January 2016 - Power Air Quality Insights 240

Precision Forecasting of Flow Control and Treatment Products is Now Possible

The wealth of available information and the power of the computer now make possible bottoms-up precision forecasting of product and service revenue rather than the traditional top-down approach.

Because of rapid changes in key factors such as oil prices or political crises, it is now possible to economically provide precision forecasting on a continuously updated basis.

One example is the forecasting of compressors for flue gas desulfurization (FGD) gypsum formation. Precision forecasting requires a systematic analysis through each of eight steps.

The first task is to select the product category. In this case it could be all the blowers and compressors used for this service or just one of the options. The determination of the type of blower or compressor is a task unto itself. First one needs to determine the forecast for the product category.

The drivers include expansion of coal-fired power plants, replacement of existing compressors but also modification of power plants. Many countries have required retrofitting of FGD to boilers.

China is the largest purchaser of FGD gypsum blowers and compressors. The country can be divided into nine major combinations of provinces and autonomous zones to conform to the territory likely to be covered by an individual salesman.

Increased electricity consumption and the desire for clean air are the basic drivers behind the compressor purchases. So wealth, population, wants and needs are all relevant.

Secondary drivers are critical but are the most challenging. The FGD gypsum compressor is not used in all coal-fired power plants but only those with FGD systems. The sub process is critical. The dry approach requires no compressors. The wet approach with natural oxidation does not require compressors. The incorporating product is also important. One type of scrubber (tray tower) needs larger compressors than another type of scrubber (spray tower).

Precision forecasting requires that this comprehensive approach be used first for all the relevant processes, sub processes and incorporating products. When this data has already been determined, the effort to forecast compressors is greatly reduced.

Prediction metrics are critical. Failing all else one uses value/value metrics. A new coal-fired power plant of 1000 MW costs $2 billion. The compressors cost $1 million. So the forecast for coal-fired power revenues can be multiplied by .0000005. It is much better to use MW of capacity, gallons of slurry/MW and m³ of air required to obtain the prediction metrics.

The forecasts can be supplied with both revenue and unit numbers and even average size of units. This is possible because McIlvaine tracks every new project and existing power plant around the world and can determine average project size.

The associated revenue is subject to many variables, so establishing the amount of air required and number of units should be the base forecast. In a country such as China, the cost of a compressor purchased locally vs. internationally can be different. But one cannot use general assumptions. Investigation shows that Chinese purchasers have spent more money for the more reliable and efficient international compressors.

This choice is partly driven by the higher cost of electricity in China. Efficiency vs. price is also a factor in the type of compressor or blower selected. The forecasting is improved if the electricity costs in each country/state/province are also known and utilized.

Precision forecasting can be achieved by McIlvaine because it integrates all the products and services used in the $350 billion flow control and treatment market and because it uses the eight step bottoms-up approach.

New Requirements to Remove Hazardous Air Pollutants Necessitate a Holistic Approach

The requirements for power, cement, waste-to-energy, incinerator and other combustion facilities to reduce hazardous air pollutants must be viewed in terms of the total impact on air, water and solid waste. Furthermore, the successes in one industry in one country need to be evaluated by other industries and other countries.

There are thousands of alternative system designs. Here are 12 of the most common or most promising:

1. Many existing combustors are just equipped with a precipitator but now face mercury, acid gas and NO_x requirements.

2. The conventional approach is to add an SCR and a wet scrubber with chemical injection in the fuel and scrubber if needed. A tail end absorber will result in overall mercury reduction above 90 percent but is not yet common.

3. A number of plants are opting for the dry approach but are no longer able to sell ash and have a landfill challenge. The concern with DSI is the cost of lime but the capital cost is low and particulate removal is high. Acid gas removal can be high with a DSI-SDA combination.

4. Older plants which want to retain the precipitator but minimize capital cost can consider the low cost approach with a small scrubber using highly reactive lime preceded by ozone injection for NO_xcontrol.

5. Older plants which also need to meet a lower particulate limit can use a venturi scrubber as opposed to upgrading the precipitator with bags.

6. Older plants which have little room can replace the precipitator with a high energy venturi absorber.

7. Using a tray scrubber and wet ESP requires a higher investment but will have lower energy costs and higher PM_2.5removal.

9. The new catalytic filter operating at 350°F or 850°F introduces another set of options.

10. The catalytic filter can be combined with a condensing heat exchanger scrubber for low emissions and heat recovery to reduce energy impact.

11. Extend the rotary heat exchanger and reduce gas temperature entering the precipitator to 200°F. The increase in efficiency rivals a wet precipitator.

12. Multiple scrubbers with hydrochloric acid and gypsum production plus heat extraction.

The most investment has been made in approach 2 but without the adsorber module. This addition can increase mercury removal to greater than 90 percent.

The adsorber module is being used at a few power plants but it is being embraced by sewage sludge incinerator operators. The location of adsorber modules above the mist eliminators in the typical sewage sludge incinerator scrubber is relatively inexpensive. The cement and power industries should take note of this early sewage sludge incinerator experience.

A number of older power plants have opted for approach 3. Perhaps approach 4 through 7 might be even more attractive for older power plants. One reason is the ability to chemically fix the calcium sulfite sludge. Before the concerns about mercury and other toxic metals the belief was that the gypsum process had the least negative impact on water and solid waste. It is now recognized that encapsulating toxic metal slurries through chemical fixation is the safest route. The loss of gypsum revenue using approach 2 is offset by savings in treating wastewater to remove the toxic metals. The solid waste from approach 3 can be mixed with lime to also provide a land fill or construction product. China is making bricks from this material.

Some new power plants with the most stringent emission requirements have opted for option 8. One advantage is the sale of the gypsum. This approach requires a capital investment more than twice some of the other alternatives. China is presently upgrading its coal-fired power plant systems by adding wet precipitators. This is approach 8 but the initial collector is an existing precipitator.

Approach 9 has been successfully applied for incinerators, biomass combustors and glass furnaces. The first big order for a cement plant application has just been placed. The heat recovery provides the greenhouse gas reduction benefits. Particulate, NO_x and acid gases are all captured in one device. Mercury needs to be captured downstream due to the high temperature at the filter.

Approach 10 substitutes a condensing scrubber for DSI. In approach 11 the precipitator efficiency is improved by lowering the entry gas temperature.

Approach 12 is the one used in a number of new waste-to-energy plants in Europe and proposed for Los Angeles. It maximizes salable byproducts and minimizes energy losses. McIlvaine has recommended a variation of this process to recover rare earths and metals in coal-fired power generation.

Much of the power plant experience has been in the U.S. while a number of the industrial installations have been in Europe. There have been some innovative approaches in China including hybrid precipitator /baghouses. It is desirable that the world experience across the industries be continually analyzed. McIlvaine is pursuing this in a series of webinars and online decision systems.

Flow Control and Treatment Companies Will Be Unevenly Impacted By the Chinese Slowdown and Oil Priced Drop

The flow control and treatment market will grow by 2 percent in 2016 to $340 billion. In general small Asian suppliers will achieve the highest percentage growth. The performance of the large international companies will be mixed. McIlvaine is analyzing each of the larger companies to compare their forecasts to the world market trends.

Clarcor will join many other international flow control and treatment companies who will experience revenue losses in 2016 while the world market increases modestly. The strength of Clarcor is that a large percentage of the sales come from consumables rather than capital equipment. The weakness is the low market shares in Asia and certain other geographies where growth will exceed the average.

Clarcor anticipates revenues falling by approximately 2 percent in 2016 based on revenues of $1.4 billion.

Segment	World Revenues $ Millions	Clarcor Revenues $ Millions	Clarcor % of World	World % Change	Clarcor % Change
Mobile Filtration	12,000	600	5	4	-4
Stationary Air Filtration	8,000	250		4	-2
Stationary Liquid Filtration Including Oil and Gas	10,000	250		-1	-2
Air Pollution Control	10,000	300	3	3	-2
Total	30,000	1,400		3	-2

Mobile filtration revenues will be up worldwide by 4 percent as more vehicles are driven more miles. The primary growth will be in Asia. The poor quality of ambient air in Asian countries and the need for air filters in homes and commercial buildings will help boost stationary air filtration sales by 4 percent.

The stationary liquid filtration sales will be down only modestly due to the high percentage of consumables in the mix. Oil production will be up in 2016 even if the capital expenditures for new equipment will be down substantially. Companies such as Clarcor who sell replacement filters will benefit.

Two of the major unknowns and concerns in 2016 are the price of oil and gas and the status of the Chinese economy. Neither one of these should have a substantial impact on Clarcor sales due to its mix of products.

The growth in LNG production in the U.S. is a positive factor for Clarcor. Clarcor expects sales of gas turbine inlet filters to remain flat in 2016 but the world market will be up by more than 5 percent. This is a combination of increased power generation but also increases in unit selling prices. High efficiency filters selling at twice the price of existing medium efficiency filters can be justified based on improvements in gas turbine operations.

A number of power plants around the world are converting their particulate control technology from electrostatic precipitators to fabric filters. This could boost filter sales by more than 20 percent per year when the movement is fully implemented. The challenge for the BHA group within Clarcor will be to achieve high market shares in countries such as China, Russia, Chile and Italy where these conversions are presently taking place.

The McIlvaine Company forecasts market shares and markets for all the products made by Clarcor in the following publications:

20,000 MW of New Gas Turbine Facilities in the U.S. Are Being Built By Just 10 Companies

Annual increases in gas turbine power generation in the U.S. will be 18,000 MW/yr over the next five years. The ten largest developers have 20,000 MW underway at 24 different sites. This is the conclusion of the McIlvaine Company in 59EI Gas Turbine and Combined Cycle Supplier Program.

The ranking of the ten largest power producers is based on the proposed gas turbine-based power capacity. (We limit our data only to those projects which are currently still on track and are either in the approval or permitting process or currently under construction.)

Rank	Power Producer
Rank	Power Producer
1	Panda Power Funds
2	Dominion
3	Exelon
4	Competitive Power Ventures
5	Advanced Power
6	Duke Energy
7	Coronado Power Ventures
8	NTE Energy
9	NextEra Energy
10	PSEG

Of particular interest is that half of these companies are private companies owned by investors with the primary intent of developing the facility, perhaps operating it for a while, then selling it at a profit when the timing is right. (The five are Panda, CPV, Advanced Power, Coronado and NTE.) The activity by private companies creates an additional challenge for large component suppliers who must forge new relationships. It is a benefit to smaller suppliers or those new to the market that has more difficulty being considered by the large utilities.

The U.S. will account for more than 20 percent of the new gas turbine power generation in the next few years. This makes it an attractive market for suppliers of power plant systems and components

Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a Weekly Basis

· LG&E announces Plan to close and cap Coal Ash Ponds at Two Power Plants

· Otter Tail Power finishes Major Upgrade at Coal-fired Power Plant in Big Stone, SD

· KU to invest nearly $700 million to meet EPA’s new Coal Combustion Residuals Rule

· EGCO continuing with 500 MW Coal-fired Power Plant Project in the Philippines

The 41F Utility E-Alert is issued weekly and covers the coal-fired projects, regulations and other information important to the suppliers. It is $950/yr. but is included in the $3020 42EI Utility Tracking System which has data on every plant and project plus networking directories and many other features.

McIlvaine conducts periodic webinars which are in a discussion format and are free of charge to all participants.

Format: 50-90 minute discussion using McIlvaine display material. The session will be free of charge to all participants but registration is required.

Approach: A summary with 50 or more slides covering the issues and options will be displayed. The default coverage will be a brief review of the individual slides. However it will be a discussion format with questions and comments encouraged. The interactive index provides quick display of any slide. Registrants will receive the index to the slides in advance.

Value to purchasers and specifiers: Your questions and interests will be prioritized in the discussion. The complete summary will also be supplied to you subsequent to the meeting at no charge.

Value to Suppliers: You have the opportunity to provide data to be considered at no charge. If you are also a subscriber, you will see the summaries in advance and be able to shed light on issues and options not properly covered in the summary. If you are a subscriber, you will have continuing yearly access to the summary and intelligence system.

Dates for the next 5 meetings are firm, the others will be held in sequence at approximately two week intervals. Unforeseen developments could dictate the insertion of new subjects.

Date	Subject
2-11	Mercury- Status of MATS and MACT in the U.S. regulatory developments in China and other countries, progress with bromine additives in fuel, performance of activated carbon, particulate mercury issue, re-emission solutions, wastewater issues
2-25	Zero Liquid Discharge- regulatory status in U.S. and ROW; spray drier vs. evaporation for Chinese power plants; difference in various system designs; total cost of ownership; valve, pump, evaporator, centrifuge, instrumentation, materials and compressor options
3-10	Gas Turbine- intake filter, SCR, NH₃, HRSG, valve, pump, instrumentation and cooling options (dry vs. wet); treatment chemicals; challenges with FAC due to extensive cycling
3-24	NO_x Control- Stationary: catalyst capacity in China; SNCR vs. SCR; catalytic filters. Mobile: Impact of RDE on urea and SCR markets, DEF filters, pumps and valves
4-7	Power Generation Technologies- future of USC coal in India, Vietnam and Indonesia; natural gas prices; GHG regulations, nuclear costs; penetration for wind and solar
	Desalination- thermal vs. membrane; energy recovery, pump, valve, compressor and chemicals options; power/desalination combinations.
	Oil, Gas, Refining- supply & demand; impact on flow control and treatment products; regional impacts e.g. subsea in North Atlantic vs. shale in the U.S. vs. Oil Sands in Canada
	Kiln and Furnace APC- focus on steel and cement; new developments in multi pollutant control; regulatory limits on mercury and NO_x; mass particulate measurement and impact; product innovations
	Food- Analysis of 12 separate applications within food and beverage with analysis of valve, pump, compressor, filter, analyzer and chemical options; impact of new technologies such as FO
	Municipal Wastewater- quality of pumps, valves, filters and analyzers in Chinese and Asian plants; new pollutant challenges; water purification for reuse
	FG- DSI vs. dry vs. wet; regulations in India and other developing countries; valve, pump, absorber, nozzle, agitator, compressor, and materials options (e.g. coatings vs. high nickel alloys)
	Mobile Emissions- reduction in CO, VOCs, and particulate in fuels, oils and air used in on and off road vehicles; impact of RDE and failure of NO_x traps and the crisis in Europe created by the focus on diesels