The Future of Clean Thermal Technologies.pdf

E N E R G Y The Future of Clean Thermal Technologies Technology developments, key costs and the future outlook By Paul Breeze ii Paul Breeze Dr Paul Breeze has specialized in the electricity sector for the past 25 years. He is contributing editor for the monthly international magazine for the power industry, Modern Power Systems, and as freelance writer he has contributed to The Financial Times, The Guardian, The Daily Telegraph, The Observer and The Economist. In addition to the power sector, Paul Breezes interests include science and the computer industry. Copyright © 2009 Business Insights Ltd This Management Report is published by Business Insights Ltd. All rights reserved. Reproduction or redistribution of this Management Report in any form for any purpose is expressly prohibited without the prior consent of Business Insights Ltd. The views expressed in this Management Report are those of the publisher, not of Business Insights. Business Insights Ltd accepts no liability for the accuracy or completeness of the information, advice or comment contained in this Management Report nor for any actions taken in reliance thereon. While information, advice or comment is believed to be correct at the time of publication, no responsibility can be accepted by Business Insights Ltd for its completeness or accuracy iii Table of Contents The Future of Clean Thermal Technologies Executive summary 10 Introduction 10 Conventional coal-burning technologies 10 Advanced and zero-emission coal burning technologies 11 Gas burning power generation technologies 11 Carbon sequestration 12 Environmental and legislative issues 12 The economics of clean thermal technologies 13 The future of clean thermal technologies 13 Chapter 1 Introduction 16 Summary 16 The power sector and global warming 18 The report 20 Chapter 2 Conventional coal burning technologies 22 Introduction 22 Coal-fired power generation 24 Pulverized coal power plants 25 Fluidized bed power plants 28 Emission control 29 Dust and particulate material 29 Sulfur dioxide 30 Mercury 32 Nitrogen oxides 33 CO2 34 Emission limits 35 iv Chapter 3 Advanced and zero emission coal burning technologies 38 Introduction 38 Pre-combustion capture 39 Integrated gasification combined cycle 40 Oxyfuel combustion 41 Retrofitting and capture ready plants 42 Effects of carbon capture on plant performance 44 Chapter 4 Gas burning power generation technologies 48 Introduction 48 Generating power from natural gas 50 Gas-fired boilers 51 Gas reciprocating engines 52 Gas turbines 53 Combined cycle power plants 55 Advanced gas turbine cycles 56 Micro turbines 57 Fuel cells 57 Gas turbine emission control 59 Carbon monoxide 60 Unburned hydrocarbons 60 Particulate material 61 Sulfur dioxide and sulfur trioxide 61 Nitrogen oxides 61 Carbon capture 62 Chapter 5 Carbon sequestration 66 Introduction 66 The size of the problem 67 CO2 transportation 68 Carbon sequestration 70 Geological sequestration 71 Ocean sequestration 74 Risks 75 Monitoring and legislative issues 76 v Chapter 6 Environmental and legislative issues 78 Introduction 78 Emissions and emission limits 78 Carbon emissions 84 Cap-and-trade systems 85 Monitoring 86 Legislative issues associated with carbon sequestration 87 Chapter 7 Future outlook 90 Introduction 90 Capital costs of thermal power plants 91 The levelized cost of electricity 98 The cost of carbon 105 Chapter 8 The prospects for clean thermal technologies 108 Introduction 108 The growth in fossil fuel for power generation 109 The competitiveness of thermal power generation 116 Market opportunities 121 Index 125 vi List of Figures Figure 1.1: CO2 emissions by sector (GtCO2/y), 2005 and 2030 17 Figure 2.2: Coal-fired power generation in the OECD and non-OECD (PWh), 2006-2030 23 Figure 3.3: Efficiency of coal-fired plants with carbon capture (%) 45 Figure 4.4: Global power generation base on natural gas (PWh), 2006-2030 49 Figure 4.5: Gas-fired power plant efficiencies (%) 54 Figure 4.6: Typical gas turbine pollutant emissions (ppmV) 60 Figure 5.7: National power plant CO2 intensity (kgCO2/MWh) 67 Figure 5.8: Cost of transportation of CO2 by pipeline and sea ($/tCO2) 70 Figure 5.9: Potential global underground storage capacities (Gt CO2) 73 Figure 6.10: World Bank guidelines for emissions from power plants 80 Figure 6.11: Acid gas emissions in the CAIR region of the US (million tonnes), 1990-2030 82 Figure 7.12: Installed cost of thermal power generating capacity in the US (2007 $/kW) 92 Figure 7.13: Lazard capital cost comparison for thermal power generating capacity ($/kW) 94 Figure 7.14: Capital cost of adding flue gas cleanup to US coal-fired power plants ($/kW) 96 Figure 7.15: The predicted cost of a carbon capture and storage demonstration project in China (m) 97 Figure 7.16: Levelized cost of electricity for new capacity entering service in the US in 2016 ($/MWh) 99 Figure 7.17: Levelized cost in Nominal 2009$ of electricity from thermal power plants in California entering service in 2009 ($/MWh) 102 Figure 7.18: Levelized cost in Nominal 2018$ of electricity from thermal power plants in California entering service in 2018 ($/MWh) 103 Figure 7.19: Levelized cost of electricity from coal-fired power plants in the UK (£/MWh) 104 Figure 8.20: Proportion of global electricity generated by thermal power plants (%), 2006-2030 110 Figure 8.21: Global power generation based on coal and natural gas (PWh), 2006-2030 111 Figure 8.22: Global coal-fired generating capacity (GW), 2006-2030 113 Figure 8.23: Global natural gas-fired generating capacity (GW), 2006-2030 114 Figure 8.24: Global power generation growth to 2030 under the IEA's 450 scenario (GW) 116 Figure 8.25: Levelized cost comparison between thermal, nuclear and alternative technologies entering service in 2016 ($/MWh) 118 Figure 8.26: Levelized cost comparison for generating capacity in California ($/MWh) 120 Figure 8.27: Key thermal power plant and emission control market drivers and resistors 122 vii List of Tables Table 1.1: CO2 emissions by sector (GtCO2/y), 2005 and 2030 16 Table 2.2: Coal-fired power generation in the OECD and non-OECD (PWh), 2006-2030 23 Table 2.3: Typical pulverized coal fired power plant operating conditions and efficiency 26 Table 2.4: Comparison of wet and dry FGD 31 Table 3.5: Efficiency of coal-fired plants with carbon capture (%) 44 Table 4.6: Global power generation base on natural gas (PWh), 2006-2030 49 Table 4.7: Gas-fired power plant efficiencies (%) 53 Table 4.8: Typical gas turbine pollutant emissions (ppmV) 59 Table 5.9: National power plant CO2 emissions from ten largest emitters 67 Table 5.10: Cost of transportation of CO2 by pipeline and sea ($/tCO2) 69 Table 5.11: Potential global underground storage capacities (Gt CO2) 73 Table 6.12: Typical daily production from a 500MW coal-fired power plant 79 Table 6.13: Acid gas emissions in the CAIR region of the US (million tonnes), 1990-2030 81 Table 6.14: EU guidelines for power plant emissions 83 Table 7.15: Installed cost of thermal power generating capacity in the US (2007 $/kW) 91 Table 7.16: Lazard capital cost comparison for thermal power generating capacity ($/kW) 93 Table 7.17: Capital cost of adding flue gas cleanup to US coal-fired power plants ($/kW) 95 Table 7.18: The predicted cost of a carbon capture and storage demonstration project in China (m) 97 Table 7.19: Levelized cost of electricity for new capacity entering service in the US in 2016 ($/MWh) 99 Table 7.20: Levelized cost in Nominal 2009$ of electricity from thermal power plants in California entering service in 2009 ($/MWh) 101 Table 7.21: Levelized cost in Nominal 2018$ of electricity from thermal power plants in California entering service in 2018 ($/MWh) 103 Table 7.22: Levelized cost of electricity from coal-fired power plants in the UK (£/MWh) 104 Table 8.23: Proportion of global electricity generated by thermal power plants (%), 2006-2030 110 Table 8.24: Global power generation based on coal and natural gas (PWh), 2006-2030 111 Table 8.25: Global coal-fired generating capacity (GW), 2006-2030 112 Table 8.26: Global natural gas-fired generating capacity (GW), 2006-2030 114 Table 8.27: Global power generation growth to 2030 under the IEA's 450 scenario (GW) 115 Table 8.28: Levelized cost comparison between thermal, nuclear and alternative technologies entering service in 2016 ($/MWh) 117 Table 8.29: Levelized cost comparison for generating capacity in California ($/MWh) 119 8 9 Executive summary 10 Executive summary Introduction Thermal power plants burning fossil fuel account for over 50% of the electricity generated across the globe. Coal is the most popular fuel followed by natural gas and the power stations burning these fuels are the principle base load plants in many parts advanced of the world. Unfortunately these power plants are also a major source of CO2 emissions into the atmosphere, emissions which are now generally considered responsible for global warming. As a consequence far reaching legislation to control greenhouse gas emissions are likely to be introduced over the next decade. Such legislation will require the power industry to develop technology to capture and store CO2 emissions from power plants if it is to continue to flourish. Provided this can be achieved then fossil fuel combustion should be capable of continuing to supply electricity well into this century. Conventional coal-burning technologies Coal is the most important source of electricity in the world today and according to most assessments its use will continue to grow over the next two decades, particularly within the developed world. Conventional coal burning technology is based on pulverized coal power plants in which coal is burned in a boiler to raise steam to drive a steam turbine. These plants produce a range of pollutant emissions as well as large quantities of CO2. Modern technology has improved the efficiency of such plants significantly and further advances are expected. Meanwhile emission control technologies can now remove most of the controlled emissions. Removing CO2 from the exhaust gases of such a plant has yet to be developed but the techniques capable of achieving it exist. Demonstration projects are expected towards the middle of the second decade of this century. 11 Advanced and zero-emission coal burning technologies The conventional coal-fired power station offers the best current technology for utilizing coal to generate electricity but several alternatives exist that may offer a better future option when it comes to introducing zero, or more accurately near-zero thermal power plants. Three are being actively developed. They are coal gasification in which coal is converted into hydrogen which can then be burnt in a combustion boiler, another coal gasification technology in which the gasification process is tightly integrated with a gas turbine combined cycle plant and a process in which coal is burnt in pure oxygen rather than air. These techniques may have potential both for the construction of new coal-fired power stations with zero emissions and for retrofitting to older existing power plants to convert them into zero emission plants. If coal is converted into hydrogen then it may also be used in a fuel cell power plant instead of any type of combustion plant. Gas burning power generation technologies Natural gas produces less CO2 during combustion than coal for an equivalent energy output and is cleaner to burn too. As a consequence it has become one of the most popular fuel for base load power plants over the last decade, particularly among countries of the OECD. However large price fluctuations and security of supply issues have had some effect on its popularity. Even so, natural gas accounts for around one fifth of global electricity production. While gas may be burned in a variety of different types of plant to generate electricity including boilers and reciprocating engines, the most popular method today is to use it to fuel a gas turbine combined cycle power plant. These plants can achieve higher efficiency than current coal-fired power plants. Though emissions from natural gas fired power plants are generally lower than from coal plants, the former do generate significant amounts of nitrogen oxides which must be removed from the exhaust gases. Regulations controlling the release of CO2 will also apply to gas-fired plants in the future and like coal plants, they will have to adopt measures to capture and store the gas. 12 Carbon sequestration Being able to capture the CO2 produced during the combustion of coal and natural gas is one part of the solution to prevent it entering the atmosphere. The other is to find a way of storing the gas after it has been captured. This is the problem of carbon sequestration. Around 25% of global CO2 emissions arise from power plants so the size of the problem facing the industry is significant. A number of different ways of storing the gas are being explored. Most involve some form of underground storage, either in spent oil and gas fields or is special geological formations that are believed to be able to hold the gas secure. It would also be theoretically possible to store the gas within the world's oceans but this may raise some complex environmental problems of its own. Environmental and legislative issues The emission of a variety of airborne products of the combustion of coal and natural gas are controlled in many parts of the world. These include sulfur dioxide, nitrogen oxides, dust, toxic metals including mercury and organic compounds. Legal emission limits vary from place to place and in some countries there are no specific limits, in which case new power plants will normally be expected to meet World Bank guidelines. Emission control regimes vary too, with absolute levels specified in some regions and for some pollutants while others are controlled by cap-and-trade systems which put a limit on the total amount of a pollutant that can be released across a geographic area. CO2 emissions are beginning to be controlled with a major cap-and- trade system now in place across the European Union. Controls in other parts of the world are anticipated. 13 The economics of clean thermal technologies Thermal power plants burning coal or natural gas are among the most competitive for base load electricity generation. The addition of emission control technologies will increase the capital cost of both but the cost rises more for a coal-fired plant because it produce more pollutants. When carbon capture and sequestration is added, the capital cost of these plants rises further still with the coal plant costs again rising more since it produces more CO2 for each unit of electricity than the gas fired plant. Coal plants both without and with emission control and carbon capture are more expensive than gas- fired plants but the cost of gas is higher than the cost of coal and the relative economics of the two depends cri