Impact of Factors on U.S. Coal Megawatt Hours

Assuming that any movement to prohibit hydraulic fracturing would be rebuffed the continued low price of oil and gas is highly predictable. As a result the gas price will be a large but predictable factor reducing coal use. Climate policy over the period through 2040 is likely to be a minor factor regardless of whether there is a Democratic or Republican Congress and Administration. There are not going to be any new coal fired plants. There will be continuing pressure to operate existing plants more efficiently to reduce CO2 and with reduced air pollution.

Investments in combustion and air pollution control technology will have more impact on operating hours than will climate change. These investments can make coal plants more flexible and able to operate more efficiently at reduced loads and in a cycling mode.

China is taking the approach of upgrading coal fired plants to make them equal to gas fired plants in terms of emissions. This includes upgrades to ultra-supercritical operation. Given an assumption of retirement in 2040 only a minority of U.S. plants will be able to justify this investment. However there are many investments with a high return over just a few years.

Injecting hydrated lime ahead of the SCR and the air heater can lower the SO₃ concentrations enough to avoid  maintenance and turn down issues. Injecting enough sorbent further upstream in the flue gas means utilities can lower load and capture waste heat that would typically escape from the stack. This  also gives utilities flexibility to run the coal-fired units at a lower load, typically at night, and be more efficient.  Buckeye Cardinal Unit 2 in Brilliant Ohio initiated this change in 2017 and is experiencing a high ROI.

There are many other initiatives which can be pursued. Here are some.

·         Catalytic filters with DSI ahead of the air heater and capture of heat and water which otherwise is lost through the stack (ideal where hot precipitators are still being used)

·         By-products such as rare earth feedstocks, hydrochloric acid, pure white gypsum to compete with precipitated calcium carbonate, ammonium sulfate, and sulfuric acid all have potential for certain site specific situations

·         CO₂ as a product: SaskPower supplies CO₂ for enhanced oil recovery from its Boundary Dam plant. BHE in Utah directs CO₂ from its gas turbine stack to a commercial tomato greenhouse on site. Most commercial greenhouses purchase CO₂. Hydraulic fracturing with CO₂ is promising as a way to reduce water consumption and sequester greenhouse gases.

All of these initiatives and the fate of each coal -fired plant is being analyzed and tracked in the McIlvaine Utility Tracking System: http://home.mcilvainecompany.com/index.php/databases/42ei-utility-tracking-system. 

Bob McIlvaine can answer your questions at 847-784-0013 or rmcilvaine@mcilvainecompany.com.

COAL-FIRED BOILERS

S.E. Asia Yearly Coal-fired Power Investment to Exceed That of the U.S. in the Boom Years

The latest IEA forecast predicts growth in coal-fired power in South East Asia from 143 MTOE in 2018 to 272 MTOE in 2040. This compares to the 2017 usage in the following countries.

In the case of China nearly 700 MTOE is used for other purposes including coal-to- chemicals. By comparison, the S.E. Asia coal-fired power generation in 2040 will equal about 70 percent of the U.S. consumption at the peak. It also means that the yearly capital expenses will exceed those in the U.S. peak since they are compressed into 20 years rather than 50. 

Southeast Asia is well on the way to achieving universal access to electricity by 2030. Millions of new consumers have gained access to electricity since 2000, yet some 45 million people in the region are still without it today and many more continue to rely on solid biomass as a cooking fuel.

Southeast Asia’s growth in electricity demand, at an average of 6 percent per year, has been among the fastest in the world, but a number of power systems in the region are facing significant financial strains.

Since 2000, overall energy demand has grown by more than 80% and the lion’s share of this growth has been met by a doubling in fossil fuel use. Oil is the largest element in the regional energy mix and coal — largely for power generation — has been the fastest growing. This has underpinned the region’s development and industrial growth but has also made air pollution a major risk to public health and driven up energy-related carbon dioxide (CO₂) emissions. 

Southeast Asia has considerable potential for renewable energy, but (excluding the traditional use of solid biomass) it currently meets only around 15 percent  of the region’s energy demand.

Hydropower output has quadrupled since 2000 and the modern use of bioenergy in heating and transport has also increased rapidly. Despite falling costs, the contribution of solar photovoltaics (PV) and wind remains small, though some markets are now putting in place frameworks to better support their deployment.

In the IEA forecast, Southeast Asia’s overall energy demand grows by 60 percent to 2040. The region’s economy more than doubles in size over this period, and a rise of 120 million in the population is concentrated in urban areas.

The projected rate of energy demand growth is lower than that of the past two decades, reflecting a structural economic shift towards less energy intensive manufacturing and services sectors, as well as greater percent efficiency. Nonetheless, it still represents some 12 percent of the projected rise in global energy use to 2040.

Coal-fired Power Will Remain Stable Over the Next Five Years

Global coal demand is expected to decline in 2019 but remain broadly stable over the next five years, supported by robust growth in major Asian markets, according to the International Energy Agency’s latest market analysis and forecasts.

The weakness in coal demand this year results mainly from coal-fired electricity generation, which is set to experience its largest ever decline — over 250 terawatt hours (TWh), or more than 2.5 percent. This drop is led by double-digit falls in the United States and Europe, according to Coal 2019, which was released this week and contains forecasts through 2024.

It is too soon to say whether the expected global decrease in coal power generation this year will be the start of a lasting trend. The IEA forecasts that renewable sources will supply a major portion of the increase in global electricity demand over the next five years. Electricity generation from coal will rise only marginally over that period, at less than 1 percent per year — and its share will decline from 38 percent in 2018 to 35 percent in 2024. This means coal remains by far the single largest source of power supply worldwide.

Ultimately, global trends will depend largely on China, where half of the world’s coal is produced and consumed.

In Europe and the United States, coal power generation is sinking to levels not seen in decades. Growth in solar PV and wind, low natural gas prices and stagnating electricity demand have created a perfect storm for coal in both regions, where coal plant retirements continue to take place. These trends will continue through 2024, although the speed of the declines is expected to slow unless coal comes under additional pressure from stronger climate policies or lower-than-expected natural gas prices.

“Wind and solar PV are growing rapidly in many parts of the world. With investment in new plants drying up, coal power capacity outside Asia is clearly declining and will continue to do so in the coming years,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, who is launching the report in Johannesburg today alongside Gwede Mantashe, South Africa’s Minister of Mineral and Energy Resources.

“But this is not the end of coal, since demand continues to expand in Asia,” Mr. Sadamori added. “The region’s share of global coal power generation has climbed from just over 20 percent in 1990 to almost 80 percent in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals.”

The report highlights that countries in South and Southeast Asia, such as India, Indonesia and Vietnam, are relying on coal to fuel their economic growth. Natural gas and oil have traditionally been the main sources of power generation in Pakistan, but the country has commissioned 5 gigawatts (GW) of coal power capacity since 2017, and another 5 GW is set to come online in the next few years. In Bangladesh, where natural gas has long generated the bulk of electricity supply, coal will gain share in the coming years, with 10 GW of capacity in the pipeline.

“In 2019, global coal power generation will experience the biggest drop ever and coal power generation in India will probably decline for the first time in 45 years,” Mr. Sadamori said. “The global picture, however, has not changed much. Coal is disappearing in many advanced economies, but it remains resilient and is even continuing to grow in developing Asia. The low coal power generation in India this year was due to unusually low growth in electricity demand and exceptionally high hydropower output. It is not at all clear that it will be repeated.”

The IEA forecast for global coal demand in this year’s report is very similar to those in previous years, but Coal 2019 warns that potential threats to the sector are increasing. Public opposition to coal is building, many countries are mulling stronger climate and environmental policies, and renewables and natural gas are becoming more and more competitive.

Enforcement Action Launched Over One of Eskom’s Coal Plants

In late December 2019 the South African Dept. of Environmental Affairs’ Environmental Management Inspectorate, also referred to as the Green Scorpions, issued a compliance notice to Eskom requiring it to submit a maintenance plan by January 12 to improve its compliance with the minimum air quality standards” for its 4116 MW Kendal coal plant. In July 2019 Eskom acknowledged that poor maintenance at its plants during 2018 had resulted in increased pollution and that bag filters had failed on four units at the plant. While the department said the timing of the compliance plan rests with Eskom, the government-owned utility is under pressure to close its two most polluting units, with a combined capacity of 1200 MW, and detail what it will do about the other four polluting units. In June 2019 the Centre for Environmental Rights, representing groundwork and the Vukani Justice Movement in Action, launched legal action against the South African Government over pollution in Mpumalanga region from Eskom’s 12 coal plants, including Kendal, and Sasol’s Secunda coal-to-liquids plant.

Babcock & Wilcox Announces Renewal of Maintenance Contract for New Mexico Power Plant

Babcock & Wilcox Enterprises, Inc. announced that its subsidiary, Babcock & Wilcox Construction Co., LLC (BWCC), has received a contract renewal valued at more than $4 million to provide maintenance services for Public Service Company of New Mexico’s (PNM) San Juan Generating Station in 2020.

BWCC will continue to provide a variety of services at the power plant next year, including general plant maintenance, coal pulverizer equipment maintenance and outage support, as it did in 2019.

“We very much appreciate our long-term relationship with PNM and this opportunity to continue to support them,” said Jimmy B. Morgan, Senior Vice President, The Babcock & Wilcox Company. “We’re pleased that our customer has renewed our contract and shown confidence in our services and ability to keep this critical plant operating at peak performance.”

Omni Warner, Director, San Juan Generating Station Plant Manager, said “We’re pleased with the commitment to safety, high level of service and support BWCC has provided us in 2019 and look forward to working closely with them in 2020. BWCC provides a cost-effective approach as PNM continues to transition to a plant closure in 2022.”

BWCC Vice President and General Manager Mike Hidas also expressed his appreciation to PNM for continuing its relationship with BWCC.

“B&W supplied one of San Juan Generating Station’s current boilers, as well as other key equipment,” Hidas said. “We have unmatched expertise and depth of experience to service and maintain our own and competitors’ equipment anywhere in the world. I thank PNM for the opportunity to continue providing our services for its facilities.”

BWCC provides outage services, installation, refurbishment, mechanical repair and maintenance services for a variety of industries, equipment and plant installations, regardless of the original manufacturer.

Indian Coal-fired Power Plants Will Ignore Pollution Control Deadline

Over 90 percent of the coal-fired plants directed to comply with new pollution standards by a December 31 deadline will not have installed the required flue gas desulfurization (FGD) units. The plants have a combined capacity of 14,000 MW. The new standards were first announced in December 2015 with the initial deadline for compliance in December 2017 extended to December 2019 following lobbying from power utilities. The bulk of the plants set to breach the standards are located in the states of Haryana, Punjab and Uttar Pradesh. A further 26,330 MW of coal units have been directed to meet the emission standards by December 2020 and over 64,000 MW in each of 2021 and 2022. To date contracts for FGD units have only been awarded for 35,200 MW of the total capacity.

PAINT SHOPS

Dürr Chosen by BMW as General Contractor for Three Paint Shops in China and Hungary

BMW is relying on Dürr's experience and technological leadership to expand its painting capacities in Asia and Europe. In Shenyang (China), Dürr is building a new paint shop and extending an existing painting system. BMW is also working with Dürr on a further new paint shop in a new plant in Debrecen, Hungary. Dürr sets standards in the painting process with state-of-the-art technology. The orders for the construction of the two plants in China were posted in the 4^th quarter of 2019.

Dürr has confirmed its position as a market leader in China with two orders for BMW. In Dadong district in Shenyang, BMW has been operating a Dürr paint shop since 2016 and is now increasing its capacity. In Tiexi district in Shenyang, where BMW has already been using Dürr painting technology since 2013, Dürr will build a further paint shop in a new manufacturing facility. In addition, BMW is already planning a second expansion stage in Tiexi and has agreed the future expansion with Dürr. An agreement has also been made with Dürr on the construction of a paint shop in Europe, with a new BMW plant in Debrecen (Hungary) scheduled to commence production in the summer of 2023.

BMW will use sustainable, resource-saving technology throughout the three new paint shops. The Dürr products for paint separation — EcoDryScrubber, in China and EcoDry X in Hungary — boast strong environmental credentials. EcoDryScrubber is based on paint separation using limestone powder, while EcoDry X uses cardboard filter boxes as a separating agent. The Dürr technology thus does not involve any polluting methods that use a mixture of water and chemicals. The recirculation of up to 95 percent of the air used in Dürr's separation processes also enables a 60 percent reduction in energy consumption in the paint booth.

The EcoInCure oven, which will be used in the new plant in Tiexi as well as in Debrecen in the top coat section, will additionally boost the energy efficiency of the plant. The oven’s exhaust air can be purified using just one afterburning system of the type Ecopure® TAR. A comparable double oven with conventional continuous flow technology would need two air pollution control systems. This reduces the amount of fresh air required, and thus the energy demand. EcoInCure uses a new technology for drying: the air flowing in through the opening for the windshield heats the body parts from the inside out, resulting in particularly uniform and fast drying of the bodies – even special body shapes like those of electric vehicles.

COMPANY NEWS

LiqTech Successfully Installs New Furnaces to Expand Manufacturing Capacity

LiqTech International, Inc., a clean technology company that manufactures and markets highly specialized filtration technologies, today announced the successful installation of a brand new customized furnace for use in the manufacture of the company’s proprietary silicon carbide membrane filters. The new furnace has throughputs that are more than 3x the company’s existing furnaces due to size and efficiency.

The installation of this initial new furnace is the first step of a multi-phase process to increase overall capacity with modernized equipment that should also benefit the company’s gross margins. The company expects to install a second new furnace by February 2020, and two additional new furnaces by June 2020. Upon successful installation of all four, brand new efficient furnaces in June 2020, the company expects to completely retire its current older, less efficient furnaces. Overall, the company’s manufacturing initiatives are expected to result in total capacity of between $150 and $200 million on an annualized basis by mid-2020.

Valmet to Start Co-determination Negotiations in the Fabrics Business Unit in Finland

Valmet is planning changes in the Fabrics Business Unit which is part of the Services Business Line in order to secure the unit’s profitability and future competitiveness. The most important action in the preliminary plan is to move the dryer fabric and wide filter fabric production from Tampere in Finland to Valmet’s unit in Portugal. The possible actions will have employee impacts. The functions under consideration are part of Valmet Technologies Oy.

Fabrics Business Unit develops and manufactures press felts, shoe press belts, dryer fabrics and wide filter fabrics in Tampere. Valmet’s location in Portugal, to which the dryer fabric and wide filter fabric production possibly is relocated, develops and manufactures filter fabrics and other industrial textiles.

Active review of operations’ locations is part of Valmet’s normal business development globally. In recent years, for example, Valmet’s production of evaporation plants from Sweden and the production of Quality Control Systems (QCS) from China have been relocated to Finland. Valmet employs 5,100 persons in Finland of which 2,000 in Tampere. At the moment Valmet has approximately 160 open positions in Finland.

FLSmidth to Adjust its Workforce

FLSmidth is adjusting the number of employees by approximately 500 as part of the business improvement initiatives announced towards the end of 2019 and as a consequence of current industry caution and delays tied to large capital investments.

To improve efficiency and adapt to the anticipated business activity in 2020, FLSmidth has decided to reduce the number of employees by approximately 500 globally. The reductions will include approximately 80 situated at the headquarter in Copenhagen, Denmark, as well as another approximately 420 staff in offices around the world.

FLSmidth CEO Thomas Schulz comments, “Despite a healthy pipeline, this is an unfortunate yet necessary action given the weakening market for large capital investments in 2019 and our ongoing efforts to improve internal efficiency. In connection with Q3, we announced a need to make necessary business adjustments, and we take this step now to position FLSmidth for future profitable growth.”

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