FGD and DeNOx
NEWSLETTER

 

April 2021
No. 51
5

 

Table of Contents

 

COAL – US

COAL WORLD

                      BIOMASS

                      BUSINESS

 

 

COAL – US

EPA Finalizes Rule to Curb Cross-State Pollution

 

The U.S. Environmental Protection Agency (EPA) has issued an update and finalized a pollution rule that will require reductions in ozone emissions from power plants in 12 states this year.

 

The update to the Cross-State Air Pollution Rule (CSAPR), issued March 15, is designed to curb emissions of nitrogen oxide (NOx)—primarily from coal-fired power plants—ahead of a July deadline for states to comply with the 2008 ozone National Ambient Air Quality Standards (NAAQS) established during the Obama administration.

 

A federal judge last year ordered the EPA to act by March 15 to reduce cross-state pollution from seven states specified in a lawsuit brought by New Jersey, New York, and other states. Power plant emissions this summer will help determine whether states face additional regulatory requirements moving forward.

 

Monday’s ruling follows several prior regulations, along with litigation, going back more than a decade regarding interstate pollution. The Clean Air Act, as part of its “Good Neighbor” provision, requires upwind states to address emissions because that pollution causes air quality

problems in other states.

 

“Millions of people across the Eastern U.S. suffer because of the coal plant pollution that blows into their communities from neighboring states. The update to the Cross-State Air Pollution Rule is a common-sense step to help them,” said Graham McCahan, Environmental Defense Fund (EDF) senior attorney, in a statement Tuesday. “We can do much more, though. We urge EPA to build on this foundation and strengthen smog protections for all Americans who live near coal plants or in downwind states.”

 

The updated rule requires power plants in 12 states to reduce their NOx emissions by improving the operation of NOx pollution controls that are already in place, and by upgrading NOx pollution controls. NOx is a major component of ground-level ozone, better known as smog, and contributes to the inability of downwind states to meet an EPA health-based smog standard set in 2008.

 

 

The states impacted by the EPA’s Cross-State Air Pollution Rule. Courtesy: EPA

 

The EPA has identified 22 downwind states in the CSAPR (some states are considered both upwind and downwind). The update issued Monday is in response to a court order requiring the agency to strengthen protections for those states and will require that coal units in 12 states – Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia—use the upgraded and more-effective pollution controls already installed, and also update those controls. The agency has noted that coal-fired power plants with pollution controls may not operate them regularly or may not use them to full capacity.

 

The update requires those plants to begin reducing pollution immediately after the rule is legally effective, which is 60 days after its publication in the Federal Register. It is ultimately expected to reduce NOx pollution from those plants by 19% over 2019 levels, according to the EPA. The agency said the rule is expected to provide an estimated $2.8 billion in health and environmental benefits.

 

The EPA noted that more than one-third of all coal-fired power plants in the Eastern U.S. have, to date, not installed modern pollution controls for NOx, and thus are not subject to the update. The EDF in a news release Tuesday said, “EPA will need to take further action to protect Americans from the more than 250,000 tons of NOx, and more than 300 million tons of climate pollution, those plants emitted in 2018.”

 

B&W Thermal Awarded $20 Million Technology Replacement Contract for North America Power Plant

 

Babcock & Wilcox (B&W) announced that its B&W Thermal segment will design, supply, and install replacement thermal technologies for a power plant in North America. The contract value is more than $20 million.

 

B&W Thermal will design, fabricate, and supply a replacement for the unit’s primary superheater pendant, a second stage economizer and other equipment to efficiently extend the operating life of the plant’s existing technologies. B&W’s subsidiary, Babcock & Wilcox Construction Co., LLC, will provide installation services.

 

“Maintenance of the existing North American power fleet is a high priority for our customers, and B&W Thermal has the resources and knowledge to keep plants running at optimal levels of performance,” said B&W Chief Operating Officer Jimmy Morgan. “Whether supplying replacement parts, maintenance services, repairs and improvements of OEM technologies or competitors’ equipment, or identifying and implementing efficiency and performance improvements, B&W Thermal’s experienced and reliable teams are able to service plants in North America and worldwide.”

 

Dustbuster™ SCR Catalyst Has Proven Performance in Over 11,000 MW of Coal-Fired Power Units Since 2016

 

In making the announcement last year, Mike Mattes, President & CEO of Cormetech said, “Demand continues to be strong as utilities worldwide recognize the benefits of DustBuster™ and are looking to improve their coal-fired generation SCR performance and meet new environmental emission standards in an economical way. DustBuster™ is our most innovative Coal SCR catalyst technology to date and solves many of the issues associated with plate style SCR catalyst. Specifically, it has superior pluggage resistance, can be regenerated more effectively to new catalyst performance, will not corrode, or delaminate, is 100% recyclable and made in the USA. Additionally, its SO2 conversion percentage does not increase over time due to iron in the metal mesh being exposed to flue gas.”

DustBuster™ utilizes 100% catalyst material and is often used in conjunction with Honeycomb catalyst on a layer to maximize life and minimize pluggage in problem areas of the SCR. A key feature associated with all of Cormetech’s SCR catalyst, including DustBuster™, is its ability to be efficiently re-used through Cormetech’s proprietary cleaning technology and then regenerated or recycled to extend SCR catalyst life. As a result, the need to landfill the spent honeycomb type catalyst can be completely eliminated, significantly reducing a utility’s overall compliance costs, and eliminating an environmental legacy.

Cormetech’s DustBuster™ SCR catalyst consists of optimized channel geometries, up to 11mm hydraulic pitch, that facilitate the flow of ash-laden flue gas through catalytic surfaces resulting in extremely low pluggage in an innovative honeycomb SCR catalyst platform which delivers higher DeNOx potential and very low SO2 conversion percentage. DustBuster’s uniform single continuous extruded element and extra-large hydraulic diameter rectangular openings with larger aspect ratios prevent dust build-up and catalyst pluggage inside the reac

 

COAL WORLD

 

The Waigaoqiao 3 Coal-fired Power Plant Incorporates Energy Improvements

 

Led by the chief engineer Weizhong Feng, engineers at the Waigaoqiao 3 coal-fired power plant have been working hard and continuously on a series of innovations designed to substantially improve coal-fired power plant performance, a package of measures they call the ‘5E technologies’: Energy saving; Efficiency preservation; Environmental protection; Ensuring safety; and Elevated turbine-generator.

 

Apart from the elevated turbine-generator concept, the other four measures have been applied successfully at Waigaoqiao 3, rendering it one of the most advanced high efficiency power plants in the world. Currently, the team implemented the full portfolio of 5E technologies at the new 1350 MWe Pingshan Phase 2 ultrasupercritical coal-fired power plant,

 

AUMA Supplied 2,300 Actuators to 6 NTPC Plants

 

AUMA supplied nearly 2,300 actuators for six large coal-fired power plants being built by NTPC, India’s largest power utility. AUMA India provided 500 actuators for each of the three plants at Lara, in Chhattisgarh, Barh in Bihar, and Gadarwara in Madhya Pradesh.

 

Another 484 actuators are going to Malwa, also in Madhya Pradesh, and 306 to two smaller projects at Meja in Uttar Pradesh and Solapur in Maharashtra.

 

The six projects range in size from 2 x 660 MW to 5 x 800 MW and all, except the Lara plant, are supercritical.

 

The actuators are deployed for intelligent valve control across all processes within the plants, including feedwater treatment, steam generation, combustion air control, turbine control, flue gas management, and cooling water supply. 

 

FGD Regulations in India Being Delayed Again

 

India’s power ministry has proposed pushing back the deadlines for adoption of new emission norms by coal-fired power plants, saying “an unworkable time schedule” would burden utilities and lead to an increase in power tariffs.

 

India initially had set a 2017 deadline for thermal power plants to comply with emissions standards for installing Flue Gas Desulfurization (FGD) units that cut emissions of toxic sulfur dioxide. That was later changed to varying deadlines for different regions, ending in 2022.

 

Under the latest proposal, no new dates have been set. However, a final decision will have to be approved by the Supreme Court, which is hearing the issue.

 

“The target should be to maintain uniform ambient air quality across the country and not uniform emission norms for thermal power plants,” Nishat Kumar, an official at India’s Ministry of Power said in a January 2 note to the country’s environment ministry, seen by Reuters.

 

“This could avoid immediate increase in power price in various relatively clean areas of the country (and) avoid unnecessary burden on power utilities/consumers,” Kumar said.

 

The power ministry proposed a “graded action plan,” whereby areas where plants are located would be graded according to the severity of pollution, with Region 1 referring to critically polluted areas, and Region 5 being the least polluted.

 

“Strict control of emissions shall be required in such key areas for thermal power stations categorized under Region 1,” Kumar said in the memo.

 

Plants in Region 2 could begin to take action one year after those in Region 1, he said.

“Presently no action is required for power plants that are situated under Region 3, 4 & 5,” he said.

 

Indian cities have some of the world’s most polluted air, much of which is blamed on coal-fired plants in close proximity to urban centers. Vehicular pollution, dust, industries, and crop burning add to the bad air quality.

 

Sunil Dahiya, an analyst at the Centre for Research on Energy and Clean Air, said of the power ministry directive: “Such claims after 5 years of emission standards being in existence create a severe dent on the government’s image.”

 

Study Reveals Coal Ash Pollution From Dominican Republic Plant

 

A study of coal ash samples from the Punta Catalina coal plant in the Dominican Republic has found leachates of heavy metals including molybdenum and selenium at levels higher than recommended by the World Health Organization and US Environmental Protection Agency.

 

The 752 MW Punta Catalina plant has been dogged by construction delays and scandals, with the two units finally commissioned in 2020. However, Duke University researchers warned “uncontrolled management and release of the coal ash from the Punta Catalina plant to the environment and water resources, poses high environmental and human health risks.” Coal for the plant has been supplied by the US mining company, Consol Energy.

 

EDR Project at NTPC

 

Development of a pilot 1000 LPH (1m3 per hour/24TPD) system and installation at an NTPC Station for study of system efficiency in terms of water recovery and ion removal capacity.

 

Technology:

 

Electro-Dialysis Reversal (EDR) is an advanced water treatment process based on electrically charged membranes. In EDR, ion exchange membranes are used to separate ionic impurities from water under the influence of DC electric field through flowing water.

Recent developments in membrane technology (leading to cost reduction) and tightening of environmental norms for water disposal and wastewater treatment has renewed interest in EDR technology as an alternative to RO based technologies

 

Comparison with RO:

 

EDR Systems have many inherent advantages over RO Systems which are tabulated as below-

 

SNo.

Feature

Reverse Osmosis

Electrodialysis

1

Power Consumption

~5.0kwh/m3

~2.0kwh/m3

2

Water Recovery

<50% for Single Stage Systems

>70% for Single Stage Systems

3

Membrane Life

Around 3 years

More than 10 years due to polarity reversal and absence of high pressure.

4

Operating Conditions

Low Operating Temperature Range and Chemical Withstand

High Temperature and Chemical Withstand (up to 50 °C and 1–2 ppm chlorine)

 

Study Urges China to Shut 100,000 MW of Poorly Performing Coal Plants

 

A study by University of Maryland researchers estimates 112,000 MW of Chinese coal-fired power plant capacity performs so poorly on economic and environmental grounds that the plants could be shut down rapidly. The paper, which was published in Nature Communications, argues the remaining plants could operate for 20 to 30 years but with declining rates of use and with their role shifting from catering for baseload demand to catering for peak loads. They argue that new coal-fired power plants are not compatible with the goals of the Paris Agreement and would risk becoming stranded assets.

 

Mitsubishi Supporting kVukng Aug 2 Coal Plant

 

Mitsubishi Corporation is pulling out from a US$2 billion power plant project in Vietnam last week, but a smaller project backed by both Tokyo and Hanoi still looks to be going ahead.

 

Mitsubishi holds a 40 percent stake in the 1.2-gigawatt Vung Ang 2 coal-fired power plant in Ha Tinh province, with the rest being held by South Korean state-run utility Korea Electric Power Corporation (Kepco) and Japanese company Chugoku Electric Power, according to the Netherlands-based finance watcher NGO BankTrack. Loans totaling US$1.7 billion have been extended to the project by the state-owned Japan Bank for International Cooperation (JBIC) and state-run Export-Import Bank of Korea, alongside other private institutions.

 

As one of the world’s fastest growing economies – even amid a global recession caused by the Covid-19 pandemic – Vietnam’s electricity demand has risen by about 12 percent per year in recent years.

 

More than half of its energy needs are met by coal-fired power stations at present, though the country is a signatory to the Paris climate agreement and has pledged to reduce its dependence on coal to 27 percent by 2030, while raising the share of non-hydroelectric renewable sources in its energy mix.

JBIC’s decision to finance Vung Ang 2 through a US$636 million loan “was made by taking into account Japanese government policy as well as the energy policies in the partner country [of Vietnam]”, said spokesman for the bank, adding that JBIC had been “promoting the energy transition from coal to gas and/or renewable energy through direct dialogue with the Vietnamese government which we will continue to strengthen.”

 

Hungary Confirms Coal Exit by 2025

 

Hungary’s Secretary of State for European Union Affairs, Attila Steiner, has confirmed the 884 MW RWE-owned Matra lignite plant, the country’s last, will be closed by 2025. The expansion of the 50-year-old plant had been mooted over the last decade but was blocked after a court ruling set aside the environmental permit for a new 500 MW unit. The government told the Powering Past Coal summit it now plans to increase solar capacity to 6,000 MW and use European Union funds to retrain workers affected by the closure of the Matra plant. Hungary had previously been planning on the Matra plant operating until 2029, at which point some of the units would have been 60 years old.

 

Japanese Utilities Accelerate Coal Exit Plans

 

Sojitz, a major Japanese trading house, has announced it will accelerate its exit from thermal coal by halving its investments in projects by 2025 and eliminating them entirely by 2030. The company said it would exit from all metallurgical coal projects by 2050. Previously the company said it would cut its thermal coal exposure in half by 2030.

 

Another Japanese trading company, Maurbeni, has also announced it plans to accelerate its exit from coal-fired power plants. The company currently has about 2,600 MW of coal capacity and is aiming to cut that to 1,500 MW by 2025 and 1,300 MW by 2030. While the company has ruled out investing in any further coal-fired power plants, it said it will continue to invest in new gas projects.

 

 To realize the significant benefits associated with co-development of Rio Grande LNG and the CCS project, NextDecade anticipates achieving final investment decision (FID) on a minimum of two trains at Rio Grande LNG in 2021 and FID on NEXT Carbon Solutions’ CCS project soon after FID at Rio Grande LNG.

 

BIOMASS

 

Valmet Wins Polish Biomass Conversion

 

Valmet has received an order from Zespól Elektrowni Patnów-Adamów-Konin SA (ZE PAK) to convert a lignite-fired boiler into a biomass-fired boiler at its power plant in Konin, Poland.

 

Under the €20 million order, Valmet will convert the existing boiler to biomass-firing using bubbling fluidized bed (BFB) technology. Additionally, Valmet will supply a selective non-catalytic reduction (SNCR) solution to lower NOx emissions as well as modernize the plant’s instrumentation and electrification systems.

 

“The reconstruction of the K-7 boiler is the main element of our transition project from fossil-based energy to renewable energy production,” said Zygmunt Artwik, Vice President, ZE PAK. “Converting the existing boiler from coal into biomass combustion is a very cost-effective way for us to carry out this energy transition. The investment will enable Konin to be the first Polish city that is heated with energy originating exclusively from renewable sources.”

The converted boiler plant will be handed over to the customer in the autumn of 2021.

 

Lisbjerg Power Plant Has 50 AUMA Electric Actuators

 

With its output of 38 MW of electricity and 78 MW of heat, the Lisbjerg power plant burns up to 240,000 t/y of straw from nearby farms. To increase its flexibility, the plant can also burn up to 50 percent woodchips. Four parallel conveying lanes and feeders supply straw to the boiler. Combustion takes place on a water-cooled vibrating grate.

 

Approximately 50 of AUMA’s latest-generation SA and SAR electric actuators automate valves in the Lisbjerg plant. Equipped with AC intelligent controls, all the actuators are centrally controlled via a Profibus DP V1 interface. Notable is the actuator on the condenser bypass damper, which has special safety requirements.

 

To make full use of its residual heat, the flue gas passes through a condenser. In case this needs to be taken offline for maintenance, the plant has a large bypass damper that allows the flue gas to be routed directly to the chimney. Failure of the damper to open when required could lead to a plant shutdown.

 

The contractor of the plant contacted Kolster, a Danish damper manufacturer that is part of engineering company KSM Kragelund. Kolster has a long history of working with Grønbech & Sønner, AUMA’s representative in Denmark. Together, Kolster and Grønbech & Sønner decided on the most suitable combination of actuator, control unit and gearbox for this critical application.

 

The designers specified that the actuator must meet the requirements of at least Safety Integrity Level (SIL) 1, as specified by IEC 61508 edition 2. They chose a Kolster KLS 1500 × 2750 mm damper with an AUMA SA 14.6 actuator, AC 01.2 SIL actuator controls, and GS 250.3 gearbox.

This actuator combination is designed for applications requiring a high degree of safety and meets SIL 2 requirements. At Lisbjerg it is used for both normal and safety-critical functions.

 

First German Straw-fired Plant in Emlicheim Uses 30 AUMA Actuators

 

The BEKW power plant in Emlichheim is the first in Germany to rely on straw as a fuel. This cogeneration plant (10.2 MWe / 49.8 MW) started up in 2013 and burns approximately 70,000 t/y of straw from surrounding farms. It achieves a record primary energy efficiency of approximately 90 percent. Technical availability is 98 percent, which is excellent for this type of plant.

 

AUMA electric actuators contribute to both the efficiency and the reliability of the Emlichheim plant. In use are around 30 SA actuators for open-close duty and SAR actuators for modulating duty, all equipped with AC intelligent actuator controls.

 

An example application is the control of water flow to the spray attemperators located after the superheaters. Variations in the quality of the straw fuel, and the continuously changing demand for district heat, make this a challenging task that the AUMA actuators are well placed to handle.

 

Skaerbaek Power Plant Adds 100 Auma Actuators

 

Skaerbaek power plant near Fredericia, Denmark, is one of three power plants operated by energy giant DONG that have recently been converted to biomass.

 

Originally built for natural gas, the plant was converted to dual-fuel cogeneration in 2017. Two new highly efficient 140 MW wood chip boilers were installed during the refurbishment. Wood chips are the primary fuel, with natural gas as a backup.

 

The main purpose of the plant is to provide district heating for roughly 200,000 people. However, the new wood chip boilers can also supply steam to the existing turbine, to the extent that the plant can be dedicated entirely to electricity generation. This ensures maximum flexibility in the summer, and during periods when wind or solar electricity production drops. The plant also has a 5500 GJ heat storage system that covers approximately 8 hours of heat consumption on a winter’s day.

 

Installing the wood chip boilers required new pipelines for water and steam to be installed and linked to the original gas-fired plant. Approximately 100 SIPOS SEVEN actuators were added.

The SIPOS SEVEN actuators, which are engineered and manufactured by AUMA Group company SIPOS Aktorik, incorporate frequency converters that allow their operating speeds to be adjusted during the valve travel. Variable speed offers significant advantages in a wide variety of closed-loop and open-loop control applications, since each change of valve position can be matched to its optimum operating speed.

 

Variable-speed operation also makes SIPOS SEVEN actuators very versatile since a single size of actuator typically covers eight different torque settings and seven operating speeds. This reduces the number of actuator variants required across the plant, and so simplifies inventory management. Torques and speeds can be adjusted at any time to optimize the process or accommodate process changes.

 

BUSINESS

 

EU Tougher Standards on Combustion Plant Air Pollution Will Take Effect This Year

 

The European Union (EU) has introduced tougher restrictions on large combustion plants with the implementation of their new BREF guidance this year. The reference document was published in August 2017 and tightened controls regarding the emissions of dust, nitrogen oxides (NOx), sulfur dioxide (SO2), mercury, particulate matter (PM) and carbon monoxide (though only regarding gas-fired power plants for CO).

 

With large combustion plants having four years to bring their operations up to speed and equip them with the requisite technologies to achieve compliance, the BREF requirements will become legally binding from August this year. That means that implicated parties have just over four months to ensure that they have the right monitoring mechanisms in place to ensure they do not exceed thresholds and incur fines as a result.

 

What is BREF?

The BREF document—so named as an approximate acronym for the term “Best available technique REFerence document”—puts down in writing the environmental performance standards that are expected of large combustion plants. It encompasses a variety of different facets pertaining to the issue, including air pollution, soil pollution, water pollution and thermal efficiency and, for the first time, will become legally binding later this year under the mandate of the Industrial Emissions Directive (IED).

 

Drafting of the BREF first began in 2011 and took place over several years and a number of different revisions, as a matter of collaboration from the Technical Working Group (TWG), which is comprised of the European Commission, representatives from each member state, NGOs, and industry members. The whole process was overseen by the European Pollution Prevention and Control Bureau, a regulatory arm of the Commission’s Directorate General Environment and Joint Research Centre (JRC).

 

The first draft of the BREF was published in July 2013, subsequently undergoing further revisions before being finally ratified and published in August 2017 following a vote by all member states of the EU in April of the same year. The name given to this specific process of law-making is called the “Sevilla Process”, due to the fact that the JRC is based in Sevilla, Spain.

What does the BREF cover?

 

The recommendations outlined in the BREF relate to emissions of NOx, SO2, dust, mercury, PM, and CO, though the CO figures will apply to gas-fired power plants only. However, it’s likely to be coal and lignite plants which are most heavily affected by the regulations, given that they set a yearly average threshold of no more than 175mg/Nm3 for all plants burning those fossil fuels with a total thermal output of 300 MW or more.

 

This means that such plants may need to install expensive technical equipment to retrofit their operations and ensure they do not exceed the limitations. More information on the exact facts and figures involved can be found in the document, The European Union’s Large Combustion Plant BREF – Monitoring and Compliance Requirements.

 

What is an EU BAT?

All of the thresholds arrived at in the BREF are based upon the conclusions arrived at in BATs, or Best Available Techniques. This concept was originally a part of Industrial Pollution Prevention Control Directive (IPPC), one of the seven previously existing directives (and one of two large combustion plant directives) that were superseded by the IED.

 

Using BATs, the TWG arrive at BAT-associated emissions levels (or BAT AELS). BAT AELS differ from previous standards in that they define what must be complied with on a daily or yearly average, whereas the pre-existing emissions limit values (ELVs) worked on a monthly basis. As such, it’s difficult to conduct a like-for-like comparison between the two, though on the whole, the standards set out in the BREF are stricter than those defined in the IED.

 

However, it should be noted that allowances are made for exceptional cases. By the very definition of BATs, they rely upon the technology and resources available to an individual plant. Therefore, a large combustion plant which can demonstrate that the costs involved in making the necessary upgrades to its facility outweigh the environmental benefits that those upgrades would bring is able to apply for an exception to made in their case. The national body responsible for issuing permits can then decide whether or not that exception is applicable and, if so, issue the license even though the plant exceeds BAT AELs.

 

What does this mean for pollution levels?

Under the terms of the legally binding BREF, large combustion plants will now have to take measures to ensure that they do not emit excessive levels of major contaminants like SO2, NOx and PM. That’s excellent news for Europe’s airways, given that the European Commission has previously indicated that the sector is responsible for up to a third of all the conventional pollution generated by industrial activity.

 

In particular, large combustion plants are believed to contribute almost half (46%) of all European SO2 emissions, as well as 18% of NOx fumes and 4% of PM10 pollution. That makes them the largest single contributor to industrial pollution in Europe. With around 3,500 large combustion plants across the continent now accountable to the new regulations, concerned inhabitants of the bloc can expect to see reduced levels of the aforementioned contaminants from this year onwards.

 

Given that ambient air pollution is thought to be responsible for the premature deaths of 800,000 people per year in Europe — roughly equivalent to one in every eight deaths — the public health benefits of cleaning up the bloc’s airways are obvious. Not only that, but the associated costs of dealing with poor air quality (including medical bills, working time lost and other outlays) run into the billions. According to one study, that works out to around an average cost of €1,276 per capita per annum. In some of the most polluted cities, such as Bucharest in Romania and Milan in Italy, the yearly personal expenditure caused by air pollution is closer to €3,000.

 

As one of the most polluting industries in the world, coal-fired power plants stand to be most affected by the new regulations — but so too do the public living in the vicinity of such plants. Indeed, calculations made by the European Environment Bureau (EEB) indicate that universal compliance with BREF could save as many as 20,000 lives that would be lost due to coal-related illnesses alone. Add to that figure the healthcare and fiscal savings engendered by other plants falling into line and the new regulations are a strong step in the right direction towards tackling Europe’s chronic coal problem.

 

As for the coal industry, it may well now be forced to modernize or withdraw. Retrofitting dirty coal plants with abatement technology like Selective Catalytic Reduction (SCR) or Selective Non-Catalytic Reduction (SNCR) devices is a hugely expensive process, but one which many plants may need to undertake if they are to avoid falling afoul of the new NOx parameters. Some countries depend heavily upon coal for their energy generation needs in comparison to others and so may find themselves out of pocket when complying with the rules.

 

For example, Poland depends upon hard coal and lignite for over three-quarters of the energy used to power its electrical grids. Understandably, the Polish energy sector has been opposed to the imposition of stringent rules regarding NOx and SO2 emissions from the outset, with Polish lobbyists complaining that adhering to the guidelines will cost the industry a cumulative €5 billion.

 

Elsewhere, some other countries have already acted pre-emptively to wean themselves off coal and reduce their reliance on the energy source. Britain is a strong example of this. As recently as 2014, the country relied on coal for almost a third (30%) of its energy needs; by 2018, that percentage had fallen to just 5.4%. Today, there are only three active coal-fired power plants in the UK and the government has indicated it plans to shut all three down by 2024 at the latest.

The British government has always maintained its commitment to its environmental goals, irrespective of its secession from the EU. Indeed, the EU Withdrawal Act of 2018 enshrines into UK law those regulations defined by the IED, the BREF and BAT AELS, ensuring that Britain will still be subject to the same laws as the EU even after the Brexit process is complete.

 

The wording of legislation in the UK has been amended from that of the EU to reference UK institutions rather than EU ones, transfer the power from the latter to the former and ensure that Britain continues to meet its environmental obligations with regard to the Paris climate summit and other international agreements. However, the changes are merely cosmetic; the meat of the regulations themselves will stay the same.

 

Given that the BAT AELS are scheduled to be revised on a regular basis, the UK is looking at how to implement a process for defining its own thresholds going forwards. This will take place in development and collaboration with each of the devolved governments and the relevant authorities in each. The Clean Air Strategy, published in 2019, sets out a firmer guideline for how this process will take place.

 

Crane Projects 2021 Sales of Over $3 Billion

 

Crane Co. CR at its annual investor day communicated that solid recovery in markets, organic growth investments, and mergers and acquisitions will be important for its prospects. It also revised key projections upward for 2021.

Talking about end markets, the company believes that its Aerospace and Electronics segment will benefit from growth in power conversion, electrification, thermal management, sensing and space markets. The Fluid Handling segment’s performance will get a boost from improvements in general industrial, chemical, and pharmaceutical markets. The Payment and Merchandising Technologies will gain from a recovery in the security, productivity, and automation business.


Investments in organic growth too are priorities for the company. Important areas of investment include product development, technology, innovation, commercial excellence, and localization.

Regarding the projections for 2021, net sales are now expected to be $3,080 million, marking a rise from $3,055 million mentioned previously. On a year-over-year basis, the revised sales projection reflects growth of 5% (or 2-4% organically) as compared with the earlier expectation of an increase of 4% (or 1-3% organically).

On a segmental basis, organic sales of Fluid Handling are expected to grow 0.5% from the previous year, while the same for Payment and Merchandising Technologies is likely to advance 6%. Organic sales for Aerospace and Electronics are expected to decline 8% and that for Engineered Materials is expected to increase 20%.

 

Crane Fluid Handling supplies a wide range of isolation and control valves to the power industry including triple offset butterfly valves.

 

Babcock & Wilcox 2020 Revenues Down 34%

 

Consolidated revenues in 2020 were $566.3 million, down 34% compared to 2019. Revenues in all segments were adversely impacted by COVID-19, including the postponement and delay of several projects. The GAAP operating loss in 2020 was $1.7 million, inclusive of an insurance loss recovery of $26.0 million offset by restructuring and settlement costs and advisory fees of $24.7 million, compared to an operating loss of $29.4 million in 2019. The improvement in operating loss was primarily due to the insurance loss recovery, the positive impact of cost savings initiatives and a lower level of losses on the EPC loss contracts, partially offset by the divestiture of Loibl and the impacts of COVID-19 on revenue in all three segments. Adjusted EBITDA improved to $45.1 million compared to $45.0 million in 2019. Total bookings in 2020 were $645.0 million, and backlog on December 31, 2020 was $535.0 million, a 21.3% increase compared to December 31, 2019.

 

Babcock & Wilcox Renewable segment revenues were $156.2 million in 2020, a decrease of 24.0% compared to $205.6 million in 2019, primarily due to the advanced completion of activities on the European EPC loss contracts in the prior year as well as new anticipated projects and parts orders being deferred due to COVID-19 and the divestiture of Loibl, a materials handling business in Germany that generated revenues of approximately $14.3 million in 2019, partially offset by a higher level of activities on two operations and maintenance contracts in the U.K. which followed the turnover of the EPC loss contracts to the customers. Adjusted EBITDA improved to $25.0 million compared to $1.6 million in the prior year, primarily due to the loss recovery of $26.0 million recognized in 2020 under an October 10, 2020 settlement agreement with an insurer in connection with five of the six European EPC loss contracts, as well as lower costs related to the loss contracts. In 2020, the segment recorded $3.7 million in net losses as compared to $6.9 million of equivalent losses recorded in 2019, inclusive of warranty expense. The Adjusted EBITDA improvement was also partially offset by the divestiture of Loibl and lower volume, as described above. The segment adjusted gross profit was $58.8 million in 2020, an improvement of $28.8 million compared to $30.0 million in 2019.

 

Babcock & Wilcox Environmental segment revenues were $108.0 million in 2020, a decrease of 60.8% compared to $275.6 million in 2019, primarily due to the completion of large construction projects in 2019 and a lower level of activity due to the postponement of new projects by several customers as a result of COVID-19. Adjusted EBITDA declined to $3.5 million compared to $12.5 million in the prior year, primarily attributable to the impacts of lower volume, partially offset by a lower percentage of overhead being allocated to the segment. Adjusted gross profit was $23.5 million in 2020, compared to $48.4 million in the prior year. On December 31, 2020, the B&W Environmental segment had two significant loss contracts, with net losses of $1.3 million and $5.6 million in 2020 and 2019, respectively. As of December 31, 2020, the first contract was approximately 100% complete with only warranty obligations remaining and the second contract was approximately 99% complete with final completion expected in the first quarter of 2021.

 

Babcock & Wilcox Thermal segment revenues were $305.0 million in 2020, a decrease of 25.6% compared to $409.7 million in the prior year, primarily due to the adverse impacts of COVID-19 resulting in lower parts, construction, package boilers and international service orders, as well as the completion of large construction projects in the prior year. Adjusted EBITDA in 2020 declined to $35.4 million compared to $51.4 million in the prior year, primarily due to lower volume and a higher percentage of overhead being allocated to the segment that was previously allocated to other segments, partially offset by favorable product mix and a full period of cost savings, and restructuring initiatives benefiting 2020; adjusted EBITDA margin was 11.6% for the year compared to 12.5% in 2019. Gross profit margin in the segment was 29.9% in 2020, compared to 22.3% in the prior year; adjusted gross profit in the segment in 2020 was $91.2 million, which was flat compared to the prior year primarily due to favorable product mix and the effects of a full period of cost savings and restructuring initiatives benefiting 2020, offset by lower volume.

 

COVID-19 Impact - The global COVID-19 pandemic has disrupted business operations, trade, commerce, financial and credit markets, and daily life throughout the world. The company's business has been, and continues to be, adversely impacted by the measures taken and restrictions imposed in the countries in which it operates and by local governments and others to control the spread of this virus. These measures and restrictions have varied widely and have been subject to significant changes from time to time depending on the changes in the severity of the virus in these countries and localities. These restrictions, including travel and curtailment of other activity, negatively impact the company's ability to conduct business. The volatility and variability of the virus has limited the company's ability to forecast the impact of the virus on its customers and its business.

 

The continuing resurgence of COVID-19, including at least one new strain thereof, has resulted in the reimposition of certain restrictions and may lead to other restrictions being implemented in response to efforts to reduce the spread of the virus. These varying and changing events have caused many of the projects the company had anticipated would begin in 2020 to be delayed into 2021 and beyond. Many customers and projects require B&W's employees to travel to customer and project worksites. Certain customers and significant projects are located in areas where travel restrictions have been imposed, certain customers have closed or reduced on-site activities, and timelines for completion of certain projects have, as noted above, been extended into 2021 and beyond. Additionally, out of concern for the company's employees, even where restrictions permit employees to return to its offices and worksites, the company has incurred additional costs to protect its employees as well as advising those who are uncomfortable returning to worksites due to the pandemic that they are not required to do so for an indefinite period of time.

 

The resulting uncertainty concerning, among other things, the spread and economic impact of the virus has also caused significant volatility and, at times, illiquidity in global equity and credit markets. The full extent of the COVID-19 impact on the company's operational and financial performance will depend on future developments, including the ultimate duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, as well as the availability and effectiveness of COVID-19 vaccinations in the U.S. and abroad, all of which are uncertain, out of the company's control, and cannot be predicted.

 

Hillenbrand Completes Sale of Abel Pumps to IDEX Corporation

 

Hillenbrand, Inc. announced that it has completed the sale of Abel Pumps, L.P., and certain of its affiliates (ABEL) to IDEX Corporation. The sale closed in accordance with the terms of the Share and Interest Purchase and Transfer Agreement with IDEX that was announced on January 11, 2021, resulting in cash proceeds to Hillenbrand of approximately $103.5 million.

 

"The ABEL divestiture is an important step in our strategy to streamline our portfolio, increase financial flexibility, and accelerate growth," said Joe Raver, President and CEO of Hillenbrand. "The completion of the ABEL sale will help drive shareholder value and strengthen our key business platforms."

 

Consistent with its current capital allocation priorities, Hillenbrand intends to use proceeds from the sale to reduce leverage and reinvest in organic growth opportunities.

 

 IEA Predicts Solar Will Overtake Coal in Indian Power Generation

 

Prior to the global pandemic, India’s energy demand was projected to increase by almost 50% between 2019 and 2030, but growth over this period is now closer to 35% in the STEPS, and 25% in the Delayed Recovery Scenario. The latter would put some of India’s hard-won gains in the fight against energy poverty at risk, as lower-income households are forced to fall back on more polluting and inefficient sources of energy. It would also extend the slump in energy investment, which we estimate to have fallen by some 15% in India in 2020. Even though the pandemic and its aftermath could temporarily suppress emissions, as coal and oil bear the brunt of the reduction in demand, it does not move India any closer to its long-term sustainable development goals.

 

Covid-19 will leave lasting scars

An expanding economy, population, urbanization, and industrialization mean that India sees the largest increase in energy demand of any country, across all of our scenarios to 2040. India’s economic growth has historically been driven mainly by the services sector rather than the more energy-intensive industrial sector, and the rate at which India has urbanized has also been slower than in other comparable countries. But even at a relatively modest assumed urbanization rate, India’s sheer size means that 270 million people are still set to be added to India’s urban population over the next two decades. This leads to rapid growth in the building stock and other infrastructure. The resulting surge in demand for a range of construction materials, notably steel and cement, highlights the pivot in global manufacturing towards India. In the STEPS, as India develops and modernizes, its rate of energy demand growth is three times the global average.

 

India’s size and dynamism will keep it at the heart of the global energy system

Solar power is set for explosive growth in India, matching coal’s share in the Indian power generation mix within two decades in the STEPS – or even sooner in the Sustainable Development Scenario. As things stand, solar accounts for less than 4% of India’s electricity generation, and coal close to 70%. By 2040, they converge in the low 30%s in the STEPS, and this switch is even more rapid in other scenarios. This dramatic turnaround is driven by India’s policy ambitions, notably the target to reach 450 GW of renewable capacity by 2030, and the extraordinary cost-competitiveness of solar, which out-competes existing coal-fired power by 2030 even when paired with battery storage. The rise of utility-scale renewable projects is underpinned by some innovative regulatory approaches that encourage pairing solar with other generation technologies, and with storage, to offer “round the clock” supply. Keeping up momentum behind investments in renewables also means tackling risks relating to delayed payments to generators, land acquisition, and regulatory and contract uncertainty. However, the projections in the STEPS do not come close to exhausting the scope for solar to meet India’s energy needs, especially for other applications such as rooftop solar, solar thermal heating, and water pumps.

 

Coal’s hold over India’s power sector is loosening, with industry accounting for most of the increase in coal demand to 2040 in the STEPS

Once the coal-fired power plants currently under construction are completed over the next few years, there is no net growth at all in India’s coal fleet. Coal-fired generation was most exposed to the dip in electricity consumption in 2020. It picks up slightly in the STEPS as demand recovers since renewables do not cover all of the projected increase in electricity demand. However, coal suppliers looking for growth increasingly have to turn to India’s industrial consumers rather than the power sector. The share of coal in the overall energy mix steadily declines in the STEPS, from 44% in 2019 to 34% in 2040, and more rapidly in other scenarios.

 

 

FGD and DeNOx Newsletter No. 515