Economic Assessment of Deploying Advanced Coal … Assessment of Deploying Advanced Coal Power...

Economic Assessment of Deploying Advanced Coal Power Technologies in the Chinese Context

Lifeng Zhao, Ph.D.Research FellowEnergy Technology Innovation Policy Belfer Center for Science and International AffairsKennedy School of GovernmentHarvard UniversityFeb. 19, 2008

2

1. Introduction2. General Assessment Basis3. Calculation Results4. Next Steps5. Final Remarks

Contents

3

1. Introduction

4

Power capacity mix, 2007

• National Bureau of Statistics of China

• China Electricity Council, 2007

1.1 Power in ChinaTotal capacity: 713 GW

Thermal capacity: 554 GWCoal capacity: 530 GW

Total electricity generation: 3256 TWh

Thermal electricity generation 2698 TWh, 83%

New added capacity:100 GWThermal: 82 GW

Hydro 20.4% Nuclear 1.2%Wind 0.6% Other 0.1%

Thermal 77.7%

5

1.2 Some good trends 1. Growth rate of total capacity dropped

Installed power capacity: 14.4% higherGrowth rate: 6.2% lower

2. Capacity from clean and renewable energy sources increased

Wind power capacity: 4 GW, 94.4%Nuclear power capacity: 9 GW, 29.2% Hydro power capacity: 145 GW, 11.5%Thermal power capacity: 554 GW, 14.6%, growth rate, 6% lower

6

1.2 Some good trends (cont.)

3. More large and advanced coal-fired units went on line

7 1000 MW Ultra-Supercritical (USC) units under operation

China Huaneng Group, Yuhuan Power Plant2006, 2 units2007, 2 units

China Huadian Corporation, Zhouxian Power Plant2006, 1 unit2007, 1 unit

China Guodian Corporation, Taizhou Power Plant2007, 1 unit

7

3. More large and advanced coal-fired units went on line

3 600 MW USC units under operation China Huaneng Group, Yingkou Power Plant, 2 units China Power Investment Corporation, Kanshan Power Plant, 1 unit

Contracts80 for 1000 MW USC50 for 600 MW USC

Bids98 for 1000 MW USC61 for 600 MW USC


8

4. Demonstration of new generation technologies was launched

3 IGCC, 2 oil-electricity co-production demonstration plants, under construction

5. Penetration of flue gas desulfurization significantly increased

FGD capacity 270 GW, accounting for over 50%6. Net Efficiency greatly improved

14 GW, closed downCoal consumption rate of power supply: 357 g/kWh (34.4%), 10 g/kWh lower


9

Net efficiency has greatly improved

Close down small size units

Build large size units

Use advanced technology

• National Bureau of Statistics of China• China Electricity Council, 2007

350

360

370

380

390

400

410

420

430

440

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

Sta

ndar

d C

oal C

onsu

mpt

ion

Rat

e of

Pow

er S

uppl

y g/

kWh

28.0

29.0

30.0

31.0

32.0

33.0

34.0

35.0

Net

Effi

cien

cy %

Standard Coal Consumption Rate ofPower Supply g/kWhNet Efficiency (%)


10

1.3 Challenges to China’s Power Future

Continued High Electricity Demand

Low Net Efficiency

Optimization of Power Mix (dependence

on coal)

Coal Supply

Environmental Impacts (coal)

11

Projection of Power Capacity in 2020

60

41

41

Nuclear Power (GW)

493

384

277

Addition of coal power

(2008-2020)(GW)

70

50

30

Wind Power (GW)

1023

914

807

Coal power (GW)

1546

1393

1241

Total installed capacity (GW)

Base

High speed

Low speed

1.3 Challenges to China’s Power Future (cont.)

12

1.4 Coal Power Technologies

Three Pulverized Coal (PC) technologies+ Pollution control technologies

SubcriticalSupercritical (SC)Ultra-Supercritical (USC)

Circulating Fluidized Bed (CFB)Integrated Gasification Combined Cycle (IGCC)

13 NHD

NHD

Furnace Desulfuriza

tion

FGD

FGD

-

FGD

FGD

-

FGD

FGD

-

Sulfur Control

Fuel Saturation

Fuel Saturation

-

LNB/SNCR

LNB

LNB

LNB/SNCR

LNB

LNB

LNB/SNCR

LNB

LNB

NOxControl

E-class

E-class

GT

Shell entrained flow

Multi-Nozzle entrained flow

CFB subcritical

USC

USC

USC

Supercritical

Supercritical

Supercritical

Subcritical

Subcritical

Subcritical

Gasifier/Boiler

Electrostaticprecipitation16.7/538/538 10

Electrostaticprecipitation25/600/600 9

Wet Scrubbe10/510/510 11

Candle filter 10/510/510 12







Particulate Matter Control

Steam ParameterMPa/℃/℃

CASE



14

1.5 Goals

To compare twelve different power plant configurationsTo evaluate the differences in capital cost and overall cost of electricity (COE) To evaluate the performance of all technologies examined

Net efficiencyEmissions (SO2, NOx, Particulate Matter, CO2)

15

2. General Assessment Basis

16

2.1 Calculation of Performance

AspenPlus

Coal Characteristics

Net power

SO2 emissions

……….

Particulate Matter emissions

CO2 emissions

Steam parameters

Gasifierparameters

Technical parameters of

gas turbine

……….

Net efficiency

17

2.2 Impact Factors for Performance Calculation

Site CharacteristicsCoal CharacteristicsEmission Standards

18

MunicipalWaterRail accessTransportation

55%Relative Humidity298KDesign Temperature1atmDesign Air Pressure

2.3 Site Characteristics

19

25.42%

21.01~24

34.95%

24.01~27

17.51%

>27

0.4%

<8.5

22.74 %12.69% 7.85% 1.18%

Average 17.01~21 12.51~17 8.5~12.5

Heating Values of China Coal (MJ/kg)

2.4 Coal Characteristics

13.69%

30.01~40

2.25%

40.01~50

1.49%

>50

0.4%

≤ 5

23.38% 33.56% 39.81% 8.8%

Average 20.01~3010.01~20 5.01~10

Ash Contents of China Coal (%)

4.57%

2.01~3

6.14%

>3

40.17%

≤0.5

1.06% 3.37% 14.27% 31.48%

Average 1.51~2 1.01~1.5 0.51~1

Sulfur Contents of China Coal (%)

28%

51%

2026110As-Received LHV（kJ/kg）

7.02ASH0.4Sulfur0.94Nitrogen6.28Ash

10.07Oxygen30.64Volatile Matter

4.58Hydrogen52.52Fixed Carbon76.99Carbon10.56Moisture

Ultimate Analysis（%，wt，dry basis）Proximate Analysis（%，wt）

Shendong Coal

2.5 Shendong Coal Characteristics

21

2.6 Emission Standards in China

NOx: Vdaf ＞20% 450 mg/Nm3

10%≤Vdaf ≤20% 650 mg/Nm3

Vdaf ＜10% 1100 mg/Nm3

SO2: 400mg/Nm3, 800mg/Nm3, 1200mg/Nm3

Particulate matter: 50mg/Nm3, 100mg/Nm3, 200mg/Nm3

22

2.7 Comparison of Emission Limits

301850Particulate Matter (mg/Nm3)

190135

USA

200200

EU

450400

China

NOx (mg/Nm3)

NationPollutants

SO2 (mg/Nm3)

23

2.8 Economic Assessment

Formation and

Analysis System for Investment

Project Feasibility

Study

Equipment cost

Annual total plant cost

Total plant investment

capital

Construction work cost

Installation work cost

Fuel cost

Primary material cost

……….

24

2.9 The Composition of Total Plant Investment Capital (Yuan)

Preparation fee for productionLand use cost

Installation engineering cost

Original equipment costConstruction engineering cost

Interests during construction periodBasic contingency cost

Other costs Site preparation

Extra costs for imported technology and equipment

Technical service cost

Management cost for project construction

Other engineering cost

Overnight construction cost

Fixed assets5Fixed assets4Deferred assets3Intangible assets2

Fixed assets1

ItemsNo.

25

2.10 The Composition of Annual Total Plant Cost (Yuan/Year)

charges for emitting particulate matter

charges for emitting NOxcharges for emitting SO2

financial cost repair cost

wage and welfare cost bought-in fuel cost

bought-in primary material cost amortization cost depreciation cost

9

2

Operation and maintenance

cost

345

8

10

76

Capital cost1

ItemsNo.

26

2.11 Basic Parameters for Economic Assessment

IGCC repair rate

PC repair rate

Loan return period

Loan ratio

Amortization of deferred assets

Depreciation period

Annual operation hours

20 years

57%

8%

6.4%

5 years

5%

3 years

3.5%

2.5%

15 years

70%

5 years

15 years

6000 hours

Depreciation residual rate

Amortization of intangible assets

Loan rate Basic contingency

cost

Operation period

Welfare and labor protection coefficient

Construction period

27

2.12 Two Economic Indicators

Capital Cost = total plant investment capital / total plant gross power (Yuan/kW)

COE = annual total plant cost / net electricity generation (Yuan/MWh)

28

2.13 Data Collection

Pathways to data collectionPlant visitsTechnology vendor and manufacturer contacts Attendance at conferencesInterviews with experts

29

Air Separation Unit (equipment, construction engineering, and installation engineering)China Huadian Corporation

Air Liquide (Hangzhou) LTD., CO.7

Air Separation Unit (equipment, construction engineering, and installation engineering)

Air Products and Chemicals (China)6

Entrained-bed gasifier, including GE, Shell, and new coal-water slurry with opposed multi-nozzles gasifier

East China University of Science and Technology4

Fluidized bed gasifier (equipment, construction engineering, and installation engineering)

Jilin Changshan Fertilizer (Group) Co., LTD.2

Fixed bed gasifier (equipment, construction engineering, and installation engineering)Shan Xi Fertilizer plant1

ContentsTitle No.

6B and 9E gas turbines, HRSG , steam turbine, auxiliary system, Control system, electric system, water treatment system, water supply system, fuel supply system, thermodynamic system

Nanjing Turbine & Electric Machinery (Group) Co., LTD.

8

Gaisifier manufacturerSichuan BluestarMachinery Co., Ltd5

Entrained-bed gasifier (new coal-water slurry with opposed multi-nozzles gasifier), sysgas cleanup unit (equipment, construction engineering, and installation engineering)

Yankuang Group3

30

FGD, flue gas denitrificationClean Environmental Protection Engineering Co., LTD.

15

Coal priceShenhua Group14

loan rate, loan ratio, depreciation period, depreciation residual rate, amortization of intangible assets, amortization of deferred assets

North China Power Engineering Co., LTD.12

subcritical, supercritical, ultra supercritical boilers and steam turbines, electric motorsShanghai Electric10

subcritical, supercritical, ultra supercritical boilers and CFB boilers

Harbin Power Equipment Corparation9

subcritical, supercritical, ultra supercritical PC power plants (capital, operations and maintenance costs), Construction period, Operation period, Load of first year in the operation period, Load of second year in the operation period, Annual operation hours

China Huaneng Group13

loan rate, loan ratio, depreciation period, depreciation residual rate, amortization of intangible assets, amortization of deferred assets, Urban construction charge rate, Extra charges rate of education funs, Operating earning tax rate, Income tax rate

Zhengjiang Electric Power Design Institute11

31

3. Calculation Results

32

3.1 Technological Performance

228.1

251.2

600

1200

1200

1200

Gross Power (MWe)

37.6% 10(CFB)

41.5% 9(USC)

40.5%11(IGCC)

41.2 %12(IGCC)

40.6% 6(SC)

Net Design Efficiency

(LHV)CASE

39.5% 3

(subcritical)

Net Design Efficiency (%)

35

36

37

38

39

40

41

42

43

Sub-cr

itical

PC

Sub-cr

itical

PC+FGD

Sub-cr

itical

PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCR

USC PCUSC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-N

ozzle

gasif

ier)

IGCC (d

ry co

al pu

lveriz

ed)

Net

Des

ign

Effic

ienc

y (%

)

33

3.2 Environmental Performance

SO2 Emissions

0

100

200

300

400

500

600

700

800

Sub-cr

itical

PCSub

-critic

al PC+FGD

Sub-cr

itical

PC+FGD+SNCR

SC PC

SC PC+FGDSC PC+FGD+SNCR

USC PCUSC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-N

ozzle

gasif

ier)

IGCC (d

ry co

al pu

lveriz

ed)

SO2 Emissions(mg/Nm3)

400mg/Nm3

759mg/Nm3

38mg/Nm3 38mg/Nm3 38mg/Nm3

76mg/Nm3

2mg/Nm3

34

3.2 Environmental Performance (cont.)

NOx Emissions

0

50

100

150

200

250

300

350

400

450

500

Sub-cr

itical

PCSub

-critic

al PC+FGD

Sub-cr

itical

PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCR

USC PCUSC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-N

ozzle

gasif

ier)

IGCC (d

ry co

al pu

lveriz

ed)

NO

x Em

issi

ons (

mg/

Nm

3)450mg/Nm3

270mg/Nm3 250mg/Nm3240mg/Nm3

35


Particulate Matter Emissions

0

10

20

30

40

50

60

Sub-cr

itical

PCSub

-critic

al PC+FGD

Sub-cr

itical

PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCR

USC PCUSC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-N

ozzle

gasif

ier)

IGCC (d

ry co

al pu

lveriz

ed)

Parti

cula

te M

atte

r Em

issi

ons (

mg/

Nm

3)

50mg/Nm3

10mg/Nm3

40mg/Nm3

53mg/Nm3

36


CO2 Emissions

0100200300400500600700800900

1000

Sub-criti

cal PC

Sub-crit i

cal PC+FGD

Sub-crit i

cal PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCRUSC PC

USC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-Nozz

le gas

ifier)

IGCC (d

ry co

al pulv

erized

)

CO2

Emiss

ions

(g/k

Wh)

805g/kWh827g/kWh 786g/kWh 717g/kWh

715g/kWh

37

3.3 Economic Assessment

0100020003000400050006000700080009000

10000

Sub-criti

cal PC

Sub-criti

cal PC+FGD

Sub-criti

cal PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCRUSC PC

USC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-Nozz

le gas

ifier)

IGCC (d

ry co

al pulv

erized

)

capi

tal c

ost (

Yua

n/kW

)

Capital Cost (Yuan/kW)8823

7433

4566

4137

3942

3762

Capital Cost

(Yuan/kW)

10(CFB)

9(USC)

11(IGCC)

12(IGCC)

6(SC)

CASE

3(subcriti

cal)

38

3.3 Economic Assessment (cont.)

COE (Yuan/MWh)

200

250

300

350

400

450

Sub-cr

itical

PC

Sub-cr

itical

PC+FGD

Sub-cr

itical

PC+FGD+SNCR

SC PCSC PC+FGD

SC PC+FGD+SNCR

USC PCUSC PC+FGD

USC PC+FGD+SNCR

CFB

IGCC (M

ulti-N

ozzle

gasif

ier)

IGCC (d

ry co

al pu

lveriz

ed)

Yua

n/M

Wh

COE

COE (including charges for emitting pollutants)

39


COE (Yuan/MWh)

4.85 276.935.25 276.22

6(SC+FGD+flue

gas denitrification)

9.02

Cost of Pollutant control unit ( not

including charges for emitting pollutants)

272.08

264.47

COE including charges for

emitting pollutants

7.61

Cost of Pollutant control unit

(including charges for emitting pollutants)

270.97

261.95

COE not including

charges for emitting

pollutants

5(SC+FGD)

CASE

4(SC)

40


Impacts of Coal Price on COE (including charges for emitting pollutants, Yuan/MWh)

293.28

232.92

210.35

208.98

209.57

380

326.67

269.6

243.55

242.95

244.48

480

309.93 275.58 177.16 143.97 USC

PC+FGD+SNCR (case 9)

342.96 306.28 196.24 159.57 CFB (case 10)

259.89

175

174.66

280

360.06

276.93

279.39

580

393.45

310.9

314.3

680

226.5

141.02

139.75

180

IGCC (Multi-Nozzle Gasifier)

(case 11)

SC PC+FGD+SNCR

(case 6)

Price of Coal(Yuan/tonne )

SubcriticalPC+FGD+SNCR

(case 3)

41

3.4 Comparison of cost between the U.S. and China

ChinaU.S.

80.578

63.364

COE, $/MWh

48.0991 1813IGCC-GE1176

526 502

Capital Cost, $/kW

51.5

36.9 37.3

COE, $/MWh

1977

15751549

Capital Cost, $/kW

IGCC-Shell

Supercritical

Plant Type

Subcritical

Exchange rate: 7.5U.S. data source: Cost and Performance Baseline for Fossil Energy Plants, NETL, August 2007

42

4. Next Steps

43

Next Steps

Deployment policies (current & options)Electricity policies & pricingIGCC market demandPolicy recommendations for IGCCScenario analysis of coal power mix in 2020

44

5. Final Remarks

45

Final Remarks

Regarding emissions, PC plants coupled with pollution control technologies, CFB, and IGCC can meet the SO2, NOx and particulate matter emissions requirements of the Chinese government todayOnly levying charges for emitting pollutants is not enough to encourage power plants to install pollution control equipment

46

Final Remarks (cont.)

From the point of view of efficiency, SC and USC units are good choices for power industryThe cost of IGCC is much higher than that of other power generation technologiesIncentive policies are needed to deploy IGCC in China

47

Acknowledgement

William and Flora Hewlett FoundationBP Carbon Mitigation InitiativeBP Alternative Energythe Woods Hole Research CenterShell Exploration and ProductionPackard Foundation

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Thank you for your attention!

Welcome questions and comments!

[email protected]

Economic Assessment of Deploying Advanced Coal … Assessment of Deploying Advanced Coal Power...

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