·       The Future of Oil, Gas and Coal Dependent on Perception and Competition

·       Industrial Scrubber System Revenues to Exceed $8 Billion In 2019

·       Renewable Energy Briefs

·       Utility E-Alert Headlines – October 17, 2014

·       “NO_x Reduction Innovations For Coal-Fired Power Plants” Hot Topic Webinar

·       McIlvaine Hot Topic Hour Registration

The Future of Oil, Gas and Coal Dependent on Perception and Competition

Gas-to-liquids plants can cost up to $15 billion.  Coal-to-liquids plants cost even more. Investments in these plants is highly dependent on the perceived demand.  This factor, in turn, is a function of attractiveness of alternatives such as wind, solar, electrical energy storage, tar sands, coal bed methane, underground coal gasification, shale gas, shale oil, oil shale, small modular nuclear, small scale LNG, advanced coal-fired power plants, etc.  All these alternatives are continually assessed in two publications:  Oil, Gas, Shale and Refining Markets and Projects and Fossil and Nuclear Power Generation: World Analysis and Forecast published by the McIlvaine Company.  (www.mcilvainecompany.com)

The biggest variable in the mix among these alternatives is coal conversion.  The proven coal reserves (defined as presently known and economically minable) is 860 billion tons. This quantity would supply the world at present consumption levels for another 100 years. But coal has a much bigger potential than just this identified resource.  Consider that there is one trillion tons of coal under the North Sea.  Billions of dollars are being invested in underground gasification technology to inject steam and oxygen and extract gas.  CO₂ generated in the process would be used to increase yield of shrinking North Sea oil reservoirs.

China is well underway with a program to convert coal to gas, fuels and chemicals at a rate equal to the entire U.S. shale gas program.  If the projects in the planning stage are implemented, China will utilize 20 percent of the world’s annual coal consumption just to make gas and liquid products.

The ultimate mix between all these energy sources will be be determined by perception and competition.  In a chess game, the winner does a better job of perceiving the moves of the loser. Among the losers to date are owners of LNG regasification terminals in the U.S.  They did not perceive the moves of shale gas extraction companies.  However, if they convert these terminals to export LNG and build others to do so, then power plants which are relying on large quantities of cheap gas will be the losers. So both the quality of the competition and the perception of the opponent are factors in success.  Some of the important inputs include:

•        The differential price between diesel and LNG is a critical market factor.

•        Crude represents 65 percent of final fuel price.

•        The disparity between oil and gas prices on an equivalent Btu basis is a function of access.

•        Gas is not economically transported overseas except as LNG, whereas oil is economically transferred.

•        Even if the price of oil drops, the market for gas is not impacted if gas prices also drop proportionately.

•        Until the U.S. has the capability to sell large quantities of LNG offshore, the price disparity will continue.

•        Investors and gas producers are expecting gas in the U.S. to remain at $5/MMBtu.

•        China expects to make gas from coal at less than $5/MMBtu.

•        Shale gas operators are expected to keep expanding as long as oil is above $70/bbl.

•        Oil companies such as Chevron are bullish on increased oil and gas demand and are continuing with high levels of investment.

•        Saudi Arabia is able to increase or decrease output to maintain price levels.  Many other producers need price levels above $90 barrel to keep their economies healthy.

•        The oil reserves of Middle East producers are less than 50 years.

•        The Saudi production cost is only $6/bbl.

•        The Saudi oil value is much higher than $100/barrel because it is a resource which is dwindling at 4 percent per year.

•        The result is that the Saudi supply will be adjusted to balance long term value and short term needs.

•        Stranded gas and other sources of LNG where the acquisition price of the gas is negative will be unaffected by oil fluctuations between $80-110 bbl.

•        Safety perceptions of nuclear energy vary widely from country to country.

•        Environmental perceptions including climate change also vary widely between the developed and developing economies.

All these factors will continue to make projections about the production from each of these resources very speculative.

For more information on Oil, Gas, Shale and Refining Markets and Projects, click on:  http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049.

For more information on Fossil and Nuclear Power Generation: World Analysis and Forecast, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/113-n043.

Industrial Scrubber System Revenues to Exceed $8 Billion In 2019

Industrial plants will be spending more than $8 billion annually for scrubber systems by 2019.  This is the conclusion reached by the McIlvaine Company in Scrubber/Adsorber/Biofilter World Markets. (www.mcilvainecompany.com)

Scrubber Revenues ($ Millions)

Bottom of Form

These forecasts include applications in the iron and steel, refining, chemical, food, petrochemical, non ferrous metals, pharmaceutical industries to remove particulate and gases from stack discharges. They do not include scrubbers used on coal-fired boilers.  One reason is that the coal-fired boiler market is as large as the scrubber market in all other industries. This market is the subject of another McIlvaine report.

A third market is developing which will also need to be separately evaluated. This is the coal gasification and liquefaction market.  Scrubbers are used in clean up of the gas produced in the indirect gasification processes.  This market is potentially going to be bigger than either the industrial scrubber or power plant scrubber market.

There are less than100,000 MW of power plant scrubbers sold for new and retrofit applications each year.  At $100,000-$200,000 MW this is an annual market of $10 billion to $20 billion.  These scrubbers are cleaning up plants which burn 300 million tons of coal per year.

Coal gasification requires even more investment in scrubbers per ton of coal processed. China is planning to convert 1.5 billion tons of coal per year into synfuels and clean gas, fuels and chemicals.  Other nations are also following this path.  Posco in South Korea is installing a coal gasifier in its steel mill and has set up a joint venture to build gasifiers elsewhere.  India and Indonesia have substantial coal reserves and are initiating projects.  Australia has canceled its carbon tax and is actively developing underground gasification.  The U.K. could potentially use the underground coal gasification technology to utilize coal reserves in the North Sea.  CO₂ could be re-injected into the dwindling oil reserves in the area and, thus, also boost oil output.

With this level of activity it is very likely that the coal gasification scrubber market will be more than $10 billion per year at a peak period a few years from now.

This large market will be temporarily covered in the industrial scrubber market report. More information on this is found at: N008 Scrubber/Adsorber/Biofilter World Markets.

Information on the power plant scrubbers is found at: N027 FGD Market and Strategies.

Renewable Energy Briefs

Yahoo Signs Long Term Power Purchase Agreement with OwnEnergy

OwnEnergy, a national leader in the development of mid-sized wind farms, announced that it has entered into a long-term Power Purchase Agreement (PPA) with Yahoo!, Inc. Under the terms of the PPA, Yahoo will purchase wind power which will be used to offset much of Yahoo's energy usage in the Great Plains region.

"It's great to see a leading tech company like Yahoo working to expand the use of renewable energy, and its involvement in this project will enable us to generate both local jobs as well as financial upside for members of the Rush County community," said Jacob Susman, Founder and CEO of OwnEnergy.

OwnEnergy partners with energy entrepreneurs across the country to develop wind projects. The company's local partners are leading members of wind-rich communities who play an active role in project development and receive a share of project ownership in return.

SPI Solar Subsidiary Announces EPC Agreements for 100 MW of Solar PV Projects in Hebei Province, China

SPI Solar, a vertically-integrated photovoltaic solar developer, announced that its wholly-owned subsidiary, Xinyu Xinwei New Energy Co., Ltd., has signed engineering, procurement and construction agreements for 100 megawatts of solar PV projects in Julu County, Hebei Province, China. The three separate agreements call for the development of two rooftop sites (consisting of 50 MW and 30 MW, respectively) for ecological agricultural farm rooftop installations, as well as a distributed grid project (consisting of 20 MW).  

For the rooftop projects, construction on the 50 MW project – phase I − is scheduled to begin in October 2014, with completion and grid connection expected in April 2015.  Construction on the 30 MW project – phase II − is scheduled to begin in May 2015, with completion and grid connection anticipated in August 2015.

Construction of the 20 MW DG project is scheduled to begin in October 2014, with completion and grid connection anticipated in March 2015.

Panasonic Partners with Powertree Services to Construct 68 Solar Powered EV Charging Stations with Energy Storage in San Francisco

Panasonic Enterprise Solutions Company announced it is providing engineering, construction and procurement services to Powertree Services Inc. to build 68 electric vehicle charging stations at multi-unit residential properties in San Francisco.

Construction has begun on the stations, which link together key energy services to provide value for property owners, tenants, EV drivers and the grid. They are designed to be powered by solar energy and to incorporate a battery storage component. When complete they will have the ability to supply high power charging to vehicles, ancillary services provided to the utility to support the grid, solar power to tenants and supplemental power to the buildings. The stations are scheduled to be completed by Earth Day 2015.

When complete, the 68 stations will result in a total installed capacity of 6.1 megawatts of power and 2.5 megawatts of EV charging capacity. Each station is configured to support up to 70 amps or 18 kilowatts. This is roughly equivalent to 60 to 70 miles of range for every hour of charging. The exact rate of charging depends on vehicle models. The stations will be powered by on site photovoltaic panels, and can generate clean energy for building use, or have the ability to provide backup generation, in the event of a grid outage.

Alterra Power and Fiera Axium Complete $176.5 Million Jimmie Creek Hydro Project Financing

Alterra Power Corp. and Fiera Axium Infrastructure Inc. (through a managed fund) announce the completion of a $176.5 million non-recourse loan facility for the $227.4 million Jimmie Creek hydroelectric project.

The Jimmie Creek project will provide 62 MW of clean power capacity to southwest British Columbia and will sell 100 percent of its power to BC Hydro for 40 years beginning in August 2016. Alterra and Fiera Axium now own 51 percent and 49 percent of the project, respectively.

Biogas Plant Enables Industrial Company to Become More Self-Sufficient

PlanET Biogas has recently commissioned their fifth Biogas plant into service. The 1.5 MW plant is situated on Singleton Birch’s Ltd. site at Melton Ross, Barnetby, and North Lincolnshire. In Future, Singleton Birch Ltd, focused on processing and delivery of limestone/chalk, will produce 40 percent of their onsite power requirements from biogas. Four local Farmers are providing 30,000 tons of feedstock every year.

For more information on Renewable Energy Projects and Update please visithttp://www.mcilvainecompany.com/brochures/Renewable_Energy_Projects_Brochure/renewable_energy_projects_brochure.htm

Headlines for Utility E-Alert –October 17, 2014 

UTILITY E-ALERT    

#1196 – October 17, 2014                                                        

Table of Contents

COAL – US

• Xcel sets April for end of Coal burning at Burnsville Power Plant

COAL – WORLD

• Marubeni to develop 1,800–2,000 MW Coal-fired Power Plant in Myanmar
• Samsung to develop $2.5 Billion Thermal Power Plant in Central Vietnam

GAS/OIL – US

• Wärtsilä to supply 112 MW Peaking Power Plant in North Dakota
• New MD Power Plant provides Sustainable Power to DEC Members

GAS/OIL – WORLD

• 1MDB awarded contract for 2,000 MW Malacca Power Plant
• GE to support Iraq’s 750 MW Combined Cycle Power Plant Project
• Parsons Brinckerhoff /WBHO named EPC Contractor for Mozambique Gas-fired Power Project
• AES Dominicana Power Plant conversion to Combined Cycle
• Wärtsilä to supply a 139 MW Flexicycle Power Plant in Mexico

CO₂

• Exelon, CB&I, 8 Rivers develop Zero Emission Natural Gas-fired Power Project

NUCLEAR

• Canada unveils New Regulations to enhance Nuclear Emergency Management

BUSINESS

• AES signs Agreement to sell Interest in Turkish Assets for $125 Million
• Duke Energy Progress seeks FERC approval to buy Generation Assets in North Carolina
• URS Corporation named Exclusive Licensee for Linde Group’s NO_x Removal Technology for North America Power Industry
• Mitsui expands Astoria IPP stake
• Two Pipeline Projects competing for Dunkirk Power Plant in New York
• Why More Coal is going to Increase the Gas Turbine Market

HOT TOPIC HOUR

• “Dry Scrubbing” will be the Hot Topic Hour on October 23, 2014
• “Power Plant Cooling Decisions” is Hot Topic Hour November 13
• Upcoming Hot Topic Hours

For more information on the Utility Tracking System, click on: 

http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei

 “NO_x Reduction Innovations for Coal-fired Power Plants” to be conducted over the Internet on Thursday, November 6, 2014, at 10 a.m. CST

Some issues to be addressed during the webinar are:

•     How does the need to remove mercury and reduce SO₃ change the catalyst selection?

•     Should you regenerate rather than discard catalyst?

•     How long will catalyst last before it is

         Cleaned,

         Renovated,

         Regenerated?

•     Where do hydrogen peroxide and ozone options make sense?

          In place of catalyst where NO_x levels are low

          Trim for SCR if very high efficiency needed

•     Where should you consider SNCR?

          As a substitute for SNCR

          In conjunction with SCR

•     Should you contract with a supplier to monitor, clean and replace catalyst as needed?

•     Where is the catalytic filter the best answer?

•     Do you also have to invest in SO₂ and particulate control?

•     Do you have a use for recovered heat from 850^oF clean gas?

•     Is space limited?

Panelists and others involved with the specification, supply, use or service of Coal-fired Power Plant NO_x Reduction equipment or services are invited to submit articles, case studies or white papers describing their equipment, services or experience prior to the date of the panel discussion. These or an abstract of them may be published in the Utility E-Alert and other of our newsletters as appropriate in the weeks preceding the panel to develop interest and questions from the potential audience. We will also post them on our web site so that potential attendees can review them.  Please send your white papers, articles and PP presentations to Dina Mohr at: mcilvaine_hot_topic_hour@earthlink.net with a copy to me.

Attendance at the panel discussions will be free for all utility personnel and panelists and there is no charge for publishing or posting the articles, case studies or white papers on our web site.

Click here to view schedule and register

McIlvaine Hot Topic Hour Registration

On Thursday at 10 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects. Power webinars are free for subscribers to either Power Plant Air Quality Decisions or Utility Tracking System. The cost is $300.00 for non-subscribers.

See below for information on upcoming Hot Topic Hours. We welcome your input relative to suggested additions.

Click here for the Subscriber and Power Plant Owner/Operator Registration Form

Click here for the Non-Subscribers Registration Form   

Click here for the Free Hot Topic Hour Registration Form   

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You can register for our free McIlvaine Newsletters at: http://home.mcilvainecompany.com/index.php?option=com_rsform&formId=5

Bob McIlvaine
President
847 784 0012 ext 112

rmcilvaine@mcilvainecompany.com

www.mcilvainecompany.com