, for which 200,000 cubic meter of extra more may have to be handled per day. These types of equipment are used: a) draglines b) Bucket wheel excavator c)Shovel & Trucks. Large & heavy trucks are used. Some trucks may be as large as 100

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tons Bucket wheel excavators can move 240,000 Cubic meters in a day, have a heightand dia of more than 100 meters, weigh 13000 tons, and take several years to constructand install. One piece of such equipment may cost in excess of one hundred million USDollars. RWE in Germany employs 22 such piece of equipment for a coal output for runon generating 17000 MW Electricity. India also has a similar number of these machines.

OOverburden10 ft

V CE OR AB LVU SR ED A

E M  N 100 ft100-150 M

Coalseam10-20M

Poor Mine Good MineProduction cost 30$ / Ton Production cost 10$/Ton

Fig 4.8: Surface mining

Good vs bad coal mine

Coal Transport:

Most coal is consumed in countries where it is mined. However countries like Australia,Indonesia, South Africa and USA export their hard coal. Thar type lignite coal is hardlytraded across international boundaries over long distances, as it degrades and isflammable. However, within the producing country, it is usually transported from one

state or province to others e.g. India, USA. In India truck transport is not uncommon,while in both USA and India coal trains are utilized both for transport from mine to thenearby coal transfer stations in to far away (several hundred kms) consumers. One wagoncarries 100 tons, and usually, there are 100 wagons in a train, to make a total of 

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Fig 4.9: A Schematic of an open cast coal mine

Courtesy: Kentucky Geological Institute

Fig 4.10: A Lignite mine in South Dakota in USA

Courtesy: Kentucky Geological Institute

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10,000 tons. Depending on the distance (say 100-200 kms), such trains make 2 or 3 trips  per day, making a daily coal transport of 20,000 tons per day or more. One requires20,000 tons for day to fire a 1000 MW coal power plant. Heavy trucks such as 100-tonners are off-road vehicles, which are used only on mines and adjoining designatedareas. Normal 20-40 ft haulers are used carrying 20 tons of coal. Coal is also transported

on conveyors. In mines and adjoining areas it is very common. Conveyors have beenused for transport to a distance of 100 Kms in some cases. Coal slurry pipelines weretried in 1960s, and are not in much vogue these days.

Coal Processing

As mined coal is seldom used directly. it has to be processed usually at the mine site for  burning either in coal power plants or elsewhere in the industry. Coal Processing involvesthe following steps:

•  Sizing & Screening

•  Washing / removal of gangue material

•  Beneficiation/ reduction of ash, volatile material

•  Drying / removing moisture content, esp. from lignite where water percentageis as high as 50%

•  Briquetting for Residential, Commercial & Industrial use.

Coal Firing/ Burning

Pulverized coal technology is generally adopted world wide, esp. for low sulfur coal.Thar coal is not so high sulfur coal with 1% sulfur. In PC technology, coal is pulverizedin pulverizers before facing into the boiler furnace. Pulverization grinds the coal toalmost a talc powder fineness, which makes coal firing and control easier, and coal burnsmore uniformly. Fluidized bed combustion technology (FBC) is normally used for highsulfur coals, like the one at Larkana, with more than 5% sulfur content.

Briquetting:

Coal briquetting is very common, esp. in lignite countries. In Greece, Germany andPoland, it is quite wide spread. After coal beneficiation (removing ash and ganguematerial) coal is grounded and pressed in the form of bricks, usually with the help of a  binder, and some biomass. These briquettes provide a useful and compact source of energy for a wide range of commercial and industrial use. In far off places, removedaway from pipeline and electricity net works, can benefit from it extensively and help inreducing forest cutting in these areas. In Pakistan, most of the cement mills are usinglocal and imported hard coal.

Some work has to be done to find their suitability in cement, bricks- kilns, cooking thelas/ carts and food vendor stoves. Same technology of brick making is also applied in

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making bricks of coal ash; such bricks are used in construction, especially as pavementitem.

Case study plants

  Nowadays coal-fired power plants of high efficiency use pulverized coal combustion(PCC) with supercritical (very high pressure and temperature) steam. We have, courtesyIEA, selected a few case studies prepared by IEA, of some recent PCC power plants, based on lignite or low grade coal, which should be of interest to the reader.

Niederaussem K, Germany

 Niederaussem K, owned by RWE Power, is a 1000 MWe ultra-supercritical lignite-firedunit near Cologne. Net efficiency is 43.2%, on a fuel LHV basis (37% on an HHV basis).The unit is the most efficient lignite-fired plant in the world. Niederaussem K opened in2002, and there are two further units based on the technology under construction at aneighboring RWE power station site at Neurath. In addition to the advanced steamconditions (27.5 MPa/580°C/600°C), there are other features that have been used for veryhigh efficiency. Among these are a complex water circuit to exploit a unique heatrecovery system downstream of the main economizer and a flue gas cooler for final heatrecovery. The condenser pressure has also been made low by incorporating an unusuallytall cooling tower. Although there were a few early difficulties with materials in parts of the boiler, these were solved by use of newer alloys. NOx emissions from the boiler arelow from the use of wall-mounted lignite-specific low-NOx burners and other fuel and air staging arrangements, so there is no downstream flue gas NOx control equipment.Electrostatic precipitators collect fly ash, and a wet FGD unit desulfurises the emergingflue gas. The investment cost was around 1175 USD/kW so in 2002, including interestduring construction and owner’s costs, and construction took 48 months. The efficiencyis very good for a plant firing 50-60% moisture content lignite fuel. A demonstration plant for pre-drying part of the lignite fuel feed using low grade heat is being installed toenable even higher efficiencies. The new units at Neurath will have slightly higher steamconditions and a simpler cycle, but include many of the features of Niederaussem K.

Wangqu 1 and 2, China

Wangqu opened in 2006, and is owned by Shanxi Lujin Wangqu Power Generation Co.Ltd. It is at an inland location, 2 km from Lucheng City near Changzhi. The two new 600MWe (nominal) units, completed in 2006, have a design net efficiency of over 41% on anLHV basis (40%, HHV basis). They represent a major step forward in being among thefirst wall-fired supercritical boilers to operate successfully using lean coals (10 to 20%V.M.) by employing advanced low NOx burners together with high velocity over fire air.Due to pressure to send the best coals to steelmaking, China’s power stations increasinglyneed to burn such coals. Each unit has a two-pass supercritical boiler, a single reheatsupercritical cycle with eight stages of feed water heating, ESPs and a wet FGD. Steam  parameters are 24.2 MPa/566°C/566°C, chosen to minimize risk, while giving good performance. The combustion system has been developed to meet Chinese legislation on NOx emissions from new lean coal-fired plant even at low loads with good combustion

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efficiency. The SO2 removal design efficiency at the plant is also good. The contractingstrategy used by the client was owner design specification with competitive bidding. Theinstallation cost was approximately 580 USD/ kWso in 2006. This figure is understood toexclude owner’s costs and interest during construction. Construction time was 30 months.These units are a good example of the way China is moving rapidly to improve the

efficiency and emissions of its power plants by ordering high-performing internationaltechnology with licensing agreements to enable the country to use its own manufacturingcapabilities for future plants. Two further identical 600 MWe units at the site will be air cooled, as Shanxi province has a water shortage problem.

Suratgarh, India

Suratgarh thermal power plant consists of five 250 MWe subcritical units commissioned  between 1998 and 2003. It is owned by the Rajasthan State Electricity Board and issituated in the northern part of Rajasthan in the Ganganagar district on the edge of theThar/Indian desert. A single reheat subcritical steam turbine system of conventional

configuration with six stages of feed water heating is used for each unit, and designefficiency is 37.1% on an LHV basis (35.1%, HHV basis). Steam parameters are 15.8MPa/ 540°C/540°C. The units are water cooled, with mechanical draught cooling towers.Ambient conditions here result in a higher condenser pressure (10.5 kp.a.) thanencountered in more temperate regions. High efficiency ESPs are fitted for particulatescontrol, and tangential firing and over-fire introduction of secondary air are used for NOxcontrol. There is no SCR or FGD. Ash utilization has grown steadily, and Suratgarh plansachieving 100% utilization by 2010. The units were designed to use indigenous coals of ash content 45% but the fuel used is now a blend, including some Chinese coal, to keepto around 30% in line with Government requirements to use maximum 34% ash coal.This is still high by world standards. Other challenges were associated with the desert

environment giving difficult site ground conditions and water quality variations. Lowrainfall necessitated construction of a reservoir for 21 days’ operation. Air intakes aredesigned to avoid ingress of sand during sandstorms. The plant specific capital cost wasapproximately 822 USD/ kW so in 2002, but the basis of this was uncertain. Constructiontime for one unit was 39 months.

FOSSIL FUEL-FIRED POWER GENERATION

The thermal efficiency is inevitably penalized by the coal quality as well as the localconditions and the use of a subcritical cycle. In future, higher efficiency supercriticalunits will be able to build on the experience gained.

Majuba, South Africa

Majuba is another plant in an area of water shortage, firing high ash coal, of around 30%ash content and of slagging and fouling propensity. The plant is owned by Eskom and issituated near Amersfoort in Mpumalanga. The coal for the 4110 MWe power station is brought from collieries in the Witbank area of Mpumalanga. Majuba consists of six unitsof over 600 MWe. The first opened in April 1996 and the others followed at yearly

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intervals. Each unit uses a subcritical once-through tower boiler of steam parameters 17.2MPa/540°C/540°C and a single reheat subcritical steam turbine. Units 1-3 employ air cooling and units 4-6 have water cooling. Six stages of feed water heating are used for   both types. The design efficiencies of the dry-cooled and wet-cooled units are around35% and 37% net on an LHV basis (33.8% and 35.7%, HHV basis), respectively. Low-

  NOx burners give control of NOx. Staggered burner geometry is used to minimizeslagging. There is no SCR or FGD. Fabric filtration systems remove particulates. In thedry-cooled condensers, steam from the turbines is condensed inside tubing, across whichair is blown. Condensing performance is very dependent on ambient temperature, so unitoutput and efficiency vary considerably with season. The wet cooled units haveconventional condensers and natural draught cooling towers. Wet cooling was selectedfor these units for economic reasons. The specific capital cost of Majuba wasapproximately 410 USD/kW so in 2001, including interest during construction andowner’s costs. The plant is currently two-shifting and performing well, despite beingintended for base load use. Dry cooled units are less efficient than conventional systemsand efficiency is also affected by the use of a subcritical cycle. Dry cooling would be

considered for future plants, depending on water availability. Eskom is understood to becurrently in the bidding stage for 3x660 MW supercritical power plants.

IGCC technology review

 Net efficiency for IGCC in existing plants is around 40-43% on an LHV basis (around38-41%, HHV basis). Recent gas turbines would enable this to be bettered and futuredevelopments should take efficiencies beyond 50% on an LHV basis. Emissions are low,and mercury removal will be cheaper than for PCC. The specific investment cost of IGCC is about 20% higher than that of PCC. There is however more uncertainty in IGCCcosts as there are no recently built coal-fuelled IGCC plants and the existing ones were

constructed as demonstrations. Availabilities have also not yet reached the demonstratedlevel of operating PCC units. Suppliers have plans to bring the capital cost to within 10%of that of PCC. Note that, while there are competitive pressures, the capital costs beingcited for many power projects have risen sharply recently because of increases in energy prices and their impacts on steel and concrete costs. There are two demonstration plantsin the EU. NUON’s plant, at Buggenum in Holland, is a 250 MWe system, based onShell gasification and a Siemens V94.2 gas turbine. It now operates as a commercial plant on imported coals with good availability and a net efficiency of 43% (LHV). Theother is ELCOGAS’s plant at Puertollano in Spain, a 300 MWe system based on thesimilar gasifier and a Siemens V94.3 gas turbine. It uses a high ash coal/high sulphur pet-coke mixed fuel and has a net efficiency of 42% (LHV). Both had initial problems in

firing syngas and needed turbine combustor modifications. Both have highly integratedsystems, which have proved to be rather inflexible. A 1200 MWe plant at another site is planned by NUON.

FOSSIL FUEL-FIRED POWER GENERATION

IGCC plants currently operating in the USA are the Tampa Electric Polk project and theWabash River coal gasification project, both constructed under the US DOE CCT

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Fig 4.11: IGCC vs Combined Cycle (CC)

Fig 4.12: Coal power plant at TVA (USA)

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Program. The 250 MWe Polk project uses a GE gasifier and GE 7FA gas turbine. The netefficiency was 35.4% on an HHV basis (36.7%, LHV basis) on coal feed. The 260 MWeWabash River project uses ConocoPhillips E-Gas technology with a GE 7FA turbine andan existing steam turbine and has a net efficiency of over 38% on an HHV basis (40%,

LHV basis). Both US plants are less integrated than the EU ones although some gasturbine air extraction has recently been incorporated at the Polk plant. The gas turbines performed well at both but there were some other difficulties. Both plants now operatecommercially, although their availabilities are understood to be lower than the best inclass operating supercritical PCC plants in the USA. A CCPI demonstration of thetransport gasifier is to be constructed in Florida. In Japan, the Clean Coal Power R&DCo., Ltd. (CCP) is constructing a 250 MWe IGCC demonstration project, due to startoperation in 2007, at Iwaki City, based on the MHI air-blown entrained gasifier and anMHI gas turbine. IGCC reference plant designs of 600 MWe have been developed bysupplier groupings to encourage market uptake by driving down the cost and providingfull single-point guarantees. Examples are those from GE-Bechtel and Siemens with

ConocoPhillips. Some projects likely to use these include: y Duke Energy, Edward sport,Indiana – GE-Bechtel y AEP, Meigs County, Ohio and Mason County, W. Virginia – GE-Bechtel y Mesaba Energy Project, Minnesota – ConocoPhillips E-Gas (CCPI Demo)With IGCC now available as a commercial package, more orders could follow as utilitiessee the cost decreasing and availability improving. It may still be necessary for subsidiesor incentives to cover the higher cost compared with PCC. IGCC fits well with CO2 capture and storage and there are projects planned in several countries, including Canada,Australia, Germany, and the UK, in addition to the US Government Future Gen andEuropean Commission Hydrogen initiatives and the Co-generation project in China.Inclusion of CO2 capture and storage will reduce efficiency but the generation cost may be lower than for CO2 capture on PCC.

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   3   1

   T  a   b   l  e   4 .   1   3  :   M  a   i  n   f  e

  a   t  u  r  e  o   f   t   h  e  e   i  g   h   t  c  o  a   l  -   f   i  r  e   d  c  a

  s  e  s   t  u   d  y  p   l  a  n   t  s  a  n   d   b  a  s  e  s   f  o  r  s  e   l  e  c   t   i  o  n   f  o  r  s   t  u   d  y

 

   P   l  a  n   t

   S

   i   t   i  n  g

   C  o  a   l

   M   W  e

  n  e   t

   B  o   i   l  e  r

   G

  e  o  m  e   t  r  y

   M  a   i  n  s  u  p  p   l   i  e  r  s  :

   B  o   i   l  e  r  ;   t  u  r   b   i  n  e

   U   l   t  r  a  -  s  u  p  e  r  -

 ,  s  u  p  e  r  o  r

  s  u   b  -  c  r   i   t

   S   t  e  a  m

  c  o  n   d   i   t   i  o  n  s

   M  p  a   /  o   C   /  o   C   (   /  o

   C   )

   O   t   h  e  r   f  e  a   t  u  r  e  s

   G  e  r  m  a  n  y  :

   N   i  e   d  e  r  a  u  s  s  e  m   K

   I  n   l  a  n   d

   L   i  g  n   i   t  e

   9   6   5

   t  o  w  e  r

   E   V   T   (   t  o   d  a  y

   A   l  s   t  o  m   ) ,   B  a   b  c  o  c   k

  a  n   d  s   t  e   i  n   M  u   l   l  e  r

   (   t  o   d  a  y   H   P   E   )  ;

   S   i  e  m  e  n  s

   U   S   C

   2   7   /   5   8   0   /   6   0   0

   L

   i  g  n   i   t  e  ;   t  o  p

  e

   f   f   i  c   i  e  n  c  y   l   i  g  n   i   t  e

  p

   l  a  n   t  ;   l   i  g  n   i   t  e   d  r   i  e  r

   d

  e  m  o  n  s   t  r  a   t   i  o  n

 

   C   h   i  n  a  :

   W  a  n  g  q  u   1 ,   2

   I  n   l  a  n   d

   C   h   i  n  e  s  e

   l  e  a  n

   2  x   6   0   0

   2  -  p  a  s  s

   D  o  o  s  a  n   H  e  a  v  y

   I  n   d  u  s   t  r   i  e  s   &

   C  o  n  s   t  r  u  c   t   i  o  n   C  o .

   S   /   C

   2   4   /   5   6   6   /   5   6   6

   L

  o  c  a   t   i  o  n  ;  w  a   l   l  -

   f   i  r   i  n  g  o   f   l  o  w  -

  v

  o   l  a   t   i   l  e  c  o  a   l  w   i   t   h

   l  o  w   N   O  x

 

   I  n   d   i  a

   S  u  r  a   t  g  a  e   h   1  -   5

   I  n   l  a  n   d

  ~   3   0   %  a  s   h

   5  x   2   2   7

   2  -  p  a  s  s

   B   H   E   L

   D  r  u  m  s  u   b  -

  c  r   i   t

   1   5   /   5   4   0   /   5   4   0

   L

  o  c  a   t   i  o  n  ;   h   i  g   h  a  s   h

  c

  o  a   l  ;   d  r  u  m   b  o   i   l  e  r

 

   S  o  u   t   h   A   f  r   i  c  a  :

   M  a   j  u   b  a   1  -   6

   I  n   l  a  n   d

  ~   3   0   %  a  s   h

   3  x   6   1   2

   (   d  r  y   )

   3  x   6   6   9

   (  w  e   t   )

   T  o  w  e  r

   S   t  e   i  n   M  u   l   l  e  r  ;

   A   l  s   t  o  m

   O  n  e  -   t   h  r  o  u  g   h

  s  u   b  -  c  r   i   t

   1   7   /   5   4   0   /   5   4   0

   L

  o  c  a   t   i  o  n  ;   d  r  y

  v

  e  r  s  u  s  w  e   t

  c

  o  o   l   i  n  g  ;   h   i  g   h  a  s   h

  c

  o  a   l ,  o  n  c  e  -   t   h  r  o  u  g   h

  s  u   b  -  c  r   i   t   i  c  a   l   b  o   i   l  e  r

 

   S  o  u  r  c  e  :   I   E   A

   U   S   C  :  u   l   t  r  a  -  s  u  p  e  r  c  r   i   t   i  c  a   l   (  s   t  e  a  m   t  e  m  p  e  r  a   t  u  r  e  o   f   5   8   0  o   C  a  n   d  a   b  o  v

  e   )

   S   /   C  :  s  u  p  e  r  c  r   i   t   i  c  a   l

 

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   3   2

   T  a   b   l  e   4 .   1   4  :   C  o  s   t  s ,  e  m

   i  s  s   i  o  n  a  n   d  e   f   f   i  c   i  e  n  c   i  e  s  o   f   t   h  e  c  a  s  e  s   t  u   d  y  p   l  a  n   t  s  a  n   d  c  o  m  m  e  n   t

  s   (  c  o  n   t   i  n  u  e   d   )

     P   l  a  n   t

   C  a  p   i   t  a   l  c  o  s   t ,

   U   S   D   /   K

   W  s  o

   A  c   h   i  e  v  e   d  e  m   i  s  s   i  o  n

  a   t   6   %   O   2 ,

   d  r  y

   M   W

  e

  n  e   t

   S   t  e  a  m

  c  o  n   d   i   t   i  o  n  s

M   P  a   /  o   C   /  o   C   (   /  o   C   )

   D  e  s   i  g  n

  e   f   f   i  c   i  e  n  c  y ,  n  e   t

% ,   L   H   V   &

   H   H   V   b  a  s  e  s

   A  n  n  u  a   l  o  p  e  r  a   t   i  n  g

  e   f   f   i  c   i  e  n  c  y ,  n  e   t

   % ,   L   H   V   &   H   H   V

   b  a  s  e  s

 

   F  a  c   t  o  r  s  a   f   f  e  c   t   i  n  g

  e   f   f   i  c   i  e  n  c  y  a  n   d  o   t   h  e  r

  c  o  m  m  e  n   t  s

   G  e  r  m  a  n  y  :

   N   i  e   d  e  r  a  u  s  s  e  m   K

   1   1   7   5   (   2

   0   0   2   )

T  o   t  a   l  p  r  o   j  e  c   t

  c  o  s   t

   N   O  x   1   3   0  m  g   /  m   3  

   S   O   2   <   2   0   0  m  g   /  m   3 

   D  u  s   t   1   9  m  g   /  m   3  

   9   6   5

   2   7   /   5   8   0   /   6   0   0

   4   3 .   2   L   H   V

   3   7   H   H   V

   4   3 .   2   L   H   V

   (   b  a  s  e   l  o  a   d   )

   3   7   H   H   V

   (   b  a  s  e   l  o  a   d   )

   L   i  g  n   i   t  e

   f  u  e   l ,

   5   0  -

   6   0   %

  m  o   i  s   t  u  r  e  c  o  n   t  e  n   t

   H   i  g   h  s   t  e  a  m  p  a

  r  a  m  e   t  e  r  s

   L  a  r  g  e  c  o  o   l   i  n  g   t  o  w  e  r   f  o  r

   l  o  w  c  o  n   d  e  n  s  e  r  p  r  e  s  s  u  r  e

   I  n  n  o  v  a   t   i  v  e   h  e  a   t  r  e  c  o  v  e  r  y

  s  y  s   t  e  m  s

   L  o  w  a  u  x   i   l   i  a  r  y

  p  o  w  e  r

   C   h   i  n  a  :

   W  a  n  g  q  u   1 ,   2

   5   8   0   (   2   0

   0   6   )

   O  v  e  r  n   i  g   h   t  c  o  s   t

   N   O  x   6   5   0  m  g   /  m   3  

   S   O   2   7   0  m  g   /  m   3   (   d  e  s   )

   D  u  s   t   5   0  m  g   /  m   3     (  u  n   i   t

   5   )

   2  x   6   0

   0

   2   4   /   5   6   6   /   5   6   6

   4   1 .   4   L   H   V

   4   0   H   H   V

   N  e  w  p   l  a  n   t  -  n  o

  o  p  e  r  a   t   i  n  g   h   i  s   t  o  r  y

   M  o   d  e  r  a   t  e   l  y

   h   i  g   h

  s   t  e  a  m

  p  a  r  a  m  e   t  e  r  s

   L  o  w  a  u  x   i   l   i  a  r  y

  p  o  w  e  r

   A   d  v  a  n  c  e   d   l  o  w  -   N   O  x   l  e  a  n

  c  o  a   l  c  o  m   b  u  s   t   i  o  n  s  y  s   t  e  m

   I  n   d   i  a  :

   S  u  r  a   t  g  a  r   h   1  -   5

 

   8   2   2   (   2   0

   0   2   )

   B  a  s   i  s  u  n  c  e  r   t  a   i  n

   S   O   2  u  n  a   b  a   t  e   d

   D  u  s   t   5   0  m  g   /  m   3  

   (  u  n   i   t   5   )

   5  x   7   2

   2   7

   1   5   /   5   4   0   /   5   4   0

   3   7 .   1   L   H   V

   3   5 .   1   H   H   V

   3   3 .   9   L   H   V

   (   b  a  s  e   l  o  a   d   )

   3   2 .   1   H   H   V

   (   b  a  s  e   l  o  a   d   )

   S  u   b  c  r   i   t   i  c  a   l  c  y  c   l  e

   H   i  g   h  a  s   h  c  o  a   l

   S  o  u   t   h   A   f  r   i  c  a  :

   4   1   0   (   2   0

   0   1   )

   T  o   t  a   l  p  r  o   j  e  c   t

  c  o  s   t

   S   O   2  u  n  a   b  a   t  e   d

   D  u  s   t   5   0  m  g   /  m   3  

   3  x   6   1

   2

   (   d  r  y   )

  :

   3  x   6   6

   9

   (  w  e   t   )

   1   7   /   5   4   0   /   5   4   0

   3   5  -   3   7   L   H   V

   3   3 .   8  -   3   5 .   7   H   H   V

   3   4   L   H   V

   (   t  w  o  -  s   h   i   f   t   i  n  g   )

   3   2 .   1   H   H   V

   (   t  w  o  -  s   h   i   f   t   i  n  g   )

   S  u   b  c  r   i   t   i  c  a   l  c  y  c   l  e

   H   i  g   h  a  s   h  c  o  a   l

   D  r  y  c  o  o   l   i  n  g

   f  r  o  m

  w  a   t  e  r

  s  u  p  p   l  y  c  o  n  s   t  r  a

   i  n   t  s

   I   G   C   C  g  e  n  e  r  a   l

  r  e  v   i  e  w

   P   C   C   +   2   0   %

   N   O  x   5   0  -   7   5  m  g   /  m   3 

   S   O   2  ~   2   0  m  g   /  m   3 

   D  u  s   t   <   1  m  g   /  m   3 

   3   0   0   /

  m  o   d  u   l  e

   I   G   C   C

   4   0  -   4   3   L   H   V

   3   8  -   4   1   H   H   V

 

   C  o  m   b   i  n  e   d  c  y  c

   l  e

   S  y  n  g  a  s  -   f   i  r  e   d   t

  u  r   b   i  n  e

   I  n  e  r   t  s  o   l   i   d  w  a  s   t  e

 

   S  o  u  r  c  e  :   I   E   A

 

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33

Coal Gasification

Coal gasification produces Coal gas which has been around for more than a century, andhad different names like producer gas, town gas etc. In pre-natural gas period, Coal gaswas ubiquitous and did almost every thing as is currently being done by natural gas.

Soviet Union was the major practitioner of Coal gasification technology. Today Russiahas one of the largest resources of natural gas, and is exporting gas to the whole of Europe and therefore has no interest or reason to pursue and maintain a more expensiveand difficult process of Coal gasification.

  Nevertheless Coal gasification is still in vogue, more for producing chemicals andfertilizers than power. 14 gasification plants are operating around the world producing4,100 MW of electricity, out of which six plants involve Coal gasification along with biomass and Pet Coke.

North Dakota Lignite Gasification 

Of particular interest to us in Pakistan, is the “Great Plain Synfuel Plan” (GPSP) whichgasifies lignite coal which is abundant in North Dakota where the plant is located. This plant started operating in 1984, gasifies 18500 tons of lignite daily and produces 130- 170MCF/d of gas and 1,200 t/d of anhydrous ammonia.

GPSP utilizes 14 Lurgi Mark IV gasifiers. In the Lurgi moving bed gasifiers, steam andoxygen are fed to the bottom of the gasifier and distributed by a revolving gate. Thesteam and oxygen slowly rise through the coal bed, reacting with the coal to produce rawgas steam, which is subsequently refined.

Table 4.15: North Dakota Lignite Gasification Plant Profile 

COD = 1984Output = 130- 170 mscf/d of sign gasBy product = Anhydrous ammonia, 1,200 tons/ dayFeed = North Dakota lignite coalTechnology = Lurgi Gasifier Mark IVCustomer = North Eastern U.S gas companiesStatus = OperationalCV Syngas = 250- 300 Btu/ SCF

Source: Paper presented at 2001 Gasification Technologies conference “The hidden

value of lignite coal” by pryles Dittus, Dale Johnson, Dakota Gasification Company.

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Fig 4.13: An Underground coal gasification concept (UCG)

Fig 4.14: Another UCG example

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(Coal) Gasification is not combustion

Gasification is a partial oxidation process which produces syngas, which is essentially amixture of H2 and CO. It does not produce carbon-dioxide, nitrous oxides and other oxides e.g. SO2, in gasification. Nitrogen remains in its elemental state and is not

converted to oxide (NOx).

Gasification vs Combustion 

Gasification

•  Minimal Oxygen

•  Partial oxidation

•  Products = CO, H2, N2,

•  Heat content = 250- 300 Btu/ cft

Combustion

•  Excess Oxygen Supplier 

•  Full oxidation

•  Products = Heat, CO2, NOx, SOx 

•   NO calorific valve of waste gas

Underground Coal Gasification UCG 

In UCG, coal mining and its transport to gasifiers are eliminated. Instead wells are drilledinto the coal seam. Steam and oxygen is injected to initiate partial oxidation.

In situ or underground coal gasification was invented and practiced by the Soviet Union,and closed down its operation in 1996, largely due to non-technical reasons. Asmentioned earlier, a natural gas abundant Russia does not require to belabor coal into gas.The technical manpower has emigrated from Russia and has formed a company, namedErgo-Exergy in Canada, which is at the forefront of promoting and marketing thistechnology. Along with Linc, these are the two companies active in UCG. A third

 possible contender is Uzbek coal (Russia Origin) which inherited the Soviet technologyand has reportedly joined hands with Reliance Industries of India in a UCG project inRajhastan and Gujarat.

Ergo-Exergy specifies following characteristics of coal deposit, to be amenable to UCG.

•  Coal seam thickness from 0.5- 30 m

•  Dip from 0o to 70o 

•  Depth from 30 to 80 m

•  Calorific value (LHV) from 8.0 to 30 MJ/ kgThar Coal meets all these requirements. Moreover, preliminary studies commissioned by

the GOP/ GSP and planning commission have also indicated positive results.

Ergo-Exergy has claimed following understandable benefits of UCG;

•   No external supply of coal or water required

•  Robust and stable gas supplies through the formation of in-situ heat and gas storage

•  Controlled output, possibilities of blending outputs from different outlets.

•   No ash or slag removal problems; buried in earth.

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Quite positive and optimistic statement regarding underground coal gasification andintegrating it with on-site power plants have been issued and posted on the web-site of ergo-energy, which appears to be the sole source of known-how on the subject at thisstage. The main features claimed are:

1. 

a number of technology options are possible;a.  gas fired boiler and steam turbine b.  IGCC or open cyclec.  gas engines

2.  emissions are claimed to be lower than in a conventional coal fired plant3.  capital costs and COGE (cost of electricity generation) being lower then

conventional coal and slightly higher than natural gas based NGCC.

Following capital costs and COGE are quoted in Canadian conditions (low cost area thanPakistan in generation business);Capital cost = C$799 per kW

COGE = C$19 per MWhCOGE with CO2 sequestration = C$24 per MWh

Even with all kinds of escalation, it would be acceptable and competitive in Pakistan, if actual costs are twice than the quoted figures.

Coal Gasification projects in India 

Perhaps, so much talk in Pakistan on Thar Coal has rekindled and renewed Indian interestin its own lignite in Rajhastan and Gujarat. India is at an advanced stage, involvingseveral UCG projects. As mentioned elsewhere, India is already operating several plants

 producing more than 5,000 MW of electricity in conventional Lignite fired plants.

Gail India, in collaboration with Canadian company Ergo-Energy, plan to setup UGC-IGCC power plant at Barmar, Rajhastan. Prefeasibility was commissioned in 2006, as aconsequence of which a JV pilot plant of 5 MW and subsequently of 750 MW to beinstalled. Cost estimates made, indicate cheaper gas than imported LNG from Qatar andIPI from Iran.

ONGC (Oil and Natural Gas Corporation) India, a counterpart of our OGDC, has alsoserious plans and undertakings involving UGC. ONGC has indentified three sites inBhavnagar (Gujarat) which have significant sized lignite resources. ONGC has entered

into JV with a formidable private sector group, Reliance Industries to implement its  projects. Reliance Industries is also active in Rajhastan, where talks are going on for 5,000- 7,500 MW of lignite electricity.

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Coal-to-Liquids & Hydrogen 

While the immediate outputs for UCG/CG would be substitute natural gas, syngas,ammonia/ fertilizers etc, the same output could be used in producing hydrogen or converting in it into liquid Petroleum. South African giant SASOL is already operating

three plants of CTL. In a future Hydrogen economy, Hydrogen based transport, andhydrogen based fuel cells to produce electricity would be on-line.

Imported Coal

Reportedly some feasibility studies have been undertaken for installing a coal-fired power plant in coastal Sindh / Baluchistan area, along with the establishment of a coal  jetty for that purpose. One keeps hearing of such interests and proposals. In an allexpenses paid scenario of tariff fixing, any possible project may be feasible. However,what NEPRA or PPA cannot assure is the foreign exchange. Even PPAs, if not based onrealism may face default of one kind or the other. The circular debt problem among

utilities, fuel suppliers and government is still lingering on. Although in implementationterms, a coal fired plant located in coastal Sindh Baluchistan based on coal imports fromSouth Africa or Indonesia may be much simpler than the difficulties and bottle necks inimplementing Thar coal, national competent authorities should not entertain such a proposal. It would divert the scarce resources away from much needed Thar coal project,irrespective who is bringing finance from him. There is an upper limit to countryexposure which is set by international financial institutions.

At later stages one may not be averse to the idea of imported coal, adding to the energysecurity and diversity; and also for offering blending opportunities with local coal. Due tocoal shortages, India has opened up for coal imports, but after having installed more than

20,000 MW of coal power. Infact, it may be more cost effective to import coal fromRajasthan and Gujarat into Sindh and Punjab. We see in Europe that natural gas isimported, exported and produced all together due to regional proximities and markets. Inthe US also, all kind of energy is produced and traded both ways. There would be nothingwrong in an India importing coal and exporting its own regionally close coal to Pakistan.Imported coal may be cheaper to India in coastal areas, than local coal transported bysurface. Transportation to Pakistan cities may be less problematic than Indian cities,especially the regional coal of Gujarat and Rajasthan, whether produced in mines or hardcoal from ready stocks.

Coal Based Methane (CBM)

During coal-forming (coalification) process, a large quantity of methane is produced,where by the plant material is progressively converted to coal. This gas is trapped withinthe coals internal surfaces and cleats. The evidence is the usual coal mine fire, which isactually generated by escaping methane generated as a byproduct of coal-mining. CBM isnot a mystery. It is being extracted in many parts of the world.

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Most gas in coal is stored on the internal surfaces. Coal stores 6-7 times more gas thanthe equivalent rock volume of a natural gas reservoir does. Gas content generallyincreases with coal rank, depth of burial of the coal bed and with reservoir pressure. Inorder to release gas from the coal bed, the partial pressure of embedded methane has to be reduced, which is done by extracting the water out. Thus with gas production, water 

comes out. In case of Thar coal, the associated water is saline; hence the produced water can be re-injected without the risk of production or salivation sweat drinking water.Alternatively water can be desalinated through reverse osmosis, or salt produced throughevaporating the saline water.

Estimates for the U.S coal based methane resource have been put at 700 TCF, but lessthan 100 TCF may be economically recoverable due to the deeper coal. (In case of Thar maximum depth is 200 meters, hence most of the embedded methane should be potentially recoverable economically). Out of 700 TCF, 11 TCF has been assured in thelignite deposits. Recently as much as 7 TCF CBM is being produced annually in the U.S,with a sales value of 156 billion U.S $ per year, at 2.26 $ per MCF unit value. Various

 production rates have been estimated, in a wide margin of 100- 700 SCF per ton of coal.Assuming a lowest potential resource of 100 SCF per ton, Thar coal’s CBM potential at200 billion tons of Coal is 20 TCF. By comparison, the current reserves of natural gas areof 29 TCF. Over a 10 years period, 2 TCF could perhaps be produced annually ascompared to a current production level of 1.45 TCF per year of natural gas. IPI project(Iran Pakistan India) will provide 1.05 trillion cubic ft (TCF) per year. At 2.50 $ MCF,this is an annual production value of 5.00 billion dollars. Over the production life cycle of 10 years, this is 50.00 billion USD. A couple of billion USD of investment may not be a bad proposition.

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Fig 4.15 CBM Wells (lower) and exploitation of CBM resources (upper)

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These projections, with the lowest possible production rates, should induce our policymakers to invest some resources in to the CBM resource assessment and evaluation.

It should be noted that in order to get hold of the CBM gas, its production has to precedecoal mining; otherwise the CBM would disappear into the thin air. CBM is a new

 phenomenon. In the U.S, also CBM production started since 2000. In the Kansas State,annual production of CBM has reached 10 BCF level. A drilling rate of 374 wells beenhas been achieved. Can a drilling rate of l, 000 wells per year (200,000 meters per year)  be feasible for a country like Pakistan? Thus it should take between 10 to 25 years toachieve a level of 1 TCF per year. Is it a pipedream?

CBM and mining reportedly contribute 10% of the total methane emission in the worldMethane is considered to be the most intense contributor, more than CO2, to the climatechange, on a per unit volume basis. CBM projects are eligible for CDM (CleanDevelopment Mechanism) emission sales.

Table 4.16: Coal Bed Methane (CBM) Resource Assessment (Hypothetical) ________________________________________________________________ 

Thar Coal Resource = 200 billion tonsAssociated CBM rate = 100- 700 SCF/ ton of coal

Say ~ 100 SCF/ tonEstimated CBM resource ~ 20 TCFExisting reserves of natural gas ~ 29 TCFCBM Resource Value @ 2.5 $ pr CFT ~ 50 Billion USD ________________________________________________________________ 

Source: Compiled by the author 

Table 4.17: CBM Well Economics  ________________________________________________________________________ 

Well cost @ USD 100/ ft * 200 Meters = 60,000 USD or alternatively @ 0.5USD per MCF per production cost.

Production rate per well = 50,000 SCF/ d ~ 1500 MCF/ month~ 18,000 MCF/ a

Over 10 years lifetime ~ 180,000 MCF@ 2.50 $ per MCF ~ 450,000 USD

5,000 wells * 18,000 MCF/ a ~ 1 TCF / a5,000 well/ year * 10 years ~ 50,000 wells2,000 wells/ year * 25 years ~ 50,000 wells ________________________________________________________________________ 

Source: compiled by the author; basic date from USGS & KGS.

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Table 4.18: Electricity Generation from CBM wells.

CBM output = 50,000 cf/ day per well= 50,000 * 800 Btu/ cft= 40,000,000 = 40 MBtu

Electricity generation @ 8,000 Btu/ kwh = 5,000 kwhGeneration capacity (70% PLF) = 0.35 MWAggregate capacity 3 wells = 1.05 MWOn three wells ~ one 1 MW gas-fired IC engine-generator can be installed

Source: compiled by the author 

As would be evident from adjoining table, one well produces about 0.35 MW (5,000 kwhat load factor of 0.70) of electricity. Three wells would be required to fire a standard ICengine based generator of 1 MW. In Australia, CBM based electricity generation has  become a common and standard practice. Initial electricity requirement of the project buildup phase could easily be produced from this almost free energy. 30 wells should be

enough for 10 MW. Also the diesel engines of the Bucket Wheel Excavators could befired out of the coal based methane.

Network Estimates CBM

20 TCF at 9,000 sq kms= 2.2 BCF/ sq kms@ 0.8 * 106 MCF per well lifeline= 12 wells pr sq kms ~ 800,000 M2/ well~ One well in a grid of 275 *275 meters~ 6,900 meters network length per sq km to support 12 wells and 4 MW of electricitygeneration

As is evident from the adjoining table, a 20 TCF of resource in an area of 9,000 sq kms,yields a spatial value of 2.2 BCF per sq km or 12 well per sq km. A network piping (2-3”) of 6,900 meters per sq kms would be sufficient to service 12 wells and 4 MW of electricity generation.

A CBM resource of 20 Tcf is indicated, by conservative estimating data. Actual resourcemay be twice or thrice this size i.e. more than the original and unconsumed natural gasresource o Pakistan. In order that the resource is not wasted, urgent action is required. Anassessment study can be undertaken by GSP. Perhaps it might be already underway. Adrilling of 50 wells equaling 10,000 meters should not take long. One resource are

confirmed, the CBM field should be allotted in phases. These can be multiple leases onthe same location. CBM base would expire before coal mining base becomes effective.

Reportedly, a contract for CBM was awarded without due process, to a foreign company,which had been cancelled by the competent authority. There is no need of foreigninvolvement in the initial assessment activity. A whetting / confirming study could beawarded subsequent to GSP work. However, all of this process should not take more than

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a year, subsequent to which production activity should begin. Pakistani contractorsshould be able to handle the initial job of 12- 50 production wells along with the network.

A 300 MW plant would require, sinking some 900 wells, over an area of 75 sq kms. Afeasibility study of such a plant may also be undertaken at an opportune time.

Towards a Coal Policy or Coal Act

Most recently a Thar Coal initiative was announced by Federal government under thetitle of Thar Coal mining company allocating sizeable financial outlay. A few days after the announcement, the project was cancelled, almost propitiations of the Sindhgovernment. 

Thar coal development has become a victim of in-fighting between federal bureaucracyand provincial Sindh government. There is a long history of two steps forward and onestep backward with respective to this vital project. Sindh Coal Authority had been formed

in 1995? for the purpose developing Thar coal deposits. The first and only NationalMineral Policy (NMR-95) was announced in 1995 under the auspices of the men PPPgovernment, which recognized the exclusive domain of provinces in the mineralresources, as per constitutional position of the Islamic Republic of Pakistan. 

 NMR-95 announced the formation of Mineral Facilitation Authorities, both at the centre(under the captainship of the prime minister) and at the provinces (under the provincialchief ministers). It is not known whether NMR-95 is defunct or is effective. There wasnews of Japanese government/world bank grant for formulating a new mineral policy inthe year 2007. Nothing seems to have happened, in the power fluid period that followed.Similarly intentions were announced to develop Coal Policy.

Sindh Coal Authority could not deliver much in the period since it was established in the1990s, for a variety of reasons including lack of interest, defined objectives and targets,turf-fights among centered the province, lack of technical know-how at SCA and itstendency to act as a political party rather than a bureaucratize institution. This attitudeunfortunately persists in certain sections of Sindh bureaucracy. 

Thar Coal Authority had been formed to develop Thar Coal at the federal level, whichwas severely opposed and died its own death rather soon. It was replaced by Thar CoalEnergy Board, with the enthusiastic support of the existing provincial government under Syed Qasim Ali Shah and is currently understood to be the sole designated body for 

developing Thar Coal. In the mean time a Technical Assistance agreement was enteredinto with the World Bank to prepare a business plan and associated documentation for inviting foreign investment and development of Thar Coal deposits. The output of this project is due to be released. In the mean time the World Bank consultants played a rolein fire-fighting among the federal and provincial bureaucracy. 

The Thar Coal controversy was understood to have been resolved by the formation of Thar Coal and Energy Board (TCEB), that a new controversy has been initiated by the

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announcement of the Thar Mining and Coal company under the aegis of the so calleddefunct Thar Coal Authority, with a financial outlay of and share of 20% of theGovernment of Sindh. CDWP approved it without consulting the provincial government,as claimed by the Sindh Chief Minister. Sindh Government because apparently furiousover it and refused to accept the scheme of TCMC. In the words of the Sindh Chief 

Minister, “without resolving the basic issue of control of provincial resources”, TCMCcannot be accepted. The Prime Minister ordered to wind up TCMC. Apparently the issueseems to have been resolved, temporarily and for the time being. 

While recognizing the provincial domain, there are sources of confusion and issues whichare at the root of in-fighting on the Thar Coal development. The issues are;

a.  In the case of oil and gas, federal domain has been recognized. Coal is a mineral,and also a fuel/energy source as well having characteristics of oil and gas. Hastyinterest in coal gasification by the federal bureaucracy seems to be stemming fromthis perception as well, merit of the case being aside. In India and elsewhere, non-

fuel minerals are treated as mineral. b.  In India, also a federation, Coal India a federal body, which almost exclusively,controls the coal resource. However in Indian constitution the minerals are in jointdomain of federation and the provinces.

c.  In Pakistan, provincial governments have generally a very limited role.Consequently provincial institutions remain under developed to handle largetransactions and projects. Virtually no project of any significance has beenhandled by any provincial government including Punjab.

d.  Thar Coal development is no ordinary subject. Pakistan’s energy future is tied tothis. In the next twenty years, 20000 MW of electrical power would require aninvestment of more than forty billion US dollars. All parts of the country would

  be affected by its demand and supply. Its development would involve contactsand coordination at diplomatic level to attract investments, loans and foreigninvestment. Thar Coal is at Indian border. Some security planning likeestablishment of a cantonment etc would be required eventually to secure theinvestment. Thus a lot of legitimate federal involvement is required for developing Thar Coal.

e.  In Pakistan there is no tradition in the federal bureaucracy to act in a coordinationcapacity in provincial domain. Either they act hands-off or want to go lock-stock and barrel.

f.  Therefore while constitutional provision of provisional domain in minerals has to  be respected, the afore-mentioned issues should also be taken into account,

  balancing the two. Otherwise, the tug of war may continue. Thar coaldevelopment would suffer and the country would suffer. Recent agreement of Iran-Pakistan gas deal, with unreasonably high prices and other difficult terms,has enhanced the urgency of domestic energy resources through which energysecurity may be achieved at affordable prices.

g.  Concluding I would like to add a caveat. People in Sindh not make a very bigissue out of provincial control on resources. The control remains only till theleases are awarded. It is the mining company which makes the investment and

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  practically controls the resource. Of course the owners get a royalty, which perhaps is probably not in jeopardy at all. Sindh is getting its royalty dues on oiland gas regularly. Of course, there are attractions in contract award, on both thesides.

Federal bureaucracies should also be sensitive and responsive to the politicalenvironment. In a political milieu, where most political parties have agreed on maximum  provincial autonomy and there are political elements demanding 1940-resolution typeconfederation ala-six point programme of Mujibur-Rehman or even more. Ignoring thesesentiments would be to ones advantage. There is always unwritten word and the fine print. The art of all politics and government is to recognize this.

In the same way, provincial people and government should also avoid pulling the“control of resources”, lever beyond a limit. Making too much out of it, “of, for and bythe province”, may be to no ones advantage. “Provincial control” is too vague and all-embracing a term. Clear working rules ought to be worked out, protecting Sindh’s

legitimate interests. Within the framework of these clearly defined rules, all activityshould be welcome. Ambiguous and unclear provincial control ideology may block  progress and development.

All other future initiatives would be a victim of this confusion, unless the federalgovernment takes decisive action in this respect. It should take the following steps.

Announce or resuscitate National Mineral Policy 95, which was prepared and launchedunder PPP government-1995. MNR-95 lays down the framework and recognizes theconstitutional position of provincial domain in respect of mines and minerals.

• Announce a coal policy and preferably introduce a Coal-Act, to clearly definedomains, roles, interfaces etc of various agencies, including the old and the new onessuch as Thar Coal and Energy Board (TCEB).

•  Instead of raising objections on individual matters, perhaps Sindh may also announceits coal/mineral policy and define the ways and means through which federal and  provincial governments could cooperate to further the Thar Coal development. InCanada and Australia which are federations and coal producers, states (provinces)announce their own coal policy. Similar is the case with India, where coal is aconcurrent subject between centre and the states, several states announce their ownmineral policies.

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Annexure: EPRI tables on coal power technologies

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   2  -

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  a  r  y

 

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   L  e  a   d   i  n  g   V  e  n   d  o  r  s

   B  o   i   l  e  r   O   E   M  s  -   A   l  s   t  o  m ,   B  a   b  c  o  c   k

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   I

 

   M  a   j  o  r   T  r  e  n   d  s

   S   t  a  n   d  a  r   d   i  z  e   d   d  e  s   i  g  n  s   t  o  r  e   d  u  c  e

  c  o  s   t   &  c  o  n  s   t  r  u  c   t   i  o  n   t   i  m  e .   F  u  e   l

   f   l  e  x   i   b   i   l   i   t  y .

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  u  n   i   t  s  :   f  u  e   l  s  w   i   t  c   h   i  n  g ,   l   i   f  e  e  x   t  e  n  s   i  o  n ,   &

  s   t  e  a  m   t  u  r   b   i  n  e  u  p  g  r  a   d  e  s .

   N  e  w  a   l   l  o  y  s  -   h   i  g   h  e  r   t  e  m  p  e  r  a   t  u  r  e   &

  p  r  e  s  s  u  r  e .   S   l   i   d   i  n  g  p  r  e  s  s  u  r  e   d  e  s   i  g

  n .

   S  e  c  o  n   d  r  e   h  e  a   t  a   d   d  e   d   t  o  s   t  e  a  m  c  y  c   l  e .

   C   h  a  n  g  e  s   t  o   W  a   t  c   h   f  o  r

   M  o  r  e   i  n   t  e  g  r  a   t  e   d   f  u  r  n  a  c  e   &  a   i  r

  q  u  a   l   i   t  y  c  o  n   t  r  o   l  s  y  s   t  e  m  s  ;   f  u  r   t   h  e  r

   d  e  v  e   l  o  p  m  e  n   t  o   f   l  o  w   N   O

   X

   b  u  r  n  e  r  s .

   P  r   i  c  e   d   i   f   f  e  r  e  n   t   i  a   l  o  n   M   M   B   t  u   b  a  s   i  s   b  e   t  w

  e  e  n

  c  o  a   l   &  n  a   t  u  r  a   l  g  a  s .   R  e  n  e  w  e   d   i  n   t  e  r  e  s   t

  r  e   l  a   t  e   d   t  o   i  m  p  r  o  v  e   d  p   l  a  n   t  e   f   f   i  c   i  e  n  c  y ,  w   h   i  c   h

  r  e   d  u  c  e  s   S   O             2 ,   N   O            X ,   H  g ,   &   C   O

   2   e  m   i  s  s   i  o  n  s .

   U   t   i   l   i  z  a   t   i  o  n  o   f   J  a  p  a  n  e  s  e   &   E  u  r  o  p  e  a  n

   t  e  c   h  n  o   l  o  g  y .   R  e  n  e  w  e   d   i  n   t  e  r  e  s   t  r  e   l  a   t  e   d   t  o

   i  m  p  r  o  v  e   d  p   l  a  n   t  e   f   f   i  c   i  e  n  c  y ,  w   h   i  c

   h  r  e   d  u  c  e  s

   S   O             2 ,   N   O            X ,   H  g ,   &   C   O

   2   e  m   i  s  s   i  o  n  s .   F  u  n   d   i  n  g

  c  o  u   l   d   b  e   i  m  p  a  c   t  e   d   b  y  e  m  p   h  a  s   i  s

  o  n   C   O

   2 

  e  m   i  s  s   i  o  n  s .   C  o  n  c  e  r  n  s  o  v  e  r  g   l  o   b  a

   l  w  a  r  m   i  n  g

  a  r  e  r  e  s   t  r   i  c   t   i  n  g  a  p  p  r  o  v  a   l  o   f  n  e  w  c  o  a   l  -   f   i  r  e   d

  p   l  a  n   t  s .

   C  a  p   i   t  a   l   C  o  s   t   D  e  c   2   0   0   7

   $   /   K   W   7   5   0   M   W   U  n   i   t

   N   /   A

   2   4   5   0   (   W   /   O   C   O

   2    C  a  p   t  u  r  e   )

   4   1   0   0   (   W   i   t   h   C   O

   2    C  a  p   t  u  r  e   )

   (   2   0   2   5   t   i  m  e   f  r  a  m  e   )

   L  e  v  e   l   i  z  e   d  c  o  s   t  o   f

  e   l  e  c   t  r   i  c   i   t  y   (   L   C   O   E ,   D  e  c .

   2   0   0   7   C  o  n  s   t  a  n   t   $   /   M   W   h   )

   N   /   A

   6   4

   9   8   (   A   )  –   8   3   (

   B   )

   O   t   h  e  r   C   h  a  r  a  c   t  e  r   i  s   t   i  c  s

   I  n   t  e  g  r  a   t   i  o  n  o   f   b  o   i   l  e  r  a  n   d

  e  m   i  s  s   i  o  n  c  o  n   t  r  o   l  s

   E  x   t  e  n  s   i  v  e  o  p  e  r  a   t   i  n  g  e  x  p  e  r   i  e  n  c  e

   A   d  v  a  n  c  e   d   i  n   t  e  g  r  a   t   i  o  n  o   f   b  o   i   l  e  r  a  n   d

  e  m   i  s  s   i  o  n  c  o  n   t  r  o   l  s

   H  e  a   t   R  a   t  e ,   H   H   V

   (   B   t  u   /   k   W   h   )

   9 ,   2   0   0  –   9 ,   6   0   0

   8 ,   9   0   0  –   9 ,   3   0   0

   A   )   1   2   6   4   0  –   W   i   t   h   C   O

   2    C  a  p   t  u  r  e ,   N  o  c  o  s   t

  a  n   d  p  e  r   f  o  r  m  a  n  c  e   I  m  p  r  o  v  e  m  e  n   t  s

   B   )   1   0   3   4   0  –   W   i   t   h   C   O

   2    C  a  p   t  u  r  e ,  w   i   t   h  c  o  s   t

  a  n   d  p  e  r   f  o  r  m  a  n  c  e   I  m  p  r  o  v  e  m  e  n   t  s

   R  e  s  o  u  r  c  e   R  e  q  u   i  r  e  m  e  n   t  s

   t   h  a   t   I  m  p  a  c   t   T  e  c   h  n  o   l  o  g  y

   E  c  o  n  o  m   i  c  s   &  p  r  a  c   t   i  c  a   l   i   t  y  n  o   t

   f  a  v  o  r  a   b   l  e   f  o  r   l  o  w  g  r  a   d  e  c  o  a   l  s

   (  c  o  a   l  s  w   i   t   h   H   H   V   l  e  s  s   t   h  a  n   6 ,   0   0   0

   B   t  u   /   l   b   ) .

   S  a  m  e  a  s   S  u   b  c  r   i   t   i  c  a   l   +   i  n  c  r  e  a  s   i  n  g  p  r   i  c  e  o   f

  a   l   l  o  y  s   f  o  r  p  r  e  s  s  u  r  e  p  a  r   t  s   &   F   G   D  a   b  s  o  r   b

  e  r  s .

   S  a  m  e  a  s   S  u   b  c  r   i   t   i  c  a   l   +  c  o  s   t   &   d  e  v  e   l  o  p  m  e  n   t

  o   f   1   3   0   0   °   F   h   i  g   h  c   h  r  o  m  e   &  n   i  c   k  e

   l  a   l   l  o  y

  p  r  e  s  s  u  r  e  p  a  r   t  s .

 

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   2  -

   T  a   b   l  e   4 .   2   0   (  c  o  n   t   i  n  u  e   d   )

   P  u   l  v  e  r   i  z  e   d   C  o  a   l  –   T  e

  c   h  n  o   l  o  g  y   S  u  m  m  a  r  y

 

   A   d  v  a  n  c  e   d  -   S  u   b  c  r   i   t   i  c  a   l   P   C

   C  o  n  v  e  n   t   i  o  n  a   l  -   S  u  p  e  r  c  r   i   t   i  c  a   l   P

   C

   A   d  v  a  n  c  e   d   (   U   l   t  r  a   )   S  u  p  e  r  c  r   i   t   i  c  a   l   P   C

   M  a  r   k  e   t   R  e  s   t  r  u  c   t  u  r   i  n  g   &

   D  e  r  e  g  u   l  a   t   i  o  n

   I  m  p  r  o  v   i  n  g   i  n   t  e  g  r  a   t   i  o  n  o   f   b  o   i   l  e  r   &

  e  m   i  s  s   i  o  n  c  o  n   t  r  o   l  s  a   t  e  x   i  s   t   i  n  g

  u  n   i   t  s

   L   i   f  e  e  x   t  e  n  s   i  o  n  s  o   f  e  x   i  s   t   i  n  g  u  n   i   t  s .

   I  n   d  u  s   t  r   i  a   l  c  o  g  e  n  e  r  a   t   i  o  n   f  a  v  o  r  s  c  o  m   b  u  s   t   i  o  n

   t  u  r   b   i  n  e  s .

   K  e  y   I  s  s  u  e  s

   U  p  g  r  a   d   i  n  g  e  x   i  s   t   i  n  g  u  n   i   t  s .

   C  o  m  p  e   t   i   t   i  o  n   f  r  o  m   C   F   B   C   &

  p  o   t  e  n   t   i  a   l  c  o  m  p  e   t   i   t   i  o  n   f  r  o  m   I   G   C   C .

   R  e  s  o   l  u   t   i  o  n  o   f   C   O

   2   r  e  g  u   l  a   t   i  o  n  s   f  o  r

  n  e  w  p   l  a  n   t  s .

   R  e   d  u  c   i  n  g  c  a  p   i   t  a   l  c  o  s   t .   I  m  p  r  o  v   i  n  g

  p  e  r   f  o  r  m  a  n  c  e ,  a  v  a   i   l  a   b   i   l   i   t  y ,   &  c  y  c   l   i  n  g

  c  a  p  a   b   i   l   i   t  y .   U  p  g  r  a   d   i  n  g  e  x   i  s   t   i  n  g  u  n   i   t  s .

   R  e  s  o   l  u   t   i  o  n  o   f   C   O

   2   r  e  g  u   l  a   t   i  o  n  s   f  o  r  n  e  w

  p   l  a  n   t  s .

   U   t   i   l   i  z   i  n  g   J  a  p  a  n  e  s  e   &   E  u  r  o  p  e  a  n

  e  x  p  e  r   i  e  n  c  e .   P  o   t  e  n   t   i  a   l  c  o  m  p  e   t   i   t   i  o  n   f  r  o  m

   I   G   C   C .   R  e  s  o   l  u   t   i  o  n  o   f   C   O

   2   r  e  g  u   l  a   t   i  o  n  s   f  o  r

  n  e  w  p   l  a  n   t  s .

   K  e  y   M  a  r   k  e   t   I  n   d   i  c  a   t  o  r  s

   H   i  g   h  e  r  n  a   t  u  r  a   l  g  a  s  p  r   i  c  e  s   i  n   l  a   t  e

   1   9   9   0  s   &  e  a  r   l  y   2   0   0   0  s  c  a  u  s  e   d

  r  e  s  u  r  g  e  n  c  e  o   f  c  o  a   l  -   f   i  r  e   d  p   l  a  n   t

  c  o  n  s   t  r  u  c   t   i  o  n .   I  n   2   0   0   7 ,  c  o  n  c  e  r  n  s

  o  v  e  r  g   l  o   b  a   l  w  a  r  m   i  n  g  c  a  u  s  e   d

  c  a  n  c  e   l   l  a   t   i  o  n  o   f  m  a  n  y  n  e  w  c  o  a   l  -

   f   i  r  e   d  p  r  o   j  e  c   t  s .

   A   d   d   i   t   i  o  n  o   f  n  e  w  u  n   i   t  s  a   t  e  x   i  s   t   i  n  g  p   l  a  n   t  s .

   I  n  c  r  e  a  s   i  n  g   d  e  p   l  o  y  m  e  n   t  o   f   l  a  r  g  e  r  s   i  n  g   l  e

  w  e   t

   F   G   D  a   b  s  o  r   b  e  r  s .

   C  o  n  c  e  r  n  s  o  v  e  r  g   l  o   b  a   l  w  a  r  m   i  n  g

  m  a  y  r  e  s  u   l   t

   i  n  a  r  e   t  u  r  n   t  o  c  o  n  s   t  r  u  c   t   i  o  n  o   f   C

   T   C   C  p   l  a  n   t  s

  e  v  e  n   t   h  o  u  g   h  n  a   t  u  r  a   l  g  a  s  p  r   i  c  e  s

  a  r  e   h   i  g   h

  c  o  m  p  a  r  e   d   t  o  c  o  a   l .

   K  e  y   B  u  s   i  n  e  s  s   I  n   d   i  c  a   t  o  r  s

   C  o  m  p  e   t   i   t   i  o  n   f  r  o  m   N   G   C   C   &

   C   F   B   C .

   C  o  m  p  e   t   i   t   i  o  n   f  r  o  m   N   G   C   C ,   C   F   B   C   &   I   G   C   C .

   G   l  o   b  a   l  m  a  r   k  e   t   f  o  r  p  u  r  c   h  a  s   i  n  g  e  q  u   i  p  m  e  n   t .

   W   i   l   l   i  n  g  n  e  s  s  o   f   U   S ,   J  a  p  a  n  e  s  e   &

   E  u  r  o  p  e  a  n

   O   E   M  s   t  o  c  o  n   t   i  n  u  e   R   &   D   i  n   t  o  e

   f   f   i  c   i  e  n  c  y

   i  m  p  r  o  v  e  m  e  n   t  s  w   i   t   h  r  e  g  u   l  a   t  o  r  y

  c   l   i  m  a   t  e

  r  e  s  u   l   t   i  n  g   f  r  o  m  c  o  n  c  e  r  n  s  o  v  e  r  g

   l  o   b  a   l

  w  a  r  m   i  n  g .

    F  o  r  o   t   h  e  r  a  s  s  u  m  p   t   i  o  n  s  s  e  e   T  a   b   l  e  s   1  -   4  a  n   d   1  -   5 .   F  o  r   t  e  c   h  n  o   l  o  g  y  u  n  c  e  r   t  a   i  n   t  y  a  n   d  c  o  s   t  u  n  c  e  r   t  a   i  n   t  y ,  p   l  e  a  s  e  s  e  e   S  e  c   t   i  o  n   1 ,   I  n   t  r  o   d  u  c   t   i  o  n .   A   )   &   B   )  -   W   i   t   h   C   O   2

  r  e  m  o  v  a   l   &  c  o  m  p  r  e  s  s   i  o  n   &  a  u  x   i

   l   i  a  r  y  p  o  w  e  r   i  n  c  r  e  a  s  e  s .

   *   O  n  e  u  n   i   t   i  n   D  e  n  m  a  r   k  w   i   t   h  s   t  e  a  m  c  o  n   d   i   t   i  o  n  s  o   f   4 ,   2   0   0  p  s   i  g   /   1   0   8   0   F   /   1   0   8   0   F   /   1   0   8   0   F   b  e  g  a  n  o  p  e  r  a   t   i  o  n   i  n   l  a   t  e   1   9   9   0  s .

   S  o  u  r  c  e  :   E   P   R   I  :   P  r  o  g  r  a  m  m  e  o   f   T  e  c   h  n  o   l  o  g

  y   I  n  n  o  v  a   t   i  o  n  :   I  n   t  e  g  r  a   t  e   d   G  e  n  e  r  a

   t   i  o  n   T  e  c   h  n  o   l  o  g  y   O  p   t   i  o  n  s ,   T  a  g ,

   N  o  v  e  m   b  e  r   2   0   0   8 .

 

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http://slidepdf.com/reader/full/4-coal 49/51

 

 

   2  -

   T  a   b   l  e   4 .   2   1

   T  e  c   h  n  o   l  o  g  y   S  u  m  m  a  r

  y  –   I  n   t  e  g  r  a   t  e   d   G  a  s   i   f   i  c  a   t   i  o  n   C  o  m   b   i  n  e   d   C  y  c   l  e

   T  e  c   h  n  o   l  o  g   i  e  s

   F   i  x  e   d   B  e   d

   F   l  u   i   d   i  z  e   d   B  e   d

   E  n   t  r  a   i  n  e   d   F   l  o  w

   A   d  v  a  n

  c  e   d  —   G  a  s   i   f   i  c  a   t   i  o  n

   P  r  o  c  e  s  s  e  s

   L  e  a   d   i  n  g   V  e  n   d  o  r  s

   L  u  r  g   i

   K   R

   W   (  n  o  w   K   B   R   ) ,   L  u  r  g   i ,   C  a  r   b  o  n  a ,

   A   h   l  s   t  r  o  m   (  n  o  w   F  o  s   t  e  r   W   h  e  e   l  e  r   ) .

   G   E   E  n  e

  r  g  y ,   C  o  n  o  c  o   P   h   i   l   l   i  p  s ,   &   S   h  e   l   l .

   S   t   i   l   l   i  n   R

   &   D

   M  a   j  o  r   T  r  e  n   d  s

   P   i   l  o   t  p   l  a  n   t   i  n   G  e  r  m  a  n  y   i  n   1   9   3   6 .

   S  o .   A   f  r   i  c  a   l  e  a   d  s  a   f   t  e  r   W   W   I   I

   (   S  a  s  o   l   ) .   1   8  g  a  s   i   f   i  e  r  s   b  y

  m   i   d  -   1   9   5   0  s .   L  a   t  e   1   9   7   0  s  s  c  a   l  e   d

  u  p  o  v  e  r   5   0   % .   S  a  s  o   l  p  r  o   d  u  c  e  s

  m  u  c   h  o   f   S  o .   A   f  r   i  c  a  m  o   t  o  r   f  u  e   l .

   K   B   R  p  r  o  m  o   t  e  s  a   i  r  -   b   l  o  w  n  g  a  s   i   f   i  e  r  s

   (   1

   )   (  a  s  o  p  p  o  s  e   d   t  o

   O             2  -   b   l  o  w  n  e  n   t  r  a   i  n  e   d  g  a  s   i   f   i  e  r  s   ) .

   S   t  a  n   d  a  r   d   i  z  e   d   d  e  s   i  g  n  s   t  o  r  e   d  u  c  e  c  o  s   t   &

  c  o  n  s   t  r  u  c   t   i  o  n   t   i  m  e .   F  u  e   l   f   l  e  x   i   b   i   l   i   t  y .

   H   i  g   h  e  r   t  e  m  p  e  r  a   t  u  r  e  s   i  n   C   T  s   &

  s   t  e  a  m  c  y

  c   l  e  o   f  c  o  m   b   i  n  e   d

  c  y  c   l  e .

   C   h  a  n  g  e  s   t  o   W  a   t  c   h   f  o  r

   T   h  e  r  e  a  r  e  c  u  r  r  e  n   t   l  y   9   7  g  a  s   i   f   i  e  r  s  a   t

   S  a  s  o   l  g  e  n  e  r  a   t   i  n  g  m  a  n  y   t  y  p  e  s  o   f

   h  y   d  r  o  c  a  r   b  o  n   l   i  q  u   i   d  s .   B  r   i   t   i  s   h

   G  a  s   /   L  u  r  g   i   (   B   G   L   )   i  s  m  o   d   i   f   i  c  a   t   i  o  n   /

  u  p  g  r  a   d  e   t  o   L  u  r  g   i .   1   1   0   M   W   B   G   L

   I   G   C   C   i  s   i  n   S  c  o   t   l  a  n   d .   B   G   L   I   G   C   C  s

  a  r  e   l   i  m   i   t  e   d  c  o  m  p  a  r  e   d   t  o  e  n   t  r  a   i  n  e   d

  p  r  o  c  e  s  s  e  s .

   C  a  r   b  o  n  a   &   F  o  s   t  e  r   W   h  e  e   l  e  r  s  e   l   l

  s  m  a   l   l   B   i  o  m  a  s  s  g  a  s   i   f   i  e  r  s .   N  e  w

  p  u  s   h  a  s  s  o  c   i  a   t  e   d  w   i   t   h  s  m  a   l   l  w  o  o   d

  m   i   l   l  s ,   f  a  r  m   i  n  g  o  p  e  r  a   t   i  o  n  s ,   &  o   t   h  e  r

  w  a  s   t  e   B   i  o  m  a  s  s  s  o  u  r  c  e  s   f  o  r  s  m  a   l   l

  g  a  s

   i   f   i  e  r  s ,   i  n  c   l  u   d   i  n  g  s  m  a   l   l   I   G   C   C .

   M  o  r  e   i  n   t  e  g  r  a   t   i  o  n   b  e   t  w  e  e  n  c  o  m   b  u  s   t   i  o  n

   t  u  r   b   i  n  e  g

  a  s  c  o  m  p  r  e  s  s   i  o  n   &  a   i  r

  s  e  p  a  r  a   t   i  o

  n  u  n   i   t   (   A   S   U   ) .

   M  e   t   h  o   d  s   t  o  r  e   d  u  c  e  p  o  w  e  r

  r  e  q  u   i  r  e  m  e  n   t  s  a  s  s  o  c   i  a   t  e   d

  w   i   t   h   O   2  p

  r  o   d  u  c   t   i  o  n   & ,   i   f   C   O   2

  e  m   i  s  s   i  o  n  s

   b  e  c  o  m  e  c  o  n   t  r  o   l   l  e   d ,

  p  o  w  e  r   f  o  r   C   O   2  r  e  m  o  v  a   l   &

  c  o  m  p  r  e  s  s   i  o  n .

   C  a  p   i   t  a   l   C  o  s   t   D  e  c   2   0   0   7

   $   /   K   W   7   6   8   (   3  x   2   5   6   M   W   )

   M   W

   N   /   A

   N   /   A

   A   )   2   9   0   0

   (   W   /   O   C   O   2   C  a  p   t  u  r  e   )

   B   )   4   0   0   0

   (   W   /   C   O   2   C  a  p   t  u  r  e  -   2   0   2   5   t   i  m  e

   f  r  a  m  e   ) .

   C   )   3   2   5   0   (

   W   /   C   O             2

  r  e  m  o  v  a   l  a  n   d

  c  o  s   t  a  n   d   P

  e  r   f  o  r  m  a  n  c  e

   i  m  p  r  o  v  e  m

  e  n   t  s  -   2   0   2   5   t   i  m  e

   f  r  a  m  e   )

   L  e  v  e   l   i  z  e   d   C  o  s   t  o   f

   E   l  e  c   t  r   i  c   i   t  y   (   L   C   O   E ,   D  e  c .

   2   0   0   7   C  o  n  s   t  a  n   t   $   /   M   W   h   )

   N   /   A

   N   /   A

   A   )   7   0

   B   )   9   1   (   2   0   2   5   )

   C   )   7   7

   O   t   h  e  r   C   h  a  r  a  c   t  e  r   i  s   t   i  c  s

   B  e  s   t  s  u   i   t  e   d   f  o  r  c  o  a   l  -   t  o  -   l   i  q  u   i   d  s .

   F  e  w  c  o  m  m  e  r  c   i  a   l   i  n  s   t  a   l   l  a   t   i  o  n  s .

   I  n   t  e  g  r  a   t   i  o  n  o   f   C   T  c  o  m  p  r  e  s  s  o  r   &   A   S   U .

   A   d  v  a  n  c  e   d

   i  n   t  e  g  r  a   t   i  o  n   C   T ,

   A   S   U ,   &  e

  m   i  s  s   i  o  n  s  c  o  n   t  r  o   l  s .

   H  e  a   t   R  a   t  e ,   H   H   V

   (   B   t  u   /   k   W   h   )

   N   /   A

   1   0 ,   5   0   0   B   t  u   /   k   W   h   (  n  o   C   O   2  c  a  p   t  u  r  e   ) .   A   )   8   9   8   0

   B   )   1   1   0   0   0

   C   )   1   0 ,   0   4   0

   R  e  s  o  u  r  c  e   R  e  q  u   i  r  e  m  e  n   t  s

   t   h  a   t   I  m  p  a  c   t   T  e  c   h  n  o   l  o  g  y

   N  o   t  p  r  a  c   t   i  c  a   l   f  o  r   I   G   C   C .

   I  n  c

  r  e  a  s   i  n  g  p  r   i  c  e  o   f  a   l   l  o  y  s   f  o  r

  p  r  e

  s  s  u  r  e  p  a  r   t  s   &  v  e  s  s  e   l  s .

   B   i  o  m  a  s  s  m  a  y   b  e  c  o  m  e  a  n

   i  n  c

  r  e  a  s   i  n  g   l  y  m  o  r  e   i  m  p  o  r   t  a  n   t

   f  e  e

   d  s   t  o  c   k .

   I  n  c  r  e  a  s   i  n

  g  p  r   i  c  e  o   f  a   l   l  o  y  s   f  o  r  p  r  e  s  s  u  r  e

  p  a  r   t  s   &  v  e  s  s  e   l  s .   A   b   i   l   i   t  y   t  o  g  a  s   i   f  y   l  o  w  e  r

  g  r  a   d  e  c  o  a   l  s  m  o  r  e  c  o  s   t  e   f   f  e  c   t   i  v  e   l  y .

   I  n  c  r  e  a  s   i  n  g  p  r   i  c  e  o   f  a   l   l  o  y  s   f  o  r

  p  r  e  s  s  u  r  e  p  a  r   t  s   &  v  e  s  s  e   l  s .

   A   b   i   l   i   t  y   t  o

  g  a  s   i   f  y   l  o  w  e  r  g  r  a   d  e

  c  o  a   l  s  m  o  r  e  c  o  s   t  e   f   f  e  c   t   i  v  e   l  y .

 

Page 50: 4 Coal

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http://slidepdf.com/reader/full/4-coal 50/51

 

 

   2  -

   T  a   b   l  e   4 .   2   1   (  c  o  n   t   i  n  u

  e   d   )

   T  e  c   h  n  o   l  o  g  y   S  u  m  m  a  r  y  –   I  n   t  e  g  r  a   t  e   d   G  a  s   i   f   i  c  a   t   i  o  n   C  o  m   b   i  n  e   d   C  y  c   l  e

   T  e  c   h  n  o   l  o  g   i  e  s

   F   i  x  e   d   B  e   d

   F   l  u   i   d   i  z  e   d   B  e   d

   E  n   t  r  a   i  n  e   d   F   l  o  w

   A   d  v  a  n  c  e   d  —   G

  a  s   i   f   i  c  a   t   i  o  n

   P  r  o  c  e  s  s  e  s

   K  e  y   I  s  s  u  e  s

   N   /   A

   R  e   d  u  c   i  n  g  c  a  p   i   t  a   l  c  o  s   t .   I  m  p  r  o  v   i  n  g

  p  e  r   f  o  r  m

  a  n  c  e ,  a  v  a   i   l  a   b   i   l   i   t  y ,   &

  c  y  c   l   i  n  g

  c  a  p  a   b   i   l   i   t  y .

   R  e   d  u  c   i  n  g  c  a  p

   i   t  a   l  c  o  s   t .   I  m  p  r  o  v   i  n  g

  p  e  r   f  o  r  m  a  n  c  e ,  a  v  a   i   l  a   b   i   l   i   t  y ,   &  c  y  c   l   i  n  g

  c  a  p  a   b   i   l   i   t  y .   D  e  m  o  n  s   t  r  a   t   i  o  n  o   f

  v   i  a   b   i   l   i   t  y

  w   i   t   h   l  o  w  -  r  a  n   k  c  o  a   l  s .   C  o  m  p  e   t   i   t   i  o  n

   f  r  o  m   P   C   &   C   F   B   C .

   R  e   d  u  c   i  n  g  c  a  p   i   t  a

   l  c  o  s   t .

   I  m  p  r  o  v   i  n  g  p  e  r   f  o

  r  m  a  n  c  e ,

  a  v  a   i   l  a   b   i   l   i   t  y ,   &  c  y  c   l   i  n  g

  c  a  p  a   b   i   l   i   t  y .   C  o  m  p  e   t   i   t   i  o  n

   f  r  o  m   P   C   &   C   F   B

   C .

   K  e  y   M  a  r   k  e   t

   I  n   d   i  c  a   t  o  r  s

   N  o   t  p  r  a  c   t   i  c  a   l   f  o  r

   I   G   C   C .

   F   i  n   d   i  n  g

  n   i  c   h  e  s   t  o   i  n  c  r  e  a  s  e

  m  a  r   k  e   t

  s   h  a  r  e .

   I  n  c  r  e  a  s  e   d  e  s  c

  a   l  a   t   i  o  n  o   f  m  a   t  e  r   i  a   l  s   &

  e  q  u   i  p  m  e  n   t   h  a

  s  r  e  s  u   l   t  e   d   i  n

  s   i  g  n   i   f   i  c  a  n   t

   i  n  c  r  e  a  s  e  s   i  n  p

   l  a  n   t  c  o  s   t  s   &

  c  a  n  c  e   l   l  a   t   i  o  n

  o   f  a  n  u  m   b  e  r  o   f  p  r  o   j  e  c   t  s .

   A   l   t   h  o  u  g   h   I   G   C   C

  e  m   i   t  s   l  e  s  s

   C   O   2 ,  a  s  s  o  c   i  a   t   i  o  n  w   i   t   h  c  o  a   l

  m  a  y  r  e  s  u   l   t   i  n  p  o

  o  r  p  u   b   l   i  c

  p  e  r  c  e  p   t   i  o  n .

   K  e  y   B  u  s   i  n  e  s  s

   I  n   d   i  c  a   t  o  r  s

   N  o   t  p  r  a  c   t   i  c  a   l   f  o  r

   I   G   C   C .

   G   l  o   b  a   l  g  r  o  w   t   h   &  m  a  r   k  e   t   f  o  r

  p  u  r  c   h  a  s

   i  n  g  e  q  u   i  p  m  e  n   t .   F  u   t  u  r  e

  p  r   i  c  e  o   f

  n  a   t  u  r  a   l  g  a  s   &

  c  o  m  p  e   t   i   t   i  o  n

   f  r  o  m   N   G   C   C .   C  o  m  p  e   t   i   t   i  o  n   f  r  o  m

   P   C   &   C

   F   B   C .

   G   l  o   b  a   l  g  r  o  w   t

   h   &  m  a  r   k  e   t   f  o  r

  p  u  r  c   h  a  s   i  n  g  e  q  u   i  p  m  e  n   t .   F  u   t  u  r  e  p  r   i  c  e

  o   f

  n  a   t  u  r  a   l  g  a  s   &

  c  o  m  p  e   t   i   t   i  o  n   f  r  o  m

   N   G   C   C .

   C  o  m  p  e   t   i   t   i  o  n   f  r  o  m   P   C   &   C   F   B   C .

   G   l  o   b  a   l  g  r  o  w   t   h   &

  m  a  r   k  e   t

   f  o  r  p  u  r  c   h  a  s   i  n  g  e

  q  u   i  p  m  e  n   t .

   W   i   l   l   i  n  g  n  e  s  s  o   f   U

   S   D   O   E   &

   O   E   M  s   t  o  c  o  n   t   i  n  u  e   R   &   D   i  n   t  o

  e   f   f   i  c   i  e  n  c  y   i  m  p  r  o

  v  e  m  e  n   t  s

  w   i   t   h  r  e  g  u   l  a   t  o  r  y  c   l   i  m  a   t  e

  r  e  s  u   l   t   i  n  g   f  r  o  m  c  o  n  c  e  r  n  s  o  v  e  r

  g   l  o   b  a   l  w  a  r  m   i  n  g .

 

   A   )   N  o   C   O   2  c  a  p   t  u  r  e

 

   B   )   C   O   2  c  a  p   t  u  r  e  a  n   d  c  o  m

  p  r  e  s  s   i  o  n  a  n   d  a  u  x   i   l   i  a  r  y  p  o  w  e  r  c  o  n  s  u  m  p   t   i  o  n  –   2   0

   2   5   t   i  m  e   f  r  a  m  e

 

   C   )   C   O   2  c  a  p   t  u  r  e  a  n   d  c  o  m

  p  r  e  s  s   i  o  n  a  n   d  a  u  x   i   l   i  a  r  y  p  o  w  e  r  c  o  n  s  u  m  p   t   i  o  n  w   i   t   h

  c  o  s   t  a  n   d  p  e  r   f  o  r  m  a  n  c  e   i  m  p  r  o  v  e  m  e  n   t  s  –   2   0   2   5   t   i  m

  e   f  r  a  m  e   i   f   R   &   D  p  r  o  g  r  e  s  s  e  s  a  s  p   l  a  n  n  e   d

 

   (   1   )   P  o  w  e  r   S  y  s   t  e  m  s   D  e  v  e   l  o  p  m  e  n   t   F  a  c   i   l   i   t  y   (   b  e   i  n  g   d  e  v  e   l  o  p  e   d  –  n  o   t  y  e   t  m  a  r   k  e   t  e   d   )   T   h  e   t  r  a  n  s  p  o  r   t  r  e  a  c   t  o  r ,  c  o  a   l   f  e  e   d   &  a  s   h  r  e

  m  o  v  a   l  s  y  s   t  e  m  s ,

 

  s  y  n  g  a  s  c  o  o   l  e  r ,  s  y  n  g  a  s  c   l  e  a  n  u  p ,  s  e  n  s  o  r  s   &  a  u   t  o  m  a   t   i  o  n ,  r  e  c  y  c   l  e ,   &  g  a  s

  c  o  m  p  r  e  s  s  o  r   h  a  v  e   b  e  e  n  s  u  c  c  e  s  s   f  u   l   l  y   d  e  m  o  n  s   t  r  a   t  e   d .

 

   F  o  r  o   t   h  e  r  a  s  s  u  m  p   t   i  o  n  s  s  e

  e   T  a   b   l  e  s   1  -   4  a  n   d   1  -   5 .   F  o  r   t  e  c   h  n  o   l  o  g  y  u  n  c  e  r   t  a   i  n   t  y  a  n   d  c  o  s   t  u  n  c  e  r   t  a   i  n   t  y ,  p   l  e  a  s  e  s  e  e   S  e  c   t   i  o  n   1 ,   I  n   t  r  o   d  u  c   t   i  o  n .

   S  o  u  r  c  e  :   E   P   R   I  :   P  r  o  g  r  a  m  m  e  o   f   T  e  c   h  n  o   l  o  g

  y   I  n  n  o  v  a   t   i  o  n  :   I  n   t  e  g  r  a   t  e   d   G  e  n  e  r  a

   t   i  o  n   T  e  c   h  n  o   l  o  g  y   O  p   t   i  o  n  s ,   T  a  g ,

   N  o  v  e  m   b  e  r   2   0   0   8 .

 

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