BUEC 663 – NRE Capstone
Clean Coal Technology Transfer to China
and India
Prof: Joseph Doucet
By: Sukhraj Batoo
Submitted: April 12th 2007
TABLE OF CONTENTS
EXECUTIVE SUMMARY .............................................................................................. 3
INTRODUCTION ............................................................................................................ 6
WHAT IS COAL? ............................................................................................................ 6
COAL TYPES .................................................................................................................... 6
GLOBAL COAL RESERVES......................................................................................... 7
COAL CONSUMPTION AND PROJECTED DEMAND............................................ 8
CONVENTIONAL COAL TECHNOLOGY............................................................... 10
ENVIRONMENTAL IMPACTS OF CONVENTIONAL COAL TECHNOLOGY ............................ 11
DEVELOPMENT OF CLEAN COAL TECHNOLOGY........................................... 12
COAL WASHING ............................................................................................................. 13
EFFICIENCY IMPROVEMENTS TO PC FIRED PLANTS ....................................................... 14
ADVANCED COMBUSTION TECHNOLOGY ....................................................................... 15
FBC ........................................................................................................................... 15
IGCC ......................................................................................................................... 16
CO2 CAPTURE AND STORAGE................................................................................. 17
CURRENT COAL TECHNOLOGY IN INDIA AND CHINA.................................. 19
CHINA ............................................................................................................................ 19
INDIA ............................................................................................................................. 20
REGIONAL ISSUES AND BARRIERS....................................................................... 21
CHINA ............................................................................................................................ 21
INDIA ............................................................................................................................. 23
RECOMMENDATIONS................................................................................................ 26
CHINA ............................................................................................................................ 26
INDIA ............................................................................................................................. 28
CONCLUSION ............................................................................................................... 31
REFERENCES................................................................................................................ 33
WEBPAGES ..................................................................................................................... 34
APPENDIX A.................................................................................................................. 38
Executive Summary
Coal is an abundant source of non-renewable fuel across the world, but the quality of coal
varies significantly by region. Demand for coal has increased significantly over the past
30 years. This trend is expected to continue at an even faster rate in upcoming years, with
most of the rise in demand coming from China and India. The increase in coal
consumption stems mainly from the need for more electricity in both of these countries.
India and China primarily make use of pulverized coal (PC) technology in order to
generate electricity. Some of the main reasons for this are, the low cost and short
construction time necessary to build these plants. In addition to this, PC technology is
mature and thus does not present any unforeseen operating challenges. The problem with
this type of technology, however, is the negative impact it has on the environment.
Emissions from these plants contribute to local pollution problems such as: acid rain,
increased ground-level ozone levels and smog. Both countries already suffer from poor
air quality and increases in coal consumption will only make things worse. China and
India have some of the most polluted cities in the world and to make matters worse, more
and more people are starting to suffer from respiratory diseases.
The implementation of clean coal technology (CCT) can help enormously towards
curbing pollution and green house gas emissions. However, many of these technologies
are still under development. Furthermore, most of the research and development (R&D)
in CCT is being carried out by developed countries, such as the United States. This is
mainly due to the high costs associated with the R&D of CCTs such as Integrated
Gasification Combined Cycle (IGCC) and Fluidized Bed Technology (FBC). Countries
such as India and China do not have adequate funds to sustain initiatives of this scale.
Nevertheless, India has started to build a few pilot plants that make use of supercritical
and IGCC technology. China is a little further ahead of India in its quest to acquire CCT,
since it already has coal plants that employ supercritical and ultra supercritical coal
technology in operation. However, neither country has a full scale coal power plant that
makes use of either FBC or IGCC technology, nor do they have a full scale power plant
that makes use of carbon capture and sequestration (CCS) technology.
It is important to note that regional specific issues hamper the rapid development and
implementation of CCT and CCS in India and China. FBC and IGCC technology may
become broadly competitive with PC plants under a CO2-restricted scenario. Currently,
power plant operators in these two countries do not have adequate economic incentive to
invest R&D dollars in IGCC and FBC advancement. Similarly, power companies are not
likely to pay the premium to install today's CCT designs in the absence of clear
regulatory direction on CO2, SO2 and NOX emissions.
Poor environmental standards and enforcement is a major problem in both countries.
Also, limited funding makes it difficult to build plants that make use of CCT because
they are relatively more expensive when compared to PC technology. Private investment
could help alleviate this issue to some extent, yet both countries struggle to encourage
foreign direct investment. Issues such as weak intellectual property rights and perceived
political risk are two factors that could be impeding both local and foreign investment.
Governments in both countries need to make moves to help facilitate the development
and implementation of CCT and CCS. One strategy that needs to be employed is the
implementation of stringent environmental regulations and policies that are enforced.
Governments in both countries also need to encourage the transfer of technology, which
involves more than simply acquiring equipment. It involves the sharing of information
and technical know-how. Also, collaborative efforts with developed countries need to be
put in place to encourage joint R&D projects. This helps researchers in different countries
share ideas and findings.
International agencies, such as the Asian Development Bank and the World Bank, need
to continue to apply pressure on India and China to build plants that use CCT. They can
accomplish this, by making it mandatory for any new coal fired power plant to make use
of CCT, whenever their funds are used to build it.
China and India have abundant reserves of coal and they will, without a doubt, continue
to use coal to provide electricity to their citizens. Putting the above recommendations into
place could help China and India accelerate the rate at which they build power plants
equipped with CCT. This in turn, would help these countries reduce the environmental
issues associated with coal.
Introduction
Coal is an abundant and cheap source of non-renewable fuel. It is also the fuel of choice
in rapidly industrializing countries, such as India and China. In North America, however,
the polluting nature of coal has made it a less favorable choice. Nevertheless, a lot of
research and development is being done in industrialized countries to ensure coal can be
used with minimal detriment to the environment. This paper looks at clean coal
technologies that are being developed in North America and whether these technologies
can be used to help developing countries, such as India and China.
What is Coal?
Coal is a fossil fuel, which is made up of the following elements, namely: carbon,
hydrogen and oxygen. Coal is formed when vegetation is consolidated between layers of
rock and subjected to the effects of pressure and temperature over millions of years.1
Coal Types
Quality and geological characteristics of coal deposits are important parameters for coal
reserves. Coal is a heterogeneous source of energy, with quality (e.g., characteristics such
as heat, sulfur, and ash content) varying significantly by region. The level of carbon or
energy content of coal and the amount of moisture content is used to determine the rank
of coal. Low rank coals typically have high moisture content and low energy content.
Hard coal, on the other hand, has low moisture and high energy content.2
1
Coal Association of Canada , About Coal,
http://www.coal.ca/content/index.php?option=com_content&task=category&sectionid=11&id=29&Itemid
=40
2
World Coal Institute, Coal Types, http://www.worldcoal.org/pages/content/index.asp?PageID=91
Lignite and sub-bituminous coals are examples of low rank coals. The typical
characteristics of this kind of coal are that it is usually soft and friable. High rank coals on
the other hand are typically hard and strong. Anthracite has the highest rank in this
category followed by bituminous coal.
Global Coal Reserves
Coal reserves are abundant and widely distributed around the world. Globally there is an
estimated 1,001 billion tons of coal that is recoverable. Official Energy Statistics, from
the U.S. government, indicate that at current consumption rates, coal reserves will last
about 180 years.3 Table 1 shows a breakdown of the global coal reserves by coal type
and region.
Table 1. Breakdown of Global Coal Reserves by region and coal type
3
Energy Information Administration, http://www.eia.doe.gov/oiaf/ieo/coal.html
Table 1 indicates that coal reserves on a tonnage basis are made up of the following:
anthracite and bituminous coal account for 53 percent of the world’s estimated
recoverable coal reserves, sub bituminous coal accounts for 30 percent, and lignite
accounts for 17 percent. The table above also shows that the United States, Russia, China
and India have the largest four coal reserves worldwide. Combined together they account
for 67 percent of the world’s recoverable reserves. It is, therefore, not a surprise that the
United States, China and India were found to be the three major producers of coal
worldwide in 2003, as shown in Figure 1.
Figure 1. Top Ten Coal Producing Countries in 2003
Coal Consumption and Projected Demand
Demand for coal has grown by 62% over the past thirty years.4 According to a report by
Beyond Petroleum (BP) in 2006, coal has been the world’s fastest growing fuel, with
global consumption rising by 5%, or twice the 10-year average. The world currently
4
World Coal Perspectives to 2030, World Energy Council, Geneva/London
relies on coal for 40% of its electricity and 66% of its steel production.5 Currently, Asia is
the biggest market for coal and it accounts for 56% of global coal consumption. Figure 2
shows the top ten coal consuming countries in 2003.
Figure 2. Top Ten Consumers of Coal in 2003
In 2003, the United States consumed about 900 million tons of coal. Over 90 percent of
the coal used in the United States is used to generate electricity.6 The United States relies
heavily on coal for electricity generation, and this trend is likely to continue.
Nevertheless, the increase in the demand for coal in North America is forecasted to be
relatively slow, when compared to that of Asia’s, due to the availability of other cleaner
burning energy sources such as natural gas.
In China, the major coal-consuming sectors are power stations, which accounted for 50%
of total consumption in 2001, the iron and steel industry with a 15% share, and other
5
6
World Coal Institute, http://www.worldcoal.org/pages/content/index.asp?PageID=95
Energy Kids Page, http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/coal.html#uses
industrial users with account for 17%.7 80% of China's electricity comes from coal.8
Also, China is one of the world’s largest producers of steel and pig iron. Coal demand in
this sector is expected to nearly triple from 2003 to 2030.9
Coal is also an important source of energy for electricity generation in India. In India,
about 70% of the electricity generated comes from coal.10 In addition to this, steel,
cement, fertilizer, chemical, paper and many other medium and small-scale industries
make use of coal.11
China and India, with their booming economies, large populations and substantial coal
reserves are forecasted to experience the largest increase in demand for coal in the
upcoming years. Much of this increase stems from the need to generate more electricity.
Together they are expected to account for 70% of the projected increase in global coal
consumption. 12
Conventional Coal Technology
Conventional coal technology involves pulverizing coal to a fine powder and then
burning it. This type of technology is primarily used for the generation of electricity.13
Over 90% of existing coal plants use pulverized coal (PC) technology and the vast
majority of these employ sub critical reactor designs.14 Standard subcritical combustion
7
World Energy Council, http://www.worldenergy.org/wec-geis/publications/reports/ser04/countries.asp
BBC news, http://news.bbc.co.uk/2/hi/programmes/newsnight/4330469.stm
9
Energy Information Administration , http://www.eia.doe.gov/oiaf/ieo/coal.html
10
World Energy Council, http://www.worldenergy.org/wecgeis/publications/default/tech_papers/17th_congress/2_3_28.asp
11
World Energy Council, http://www.worldenergy.org/wec-geis/publications/reports/ser04/countries.asp
12
Energy Information Administration, http://www.eia.doe.gov/oiaf/ieo/coal.html
13
CaseStudy- Clean Coal Technologies by Cedric Philibert and Jacek Podkanshi, IEA 28-Apr-2005
14
Booras, George and Neville Holt. “Pulverized Coal and IGCC Plant Cost and Performance Estimates.”
Electric Power Research Institute presentation at the Annual Gasification Technologies Conference,
Washington, D.C., October 4-6, 2004.
8
usually operates at 1000°F, and can reach total efficiencies of 35-37%.
15
Power plants
generate electricity by burning coal to make steam. The steam produced is then used to
turn turbines, which generate electricity.
Environmental Impacts of Conventional Coal technology
There is a downfall to conventional coal technology, especially in terms of its impact on
the environment. Coal combustion emits particulates, sulphur dioxides, nitrogen oxides,
mercury and other metals. These emissions contribute to local pollution problems such
as: acid rain, increased ground-level ozone levels and smog. Major cities in China are
already some of the most polluted, largely due to the high rates of coal use.
There are also global ramifications. According to China's submission to the UN, it
emitted 2.6 billion tonnes of carbon dioxide, 34.3 million tonnes of methane and 850,000
tonnes of nitrous oxide in 1994.16 China, the world's second-largest polluter behind the
U.S., increased its emissions by 33 percent and India by 57 percent between 1992 and
2002.17 China now represents 15% of the world’s carbon dioxide emissions and coal is
responsible for 80% of this. China’s expected increase in coal usage is expected to raise
sulphur dioxide emissions from power plants from 8.5 million tonnes in 1995 to 21
million tonnes in 2015.
15
Coal Technology Options: Costs, Emissions and Experience for Electricity Generation in a CarbonConstrained World, NRDC Feb 13, 2006
16
China is second biggest greenhouse gas emitter,
http://www.scidev.net/news/index.cfm?fuseaction=readnews&itemid=1761&language=1
17
China, India Pollution Rises as Economies Grow, World Bank Says, Bloomberg
http://www.bloomberg.com/apps/news?pid=10000080&sid=aBDx6BzoRJJk&refer=asia
India, like China, is heavily reliant on coal-fired power plants for its electricity
generation. Surprisingly enough, India’s Central Pollution Control Board has been slow
to set sulfur dioxide (SO2) emissions limits for coal-fired power plants. Currently, there
are also no emissions limits for nitrogen oxide (NOx) in India.18
According to the World Bank, China and India recorded increases in carbon dioxide
output that contributed to emissions worldwide rising by 15% between 1992 and 2002.
These countries have also seen a rise in pollutants causing climate change.19 The absolute
increase in emissions from both of these countries will partially be a function of the
degree to which coal is relied upon as a major energy source in the future. The
International Energy Agency estimates that China and India will account for nearly half
of the total world coal demand by 2030, up from 40% in 2003. These developing
countries, therefore, need to find cleaner ways to use coal in order to avert dire
environmental consequences.
Development of Clean Coal Technology
Clean coal technology is a term used to describe various technologies that can be
employed to reduce the environmental impacts associated with the use of coal. The
United States is a front-runner in the research and development of such technologies. The
U.S. interest in coal stems in part from concerns about energy security and the fact that it
has huge coal reserves. In addition to this, rising legislative pressures have pushed the
U.S. government to invest in the research of cleaner coal technologies. Technologies
18
India: Environmental Issues, http://www.eia.doe.gov/emeu/cabs/indiaenv.html
China, India Pollution Rises as Economies Grow, World Bank Says, Bloomberg
http://www.bloomberg.com/apps/news?pid=10000080&sid=aBDx6BzoRJJk&refer=asia
19
have also been developed to remove, or prevent the formation, of SO2, NOx and
particulates when coal is burned at conventional PC power stations.
Coal Washing
Due to growing environmental concerns, processes such as coal washing have been
added onto conventional coal power plants to help curb NOx and SOx emissions. Coal
washing helps in the removal of minerals in raw coal before it is combusted. Figure 3
shows a schematic of the coal washing process.
Figure 3. Coal Washing Process Diagram20
Washing coal generally describes a water based process where the denser material (rocks
and high ash coal particles) is separated and removed from coal. Coal washing involves
grinding coal into smaller pieces and passing it through a process called gravity
separation.21 The process involves feeding the coal into barrels containing a fluid that has
a density which causes the coal to float, while unwanted material sinks and is removed
from the fuel mix. The product from this process, cleaned or washed coal, has less ash
and more moisture than the raw coal product. The coal is then pulverized and prepared
for burning.
20
21
BBC news, Clean Coal technology, http://news.bbc.co.uk/1/hi/sci/tech/4468076.stm
BBC news, Clean Coal technology, http://news.bbc.co.uk/1/hi/sci/tech/4468076.stm
This process reduces the amount of ash in raw coal to facilitate combustion and increase
the energy content per tonne. It also helps to curb SO2 emissions and increase thermal
efficiencies, which also leads to lower CO2 emissions. Coal washing is quite widespread
around the world. India washes only about 16 per cent of its coal production.22 By law, in
China, every coal mine must have a washing facility—but only around 30 percent of
China's coal is properly rinsed of ash (which adds to pollution) and tailings (that reduce
energy efficiency).23 However, enforcement of these regulations is poor.
Efficiency Improvements to PC Fired Plants
Conventional sub-critical PC fired generation has improved significantly in its efficiency
(38%-40%) and this has also helped towards reducing emissions. However, supercritical
and ultra-supercritical plants offer even higher efficiencies. Table 2 shows a comparison
between the performance and emissions from both subcritical and supercritical coal
plants.
Table 2. Comparison between subcritical and supercritical plants24
22
The Hindu Business Line, Ministry working on plan for clean coal,
http://www.thehindubusinessline.com/2003/07/25/stories/2003072500210900.htm
23
Newsweek International Edition, The Coal Trap,
http://www.msnbc.msn.com/id/16500200/site/newsweek/page/3
24
World Energy Council, 18th Congress, Buenos Aires, October 2001 – Clean Power Generation
Technologies
Supercritical combustion operates above the so-called “critical point”, which involves
operating at a pressure and temperature where it is difficult to distinguish between the
liquid state and gaseous state (operating temperature and pressure above 705 °F (374 °C)
and 3,212 psia (22.1 MPa) respectively)25. In this mode of operation, there is a more
effective heat transfer from coal to the supercritical steam being produced. These types of
reactors usually achieve efficiencies around 40-42%. More than 400 supercritical plants
are in operation worldwide, including a number in developing countries.
Ultra-supercritical plants simply run their operation at even higher temperatures and
pressures when compared to supercritical plants. There efficiencies are supposed to be in
the range of 46-48%. However, not many of these types of plants exist.
Advanced Combustion Technology
Advanced combustion technologies are emerging and starting to gain increasing
attention. They offer an alternative approach to conventional emission abatement
measures, such as coal washing. These technologies stemmed from poor conventional
coal practices, increased environmental awareness and growing global energy demands.
The two main types of advanced combustion technologies are: Fluidized-Bed combustion
(FBC) and Integrated Gasification Combined Cycle (IGCC).
FBC
Fluidized beds suspend solid fuels on upward-blowing jets of air during combustion. The
result is a turbulent mixing of gas and solids. The tumbling action, much like a bubbling
fluid, provides more effective chemical reactions and heat transfer. FBC has good fuel
25
Wikipedia the Free Encyclopedia, Fossil Fule Power Plant,
http://en.wikipedia.org/wiki/Fossil_fuel_power_plant#Supercritical_steam_plants
flexibility and lower emissions compared to conventional combustion systems.26 FBC at
atmospheric pressure can be particularly useful for high ash coals, and/or those with
variable characteristics. Pulverized coal is mixed with limestone and fired at relatively
low temperatures in a process resembling a boiling fluid. This process reduces emissions
of SO2 and NOx by the controlled combustion of crushed coal in a bed fluidized with jets
of air. Around 90% of the sulphur can be removed as a solid compound with the ash.
FBCs operate at a much lower temperature than conventional pulverized coal boilers,
greatly reducing the amount of thermal NOx formed.27 One current advantage of FBC is
that its operating experience is greater than that of gasification technologies.
IGCC
IGCC gasification of coal is a cleaner alternative to coal fired power plants. In IGCC
systems, coal is gasified by making it react with oxygen at a high temperature to form a
syngas. The syngas is a mixture composed primarily of hydrogen, carbon monoxide and
other gaseous constituents. The syngas is then treated for the removal of hydrogen
sulphide, ammonia and particulate matter. It is then burned in a gas turbine to generate
electricity which in turn is used to produce steam to power a steam turbine. Residual heat
in the exhaust gas from the gas turbine is recovered in a heat recovery boiler as steam,
which can be used to produce additional electricity in a steam turbine generator. This
dual system is commonly known as a combined cycle, which allows for a more efficient
process of generation. This higher efficiency leads to an increase in financial savings, as
well as reduces the waste of coal resources. Figure 4 is a schematic showing the process
involved.
26
27
IEA Clean Coal Centre - NEWS July 2006, http://www.iea-coal.org.uk/content/default.asp?PageId=749
CaseStudy- Clean Coal Technologies by Cedric Philibert and Jacek Podkanshi, IEA 28-Apr-2005
Figure 4. IGCC process28
IGCC systems are among the cleanest and most efficient of the emerging clean coal
technologies: sulphur, nitrogen compounds, and particulates are removed before the gas
is burned in the gas turbine and thermal efficiencies of over 50% are likely in the future.
Coal-fueled IGCC plants currently exist in Europe and the United States. One IGCC plant
started up in 1993 in Buggenum, Netherlands, with an electrical output of 250 megawatts
(MW). A similar plant in Puertollano, Spain, uses a mixture of coal and petroleum coke
and has an output of 320 MW. In the United States, Polk Power Station in Polk County,
Florida has an output of 250 MW, while the Wabash River plant in Terre Haute, Indiana,
has an output of 262 MW. Currently, IGCC technology is considered to be the most
effective means for eliminating coal-plant CO2 emissions.
CO2 Capture and Storage
Efficiency improvements in coal fired power plants will definitely help towards lowering
CO2 emissions; however, further steps are necessary in order to make significant
reductions in CO2 emissions. Carbon dioxide capture and storage (CCS) offers a longer
28
BBC news, Clean Coal technology, http://news.bbc.co.uk/2/hi/science/nature/4468076.stm
term option for achieving near zero CO2 emissions. These technologies basically involve
stripping out CO2 from the exhaust streams of coal combustion or gasification processes
and geologically disposing of it so that it does not enter the atmosphere.
Some of the technologies that can be used for CO2 capture are pre-combustion capture,
oxyfuel combustion and chemical looping combustion. The first method is feasible if it is
used in conjunction with a modified IGCC plant where hydrogen is produced along with
CO2 rather than carbon monoxide. The hydrogen is then combusted in a gas turbine and
the CO2 is captured for storage. The second, oxyfuel combustion, basically involves
burning coal in an oxygen-rich process environment to land up producing CO2. Last but
not the least; the third method involves indirectly combusting coal via chemical looping.
An air fired boiler uses a continuously looping solid oxygen carrier to oxidize the fuel
into water and CO2.29
Although the concept of capturing green house gas (GHG) emissions sounds like a new
idea, in reality it isn’t. Canadian firms, for instance, injected nearly 200 million cubic
meters of acid gas, comprising of CO2 and H2S, into more than 30 locations in 2001.30
The Intergovernmental Panel on Climate Change (IPCC) recently stated in 2005 “that
most existing CCS technologies are mature or economically feasible under specific
conditions and that CCS could contribute 15-55% to the cumulative mitigation effort
worldwide until 2100, averaged over a range of baseline scenarios”. However, none of
these commercial applications were built for large power plants, and scaling them up is
29
IPCC Special Report on Carbon Dioxide Capture and Storage (2005), Chapter 3
http://arch.rivm.nl/env/int/ipcc/pages_media/SRCCS-final/SRCCS_Chapter3.pdf
30
Herzog, H.J. and D. Golomb, “Carbon Capture and Storage from Fossil Fuel Use,” in C.J. Cleveland
(ed.), Encyclopedia of Energy, Elsevier Science Inc., New York, pp 277-287, 2004.
both expensive and energy intensive.31 Table 3 shows the different phases that carbon
capture is currently in.
Table 3. Development stage of Carbon Capture Technology.32
Several projects are now underway to push this technology ahead in countries such as
Australia, Canada, Germany, the UK, and the USA. One such example is the FutureGen
project, which is a $1 billion (USD) public-private partnership that was set up to build a
coal fueled IGCC plant with both CO2 separation and geological storage capability.33
Current Coal technology in India and China
China
In China, the coal-fired capacity mix is mostly comprised of PC fired plants, the majority
of which are 100 MWe and 200-300 MWe units with sub-critical steam cycles.34
Currently, there is a trend towards building new, larger PC units that have higher
efficiencies, while very small and inefficient units are being closed down. In China,
31
CaseStudy- Clean Coal Technologies by Cedric Philibert and Jacek Podkanshi, IEA 28-Apr-2005
Carbon Capture and Storage, November 02, 2005,
http://climatechangeaction.blogspot.com/2005/11/carbon-capture-and-storage-whats-that.html
33
World Coal Institute, CCS projects, http://www.worldcoal.org/assets_cm/files/PDF/ccs_projects.pdf
34
Energia,, Coal in China, http://www.caer.uky.edu/energeia/PDF/vol16_5.pdf
32
supercritical coal fired power plants can be considered to be relatively new when
compared to PC fired ones. It wasn’t till the early 90s that a 2x600MW unit in
Shidongkou was put into operation.35 A total of 10 supercritical units were in operation
in 2003. In addition to this, it was only last year that one Chinese company put in a
1,000-megawatt ultra-supercritical coal-fired generating plant into commercial use, which
was the first of its kind in China.36 However, when it comes to IGCC technology, Du
Minghua, a director for coal chemistry at the Chinese Coal Research Institute, predicts
that it will be 2020 before this technology comes into commercial use.37
India
India currently makes use of conventional sub-critical PC technologies, and most of these
plants operate with low conversion efficiencies of coal to electricity. However, many of
these old existing plants will soon be due for retirement. New investments in new
capacities are presenting India with the opportunity to try new advanced technologies.
For example, the first phase construction of a supercritical Thermal Power Plant involves
building three 660MW power stations in Sipat, Chhattisgarh, and is due to be completed
in early 2009.38 There are also plans for a further 20 GWe of supercritical capacity. In
addition to this, there is an air blown pressurized fluidised bed gasification unit, which is
based on IGCC technology that is currently being worked on in Tiruchinapalli. Currently,
the facility has had a runtime that now exceeds 4000 hours .There are plans to scale up
35
World Bank, http://www.worldbank.org/html/fpd/em/supercritical/supercritical.htm
China Daily, 2007-02-02, China Huaneng plans to power up new capacity
37
Technology Review, China’s Coal Future, Friday, Jan 05 2007,
http://www.technologyreview.com/Energy/17964/page2/
38
Doosan Group Newsroom,
http://www.doosan.com/english/news/read.php?code=Neng_News&id=118&vnum=117&cpage=1&key=&
val=
36
the process with the construction of another demonstration plant in Aurva, Uttar Pradesh.
39
Thus, India and China are both spearheading efforts to increase the use of CCT. This
could potentially help both countries curb their emissions to the environment and also
allow them to make more efficient use of their coal resources.
Regional Issues and Barriers
The exponential growth of some developing countries poses a problem to national
governments. Governments seem to find themselves split between having to make the
tough choice between rapidly increasing the standard of living by providing cheap
electricity to its citizens or recovering full costs in major capital investments. In addition
to this dilemma, perceived political risk in developing countries makes it unattractive for
outside investors to make large, fixed, capital investments in one country.40 These are
some of the general issues that governments in the developing world are facing; however,
each country has specific issues that it needs to tackle. This report will now look at some
of the issues that are specific to China and India and then offers recommendations on
how to potentially overcome some of these issues.
China
Since the early 80s, the United States has invested heavily in research and development
of CCTs. During this same period, China did not share the same level of interest in
developing these technologies mainly because they were expensive, unproven and
39
E-coal, A Focus on India, http://www.worldcoal.org/assets_cm/files/PDF/ecoal_focus_on_india.pdf
Clean Coal Technology Deployment from today into the Next millennium, Lawrence T. Papay, Bechtel
Technology and Consulting San Francisco, California,
http://www.netl.doe.gov/publications/proceedings/97/97cct/cct_pdf/97CCPOP4.PDF
40
required a lot of investment to research and develop. As a result, most of the coal fired
plants that have been built in China are sub-critical and powered by PC technology.
Over the past few years however, China has found itself in a different scenario altogether.
Its economy has been growing at a phenomenal rate and its appetite for coal fired
powered plants has grown tremendously. Most of the plants being built, however, are PC
powered. The norms and standards for these types of plants are usually less stringent than
those in OECD countries, but they are reviewed and tightened when the government
deems it necessary. The problem lies in the fact that they still have little impact because
proper monitoring equipment is not available and this is due to poor enforcement.41 The
Chinese population, however, is starting to become increasingly concerned about
environmental affairs and wants the government to put measures in place to mitigate
pollution, as it is starting to cause all sorts of health ailments in China.
Consequently, China is now eager to adopt CCTs. The development and implementation
of CCTs, however, requires considerable investment. China, like most developing
countries, has limited investment reserves, which will no doubt slow down the rate of
development, introduction and use of CCTs. In 1999, the Nautilus Institute noticed that
“many of the new plants being built by the local governments are in unit sizes of 50MW
or less. The main reason is that these small units are easier to finance.”42 As a result, most
of the new plants that are being built continue to be small sub-critical PC powered plants.
41
Watson, Jim and Geoffrey Oldham, 1999. International Perspectives on Clean Coal Technology Transfer
to China. First Report to the Working Group on Trade and Environment, China Council for International
Cooperation on Environment and Development
42
Nautilus Institute, 1999, Financing Clean Coal technologies in China. Background paper for ESENA
Workshop: Innovative Financing for Clean Coal in China: A GEF technology Risk Guarantee? Berkley,
CA
As mentioned earlier in the report, IGCC technology is often regarded as the best
technology when it comes to reducing emissions and increasing efficiency. The main
barriers of using this technology, in China, are that the “cost and risk” disadvantages are
substantially higher in China when compared to developed countries. According to the
Nautilus Institute, in 1999, “the average cost of power generation from an IGCC plant
would be 32% higher than power from a PC plant and the overall risk factor would be
23% greater” in China.43
Countries such as Canada and the United Kingdom are currently trying to find ways to
curb their CO2 emissions so as to reduce its impact on climate change. In China, it is
deemed important to acquire and implement CCS technology, but a lot of work has not
been done in this area. Li, deputy director with the Administrative Centre for China's
Agenda 21, admits the technology is not a priority area of development for China, though
it may play a role in the future when China, a signatory of the Kyoto Protocol, has to
shoulder more responsibility for emissions reduction.44
India
One main issue that India’s electricity sector faces is the very poor quality of coal
delivered to power plants. Indian coal has very high level of ash content varying between
35 to 50 percent by weight (IEA, 2000). Consequently, future technology choices might
43
Nautilus Institute, 1999, Financing Clean Coal technologies in China. Background paper for ESENA
Workshop: Innovative Financing for Clean Coal in China: A GEF technology Risk Guarantee? Berkley,
CA, 27-28 February
44
China, UK ink carbon capture technology deal, December 22, 2005
http://english.people.com.cn/200512/22/eng20051222_230016.html
be constrained by the quality of domestic coal. The fact that there is very little washing of
coal simply exacerbates the issue.45
Another problem this sector faces is the astoundingly level of losses that it incurs due to
commercial theft, non-billing, and poor metering.46 This issue needs to be dealt with in
order to ensure future profitability of the industry. Resolving this issue could be a quick
win to help reduce the financial woes of the Indian power industry.
When it comes to the electricity industry in India, almost 60 percent of the generation
capacity is owned and managed by state level utilities and a third of the capacity is owned
by two federally owned and managed utilities (IEA, 2000). The performance of the
National Thermal Power Corporation plants, which are federally owned, are known to be
better than those belonging to state level utilities primarily due to more efficient
operation and management practices.48 State managed facilities, on the other hand, can
barely cover their operating costs. It is not unusual to see investment-strapped plants stay
in operation beyond their operating lives, leading to poor plant efficiencies and high
emissions. Therefore, without increased private or federal investment, it is quite likely
that the condition of the industry will continue to deteriorate.
Currently, private and foreign participation in the electricity industry remains limited
with a capacity ownership of around 9 percent of India’s total installed capacity (IEA,
45
Recent information from the Ministry of Coal in India, the government department in charge of matters
related to coal, reports existence of five washeries for non-coking coal with an aggregate raw coal handling
capacity of 17 MT (http://coal.nic.in/)
46
Estimates show that out of the total power generated, about 55 percent is billed and out of that only 41
percent is realized (Tongia, 2003).
48
State owned enterprises that dominate the electricity industry collectively lose 5 billion dollars per year,
which is over one percent of the GDP. The losses would be higher if one does not account for the
government subsidies of roughly two billion dollars from the state governments a well as myriad of cross
subsidies, grants, and loans. (Tongia, 2003).
2000).The limited private and foreign investment in this sector has contributed to issues
of limited funding and stunted technological innovation. Private investment in the power
sector, both domestic and foreign, depends highly on power sector reform. Policy and
regulatory reform, relating to user charges, reduction of theft and private entry into
distribution are a pre-requisite for increased private investment.49
When it comes to environmental issues, India’s coal-based plants lack performance
standards and have inadequate environmental regulations. There are no current
regulations on NOX emissions or SO2 emissions from power plants. Currently, statutory
environmental requirements for new power projects in India as well as regulations for
existing projects are considerably less stringent than in the majority of the developed
economies, and even in some developing economies.50 Therefore, stringent
environmental laws need to be put in place and enforced. These regulations will motivate
power plant owners to explore ways to make their plants more environmentally friendly
and to consider adopting CCTs.
When it comes to investment in CCT, only the federally owned entity, NTPC, has
undertaken efforts for technological advancement. The majority of the power plant
owners, i.e. the state level utilities, have had limited participation in this area. In order to
ensure CCT is adopted by most power plants owners, it is important that research and
development be undertaken as a coordinated effort. Stringent environmental policy is also
required, in order to motivate companies to adopt CCT rather than simply replicate
current technology that is in use.
49
50
Planning Commission, Government of India, 2002. Foreign Investment, India. Pg.50
Couch, G.R., 1999. Non-OECD Coal-Fired Power Generation—Trends in the 1990s. IEA Coal
Research, London. 30 October–3 November 2000.
Coal combustion accounts for 40% of total CO2 emissions in India. Given that 70% of
the coal consumed in the country is used for power generation, reduction of CO2
emissions will significantly impact coal powered plants. However, the nature and timing
of emission targets have not been well defined as of yet. Nevertheless, in 2006, India
committed to undertake one of 17 projects across the world to test technology for
separation and storage of carbon dioxide generated in coal-fired power plants as part of
steps to stabilize the emission of greenhouse gases.51 The project is planned to be
undertaken in the Deccan plateau for storage of captured carbon emissions in basalt
formations in coal mines. Thus, CCS technology in India is still in its infancy and
considerable investment and resources will be needed in order to help curb CO2
emissions in the future.
Recommendations
China
The Asian Development Bank (ADB) is very active in the power sector in China when it
comes to support for CCT. In 1988, it financed a super critical coal fired plant in Anhui
Fyang and it also financed a study on the Yantai prospect for an IGCC plant. Though
China is making the effort to build new plants that make use of CCT, the rate at which it
is doing so is relatively slow. As a result, PC fired plants that are both small and cheap
are rapidly being built across the country. For things to change, China needs assistance
from the international community. The World Bank, for example, currently lags behind
the ADB when it comes to involvement and support for CCT and, therefore, there is
room for improvement in this area. Also, when international institutions, such as the
51
IANS, India to undertake Carbon Dioxide Storage Project,
http://in.news.yahoo.com/060404/43/63bx9.html
World Bank decide to invest in China, they need to favor CCTs. They can do so by
requiring that environmental factors be taken into consideration when using their funds to
build additional capacity.
The State Environmental Protection Administration (SEPA), in China, needs to put
regulation and policies in place to further curb pollution and carbon emissions. Current
standards are inadequate and the degradation in air quality is starting to take its toll on the
health of Chinese citizens. However, having more stringent rules alone won’t suffice; an
increase in funding and resources is also required for enforcement agencies. If these
initiatives are put in place, then power plant owners will need to invest in CCT, in order
to comply with the new emissions targets. China already has plants that employ
supercritical and ultra super critical technology. If more of these plants continue to be
built, China will set itself up to benefit from economies of scale in CCT.
In the case of IGCC technology, China needs work with companies and governments in
other countries, such as the United States. Technology transfer from other countries could
help China shorten the time it takes for IGCC technology to become economically
feasible on a large scale. However, China’s weak protection of intellectual property rights
(IPR) and its history of replicating imported equipment is cause for concern for western
companies that want to invest in China. This in turn, results in reduced foreign direct
investment and collaboration between researchers from developed countries. China
therefore, needs to start to take action to address IPR related issues, which in turn could
help the funding in the research and development of CCT and CCS.
China currently lacks a mechanism to help industries hedge the significant financial risks
associated with CCT demonstration projects. Existing government cost-sharing programs
are insufficient and need to be improved. Doing so would help encourage private
investors, both domestic and foreign, to invest more in IGCC technology.
India
India faces the challenge of finding cleaner technology that is easily deployable, cost
effective and can make use of its domestic coal that is high in ash. The high ash content
in Indian coal can be dealt with by making use of coal washing facilities. Recent policy
directives make the use of washed coal mandatory for plants that are located 1000 km
from the mine-mouth (IEA, 2000). However, due to limited washed coal availability,
plants that are required to comply with this regulation are shifting towards using imported
coal. Looking to coal imports may act as a viable alternative in the short term, but doing
so exposes the country to fluctuations in international coal pricing. Thus, in order to
encourage the use of domestic coal, tax incentives and subsidies need to be put in place to
increase the number of coal washing facilities in India.
The rate at which India needs to build additional electricity capacity limits its selection of
coal technology. India is also restricted to choosing CCTs that are proven. Also, India
cannot afford to invest time and money in new inventions that need considerable
resources and experimenting before they work in an efficient, stable and economical
manner. This is one reason why PC coal fired plants continue to be built across the
country; they are both cheap and easy to operate. As a result, when it comes to selecting a
CCT for India, supercritical plants are attractive, because they make use of a mature
technology that is relatively cheaper than IGCC, FBC and ultra-supercritical plants.
Supercritical technology is more efficient than regular PC technology and, thus, it would
also help reduce emissions and pollution to some extent. Policy efforts need to be
directed towards accelerating the development, demonstration, and deployment of
supercritical technology in the country. India could learn from experiences from a
number of countries in this area, including the United States, which has a long experience
of supercritical technology development and deployment.
FBC and IGCC may become broadly competitive with PC plants under a CO2-restricted
scenario. The Indian government currently does not have adequate economic incentive to
invest R&D dollars in IGCC and FBC advancement. Similarly, power companies are not
likely to pay the premium to install today's CCT designs in the absence of clear
regulatory direction on CO2, SO2 and NOX emissions.
As a result, environmental regulations need to be put in place to address the issues of
CO2, NOX and SOX emissions. Not having emission targets for SO2 stem in part from the
fact that Indian coal has relatively low sulphur content (IEA, 2000). Consequently, SO2
emissions from Indian power plants are not considered a critical issue. Nevertheless, with
the rapid increase in the number of power plants in India, SO2 emissions control will
likely be necessary in areas where clusters of large capacity plants are built, especially if
they are located close to urban centers. In order for this to happen, resources will also
need to be put in place to enforce these regulations.
Continued R&D efforts and demonstration plants should be supported by the government
to help expedite the deployment of these technologies in the future. In order to ensure
CCT is adopted by most power plants owners, it is important that research and
development be undertaken as a coordinated effort. If foreign direct investment is
encouraged in the Indian power industry, it could help in the funding of technological
advancement. Nevertheless, stringent environmental policy is required, in order to
motivate companies to adopt CCT rather than simply focus on rapid capacity additions,
which leads more towards technology replication rather than innovation. As mentioned
earlier in the case for China, institutions such as the World Bank can also help by making
it a point of favoring CCTs. They can do so by ensuring that environmental factors be
taken into consideration when facilities are built with their funds.
Technology transfer from developing countries can also help facilitate the move towards
CCTs. The Greenhouse Gas Pollution Prevention project (GEP), which is a collaborative
effort between NTPC and USAID, is designed to reduce GHG emissions per unit of
electricity generated. This is being done by making efficiency improvements to existing
plants and implementing advanced technologies for future coal-based power plants.
These types of initiatives that involve technology transfer from other countries need to be
encouraged, as these sorts of programs help accelerate the rate at which new and
improved technologies are adopted.
Power sector reforms in India need to strive towards altering ownership in the power
sector. The Indian government needs to encourage private and foreign participation as
well as, reform the state level utilities. Doing so will help address the financial issues
faced by the sector and will help increase competitiveness in the industry. This should
give rise to better plant efficiency and reduce the adverse impact on the environment.
Increasing the presence of private investors in the power industry would also help reduce
the monopoly the Indian government currently has in this sector. Consequently, this
would help foster a more competitive industry, which in turn would lead to increases in
production, efficiency and technological advancement of Indian power plants.
Conclusion
Coal is an abundant source of fuel across the world. Coal quality, however, varies
significantly around the world. India and China are two countries with vast coal reserves.
Current forecasts suggest that major increases in coal consumption will come from these
two countries. The increase in coal consumption stems from the need to generate more
electricity. PC technology is mature and is widely used in both of these countries because
it is cheap to operate and maintain. The problem with this type of technology, however, is
its negative impact on the environment. Emissions from PC fired plants contribute to
local pollution problems. Both countries already suffer from poor air quality, thus
increases in coal consumption will only make things worse.
The implementation of CCT can help enormously towards curbing pollution and green
house gas emissions, yet its use is scarce in India and China. Technologies such as FBC
and IGCC are still under development and require significant R&D in order to be used as
full scale plants. The research is very capital intensive and, as a result, India and China
are unable to support large scale projects.
Supercritical coal technology, on the other hand, is cleaner than PC technology and also
cheaper than IGCC and FBC. However, the efficiency and reduction in emissions of
supercritical plants is lower than FBC and IGCC. Supercritical coal technology plants are
already in use in China and are close to coming online in India. The two countries favor
this technology because it is mature and its use is widespread around the world. This
makes the sharing of knowledge and information easier and cheaper. If coal washing is
increased, it would address the problem of high ash content in coal and reduce emissions
as well. Thus, increased coal washing coupled with supercritical coal technology could
help significantly to reduce emissions and increase plant operating efficiencies.
Currently, environmental regulations are quite relaxed and poorly enforced in India and
China. Consequently, companies do not have any real driver to use CCT or CCS in the
short term. However, power companies will likely be more willing to pay the premium to
install FBC and IGCC designs if stringent regulatory controls are implemented that limit
CO2, SO2 and NOX emissions.
To encourage the use of IGCC and FBC, governments in both countries need to make
moves to help facilitate the development and implementation of CCT and CCS.
Governments in both countries need to promote the transfer of technology from Europe
and North America. Collaborative efforts with developed countries need to be put in
place in order to support joint R&D projects. In addition to all of this, issues such as
intellectual property rights and perceived political risk need to be addressed to attract
more foreign direct investment. This in turn, would help address the issue of limited
investment funds that these governments face.
Implementing some of the recommendations in this report could help China and India
accelerate the rate at which they build IGCC and FBC equipped power plants. By putting
these types of initiatives in place, China and India could make use of their abundant coal
reserves to provide “cheap” electricity to its citizens, while reducing its negative impact
on the environment.
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Appendix A
Table A1: Climate Change and Air Quality—Measures with Co-Benefits in China
(http://pubs.acs.org/subscribe/journals/esthag/40/i16/html/081506viewpoint_aunan.html?
sa_campaign=rss/cen_mag/estnews/2006-08-15/i16feature)
Table A2. Costs of Implementing Different Coal Technologies in India.