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Construction and Operation of the Shenhua Anqing High-Efficiency, Low-Emissions Power Plant

By Liu Zhijiang
General Manager,
Department of Electric Power Management,
Shenhua Group Co., Ltd.

Primary energy reserves in China are largely based on coal, with small contributions from oil and gas. In fact, coal accounts for over 90% of China’s total fossil energy reserves, meaning that China will continue to rely heavily on coal over the long term. However, China is working to reduce the environmental footprint of coal utilization, including emissions of particulate matter (PM), sulfur dioxide (SO2), nitrogen oxides (NOx), and CO2. Thus, a major focus in the country is to increase the use of high-efficiency, low-emissions (HELE) coal technologies and meet the dual objectives of providing power and realizing environmental and social responsibility.

Shenhua Shenwan Energy Company’s Anqing Power Plant Phase II’s 2×1000-MW expansion project is a prominent example of HELE coal-fired power in China. In this project, Shenwan adopted a series of design innovations to optimize environmental performance based on the specific features of China’s coal-fired power sector as well as Shenhua Group’s development strategy to be a world-class supplier of clean energy. Using the latest technological achievements, Shenwan constructed a high-capacity, efficient, and low-emissions coal-fired power plant, which is currently considered to be the state of the art in China. For example, the plant boasts the highest steam parameters in China (see Table 1), resulting in the efficient utilization of coal with extremely low emissions.

Liu Table 1

PROJECT BACKGROUND

The Anqing Power Plant is located in the middle and lower reaches of the Yangtze River. With recent continuous growth of the regional economy, insufficient power supply has emerged as a bottleneck restricting economic and social development. The construction and commissioning of the Anqing Power Plant’s Phase II 2×1000-MW units have fundamentally alleviated the power shortage in the Anqing region and have increased the stability of the local grid. This has supported increased growth in industrial and agricultural production and an expanding
service sector in the region and the larger province.

The state-of-the-art Shenwan Anqing Power Plant

The state-of-the-art Shenwan Anqing Power Plant

The scope of the construction of the Anqing Phase II project included two identical ultra-supercritical coal-fired power units, including limestone-gypsum wet desulfurization (FGD) and selective catalytic reduction (SCR) denitrification facilities that were built simultaneously.

Construction commenced on 1 March 2013, and the two units were commissioned with the compulsory 168 hours of full-load testing on 31 May and 19 June 2015. Thus, the effective construction period was just over 22 months. The project investment was 6.096 billion yuan (US$950 million) or 3048 yuan/kW (US$478/kW).

The main operating indicators as measured during the full-load test prior to commercial operation are as follows: unit #3 consumed 272.5 g/kWh of coal with a parasitic energy consumption rate of 4.01%; unit #4 consumed 273.9 g/kWh of coal with a parasitic energy consumption rate of 4.06%. Thus, both units operated more efficiently than an average 1000-MW unit in China in 2014, which consumed 287.65 g/kWh of coal with an average parasitic energy consumption of 4.08%.1

The emissions were also measured during the full-load test and were lower than the national emission standards for natural gas-fired power plants. Since passing the 168-hour test, the units and their emissions control systems have continued to operate at the same high standards. In addition to low emissions, 100% of the fly ash, slag, and desulfurization by-products are utilized during normal operation and no wastewater is discharged.

CONSTRUCTION OPTIMIZATION

Through research and collaboration between engineers, technicians, and design institutes, the optimization of cost and key operating parameters was carried out concurrently. This helped to save more than 40 million yuan (US$6.3 million) in project investment.

By optimizing purchasing, maximizing competitiveness, and lowering the procurement cost, the best possible price performance ratio was obtained. For the desulfurization system’s absorber alone, the cost was reduced by 12 million yuan (US$1.9 million) compared to the original project budget.

Construction Cost Controls

With effective control of construction costs, the project investment of 6.096 billion yuan (US$950 million) was 547 million yuan (US$85.7 million) lower than the approved project budget of 6.643 billion yuan (US$1.04 billion), and the construction costs were reduced by 8.2%. The unit investment of 3048 yuan/kW (US$477.5/kW) was 152 yuan/kW (US$23.8/kW) lower than the budgeted amount. Cost-saving measures meant that the total project investment was less than that for comparable units in China.

HIGH-EFFICIENCY TECHNOLOGIES

Efficiency was maximized at the Anqing Phase II units mainly by increasing the initial steam parameters and adopting new technologies. Eighty-five new technologies were adopted at the plant, raising the power plant efficiency significantly and reducing coal consumption and emissions.

Perhaps the most important factor related to efficiency was the installation of the ultra-supercritical (USC) steam turbines, which decreases the amount of coal needed per unit of power produced compared to plants that operate at supercritical or subcritical steam conditions. The USC Anqing units are able to operate at steam cycle pressure and temperatures of 28 MPa/600˚C/620˚C—the first time such high parameters were used in China on a plant of this size. Currently, the rated pressure upstream of the main valve of the top three 1000-MW ultra-supercritical steam turbine plants is 25 or 26.25 MPa. Among them, the Waigaoqiao No. 3 plant has the highest pressure, 27 MPa, at the main valve, with main steam and reheat steam temperatures of 600˚C (see Figure 1). After considering all technology options, a main steam pressure of 28 MPa and a reheat steam temperature of 620˚C were selected. Compared to the steam parameters used by conventional 1000-MW units, the Anqing steam turbines’ heat consumption is 53 kJ/kWh lower and the standard coal consumption for power generation was reduced by 1.94 g/kWh. The annual savings, based on standard coal costs, are about 19.8 million yuan (US$3.10 million).

FIGURE 1. Steam turbine of the Anqing Phase II 1000-MW ultra-supercritical units

FIGURE 1. Steam turbine of the Anqing Phase II 1000-MW ultra-supercritical units

Many other technological approaches were also taken to improve the efficiency. For example, grade-9 regenerative extraction (i.e., extracting steam from nine different locations in the turbine to optimize boiler feedwater heating) was adopted. As compared to the typical grade-8 regenerative extraction, heat consumption was reduced by 10 kJ/kWh and standard coal consumption for power generation was reduced by 0.34 g/kWh.

A high-yield water cooling tower designed to save energy compared to a conventional cooling tower (see Figure 2) was used for the first time at a 1000-MW unit in China, reducing the circulating pump lift by 10–11.5 m and reducing noise by 8–10 dB. About 3790 kW/hr of parasitic energy was saved, reducing the plant’s power consumption by 0.38%, and the standard coal consumption for power generation was reduced by about 1 g/kWh.

FIGURE 2. Internal structure of high-level wet cooling tower

FIGURE 2. Internal structure of high-level wet cooling tower

Another approach to saving energy was capturing the waste heat in the flue gas and using it to preheat the boiler feedwater. Operating at the designed full load, the flue gas heat exchanger recovers 44,000 kW of heat, which reduced heat consumption by 45 kJ/kWh, and reduced the plants’ standard coal consumption by 1.65 g/kWh.

Minimizing the backpressure on the steam turbines is another approach to increasing the efficiency of the power plant. Thus, at the Anqing units the backpressure for the units was optimized to improve overall efficiency, with an operating design value of 4.89 kPa. Based on this rated backpressure, heat consumption was reduced by 30 kJ/kWh and the standard coal consumption for power generation was reduced by about 0.75 g/kW for every 1 kPa of reduction in the turbine backpressure. In comparison to a standard unit backpressure of 5.1 kPa, heat consumption was reduced by 6.3 kJ/kW and the standard coal consumption for power generation is reduced by about 0.21 g/kWh.

Through the 11 energy-saving projects that have been implemented, the total heat consumption reduction was 152.1 kJ/kWh in total, and the standard coal consumption for power generation was reduced by a total of 5.51 g/kWh. Assuming an annual operating time of 5500 h, 30,305 tonnes of standard coal can be saved by each of the Anqing units per year.

Comparing the Anqing units with China’s national average for similarly sized plants, their coal consumption is 15.15 g/kWh lower, saving 83,325 tonnes of standard coal per unit every year—a combined savings of 166,650 tonnes of standard coal each year. This means that CO2 emissions can be reduced by about 416,700 tonnes per year, which is a 5% decrease compared to the average 1000-MW plant in China. Compared to the national average of new coal-fired power plants (i.e., 318 g/kWh in 2014) these two units represent a nearly 15% decrease in CO2 emissions.

ULTRA-LOW EMISSIONS TECHNOLOGIES

The Anqing Phase II project incorporated highly advanced flue gas treatment technologies, based on an ultra-low emission technology roadmap. The roadmap includes an electrostatic precipitator (ESP) with a low-temperature economizer, spin exchange coupling FGD, and a rotary tube bundle PM demister. Several of these flue gas treatment devices offer cobenefits that further reduce net emissions.

There are three separate processes in the power plant that remove PM from the flue gas. The high-frequency ESP with three chambers and five electric fields forms the first segment of particulate emissions control. The removal efficiency of PM in the ESP is up to 99.86–99.9% with a concentration around 25 mg/Nm3. The secondary PM removal segment is the efficient spin exchange coupling FGD that removes 60% of the remaining PM. The third approach to PM removal is the low-temperature economizer + rotary tube bundle PM demister, which has a PM removal efficiency of more than 70%. Compared to other PM capture options, the investment and operating costs for the advanced tube bundle PM removal technology were lower, it takes up less space, and it fits well into the general layout of new construction and retrofit projects. In total, the final target of an outlet concentration of PM less than 3 mg/Nm3 can be achieved—exceeding the requirement for a natural gas power plant in China.

The efficient spin exchange coupling wet FGD removes SO2 with an efficiency of 97.8–99.7% (see Figure 3). In the spin exchange coupling efficient-FGD technology, a device termed a “turbulator” has been added between the entering flue gas and first level of the FGD tower, which changes the flow state of the incoming gas from laminar to turbulent and reduces the gas film resistance, so as to increase the liquid-gas contact area, increase the gas-liquid mass transfer rate, and thus increase FGD and PM removal efficiency. This system also requires less power consumption than other FGD systems. In the compulsory 168-hour unit test run, the FGD efficiency reached 99.7%.

FIGURE 3. FGD system based on spin exchange coupling and energy-saving spray

FIGURE 3. FGD system based on spin exchange coupling and energy-saving spray

For removing NOx, low-NOx combustion and SCR using urea as a reducing agent results in a minimum denitrification efficiency of 95%.

Together, this low-emissions technology chain drastically reduces emissions of PM, SO2, NOx, heavy metals, etc. Not only are the emissions less than the national standards where the Anqing plant is sited,2 they are also lower than the emission limits for newly built coal-fired power units in the central regions. In addition, the new units at Anqing actually surpass the limits for gas-fired units as prescribed in the “Action Plan for Coal Energy Saving, Emission Reduction, Upgrading and Alteration (2014–2020)” from the National Development and Reform Commission, Ministry of Environmental Protection and National Energy Administration (see Table 2 for emissions results from the 168-hour test run).3

Liu Table 2

OUTLOOK

Anqing Phase II’s 2×1000-MW ultra-supercritical expansion project is Shenhua Shenwan Energy Company’s first project to integrate state-of-the-art HELE technologies. The resulting operations have met the expected efficiency and emissions goals. This power plant can serve as a model for China and the international community about what can be achieved regarding construction costs, economic indicators, and emissions reductions when the best HELE technologies are implemented. Through additional optimization of operations, key indicators are expected to further improve. This project is a significant demonstration of the clean and efficient utilization of coal, and the associated reduction in the environmental impact, which is a story worth telling.

REFERENCES

  1. China Electricity Council. (2015). 2014 national coal-fired power 600-MW grade unit energy efficiency benchmarking and competition materials. (In Chinese)
  2. Administration of Quality Supervision, Inspection and Quarantine of the Ministry of Environmental Protection. (2011, 29 July). GB13223-2011. Emission Standard of Air Pollutants for Coal-fired Power Plants. China Environmental Science Press, 2–3. (In Chinese)
  3. National Energy Administration, Ministry of Environmental Protection, National Development and Reform Commission. (2015). Action plan for coal energy saving, emission reduction, upgrading and alteration (2014–2020) [EB/OL], news.bjx.com.cn/html/20140922/548573-2.shtml (In Chinese)

 

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Upgrading the Efficiency of the World’s Coal Fleet to Reduce CO2 Emissions

By Ian Barnes
Associate, IEA Clean Coal Centre

Coal remains an important source of energy for the world, particularly for power generation. During the last decade the demand for coal has grown rapidly, as has the demand for gas, oil, nuclear, and renewable energy sources. Various projections for future growth in energy demand suggest that this trend will continue, dominated by coal use in the emerging economies, particularly China and India. Continuing pressure to cut CO2 emissions to mitigate the effects of climate change, specifically to limit the average rise in global temperature to between 2°C and 3°C, will require halving (from current levels) CO2 emissions by 2050.

To contribute to this goal, emissions from coal-fired power generation will need to be reduced by around 90% over this period: Cuts this deep will require carbon capture and storage (CCS). In the International Energy Agency (IEA) 450 ppm CO2 climate change scenario, around 3400 large-scale CCS plants must be operating globally by 2050 to abate the required amount of CO2 emissions.1 At the same time, the growing need for energy, and its economic production and supply to the end user, must remain central considerations in power plant construction and operation.

In 2012, the IEA concluded that, in general, larger, more efficient, and hence younger coal-fired power plants are most suited for economic CCS retrofit. However, the agency also found that only around 29% of the existing installed global coal-fired fleet could be retrofitted with CCS. Furthermore, on average, the efficiency of existing global coal-fired capacity is comparatively low, at about 33% (net HHV basis for all loads, all coals, and all steam conditions)A, although the recent establishment of large tranches of modern plants, particularly in China, is raising this figure. This article examines the first step in the decarbonization of the coal-fired electricity sector: increasing power plant efficiency.

Recently the IEA CCC published a study evaluating how improving coal-fired power plant efficiency would reduce CO2 emissions. For all nations evaluated, increasing the efficiency of the fleet of coal-fired power plants offered considerable CO2 emission reduction benefits, although variability was observed in the time frame in which such benefits could be realized.

REALIZING DECARBONIZATION THROUGH EFFICIENCY GAINS

Operating at lower efficiency means that relatively large amounts of coal must be used to produce each unit of electricity. As coal consumption rises, so do the levels of CO2 and other emissions. Upgrading existing plants and building new high-efficiency, low-emissions (HELE) coal-fired power plants addresses climate change concerns in two important ways. In the near term, emissions can be reduced by upgrading existing plants or building new HELE plants. Such plants emit almost 20% less CO2 than a subcritical unit operating at a similar load. Over the longer term, HELE plants can further facilitate emission reductions because coal-fired plants operating at the highest efficiencies are also the most appropriate option for CCS retrofit. For these reasons, there is considerable global interest in HELE technologies. Figure 1 illustrates the impact of employing progressively more effective HELE technologies and CCS on CO2 abatement (presented in terms of LHV at full load with hard coal).

FIGURE 1. Reducing CO2 emissions from pulverized coal-fired power generation

FIGURE 1. Reducing CO2 emissions from pulverized coal-fired power generation

The terms subcritical, supercritical, ultra-supercritical (USC), and advanced ultra-supercritical (AUSC) describe the steam conditions by which electricity is generated in a thermal power plant. HELE technologies center on improvements to the steam cycle, allowing for higher steam temperatures and pressures and the consequent improvement in the steam cycle efficiency. A switch from subcritical to current USC steam conditions raises efficiency by around four to six percentage points. Historically, the majority of pulverized coal-fired plants were based on subcritical steam-cycle technology, but supercritical technology is now widespread, largely due to improvements in boiler tube materials. Table 1 summarizes the differences in operating pressures and temperatures for various types of coal-fired plants currently in operation. Although the definitions of supercritical and USC vary from country to country, the ranges cited in the table are used frequently.

table 1 barnes

Supercritical plants can be found in 18 countries and are now the norm for new plants in industrialized nations; USC steam cycles are now the state of the art. A current coal-fired plant operating with a high-efficiency USC steam cycle not only has improved efficiency, but is also more reliable and has a longer life expectancy.

Whereas the first supercritical units were relatively small (typically less than 400 MWe), larger units of up to 1100 MWe are now being built based on USC technology (such as the Neurath USC lignite-fired plant in Germany) and even larger units are planned.

Developments in AUSC steam cycles are expected to continue this trend. AUSC coal-fired plants are designed with an inlet steam temperature to the turbine of 700–760°C. Average metal temperatures of the final superheater and final reheater could be higher, up to about 815°C. Nickel-based alloy materials are needed to meet this demanding requirement. Various research programs are underway to develop AUSC plants. If successful, a commercial AUSC-based plant would be expected to achieve efficiencies in the range of 45–52% (LHV [net], hard coal). A plant operating at 48% efficiency (HHV) would emit up to 28% less CO2 than a subcritical plant, and up to 10% less than a corresponding USC plant. Commercial AUSC plants could be widely available by 2025, with the first units coming online in the near future.

To illustrate the potential of HELE technologies, Figure 2 summarizes the impact of different steam-cycle conditions on an 800-MWe power station boiler burning hard coal and operating at an 80% capacity factor. Such a unit would generate 6 TWh of electricity annually and emit the quantities of CO2 shown in the figure, depending on its steam-cycle conditions and corresponding efficiency. Thus, replacing a unit of this type operating with a subcritical steam cycle with a unit based on AUSC technology (under development) would result in savings of CO2 in the region of 30%.

FIGURE 2. The impact of HELE technologies on CO2 emissions

FIGURE 2. The impact of HELE technologies on CO2 emissions

COAL FLEETS IN DIFFERENT COUNTRIES

Across nations, a legacy of using coal to produce electricity has given rise to coal fleets of differing age and efficiencies. Countries with a long history of using coal to generate power tend to have mature coal fleets that are maintained and upgraded with replacement components and new plants when necessary. Newer coal users tend to have younger coal fleets, in some cases based on the best available technology. These two extremes are well illustrated by comparing the coal fleet profiles of Russia and South Korea (Figures 3 and 4, respectively). Russia’s fleet is older, and thus consists of mostly subcritical plants, whereas South Korea’s recently built and rapidly growing fleet is made up primarily of supercritical and USC plants.

FIGURE 3. Russian coal-fired power fleet by year of construction and steam-cycle conditions *Planned or under construction

FIGURE 3. Russian coal-fired power fleet by year of construction and steam-cycle conditions
*Planned or under construction

FIGURE 4. South Korean coal-fired power fleet by year of construction and steam-cycle conditions *Planned or under construction

FIGURE 4. South Korean coal-fired power fleet by year of construction and steam-cycle conditions
*Planned or under construction

The IEA CCC recently examined the potential of HELE coal-fired power to reduce CO2 emissions; the principal coal-consuming nations were studied: Australia, China, Germany, India, Japan, Poland, Russia, South Africa, South Korea, and the U.S. Notably, the coal-fired power fleets of these countries vary in age and efficiency, and have different local conditions and policies that affect the possible scope for implementing HELE technologies.

The coal fleet profile of each country to meet future electricity demand was assessed under three scenarios: continuing electricity generation based on the existing fleet and retiring and replacing older plants on the basis of a 50-year or 25-year plant life. The potential impact of HELE upgrades on CO2 emissions was quantified and costs of implementation were estimated. Industry norms were used for unit efficiency and availability and current assumptions on capture rates from CCS retrofitted to HELE plants were assumed.

HELE UPGRADES IN THE LARGEST EMERGING ECONOMIES

As China and India represent the largest emerging economies and both rely heavily on coal, the key findings for the Chinese and Indian studies are summarized below.

China

The Chinese coal-based fleet is the largest in the world, as are the associated CO2 emissions. These plants account for approximately 41% of the global coal-fired capacity and are responsible for approximately 37% of global CO2 emissions from coal through the production of electricity.2 China’s coal-based fleet—with a median age of less than 20 years—is by far the youngest currently in operation. In addition, a significant number of the newer plants employ supercritical or USC steam conditions.

By the end of 2013, China’s total electricity capacity was 1247 GW. With a reported coal-fired power generation capacity of over 786 GW and an annual total generation of 3947 TWh (2013 data),3 China is the world’s largest producer of power from coal. Predictions on the role of coal in China’s future energy requirements generally agree that coal will continue to be a very significant contributor to the country’s energy needs, although estimates of the relative importance of coal with respect to other primary energy sources differ. China is actively seeking to diversify its electricity supplies. The electricity capacities from other energy sources currently stand at 22% for hydroelectric, ~8% for other renewables (led by wind at ~6% and solar at ~2%), 6% for natural gas, and 1% for nuclear power. Although power from these sources is growing, they still account for a relatively small share of China’s energy generation profile, with coal still responsible for about 70% of electricity generation.

The Chinese government has set a target to raise non-fossil fuel energy consumption to 11.4% of the total energy mix by 2015 as part of its 12th Five-Year Plan. The U.S. Energy Information Administration (EIA) projects coal’s share of the total energy mix to fall to 59% by 2035 due to anticipated higher energy efficiencies and China’s goal to reduce its carbon intensity.4 Still, absolute coal consumption is expected to double over this period, reflecting the large growth in total energy consumption.

China is the premier example of a country benefitting from an actively pursued HELE upgrade policy. By utilizing state-of-the-art USC plants for new and replacement capacity, and with the retirement of older, less efficient units, CO2 emissions are projected to rise less steeply than the increase in demand for coal-based electricity; emissions are projected to reach 6136 Mt in 2040. If China continues to adopt the best technology and retire older units on a roughly 25-year timescale, a largely AUSC-based coal fleet would see projected CO2 emissions actually fall between 2035 and 2040; in this case the CO2 emissions are projected to be 5153 Mt in 2040 (a 16% reduction over the base case scenario), despite a continuing increase in demand. If the most effective CO2 abatement pathway is followed (25-year plant retirement, AUSC upgrades after 2025, CCS installation) emissions could fall to 750 Mt in 2040 (see Figure 5). Although the analysis presented here does not incorporate China’s recent announcement to peak coal utilization by 2020, such a policy approach would certainly require continued aggressive deployment of HELE coal-fired power plants.

FIGURE 5. China’s coal-based power fleet composition and CO2 emissions under a plan to retire plants after 25 years of operation, from 2015–2040

FIGURE 5. China’s coal-based power fleet composition and CO2 emissions under a plan to retire plants after 25 years of operation, from 2015–2040

India

India has the third largest coal-fired power plant fleet installed in a single country. The Indian coal fleet contributes approximately 6% of the global coal-fired capacity with approximately 8% of global CO2 emissions from coal through the production of electricity.2 India has a relatively high share of smaller units (i.e., <400 MWe) and many of India’s power plants burn high-ash coal (up to 50%). The majority of the Indian coal-fired power plant fleet is based on subcritical technology, although some recently built plants have incorporated supercritical steam cycles. Overall, the fleet is relatively young and a very large portfolio of supercritical plants is reported as planned or under construction, which will make India the second fastest growing user of coal for electricity generation (after China) by 2020.1

India’s 12th Five-Year Plan (2012–2017) sets a goal that 50–60% of new coal-fired plants must use supercritical technology, although observers suggest that significantly less is likely to be achieved. Early indications of India’s longer-term policy direction suggest that the 13th Five-Year Plan (2017–2022) will stipulate that all new coal-fired plants must be at least supercritical, thus no new subcritical plants would be allowed.5

India is a rapidly developing country with considerable energy poverty and rapidly growing energy demand. Growth in coal-based energy demand is projected to extend to 2040, with no sign of leveling off. If new capacity is based on the best available HELE technologies and older plants are retired after 25 years and replaced with HELE units, CO2 emissions will first flatten out and then decline, despite increasing demand: 764 Mt in 2015 to 1063 Mt in 2040; a 39% increase (see Figure 6). With implementation of CCS, emissions could be reduced much more rapidly.

FIGURE 6. India’s coal-based power fleet composition and CO2 emissions if subcritical plants were retired after 25 years of operation, from 2015–2040

FIGURE 6. India’s coal-based power fleet composition and CO2 emissions if subcritical plants were retired after 25 years of operation, from 2015–2040

KEY CONCLUSIONS

The results of the IEA CCC study reveal trends for the major coal-consuming countries. Some trends are specific and depend on the profile of the respective coal fleet and the prospects for growth or decline in coal-sourced electricity, while other trends are more generally applicable. A few key conclusions can be garnered from the larger IEA CCC analysis:

  • Countries experiencing a prolonged period of growth necessitating additional power capacity and having a relatively new coal fleet are characterized by rising CO2 emissions, but these are projected to be offset by the use of AUSC over USC plants for new builds (e.g., China and India).
  • Countries experiencing a prolonged period of growth necessitating additional capacity and having a more mature coal fleet are characterized by rising CO2 emissions, but these are projected to be offset by the use of AUSC over USC (e.g., South Africa), particularly when older plants are retired and replaced by AUSC units.
  • Countries experiencing a prolonged period of growth necessitating additional capacity and having an old, relatively inefficient coal fleet see falling levels of CO2 emissions, even with growth in electricity demand (e.g., Poland and Russia).
  • Countries experiencing relatively low to moderate levels of growth and having an efficient coal fleet do not see significant reductions in CO2 emissions until 2040 when some older plants are projected to retire (e.g., South Korea).
  • As an existing coal fleet transitions to a HELE composition it becomes smaller with respect to installed capacity. This potentially benefits the siting and replacement of plants, particularly in countries where planning regulations are demanding and time consuming.
  • The greatest gains are seen when plant life is limited to 25 years (an evolving practice in China) rather than 40 years or more (common in OECD countries). Policies and incentives to encourage shorter timescale plant renewal would enhance CO2 savings.
  • When CCS readiness is considered, in all cases, the 25-year plant life scenario represents the best option for CCS deployment as all coal fleets transition to a high HELE composition quickly and enjoy maximum CO2 abatement as any remaining lower efficiency capacity is retired. This is particularly evident in the Indian case where the effects of rapidly increasing electricity demand are attenuated by a combination of HELE and CCS technologies.
  • Economics will govern the decision to replace plants unless policies and incentives drive the selection toward HELE technologies.

HELE plant upgrades can be considered a “no regret” option for coal-fired power plant owners and operators. A current state-of-the-art coal-fired plant operating with a high-efficiency USC steam cycle will be more efficient, more reliable, and have a longer life expectancy than its older subcritical counterparts. Most significantly, it will emit almost 20% less CO2 compared to a subcritical unit operating under similar load. In the near future, developments in AUSC steam cycles promise to continue this trend: A plant operating at 48% efficiency would emit up to 28% less CO2 than a subcritical plant, and up to 10% less than a corresponding USC plant. In addition, when CCS is available it will likely be applied to higher efficiency plants, making HELE a first step toward deep carbon emission reductions.

It is hoped that this study has provided an overview of what might be achieved in the major coal-using countries through an aggressive uptake of HELE technologies and the role they can play in reducing CO2 emissions. Deeper analysis by the IEA CCC is planned on a country-by-country basis to provide policy makers and planners with a local perspective on how HELE implementation can reduce emissions.

Steam turbines at the ultra-supercritical Waigaoqiao No. 3 (Shanghai) (photo courtesy of IEA CCC)

Steam turbines at the ultra-supercritical Waigaoqiao No. 3 (Shanghai) (photo courtesy of IEA CCC)

NOTES
A. Coal-fired power plant efficiencies are determined by properties such as the steam-cycle conditions, coal grade, load factor, etc. and are often reported in terms of LHV or HHV. Efficiencies provided in lower heating value (LHV), have subtracted the heat required to vaporize any moisture in the coal and assume that heat is not recovered. The higher heating value (HHV) includes the heat required to vaporize the moisture in the fuel and is usually about 2–3 percentage points higher than LHV.

REFERENCES

  1. International Energy Agency (IEA). (2012). Technology roadmap: High-efficiency, low-emissions coal-fired power generation, www.iea.org/publications/freepublications/publication/TechnologyRoadmapHighEfficiencyLowEmissionsCoalFiredPowerGeneration_Updated.pdf
  2. IEA. (2010). CO2 emissions from fuel combustion, www.oecd-ilibrary.org/energy/co2-emissions-from-fuel-combustion-2010_9789264096134-en
  3. China Electricity Council. (2014). Generation, english.cec.org.cn/No.117.index.htm
  4. Energy Information Administration (EIA). (2013). Annual energy outlook 2013, www.eia.gov/forecasts/archive/aeo13/
  5. George, T. (2014). Private communication. Second Secretary Energy & Resource Security, British High Commission, New Delhi, India.

This article is based on an IEA CCC report, “Upgrading the Efficiency of the World’s Coal Fleet to Reduce CO2 Emissions”, by Ian Barnes, CCC/237, 99 pp, July 2014. The report is available for download from the IEA Clean Coal Centre Bookshop: bookshop.iea-coal.org; the author can be reached at ianbarnes@hatterrall.com

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An Analysis of the Interdependence Between China’s Economy and Coal

By Xie Heping
Academician, Chinese Academy of Engineering
President, Sichuan University
Liu Hong
Associate Research Professor, Energy Research Institute,
National Development and Reform Commission
Wu Gang
Research Assistant, Sichuan University

China’s energy policies and development strategies have always emphasized domestic energy development. As China’s most abundant, most economical, and most reliable fossil fuel, coal has long been the principal energy source supporting economic development; this has led to a unique, complementary interdependence between China’s coal industry and its economy. In other words, economic growth could not have occurred without sufficient coal supplies; this is particularly true of the many national economy infrastructures and pillar industries that are coal-intensive and are therefore highly dependent on coal as a raw material. Similarly, economic growth has supported the development of coal resources, provided greater opportunity for market development and technological advancements, and promoted the overall growth and development of China’s coal industry. Today, coal is an irreplaceable energy source that helps ensure energy security, maintain social stability, and promote the development of the national and regional economies. In China, the vitality and performance of the coal market are often considered barometers for the overall state of economic development. However, today there is some desire for China to reduce its dependence on coal; such sentiment is primarily related to the desire to conserve energy resources and limit the energy sector’s environmental impact.

In order to analyze and clearly understand the interdependence of China’s economy and its coal industry, we designed and employed a series of quantitative indicators and we have also identified overall trends with regard to the correlation between China’s economy and its coal industry. The purpose of this effort was to make a relatively accurate quantitative assessment of this interdependence and how it has evolved over time, so as to provide useful information to the government for its decision-making process.

Correlation between Economic Growth and Developing Coal Resources

The growth rate of China’s GDP, coal consumption, and coal production over the past 60 years are shown in Figure 1. From the figure, it can be determined that the growth rate and trends are similar, with generally the same fluctuation cycles, which indicates a significant positive correlation. Since China produced all of the coal it consumed until about 2009, the rates of growth of coal production and consumption have been quite similar.

Figure 1. Historical growth rates for GDP, coal production, and coal consumption

Figure 1. Historical growth rates for GDP, coal production, and coal consumption

Based on historical data from the National Bureau of Statistics of China,1,2 we calculated the average correlation coefficient between growth in China’s GDP and coal consumption. The correlation coefficient is defined as the interdependence of two variables—a value of one indicates complete positive interdependence and a value of zero indicates no interdependence. We found that, from 1953 to 2013, the average correlation coefficient between the GDP growth and coal consumption was about 0.6. In the 30 years before China’s reform and opening up, the correlation coefficient averaged 0.7. In the 30 years after the reform and opening up, the correlation coefficient averaged 0.4. Examining the overall trend could lead to the conclusion that the strength of the correlation has been decreasing. However, when broken down into shorter time periods, the correlation has fluctuated and been considerably higher and lower than the average. For example, since the beginning of the 21st century, China’s economy has experienced unprecedented rapid development; the automobile, real estate, heavy industry, and power industry have gained momentum as development accelerated. In addition, there has been increased construction of urban infrastructure, which has further supported the growth of energy-intensive industries. As a result, economic growth that is highly resource dependent has been ramping up again.

During the 10th Five-Year Plan period (2001–2005), the correlation coefficient between coal consumption and GDP growth increased gradually reaching a maximum of more than 0.8, which reflects the high degree of dependence of China’s economy on coal consumption. During the 11th Five-Year Plan period (2006–2010), China increased efforts related to transforming the structure of all industry sectors, conserving energy, and reducing emissions. China also set a goal to reduce GDP energy intensity by 20%. During this period, the coal industry reorganized itself through mergers and acquisitions, and efforts were made to adhere to an energy efficiency approach that supports large power plants and eliminates small power plants. Also, the role of natural gas, nuclear power, and renewables in the energy sector was increased; major advancements were made in the optimization of energy efficiency and the energy mix nationally. All these factors contributed to a decrease in the dependence of China’s GDP on coal consumption.

Looking at a longer time frame as the country progressed from the early stages to the mid-to-late stages of industrialization, the economy transitioned toward service-sector and light-industry-oriented development. During this progression, the carbon intensity of the energy mix was reduced and the correlation between the economy and coal consumption gradually weakened. However, in special periods when economic growth picked up rapidly, the positive correlation between coal and China’s economy once again became strongly evident.

In addition to power generation, coal is also used as a raw material and energy source to support rapid growth of the steel and construction materials industries.

In addition to power generation, coal is also used as a raw material and energy source to support rapid growth of the steel and construction materials industries.

Interdependency of China’s Economy And Coal

Definition of the GDP-Coal Dependence Index

In order to analyze the dependence of China’s economic development on the coal industry, coal’s contribution to GDP growth, and the dependence the GDP has on the coal industry, we have proposed a concept index called the “GDP-coal dependence index”.

This comprehensive index characterizes the dependence of China’s economic growth on coal. This index employs a base year to conduct comparative analyses of changes in certain elements of the dependence of target years. Calculations using a weighted normalization process and the index were completed to indicate the changes in the dependence index for a target year relative to the base year.

Using 2000 as the base year, four indices were considered: GDP coal intensity, the elasticity coefficient of coal production and consumption, the contribution of coal to total and incremental energy consumption, and the contribution of coal-related industries (i.e., including those that are producing and heavily consuming) to total and incremental GDP. These four indices were used to determine the overall interdependence of China’s economy and coal.

GDP Coal-Intensity

China’s GDP coal-intensity is a key quantitative indicator that comprehensively reflects the level of dependence of the national economic growth on coal and is most often expressed as coal consumption in tonnes of standard coal equivalent (tsce) per RMB10,000 GDP. Figure 2 shows this trend over the past 10 years using the fair value in 2000 (orange) and the market value in each respective year (blue). It can be seen that China’s overall coal consumption per RMB10,000 GDP has generally declined, with the exception of a minor rebound during the 10th Five-Year Plan period. During the 11th Five-Year Plan period, the Chinese government implemented energy consumption restrictions with quantitative quotas for energy conservation, which led to decreases in the GDP coal-intensity as well as the GDP energy-intensity. If calculated based on the market value each respective year, the GDP coal-intensity decreased from 1.42 tsce/RMB10,000 in 2000 to 0.68 tsce/RMB10,000 in 2012. If calculated based on the fair value in 2000, coal consumption per RMB10,000 GDP in 2012 was about 1.12 toe.

Figure 2. GDP coal-intensity in China

Figure 2. GDP coal-intensity in China

GDP Coal Elasticity Coefficient

The GDP coal elasticity coefficient reflects the sensitivity of the GDP to coal production and consumption (i.e., GDP growth rate to the changes in coal consumption and production). The greater the value of the elasticity coefficient of the GDP to coal production and consumption, the more dependent economic growth is on coal; the smaller the index, the less dependent economic growth is on coal. Figure 3 shows the elasticity coefficients of GDP to coal production and consumption in China from 2000–2012. During this time period the average elasticity coefficients of GDP were 0.79 and 0.80 for coal production and consumption, respectively. In other words, on average for every percentage point increase in GDP, coal production and coal consumption increased by 0.79 and 0.80 percentage points, respectively.

Figure 3. Annual elasticity coefficients for coal production and coal consumption in China

Figure 3. Annual elasticity coefficients for coal production and coal consumption in China

This indicates that China’s economy had a strong reliance on coal during the time period examined. In addition, it can also be observed that during much of the 10th Five-Year Plan period, the elasticity coefficient was generally higher than in previous or later years, peaked at a value of 2.0, and came close to that maximum a second time, indicating that coal production and consumption were growing at a faster rate than the GDP. The huge demand for coal across the nation was mainly due to the sharp increase in energy-intensive industries during this period. In 2001, 2006, and 2012, the elasticity coefficient was relatively low (even negative in 2001); in each of these years China saw a sharp reduction in coal consumption.

Coal’s Contribution to Energy Consumption

The rapid development of China’s modern coal mining industry has also given new opportunities to the equipment manufacturing industry.

The rapid development of China’s modern coal mining industry has also given new opportunities to the equipment manufacturing industry.

Coal’s contribution to total and incremental energy consumption can be reflected in its contribution to China’s overall energy mix. Historically, the percentage of coal in the energy mix has been relatively high. Despite the government’s tremendous efforts to optimize the energy mix and also advance low-carbon energy development, coal’s share in China’s primary energy mix has not changed significantly over the past 13 years; the average has been 69% since 2000 and in seven out of the last 13 years coal contributed over 70%. The lowest contribution was in 2012, when coal accounted for about 67% of China’s primary energy mix.

Coal’s contribution to incremental energy increases is defined as the ratio of annual increase in coal consumption to the increase in total energy consumption—this ratio, shown in Figure 4, averaged 66% over the past 13 years. Similar to the elasticity coefficient of coal consumption, this ratio saw dips in 2001, 2006, and 2012.

Figure 4. Coal’s contribution to total and incremental energy consumption in China

Figure 4. Coal’s contribution to total and incremental energy consumption in China

The Contribution of Coal-Related Industries to Total and Incremental GDP

The term “coal-related industries” includes the coal industry itself and industries that use coal as a principal fuel or raw material (e.g., power production, iron and steel, chemicals industry, and the building materials industry). The contribution of coal-related industries to China’s economy can be evaluated through two metrics: the contribution to the total GDP and that to incremental GDP. Coal-related industries’ contribution to the total GDP is defined as the ratio of the total value added in such industries each year to the total GDP. Coal-related industries’ contribution to incremental GDP is defined as the incremental value added in coal-related industries each year to incremental GDP. Based on the growth of coal-related industries in China in recent years, we assessed the contribution of these industries to total and incremental GDP in China; the results are shown in Figure 5. From 2005–2012, coal-related industries contributed to China’s total GDP and incremental GDP an average of 15% and 18%, respectively.3

Figure 5. Annual contributions of coal-related industries to total and incremental GDP in China

Figure 5. Annual contributions of coal-related industries to total and incremental GDP in China

GDP Coal-Dependence Index

Based on the quantitative analyses conducted by using the various indicators, and setting 2000 as the base year (i.e., GDP coal-dependence index is 1 in 2000), the GDP coal-dependence index was calculated for each year from 2000 to 2012. The calculation results are shown in Figure 6. Over the past 12 years, the dependence of China’s economic development on coal has fluctuated. When comparing the dependence indices for each year, there is no clear indication of gradual decline. In fact, in five of the years, the coal-dependence index exceeded that of the base year. There were also two outlying years: 2001 and 2012, when the coal-dependence index was relatively low due to the economic slowdowns in China, during which there was an overcapacity of high-energy-consuming industries and a plummet in coal demand. In the other five years that were not higher than the base year and not outliers, the GDP coal-dependence index maintained a relatively high level, averaging between 0.7 and 0.9.

Figure 6. China’s GDP-coal dependence

Figure 6. China’s GDP-coal dependence

Conclusions

Since the start of the 21st century as China has transitioned from the early stage to the mid-to-late stages of industrialization, its economy has moved toward a service sector and light-industry-oriented development. In addition, efforts have been made to reduce the carbon intensity of its energy mix. As a result of both factors, the degree of sensitivity in the correlation between the economy and the coal industry has gradually weakened. However, in specific periods of rapid economic growth, the positive correlation between coal and economic development remained quite clear. Similarly, as the Chinese government continues to increase its efforts to promote energy conservation and emission reductions, optimize China’s energy mix and industrial structure, promote technological advancements, and enhance energy efficiency, China’s GDP coal-intensity has also gradually decreased. The decrease became most evident early in the 11th Five-Year Plan period; during this time the GDP coal-intensity declined at an increasingly rapid rate, slightly higher than the average decline during the 10th Five-Year Plan period. Although some years since the start of the 21st century were affected by slowdowns in the domestic and international macroeconomic environments and saw relatively lower coal elasticity coefficients, most years saw high coal elasticity coefficients, highlighting the important, supportive role coal production and consumption play in national economic growth.

Despite the fact that the dependence of economic development on coal varied from year to year, the overall level of interdependence has been consistently high—there is no significant trend of a gradual decline. The contribution of coal-related industries to the total national economy has actually been increasing. Over the past 10 years, China’s energy-intensive economic growth model based on investment in resource development has not demonstrated a fundamental reversal. Therefore, we believe that to meet the pressing need for continued economic and societal development and to also protect the environment, while controlling total coal consumption and avoiding excessive consumption of coal resources, the Chinese government must find a balance between economic growth and coal consumption.

 

References

  1. National Bureau of Statistics. (2013). China statistical yearbook 2013. Beijing: China Statistics Press. (in Chinese)
  2. National Bureau of Statistics. (2010). China energy statistical yearbook 2010. Beijing: China Statistics Press. (in Chinese)
  3. Xie, H., Liu, H., & Wu, G. (2012). A quantitative analysis on contribution of coal to national economic development. China Energy, 4. (in Chinese)
The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

Studying the Dominance of Coal in China’s Energy Mix

By Zhang Kehui
Chief Financial Officer, China Shenhua Energy Co., Ltd

China is facing serious environmental problems. Unlike most developed countries that had experienced such problems in their post-industrial eras, China is still in the process of industrialization. How to maintain a balance between economic development and environmental protection is quite a challenge for the country; the selection of sources of primary energy has a direct impact on the total costs of a society and, therefore, must be comprehensively evaluated based on four key factors: cost-effectiveness, security/safety, environmental impact, and availability. Although the current mainstream discussion around the future of coal may be negative, after careful consideration it can be concluded that coal will continue to maintain its position as the dominant primary energy source for the foreseeable future. However, ensuring that it is produced and utilized as cleanly and responsibly as possible must be driven through economic and regulatory approaches.

Modern coal mines can employ technologies to achieve zero discharge of dust or gangue to the nearby environment; the mine is a closed loop process to mitigate affecting the environment.

Modern coal mines can employ technologies to achieve zero discharge of dust or gangue to the nearby environment; the mine is a closed loop process to mitigate affecting the environment.

Uncertainties Regarding the Dominance of Coal

For more than 60 years, since the foundation of the People’s Republic of China, coal, also given the nickname “food for industries”, has been consistently the dominant source of primary energy in China. In 1952 coal reached its highest percentage of primary energy, 95%. Even during the last decade, this figure has never fallen below 65%. However, with increasingly serious environmental concerns in recent years, a growing number of people have been questioning coal’s dominant role.

Environmental Pressure

In January 2014, China witnessed the highest monthly number of average hazy days since 1961, and continuous and high-intensity haze pollution was reported in 10 provinces nationwide. Many research institutions have cast mining and coal consumption as the main causes for China’s environmental
problems.

Although China’s environmental performance on coal mining has improved, there are still some major concerns that must be addressed. For instance, the accumulation of coal gangue, discharge of mine water, and uncontrolled release of coal bed methane.

Regarding coal consumption, according to 2009 national statistics, high coal-consuming industries, such as coal-fired power, coking, steel, and building materials, emitted approximately 7.29 million tonnes of particulate matter, 16.05 million tonnes of SO2, and 3.254 billion tonnes of CO2, each accounting for more than 50% of the nation’s total respective emissions. To cope with the increasingly serious problems of air pollution, in September 2013 China’s State Council issued the “Action Plan for Air Pollution Prevention and Control”. The Plan noted that, by 2017, the concentration of particulate matter in regions like the Beijing-Tianjin-Hebei area, the Yangtze River Delta, and the Pearl River Delta needs to be decreased by about 25%, 20%, and 15%, respectively. The 10 concrete measures outlined in the Plan also require that coal, as a percentage of primary energy, be decreased to less than 65% by 2017.

Additionally, the coal-fired power and the coal conversion industries are characterized by significant water consumption; moreover, most such plants are located in western China where coal is rich, but water resources are scarce. The impact of industrial development on the local water resources cannot be ignored.

Therefore, pressure based on environmental concerns and the adjustment of national energy policies has led many people to believe that the dominant position of coal in China has become vulnerable.

The Rise of Alternative Energy Sources

With the growing global demand for alternative sources of energy, such options are thriving in China and are juxtaposed to the dominance of coal in China’s energy mix.

According to the national energy development plan, by 2020, 30 nuclear power plants will be built with an annual power generation capacity of 40 GW producing 260 billion kWh each year. The cumulative grid-connected wind power capacity is projected to reach 62.66 GW, producing a projected 100.8 billion kWh annually. China’s installed solar power capacity is planned to reach 50 GW annually, producing 150 billion kWh. In addition, shale gas production is projected to increase to 100 billion m3. An earlier goal was set for geothermal power capacity, which is planned to provide 100 MW, and for the production of coal-bed methane, which will reach 30 billion m3.

The development and utilization of these alternative energy sources could directly replace an annual coal production capacity of around 200 million tonnes. Based on these figures, some believe that the dominance of coal in China’s energy mix can be displaced by alternative energy sources.

Market Downturn

Since the start of the 21st century, China has seen a rapid growth of more than 10% in coal sales. However, beginning in 2012, growth in sales has been slowing and the coal market has been weak. The growth rate at the beginning of 2014 was less than 2%, highlighting the issue of oversupply. By 2013, China’s coal production capacity had reached 4.63 billion tonnes plus an extra 300 million tonnes of imported coal, but coal consumption in the same year was only 3.61 billion tonnes. This oversupply has caused a decrease in coal prices. By the end of February 2014, the price of Qinhuangdao 5500K steam coal had fallen to RBM537 (US$86). In addition, the total coal inventory of the seven northern ports had reached 27 million tonnes, a historical high. Industry insiders are deeply concerned and some have become increasingly pessimistic—to the point they have commented about the imminent end of China’s era of coal.

Comprehensive Evaluation of China’s Dominant Energy Source Options

The selection of a principal primary energy source is closely related to the ability to sustain the national economy; therefore, the selection cannot be based on mainstream consensus, but must consider how to best balance economic development and environmental protection. Taking the long-term well-being of the Chinese people into consideration, a system with set scientific and comprehensive evaluation criteria was established so as to make economy-wide comparisons between sources of energy in terms of cost-effectiveness,
security/safety, environmental impact, and availability.

Structure of the Comprehensive Evaluation System

When considering a dominant energy source, it is important not to overgeneralize the criteria, define energy sources via only one characteristic, or even to veto an energy source because of one area of concern. At the very least, I believe the following four factors should be reviewed:

Cost-effectiveness: In this case, the term refers to a ratio between the input costs for the utilization of energy and its output efficiency. China is a developing country and development remains the top priority for social progress; therefore, at this stage, cost-effectiveness should be given priority during the evaluation process.

Security/Safety: This term covers two levels of security/safety. On the macro level, it involves national energy self-sufficiency and the associated geopolitical security; on the micro level, it refers to actual energy production safety—namely, the extent of injury and damage to human life and property during the process of energy production, transportation, and utilization.

Environmental impact: This refers to the extent of environmental impact that could occur during energy production, transportation, and utilization.

Availability: This term is related to the cost-effectiveness factor, but specifically refers to the convenience of energy access (both mining feasibility and transport requirements) and utilization based on technological and economic feasibility.

Coal is shipped from the Shenhua Tianjin port to the various destinations where it is needed.

Coal is shipped from the Shenhua Tianjin port to the various destinations where it is needed.

Using the Factors to Analyze Alternative Energy Sources

The above energy evaluation criteria can be used to analyze and compare other alternative energies, enabling us to make the right choice. With respect to fossil energies, oil and gas could not compete with coal for the dominant position since China has little oil and gas, with reserves accounting for only 2.82% and 3.07%, respectively, of China’s total fossil reserves, compared to 94.11% for coal.

The exploration of shale gas in the U.S. has led to the shale gas revolution in the region, and is helping the U.S. to make rapid progress toward achieving energy independence. According to estimates, China’s shale gas reserves total 30.7 × 1012 m3 (mid-value), which ranks first in the world. However, due to factors such as immature production technology, high production cost (due to geological conditions very different from those in North America), and excessive water consumption, it is still too early to talk about large-scale development of shale gas in China.

By the end of 2013, nuclear power installed capacity nationwide was 14.61 GW and the power generation volume was 112.1 billion kWh, with an average plant availability time of 7893 hr/yr (>90% capacity factor). With respect to the four evaluation factors, nuclear power does well in terms of cost-effectiveness and availability, but due to immature nuclear waste treatment technology, its safety and environmental friendliness are of concern. Recently, the Fukushima accident further heightened concerns around nuclear power, and protests against the construction of nuclear power plants have been occurring globally. Currently, on a percentage basis in China’s energy mix, the contribution of nuclear is less than 1%; there is still great uncertainty about the large-scale development of nuclear power in the future.

When considering solar photovoltaic (PV) energy, there are certainly advantages in respect to the safety and environmental friendliness factors, but given the low energy density, large footprint, and geographical restrictions associated with solar energy, its underperformance in the cost-effectiveness aspect has been causing concern for China’s government, similar to issues faced in some developed countries. For example, in 2012 the Parliament of Germany reduced direct subsidy to the PV power industry by 29% from the original €0.50/kWh as a result of the excessive financial burden. For a developing country like China, taking the current power generation cost into consideration, large-scale development of the PV power industry would inevitably result in huge financial subsidies that would be difficult for the government, and the growing economy, to justify.

Wind power is another option as a primary energy source. The safety and eco-friendliness aspects of China’s wind energy are generally positive, but because the grid technology for wind power generation is not yet mature and the power produced is unreliable, it results in high operating costs. Even so, China is the world’s number one wind power producer; as of the end of 2013, the installed wind power capacity was 91.4 GW, accounting for 6% of the total national installed capacity. However, the average time of availability was only 2080 hr/yr, much less than the 5012 hr/yr average for coal-fired power plants. Wind power generation in 2013 was 140 billion kWh, providing only 2.7% of total national power generation. The large-scale deployment of wind farms to replace coal-fired power generation is uncertain and remains subject to breakthroughs in energy storage and smart grid technology.

Hydropower is an important source of clean energy. China’s hydropower installed generation capacity in 2013 was 280 million kW and the planned generation capacity by 2020 will be at least 420 million kW—84% of China’s total economically exploitable hydropower (estimated at 500 million kW). There is some concern regarding the local environmental impact of the large-scale construction of hydropower stations, which should not be ignored. Therefore, mainly from the perspective of development potential, hydropower also cannot replace the dominant role of coal-fired power generation.

To sum up the evaluation of all energy sources, although nuclear energy, solar energy, wind energy, hydropower, and shale gas could be developed to replace coal energy to a certain extent, coal will still maintain the dominant position in China’s energy mix into the long-term future.

Coal-Related Intrinsic Advantages and Technological Development

Among China’s proven fossil energy reserves, coal makes up the overwhelming majority (94%); this vast reserve is the third largest in the world. Over the past 14 years, RMB3.1818 trillion (US$511 billion) has been invested in the mining, beneficiation, production, and supply chain of coal, which accounts for 20% of the total investment in China’s energy sector. The mining technologies used by China’s largest coal enterprises are competitive with the best in the world. All these factors offer an enormous advantage for coal when considering factors such as cost-effectiveness and availability.

In terms of security/safety, China’s abundant coal reserves provide a reliable basis for energy security. In 2013, 58% of oil in China was imported, but due to the large amount of coal resources, 90% of China’s energy is domestically sourced. When considering the safety of production, coal production in China still has significant risks, but these risks are being reduced through the expansion of modern mining practices. For instance, the fatality rate per million tonnes of coal in China’s coal industry has dropped by nearly 90% in only a few years, from 2.81 in 2005 to 0.293 in 2013. China’s largest coal producers have already achieved safety standards comparable with those of the mining industry in developed countries such as the U.S. With further development and deployment of science and technology, safety in mining can be further improved.

In China, big coal-related energy enterprises, such as Shenhua Group, are also committed to decreasing the environmental impact of coal production and utilization. For coal mining, technologies involving environmental mining practices, water conservation, and integrated utilization of resources have been developed. In some mining areas, the vegetation coverage during mining has been increased by nearly 50% and zero discharge of mine water has been accomplished; in some cases water is processed and used to fulfill over 95% of the local need. For coal utilization, several high-efficiency, low-emissions, coal-based electricity generation technologies, including GW-sized ultra-supercritical (USC) technology, have been mastered. Similarly, technologies for SOx, NOx, and particulate matter emissions have been developed to the same level as developed countries, but have not yet been fully deployed. For coal conversion, several chemical technologies, such as direct coal liquefaction, indirect coal liquefaction, and coal-to-olefins, has been developed. By 2020, the planned capacity of coal-to-liquids (CTL) is 30 million t/yr; coal-based to synthetic natural gas production is planned to be 50 billion m3/yr.

The environmental impact of coal utilization remains the major concern, both domestically and abroad, associated with coal as an energy source. It is not only a problem constraining the further utilization and development of coal resources, it is generally a major issue that China must face on as it continues its path of development.

In China, the selection of coal as a dominant energy source is not only a reflection of its energy mix, but also its current stage of development. As environmental problems are often byproducts of industrial development, it is necessary to reduce such impacts by means of policy, law, science, and technology so as to achieve greater societal benefits with relatively low associated costs.

Ways to Reduce China’s Coal- Related Environmental Impact

To some extent, the coal-related environmental impact occurring in China is inevitable and the root cause can be attributed to the extensive growth model of the coal industry which has limited the attention paid to environmental protection. Correspondingly, effective ways to address these ecological problems should invoke law, policy, and technology.

Improve Legal Regulation

Among China’s existing laws and regulations governing coal production and utilization, those that focus on the environmental impact are fragmented and sometimes even absent. Therefore, I believe China should learn from the experiences of developed countries and accordingly make clear the functions and duties of the legislature and government. The old notion and practice of “policy playing the role of law” (i.e., when policy is taken as the law and no set laws exist) must be abandoned.

The legal system for clean coal utilization should be reviewed at the national legislative level with top-down implementation. Under such a framework, the central government should fulfill its duty of administrative legislation and policy-making, while the local people’s congresses and governments should play a supplementary role within their respective legal authorities (i.e., local decrees and special decrees).

I believe all of the laws and regulations should make operability an important consideration. Clauses focused on penalties for noncompliance should be spelled out in detail so as to avoid misinterpretation. Similarly, while intensifying the penalties,
protection should be extended to those implementing technological and economic responsibility around clean coal production and utilization. I believe that not only the principal responsibilities of coal producing and consuming enterprises, but also the supervisory responsibilities of the various levels of government should be clearly defined so as to ensure that all the entities can carry out responsible production and utilization of coal within the legal framework.

Finally, the supervisory and management functions of various levels of government during law enforcement should be clearly defined. While the watchdog role of different levels of government is encouraged, it must not be expanded beyond certain limitations—specifically, government entities should not intervene in the markets. Instead legal means should be adopted to guide enterprises to make responsible choices.

Strengthen Policy Guiding Clean Coal Production and Utilization

Enforcing environmentally friendly production and utilization of coal will undoubtedly increase the costs associated with such activities. Therefore, it is important that governments’ policy is perfected so it can serve as a guide.

The first measure to improve policy is to change the way performance appraisals for businesses are completed. Indexes reflecting the scale of economic growth should be reduced, while the focus on coal-related environmental impact should be increased. In addition, the environmental performance appraisal structure should be improved by taking environmentally related investment as an adjustment factor for the economic value added (EVA); this would guide enterprises to change how their businesses are run to more carefully consider the goal of environmental protection.

Another approach to better regulating/legislating coal producers and consumers to reduce environmental impact is to promote the development of an economy based on recycling, low-carbon, and environmentally friendly businesses through the creation of financial incentives and taxation policies. I propose that the central government implement additional pre-tax deductions focused on environmental investment by the coal enterprises under the premise that coal consumers have reached certain standards for energy savings and also emissions reductions. For coal-producing enterprises, the tax incentives associated with land reclamation should be further strengthened; pricing mechanisms should also be used to promote water recycling. For coal-consuming enterprises, a compensation mechanism for saving energy and reducing emissions should be created. Since coal-fired power plants are the main consumers of coal in China, accounting for around 60% of total coal consumption, such incentives should be given to enterprises that adopt large, clean, and efficient power units. The incentives could include dispatch priority, price subsidies, tax abatement, etc., which would encourage coal-fired power plants to make progress toward the goal of near-zero emissions.

Last, but not least, based on the current number of environmentally related debts that should be compensated for in China, it is also important to exert certain taxation incentives encouraging enterprises to set up special environmental funds for coal production and utilization.

With the addition of de-SOx and de-NOx environmental technologies, emissions from coal-fired power plants can be dramatically reduced.

With the addition of de-SOx and de-NOx environmental technologies, emissions from coal-fired power plants can be dramatically reduced.

Promote New Clean Coal Technologies

Production and utilization are at the two ends of the coal resource chain; with the application of clean technologies, the eco-friendliness factor could be improved at both ends, which would be conducive to fostering a cleaner, recycling-based, low-carbon modern industrial system.

To promote environmentally friendly mining technologies by strengthening the life-cycle management of coal production, the following areas should be given priority:

  • Improve coal-bed methane detection capabilities so as to facilitate its collection and utilization.
  • Increase research on the usage options for coal gangue, especially in the power sector (e.g., mixture of coal gangue and slime and the use of coal gangue in construction).
  • Promote mine water purification technologies so as to increase the utilization of mine water.
  • Promote the use of low-carbon gangue in mine reclamation and land filling so as to reduce ground subsidence and surface damage.
  • Plan comprehensively for coal transportation and power transmission adhering to the idea of “placing equivalent priority on both forms of energy transfer” so as to optimize the delivery and distribution system and reduce the environmental impact of coal transportation.
  • Exert greater effort on the extraction and utilization of coal byproducts so as to reduce the discharge of waste and improve the comprehensive utilization of coal resources as well as increase the value of coal.

Promoting cleaner power generation technologies will require strengthening the management of coal-fired power plants. Revamping equipment and technology and upgrading efforts in power enterprises should be reinforced. For instance, encouraging the adoption of high-efficiency, low-emissions, large units and also promoting closed-loop operation, auto-controlled, high-efficiency combustion, and low excess air technologies would increase the efficiency of utilization of the coal feedstock. Similarly, new technologies should be studied and promoted, such as high-efficiency and boiler gas removal technology, upgrading removal systems for SOx, NOx, mercury, and particulate matter as well as coal residue extraction and utilization technologies.

The methodical development of China’s coal conversion industry can be founded on new technologies. For this newly emerged industry, overall planning for the proper nationwide design with the integration of different coal-to-chemicals technology routes is necessary. At the same time, new technologies such as coal-based polygeneration and integrated gasification combined cycle (IGCC) power generation, as well as the combination of chemical production with wind power, should be developed and promoted so as to improve comprehensive energy efficiency. Specifically in the coal conversion industry, not only can high-carbon coal can be converted to relatively low-carbon liquid fuels or chemical products, but also the high-concentration CO2 generated during the process could be captured and stored (CCS) so as to truly accomplish the clean and low-carbon conversion of coal.

Conclusions

China’s dependence on coal will continue into the foreseeable future. In fact, today there are no other viable energy sources that could replace coal’s principal role as a primary energy source. For this reason, it is worthwhile to take carefully implemented steps to improve the efficiency and environmental impact of coal production and utilization.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

Advancing China’s Coal Industry

By Wang Xianzheng
President, China National  Coal Association

China is responsible for more coal production than any other country. Since the beginning of the 11th Five-Year Plan in 2006, many efforts have been made to reform the Chinese coal industry. Transforming a large industry during a time of rapid growth is not an easy task. However, using science and technology to fuel much of this transformation has led to carefully implemented changes throughout the industry. Looking forward, we will have many more opportunities and challenges related to the industry’s continued development and reform. To address future challenges, the China National Coal Association (CNCA) recommends that China’s coal industry place greater importance on technological progress, implement innovation-driven development strategies, strengthen structural changes, promote quality and efficiency, and strive for a general advancement.

China Coal Group’s Pingshuo mine is an example of a large, high-efficiency, modern mine; there has been a push by China’s coal industry to construct many such facilities.

China Coal Group’s Pingshuo mine is an example of a large, high-efficiency, modern mine; there has been a push by China’s coal industry to construct many such facilities.

Progress since the 11th Five-Year Plan

Industry-Wide Restructuring

Since the start of the 11th Five-Year Plan, the coal industry has undergone an industry-wide restructuring, rapidly changing to focus on large, modern mines. The total number of coal mines in China has decreased from 24,800 in 2005 to about 14,000 in 2012. The average annual production for an individual mine has increased from 90,000 to 260,000 tonnes per year. In 2012, large-scale modern coal production accounted for about 65% of China’s total output and the contribution of small-scale production had been reduced to 17%. Today about 600 million tonnes of coal per year are produced from 47 large-scale mines, each of which is producing more than 10 million tonnes per year.

China’s coal production has also become more concentrated geographically. The total annual production from the 14 large- scale coal bases is 3.3 billion tonnes of coal, accounting for 90.4% of total coal output.

There has also been a shift in focus to fewer and larger coal producers. Today, there are 52 companies producing from more than 10 million up to 461 million tonnes of coal per year; their combined annual output is 2.76 billion tonnes. Seven companies produce over 100 million tonnes of coal per year; their combined output is 1.227 billion tonnes. The top four coal-producing enterprises account for 22.2% of the total annual coal production.

The focus on increasing mine size came at a time when coal production was expanding: 2.35 billion tonnes were produced in 2005 compared to 3.65 billion tonnes in 2012. Increased integration has been necessary to utilize coal more effectively. For example, today there is increased integration between coal producers and power generators. Currently, the combined installed capacity of coal enterprises is more than 130 GW. In addition, coal producers are becoming more involved in downstream industries such as coal-coking and coal-to-chemicals. Many of today’s coal companies not only mine coal, but also engage in trading, logistics, finance, and other diversified businesses.

Innovation Based on Science and Technology

The move toward larger, more modern mines in China would not be possible without the adoption of greater mechanization, technology, and innovation throughout the industry. Closer collaboration with research institutions has also been important. From research to commercial deployment, the integration of technology is critical for China’s coal industry. Specific areas where research, development, and demonstrations have resulted in significant improvements include improved safety and increased efficiency. For example, improved technology for mine gas extraction has been deployed as a result of breakthroughs in the construction of kilometer-deep shafts. There has also been an increase in development and utilization of domestically developed large-scale (i.e., output of more than 10 million tonnes) mining technologies, which has led to an increase in the vertical integration of the industry.

When considering coal-related innovation, one would be hard- pressed to find a better example than the expansion of the coal-to-chemicals industry in China. In a relatively short time frame the technology has been commercialized and today China is the world leader in this field. Examples of technologies developed in China include direct coal liquefaction at the megatonne scale, 600,000 tonnes of coal-to-olefin conversion, and the construction of coal-to-gas demonstration projects.

Environmental Stewardship Adopted

China’s coal industry continues to explore ways to make mining more environmentally friendly. Approaches include water conservation, resource utilization, increased oversight of mining activities, and more land reclamation and environmental rebuilding efforts. For example, to avoid wasting coal gangue (the material left behind during mining that is often considered to be of little value), it is used to fuel power plants with a combined capacity of 29.5 GW, utilizing gangue equivalent to 46 million tonnes of standard coal equivalent. In addition, reclamation of mining areas is increasing; today, about 62% of mines are reclaimed after closure.

Market Reforms

Today’s coal industry is primarily led by market forces. Gone are the days of fully government-directed ordering systems and fixed prices. The formation of a national coal market trading system has been of critical importance. Currently 31 regional coal-trading centers have been established. Coking coal and thermal coal futures contracts are traded in the Dalian Commodity Exchange and Zhengzhou Commodity Exchange. The decades-old coal production and licensing system has been abolished, key coal contracts have been canceled, and coal pricing is often based on actual market value. Although the industry is generally moving toward being market-based, the transition is not yet complete.

Improvement in Long-Term Production Safety

Improving safety is a key concern for China’s government as well as the coal industry. To ensure that adequate attention is given to improving safety, nation-wide directives now specify what fraction of production costs must be spent on safety- related measures. The General Office of the State Council issued “Opinions on Further Strengthening Coal Mine Production Safety”, which proposed coal mine safety initiatives designed to tackle the root issues that have led to less-than-satisfactory safety practices in the past. The coal industry has been able to improve safety through a focus on increased technology deployment, risk management, and improved equipment maintenance. These actions have resulted in a decrease in national coal mining deaths from 3306 in 2005 to 1384 in 2012. The fatality rate per million tonnes of coal fell from 2.81 in 2005 to 0.293 in 2013—a substantial improvement in seven years.

Accelerated Globalization

As a result of the rapid growth in coal demand, China has become a net coal importer. China’s coal industry has taken advantage of favorable international coal markets and has increased its openness to globalization. For example, several Chinese coal companies—Yankuang Group, Shandong Energy Group, Kailuan Group, the China National Administration of Coal Geology, Xuzhou Coal Mining Group, Jiangxi Coal Group, Beijing Haohua Energy Resource, among others—have invested internationally to develop coal resources abroad.

Not only coal producers are finding opportunities abroad; this is also true for several of China’s large-scale mining equipment manufacturers.

Socially Responsible Mining

The coal industry is a major contributor to China’s economy, and we believe it is the responsibility of the industry to play a leading role in improving the quality of life in China, not only through providing energy, but also by providing assistance to the local community. Since the start of the 11th Five-Year Plan, coal mining enterprises have increased their investment in shanty town improvement projects, enhanced construction in the mining site’s community, engaged stakeholders, improved environmental stewardship, and increased the pay of miners. Miners may have benefited the most from such reforms.

Mid- and Long-Term Development Strategy

There have been significant improvements in China’s coal industry. However, it is important to acknowledge there is more work to be done. For example, productivity must be improved, environmental standards and regulations will continue to be strengthened, and the coal industry must be ready. Resources must be utilized more effectively; the coal industry must address the fact that the excess capacity under construction today will result in overall coal reserves that have been mined to the point that they will be insufficient to keep up with increases in demand in the long term. The coal industry still faces daunting, but not insurmountable, challenges.

Heading into the 13th Five-Year Plan and beyond, China’s coal industry should implement further reforms in several key areas. The focus on development recommended by the CNCA has been described as “one enhancement, five advancements, and six shifts” to strengthen research, innovation, and conduct reforms within the industry.

The CNCA believes that the coal industry should collaborate with scientists and researchers at organizations such as the National Institute of Clean and Low-Carbon Energy.

The CNCA believes that the coal industry should collaborate with scientists and researchers at organizations such as the National Institute of Clean and Low-Carbon Energy.

One Enhancement

Enhanced efforts are needed to maintain the industry’s momentum achieved to date, and to invigorate energy and creativity while removing institutional obstacles. We should strengthen and improve the modern coal market system, giving full play to the market’s decisive role in the allocation of resources. The coal industry should strongly support implementation of innovation-driven development strategies. Innovation can lead to breakthroughs in key technologies where the industry-wide improvements are currently limited. The CNCA recommends that the industry should promote science and technology research and development that could lead to new competitive advantages.

Five Advancements: Progressing Innovation

First, encourage reforms related to coal production and utilization. Coal production and utilization reforms can help alleviate the pressure on coal resource development and environmental concerns. The coal industry should actively promote reforms in coal production and coal use, advocate safe and efficient mining, and clean and efficient use of coal, so as to maximize the yield of resources with minimal environmental impact, while providing energy security for China.

Second, continue to restructure and modernize the coal industry. To date, this has been an arduous task for an industry traditionally focused completely on resource development. China’s coal industry should continue to focus on building large-scale coal production bases (because large modern mines are safer and more efficient), increase the rate at which inefficient production capacity is eliminated, promote projects integrating coal production and electricity generation, boost processing and conversion of coal, and generally optimize the industry’s structure. The industry should carry out its own development plans based on China’s national development goals to “control the output in the eastern region, stabilize the output in the central region, and develop the output in the western region”. The coal industry should also stand by its market-oriented focus, promote corporate mergers and reorganizations, and better coordinate the development of upstream and downstream coal industries.

Third, promote construction of environmentally friendly and socially responsible mines.  The delicate balance between the need to develop coal resources and the need to protect the environment must be handled with care. In addition, we believe the coal industry should ensure that resource development contributes to regional and local economies, which requires a focus on overall planning and coordination with the local government. Finally, we support the construction of environmentally friendly and socially responsible mining by taking into consideration regional economies, social stability, and sustainable development during resource exploration.

Fourth, promote innovation and development of coal-related technologies. Science and technology constitute the foundation of improving productivity. China’s coal industry should employ technologies that can affect everything from economic restructuring to integration to achieving sustainability. The industry should promote a new collaborative innovation system that combines production and research, market oriented and corporate based operation, so as to enhance the innovation of coal technologies.

Fifth, tap into the unique culture of the coal industry. CNCA recommends that China’s coal industry recognize the unique value of its mining workforce, which is generally characterized by high morale and loyalty. These traits are the foundation of the culture of the industry and we believe they should be more fully encouraged.

Six Shifts: Changing the Industry’s Economic Development Model

First, shift from a partial market orientation to being fully market oriented. Also, there should be a continued emphasis on the activities yet to be undertaken to complete the transformation from being government supported to being market oriented. China’s coal industry should actively promote market-oriented reforms, including boosting resource allocation according to market rules, market prices, and market competition, so as to maximize returns and achieve maximum efficiency.

Second, shift from a labor-intensive to an integrated talent- and technology-intensive model. The industry should take full advantage of advanced technology and equipment to enhance modernization, collect data for management purposes, accelerate the construction of smart mines, and increase the education and talent level of its mine workers.

Third, shift from viewing coal as a fuel to considering it a raw material to produce a wide array of products. Based on the initial results of coal conversion demonstration projects in China, such as coal-to-liquids, coal-to-olefins, and coal-to-gas, China’s coal industry should accelerate the construction of large-scale, clean, and efficient coal-conversion projects, which could effectively replace some oil and gas.

Fourth, shift from production and sale of raw coal to sale of upgraded, cleaner coal. The industry should gradually move toward reduced shipping and burning of raw (i.e., untreated) coal. Instead, the industry should make progress toward providing primarily high-quality coal. The price of coal should be based on the calorific value of coal when it is sold. Therefore, China’s coal industry should increase the proportion of coal that is washed or blended. Adding more coal upgrading will extend the coal product value chain, add product value, and raise overall industrial efficiency.

Fifth, shift from focusing on production volume and speed to focusing on quality and efficiency. From its historical developmental model, which has traditionally been based on increasing output and scale expansion, the coal industry should move toward reliance on scientific and technological progress, structural adjustment, modern management, and quality to increase returns. This will also lead to a workforce that is less labor-intensive and more talent- and technology-intensive.

Sixth, shift from focusing on reducing mining accidents to holistic health. We believe China’s coal industry should work toward providing good health services for its miners. Along with a steady improvement in China’s coal mine safety, the industry should increase investment related to improving working and living conditions for coal miners, strengthen occupational disease prevention, improve occupational health protection levels, and make an earnest effort to protect miners’ mental and physical health.

Conclusion

Coal is China’s main energy source and an important industrial feedstock; the coal industry is the backbone of the energy industry. In retrospect, the coal industry has made remarkable advancements, but there are still difficult tasks ahead. China’s coal industry needs to accurately envisage its overall development, seize development opportunities, and actively address challenges. The development of the industry should be based on science and technology, implementing improvements based on innovation. There must be a push to make structural adjustments, strengthen efforts to boost coal production and utilization reforms, improve China’s coal upgrading industry, and strive to build a new coal industry system that is strong in resource utilization, is safe and secure, and has good economic returns, low environmental pollution, and a sustainable and healthy development.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

China’s Policies for Addressing Climate Change and Efforts to Develop CCUS Technology

By Ren Xiangkun
Clean Coal Experts Convenor, China Ministry of Science and Technology
Dean, Low-Carbon Research Institute of China University of Mining & Technology
President, Baoju Energy Science & Technology Co., Ltd
Zhang Dongjie
Engineer, GD Power Development Co., Ltd
Zhang Jun
Engineer, Shenhua Science and Technology Research Institute Co., Ltd

China is one of the largest energy-producing and -consuming countries in the world. Coal has historically been the country’s dominant source of primary energy, which has resulted in high CO2 emissions. Finding a way to effectively reduce CO2 emissions while meeting the ever increasing energy demand is a pressing issue that must be tackled by the Chinese government. Due to the unique potential to dramatically reduce CO2 emissions from large, centralized fossil energy consumption sources, carbon capture, utilization, and storage (CCUS) technology is attracting global attention.

International collaborative efforts, such as technology transfer (for example, the meeting shown above between Chinese and Japanese researchers) and jointly sponsored projects, are critical to accelerating the development and deployment of CCUS.

International collaborative efforts, such as technology transfer (for example, the meeting shown above between Chinese and Japanese researchers) and jointly sponsored projects, are critical to accelerating the development and deployment of CCUS.

The authors of this article have been have been closely monitoring CCUS development in China since its inception, and also have been actively participating in CCUS-related R&D, commercialization, and policy-making efforts. In the hopes of expanding the knowledge base around China’s efforts in climate change mitigation and CCUS development, this article introduces China’s policies and technical efforts, including R&D and industrial-scale demonstrations, to address this global challenge. We believe that China is now playing a leading role in the collective campaign to develop CCUS and will contribute significantly to climate change mitigation. We suggest that the world should pay close attention to China’s CCUS progress and boost cooperation with China to increase the rate of development and adoption of this technology globally.

China’s Energy Resources

Coal’s Role in Providing Primary Energy

China’s economy has been growing quickly in recent years; a significant portion of that growth can be attributed to large-scale infrastructure construction, which has been accompanied by rapid growth in energy consumption. In 2012, the total amount of primary energy consumption in China reached 2.74 Btoe (billion tonnes of oil equivalent).1 Given its extensive coal reserves, coal accounts for 68.49% of China’s primary energy consumption,2 as is shown in Figure 1. Coal provides 75% of China’s industrial fuel, 76% of the fuel for power generation, 80% of household fuel, and 60% of raw materials for the chemical production industry. Therefore, from the perspective of energy security, China must continue to rely on its domestic coal resources to meet energy demand in the mid- and long-term future. Without an unforeseen change in resource estimates and a significant reduction in cost for other energy options, coal’s dominant role in China’s energy mix will not change.

Figure 1. China’s 2012 primary energy consumption

Figure 1. China’s 2012 primary energy consumption3

Environmental Pressure

Large-scale utilization of coal has made China one of the largest CO2 emitters in the world.4 The power industry, which is responsible for more than half of China’s total consumption, which is shown in Figure 2, contributes about 40% of CO2 emissions. China and other major emitters are facing increased international pressure to reduce CO2 emissions or, at the very least, cut the rate of growth. The power industry, as the biggest emitter with centralized emissions, will inevitably bear the brunt of policies to address these concerns.

Figure 2. Coal consumption by sector

Figure 2. Coal consumption by sector

CCUS is a technology suitable for CO2 reduction from large point sources and therefore has attracted significant attention from the Chinese government, industry, and research institutions. China has focused on CO2 utilization, rather than only storage, based on the current reality that pure CCS projects are expensive and difficult to move forward at the industrial scale.

China’s Climate Change Mitigation Efforts

The Chinese government has demonstrated its dedication to addressing climate change by developing a comprehensive scheme for climate change mitigation efforts that takes into account China’s current stage of development. At the 2009 UN Climate Change Summit, President Hu Jintao vowed that China would make progress in two key areas: 1) improve energy conservation and increase energy efficiency and 2) develop renewable energy and nuclear energy to reduce the proportion of fossil fuels in China’s energy mix.5 In accordance with these promises, in November of the same year the State Council of China declared that CO2 intensity per unit GDP would be reduced by 40–45% compared to 2005 by the end of 2020.6

Relevant Policies

China was one of the first countries to propose measures to mitigate climate change, and has continued to follow up with corresponding policies on those measures, as is outlined by timeline in Figure 3.7–14

Figure 3. Timeline of select CCUS-related policies in China Note: S&T is science and technology

Figure 3. Timeline of select CCUS-related policies in China
Note: S&T is science and technology

Science and Technology

Although CCUS has progressed to the industrial scale, reducing costs and long-term competiveness will require continued investment in smaller-scale R&D. Such work is being carried out globally, but China’s central government has been particularly supportive of such research projects. Many important CCUS-related R&D collaboration programs have been carried out among universities, research institutes, and energy corporations. Figure 4 shows the number of nationally supported programs for CCUS-related technologies, which are categorized by type, as well as their sponsoring sources. Most programs are sponsored by MOST (Ministry of Science & Technology of China), which is now leading national support for CCUS development and covers a wide range of CCUS-related technologies.

Figure 4. Major government-supported CCUS-related programs Notes: NEA is National Energy Administration of China; MOLR is Ministry of Land & Resources of China; EOR is enhanced oil recovery; ECBM is enhanced coal-bed methane recovery

Figure 4. Major government-supported CCUS-related programs
Notes: NEA is National Energy Administration of China; MOLR is Ministry of Land & Resources of China; EOR is enhanced oil recovery; ECBM is enhanced coal-bed methane recovery

In addition to the government-supported domestic projects, China is also actively participating in several CCUS-related international collaborations (see Table 1). This provides experts in China the opportunity to learn about the latest international achievements in CCUS technologies, which can help increase the rate of development and deployment of domestic CCUS projects. This collaboration is also useful to share China’s progress on climate change mitigation internationally.

Table 1. Recent international collaborative projects related to CCUS

Table 1. Recent international collaborative projects related to CCUS

With the support from these government-dominated or international-collaboration R&D programs, China has made great progress related to CCUS. However, to move CCUS forward, industrial-scale demonstrations are critically important.

CCUS Demonstration Projects Throughout China

In the last five years China’s largest energy companies have carried out a dozen CCUS demonstration projects, some comprehensive (i.e., capture and utilization and/or storage) and some partial (i.e., capture or utilization and/or storage). These projects were carried out either independently or through collaboration (often with government support). Implementation of such demonstration projects is necessary to verify the technical and economic viability of CCUS; in addition, these demonstrations are laying a technical foundation for future large-scale implementation of CCUS in China.

Table 2. Pure CO2 capture demonstration projects in China

Table 2. Pure CO2 capture demonstration projects in China

Major CCUS industrial-scale demonstration projects being carried out in China in recent years are listed in Tables 2–4. The projects in Table 2 are pure CO2 capture projects; projects in Table 3 are pure CO2 storage or utilization projects; and projects in Table 4 are integrated projects that include CO2 capture and storage and/or utilization. These projects are geographically distributed throughout much of China.

There is a tremendous amount of CCUS activity occurring in China; therefore, only select demonstration projects with global significance, such as first-of-a-kind or industrial-scale projects, are discussed in greater detail in subsequent sections.

Table 3

Table 3. Pure CO2 storage/utilization demonstration projects in China
*Plans are to soon increase injection to this rate; to date, the capture demonstration facility capacity of 150,000 tonnes of CO2/yr has been completed.
**This project is a short-term pilot CO2-ECBM project co-established by China and Canada, with CO2 injection operation lasting for only 13 days. Approximately 1900 tonnes of CO2 was injected into the coal bed. Although this was a relatively small in total injection amount, this was the first trial of CO2-ECBM production in China; therefore it is included in this article.

Select CO2 Capture Demonstrations

Huaneng Shidongkou CO2 Capture Project: Based on the successful experience with the Gaobeidian demonstration project, Huaneng Group established a larger flue gas CO2 capture demonstration at Shanghai Shidongkou No. 2 Power Plant. The project adopted the same technology and process as the Gaobeidian project, but at a much larger scale; the new project scale was 100,000–120,000 tonnes CO2/yr. This was the largest post-combustion CO2 capture demonstration in the world at the time operation began. The captured CO2 is sold to chemical plants nearby as raw material. Constrained by a limited market, the CO2 is sold at a price only offsetting the cost.

HUST CO2 Capture Project: Huazhong University of S&T (HUST) established China’s first, and the world’s third, 3-MWth oxy-fuel combustion pilot plant in Wuhan. This pilot is capable of capturing more than 7000 tonnes CO2/yr. Based on that project, HUST is collaborating with power-sector companies to establish the world’s largest (35 MWth) oxy-fuel combustion demonstration in Yingcheng, Hubei. The demonstration plant will be able to capture more than 100,000 tonnes CO2/year. This progress clearly demonstrates that China has become a global leader in the development of oxy-fuel combustion technology.

Table 4. Integrated CCUS demonstration projects in China

Table 4. Integrated CCUS demonstration projects in China

Select CO2 Storage/Utilization Demonstration

Jilin Oilfield Project: Since 1997, PetroChina has been executing an industrial-scale CO2-EOR demonstration at Jilin Oilfield. Presently 150,000 tonnes of CO2 separated from a nearby natural gas field are injected into an oil reservoir each year; as a result, oil field productivity has increased by 80%. PetroChina plans to increase the CO2 injection rate from the current level to 300,000–1,000,000 tonnes CO2/yr. Although CO2-EOR is a mature technology in the U.S., the geology of China’s oilfields is quite different, so this demonstration is critically important to understand and implement large-scale CO2-EOR with storage under China’s complicated geological conditions.

Select Integrated CCUS Demonstration

Integrated CCUS Project by GreenGen, Huaneng: In 2009, Huaneng began cooperation with Peabody Energy (U.S.) to establish China’s first 265-MW IGCC demonstration project in Tianjin, which was placed into service on 12 December 2012. Huaneng also plans to implement a Selexol physical absorption-based CO2 capture retrofit for part of the fuel gas at this plant by 2015. This project, which will capture 60,000–100,000 tonnes of CO2/yr, will be the first pre-combustion CO2 capture demonstration on an IGCC plant in China and also the world. If successful, Huaneng will conduct a full-scale pre-combustion CO2 capture retrofit, resulting in a near-zero pollutants/near-zero CO2 coal-based power plant. Huaneng plans to store the captured CO2 in depleted oil/gas fields or saline aquifers nearby; the region around Dagang Oilfield has been preliminarily selected.

Conclusions

Today China has moved to the forefront of the global CCUS development and industrial demonstration effort. China now boasts the largest number of CCUS industrial demonstration projects in the world, several which are rapidly developing. These projects are a tangible contribution made by China to the field of climate change mitigation. Therefore, the authors suggest that the world should keep an eye on CCUS progress in China. It is worthwhile for international organizations to consider providing technical or financial aid or to enhance bilateral or multilateral collaboration with China, in the hopes of further advancing and encouraging adoption of CCUS technology. Thus, the efforts of China can be leveraged to play an even larger role to help reduce the increase in global CO2 emissions.

 

References

  1. Government of China, 863 Program: The State Plan for High-Tech Research and Development of China.
  2. BP, Statistical Review of World Energy 2013, 2013, BP Company, London.
  3. Sun Qiming, Wang MingPeng, Problems and Countermeasures for Exploitment and Utilization of Coal Resources in Western China, Science & Technology and Industry, 2010, 10, 79–82.
  4. IEA, CO2 Emissions from Fuel Combustion, 2011, International Energy Agency, Paris.
  5. Hu Jintao, Join Hands to Address Climate Challenge, politics.people.com.cn/GB/1024/10098974.html, (accessed January 2013).
  6. Cao Hua, The State Council of China: CO2 Emissions per GDP Will Be Reduced by 40%–45% by 2020, finance.people.com.cn/GB/10461522.html, (accessed January 2013).
  7. Chinese Government, China Agenda 21: Whitepaper of China’s Population, Environment and Development in 21st Century, 1994, The State Council of China, Beijing.
  8. CSLF, About CSLF, www.cslforum.org/contactus/index.html, (accessed 1 March 2013).
  9. The State Council of China, Outline of the National Program for Long- and Medium-Term Scientific and Technological Development, www.gov.cn/jrzg/2006-02/09/content_183787.htm, (accessed January 2013).
  10. J. Zhenrong, China Promulgated National Assessment Report on Climate Change for the First Time, www.gmw.cn/01gmrb/2006-12/27/content_527791.htm, (accessed January 2013).
  11. National Assessment Report on Climate Change, National Development and Reform Committee, 2007: Beijing.
  12. Whitepaper: China’s Policies and Actions on Climate Change, The State Council of China, 2008: Beijing.
  13. Social Development and S&T Bureau under Ministry of Science & Technology of China, The Administrative Centre for China’s Agenda 21 under Ministry of Science & Technology of China, Research on Carbon Dioxide Capture and Storage Technology Roadmap of China, 2011: Beijing.
  14. Notification of Publishing the National Mid- and Long-term Outline for Key S&T Infrastructure Construction (2012–2030), 2013, The State Council of China, Beijing.

 

The authors can be reached at renxiangkun@baojukeji.com, zhangdongjie03@gmail.com, and zhangjund@shenhua.cc.

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

The Momentum of Chinese-Developed Indirect Coal-to-Liquids Technologies

By Weng Li
Director, National Institute of Clean and Low-Carbon Energy
Men Zhuowu
Professorate Senior Engineer, National Institute of Clean and Low-Carbon Energy
Bu Yifeng
Senior Engineer, National Institute of Clean and Low-Carbon Energy

Indirect coal-to-liquids (ICTL) technology consists of a two-step process using coal as a feedstock that is first gasified to produce synthesis gas (CO+H2). The syngas is then converted into hydrocarbon compounds and other products via Fischer–Tropsch (F-T) synthesis.1-3 The liquid fuels produced through ICTL are environmentally friendly. For example, ICTL fuels contain less sulfur and fewer aromatic hydrocarbons and the cetane number of ICTL diesel can be as high as 70. (The higher the cetane number the better for combustion performance; premium diesel fuels usually have cetane numbers of approximately 60.) The advantage of such a high-quality diesel is that it can be used when there are strict constraints regarding automobile exhaust gases or it can be used as a blending stock to upgrade lower quality diesel. ICTL can also produce higher value products such as wax and lubricating oil.2,3 Today, the wide array of products that can be made through ICTL is an extremely active R&D area. The core technology of ICTL is undoubtedly the F-T processes. A brief history of its development follows.3-5

National Institute of Clean and Low-Carbon Energy

Researchers at the National Institute of Clean and Low-Carbon Energy monitor operations of an ICTL project.

F-T synthesis (FTS) was first invented by German scientists F. Fischer and H. Tropsch in 1923. F-T synthesis later became the basis of, and principal step in, ICTL technology. The first commercial-scale ICTL plant was built by Ruhrchemie, a German company, in 1934 and was put into operation in 1936. In 1955, Sasol successfully commercialized the first ICTL plant using a fixed bed reactor in South Africa. After some 50 years of continuous development, Sasol has become the largest producer of ICTL fuels today. The company is able to produce nearly eight million tons of liquid fuels every year. Moreover, Sasol has advanced their technical capabilities for all areas within its ICTL process. One particular achievement worthy of mention is the use of cobalt-based catalysts at commercial scale in F-T technology with natural gas as feedstock. This has inspired worldwide interest in ICTL. Since 1980, China and a few other countries have boosted development and accelerated industrialization of ICTL. International energy companies such as Exxon, Rentech, and Shell all have their own programs to advance the technology toward commercialization. Since the turn of this century, these international companies have mainly focused on cobalt F-T catalysts and gas-to-liquids (GTL) technologies. Taking a different approach, companies in China have focused primarily on iron-based catalysts, resulting in breakthroughs in many areas that have advanced ICTL technologies.

Current Status of ICTL Technology in China

ICTL Development in China

ICTL development in China can be divided into three stages2: the first stage was before 1980. During this time, there was little ICTL-related activity in China. The second stage was between 1980 and 2000. During this period, the focus was on the fundamental research necessary to accumulate knowledge and to play catch-up. Only Shanxi Institute of Coal Chemistry (SXICC) of the Chinese Academy of Sciences developed a two-stage process with two different configurations. The first configuration was a modified Fischer–Tropsch (MFT), in which two fixed beds in series were utilized to increase the overall conversion efficiency. The second configuration was a slurry modified Fischer–Tropsch (SMFT), in which a slurry reactor and a fixed bed in series were developed. Both reactor types were tested at the pilot-scale. The third stage of ICTL development is the time since the turn of the 21st century. ICTL in China is experiencing a period of fast-paced development, which has made China a global leader in the field of ICTL technologies and their applications.

China’s Shenhua Group, a bellwether in China’s coal industry, pioneered its modern coal-to-chemicals technologies with a direct coal liquefaction technology as its first project. Following this success, Shenhua Group extended its effort to include most modern coal-to-chemicals technologies, including ICTL. A specialized ICTL research department was formed and a demonstration ICTL plant was successfully operated in 2010. Yankuang Group also founded a research department specifically focused on ICTL and operated a 10-ktpa (kilo tonnes per annum) scale plant in 2004, based on which a megaton process development package (PDP) was developed. SXICC, another major force in the coal industry in China, developed a successful catalyst for ICTL and also was able to mass produce this catalyst. SXICC also formed a partnership with Yitai Group, which is the parent company of Synfuels China. Synfuels was commissioned to conduct research and engineering design on ICTL technology. Sinopec, a petroleum giant in China, is also developing a natural-gas-to-liquids (GTL) technology. Shehua’s Ningxia Coal Industry Group, Yankuang Group, Yitai Group, Lu’an Group, and others are either constructing or are planning to construct megaton-scale ICTL plants. The ICTL projects are listed in Table 1. In addition to these major players, some smaller technology companies and institutes in China, such as Shaanxi Gold Nest, are also working on the development of ICTL applications.

Coal-to-Liquids Table 1

Table 1. ICTL projects in China that are planned or have been constructed

Key Features of ICTL Technologies Developed in China

A typical flowchart of an ICTL process is illustrated in Figure 1. It can be seen from Figure 1 that the F-T step is the centerpiece of ICTL. In the F-T process, the most important aspects are the catalyst and the reactor type. Catalysts used in the F-T process are developed around transition metal elements such as Fe, Co, Ni, and Ru (iron, cobalt, nickel, and ruthenium, respectively), which have the property of ionizing the CO molecules. In addition, they also exhibit the ability to catalyze the hydrogenation process to extend the length of the hydrocarbons. Among these catalytic metals, Ru exhibits a very high catalytic activity, but its cost is exceptionally high. Ru deposits are rare and for this reason the metal is unlikely to be used as a catalyst in large-scale applications. When Ni-based catalysts are used, they demonstrate a very high selectivity for producing methane as an end product. Ni-based catalysts are more often used in the hydrogenation and methanation processes. The catalysts used in modern F-T processes can be divided into Fe-based and Co-based. Fe-based catalysts are less expensive; metal iron is readily available. They also have a wide operating temperature range for their applications, 200–340oC. Therefore, these catalysts can be made to suit either a high-temperature or a low-temperature F-T process. In addition, they can be manipulated to yield different products. On the other hand, Co-based catalysts exhibit high catalytic activities in the F-T process, but they are more applicable in processes with narrow temperature fluctuations in the 220–230oC range. Cobalt catalytic F-T processes can produce hydrocarbons with a wide range of carbon numbers without producing CO2. Products include a high percentage of saturated hydrocarbons and wax.2-5

Coal-to-Liquids Figure 1

Figure 1. Schematic illustration of a typical ICTL process

The reactors used in F-T processes can be grouped into the following categories: fixed bed (FB), circulating fluidized bed (CFB), fixed fluidized bed (FFB), and slurry bubble column reactor (SBCR). The advantages of FB are the ease of collection of the liquid products and easy separation of the heavy hydrocarbons from the catalysts. Its disadvantages are the non-uniform temperature distribution both axially and radially. In addition, construction of FB reactors can be complex, costs are high, and loading and unloading of the catalysts is difficult. A CFB is better suited to high-temperature F-T, leading to products with lower carbon numbers. Turbulence mixes the catalysts and reactant gases in the reactors, which results in effective heat transfer, in turn leading to a more homogeneous temperature profile inside. The uniform temperature distribution allows the control of reaction selectivity (i.e., close control of products). The effective heat exchange also offers the benefit of a smaller heat transfer area, which means a higher capacity with a similar-sized reactor. Its disadvantages include high cost, complicated operations, expensive repairs, and difficult scale-up. The advantages of a FFB are the uniformity in the temperature profile of the same bed, ease of control of reaction selectivity, low equipment cost, and production-targeted fuel products. Sasol’s projects in South Africa that were finished in the 1980s all used FFB reactors. The advantages of a SBCR are the homogeneous reactants, homogeneous temperature profiles, low pressure drop (one-fourth of that in a FB), high yields per reactor volume, flexible operations, low operation costs, and the ability to exchange the catalysts while on-line. The shortcoming of the SBCR is the stringent requirements in the separation of the liquid products from the solids.4-6

The F-T process can be classified into LTFT (low-temperature F-T) and HTFT (high-temperature F-T) according to the operating temperatures. An LTFT operates in the 200–270oC range and HTFT operates in the 300–340oC range. The F-T process can also be described according to its number of stages. In general, F-T processes have one or two stages. Some researchers believe that a two-stage process can increase the overall conversion and product capacity. However, two-stage design makes the process more complicated and more difficult to operate, so initial investment may also be higher. Different temperature-based processes lead to different product distributions. These in turn have led to several technologies such as Sasol Slurry Phase Distillate (SSPD), Sasol Advanced Synthol (SAS), and Shell Middle Distillate Synthesis (SMDS)2. The technical details are listed in Table 2.

Coal-to-Liquids Table 2

Table 2. Technical details of different F-T processes

Because Fe-based catalysts have a greater resistance to sulfur, whereas Co-based catalysts are prone to sulfur poisoning, most Chinese ICTL researchers prefer Fe-based catalysts. A few LTFT processes with SBCR are progressing toward commercialization.

As shown in Figure 1, the following processes are involved in an ICTL technology: coal gasification, F-T product refining, and other technologies. In addition, the composition of the inlet gases and the partial pressure of the effective gas (CO+H2) can influence overall syngas conversions and product yield. For example, the lower the inert gas partial pressure in the fresh syngas, the better for the Texaco gasification technology in an ICTL process. The refining technology for FTS preliminary products is selected to meet the final products requirement. In general, hydrofining is used to deoxidize and to remove olefins and hydrocracking is used to produce diesel.

China’s ICTL Projects

In China, most ICTL technology operators have experience based on technology progression from bench-scale to pilot-scale to large-scale demonstrations. Yanhuang Group achieved a 10-ktpa demonstration plant in 2004. Shenhua, Yitai, and Lu’an constructed a demonstration plant with 160–180-ktpa capacity mainly based on Synfuels China ICTL technology during 2006 to 2009. Also, during the 2006–2009 period, Shenhua independently started and operated a demo plant using its own catalyst and completed a modified ICTL process. Lu’an and Yitai operated their own demo plants using Synfuel China’s technology, including catalyst and technical support. The Yitai Group plant has been operating the longest. With these experiences, China has accumulated abundant experience in the key aspects of ICTL technologies such as F-T catalyst scale-up, commercialized reactors, and various F-T processes. In the meantime, China has also had first-hand experience in industrial scale-up. Table 3 lists some of the technical parameters for the three demo plants.7

Coal-to-Liquids Table 3

Table 3. Technical parameters for the three current China ICTL demo plants

Based on the experiences of operating the demonstration plants, especially the long-term operation by the Yitai Group, the Chinese government approved a four-million-tons-per-year ICTL plant based on homegrown, rather than international, ICTL technologies. The approval allowed Shenhua Ningxia Coal Industry Group to begin construction of the ICTL project in Ningxia Province.

Challenges

Resource, Environment, and Industrial Policy Challenges

Generally for ICTL processes, when one ton of synthetic fuel is produced, four to five tons of coal and four to eight tons of water are consumed. Clearly, ICTL has a high demand for coal and water. Therefore, attention must be paid to the availability of coal and water in different regions when planning ICTL projects. China’s coal and water resources are unevenly distributed. The coal reserves are centered in the north or mid-west regions such as Shanxi, Inner Mongolia, Ningxia, and Xinjiang provinces, where water resources are less abundant. Some areas have even less water; in these areas, industrial water uses even rely on underground water. Consequently, any ICTL project developer must pay close attention to the efficiency of water use, how much water can be recycled, and the reduction and control of water pollution. At the state level, the central government should carry out the overall planning with a step-by-step, hierarchical coordination strategy to formulate industrial policies to ensure a balance between sustainable development and resource conservation. ICTL also requires a large initial investment and, therefore, necessitates a great deal of support. The investment for a one-million-tpa plant is approximately US$2.5 billion. China’s ICTL industry is still in the early stages of engineering development. Although the technology has gone through solid research, development, and industrial demonstration, its further commercialization still faces hurdles due to the upfront investment required. Gasification accounts for over 50% of the total investment. Breakthroughs in this technology will most definitely reduce the financial burden. Improving catalyst performance, optimizing the process parameters, and selectively choosing the materials of construction will undoubtedly reduce the investment required.

Engineering Challenges

Sasol has acquired a tremendous amount of ICTL experience based on research, scale-up, and operations. Even so, some serious problems arose when Sasol started up the 1400-ktpa capacity Qatar Oryx GTL plant; these problems were resolved by 2009. The take-home message for China’s ICTL industry is that engineering scale-up problems are real possibilities. In addition to the accumulation of engineering experience and actual operational experience, simulation is also a powerful tool to predict the possible problems in reactors and throughout the processes.6,8 The National Institute of Clean and Low-Carbon Energy (NICE) is cooperating with Pittsburgh University and other research institutions in the areas of industrial hydrodynamics, reaction kinetics to improve reactor capabilities, and process simulations to support the megaton ICTL PDP for Shenhua Group.

Other Challenges

Water produced in LTFT process contains about 5 wt% organic chemicals; for HTFT, this value is even higher. The separation and purification of these organic chemicals for higher value products can improve the overall project economics. Water cleanup is also important for environmental protection. As a result, optimizing the water treatment technologies currently used is critical. Presently, only Yankuang Group has completed comprehensive research in this area; they were able to remove the organic acids using a technology that combined extraction and distillation. However, the largest scale of F-T water treatment in China is approximately 0.2 million tpa, and the project economics are still problematic unless the megaton process is begun in the next few years.2

Currently, Co-based catalysts are mainly used for GTL processes. The question remains as to whether they can be used in ICTL. In GTL, the feedstock is natural gas (mainly CH4). The syngas from natural gas has a H2-to-CO molar ratio near two with very low sulfur content, which makes it suitable for Co-based catalysts. On the other hand, the syngas from ICTL has a H2-to-CO molar ratio of less than two with higher sulfur content, even after cleanup, which makes it suitable to Fe-based catalysts. Fe-based catalysts also have an advantage of lower preparation cost. However, Fe-based catalysts require a longer preparation cycle, consume a large amount of water, and can change structure during reactions, which leads to attrition, shorter life, and difficulty in reactivation. Co-based catalysts may be expensive initially, but are more resistant to attrition, have better longevity, trigger simple reactions, and can be reactivated. Co-based catalysts have received greater attention for further research and development efforts.2,5

Prospects

ICTL in China has entered into an industrial-scale era and China has become a global leader of ICTL technology developments and commercialization. Megaton-scale industrial demonstration plants will be constructed and operated in China over the next few years, which will allow the industry in China to continue expanding its experience in ICTL technology. As breakthroughs occur related to Co-based catalysts and problems associated with water constraints and environmental issues are solved, ICTL will find more applications and play an even bigger role in the modern coal-to-chemicals industry.

 

REFERENCES

  1. Yuzhuo Zhang, Transform High-carbon Energy to Low-carbon Energy Prospect of Clean Coal Conversion, Energy of China, 2008, 30 (4), 20–23. (in Chinese)
  2. Qiwen Sun, Indirect Coal Liquefaction. Beijing: Chemical Industry Press, 2012. (in Chinese)
  3. M.E. Dry, Fischer–Tropsch Synthesis-Industrial, Encyclopedia of Catalysis. New York: John Wiley & Sons, 2010.
  4. M.E. Dry, The Fischer–Tropsch Process: 1950–2000, Catalysis Today, 2002, 71, 227–241.
  5. A. Steynberg, M.E. Dry, Fischer–Tropsch Technology, Studies in Surface Science and Catalysis, 2004, 152.
  6. R. Krishna, S.T. Sie, Design and Scale-up of the Fischer–Tropsch Bubble Column Slurry Reactor, Fuel Processing Technology, 2000, 64, 73–105.
  7. Xiuzhang Wu, Jiming Zhang, Yulin Shi, Zhuowu Men, Industrial Application of SFT418 Catalyst for Fischer–Tropsch Synthesis, Petroleum Processing and Petrochemicals, 2011, 42 (6), 45–49. (in Chinese)
  8. M.T. Dhotre, B.L. Smith, CFD Simulation of Large-scale Bubble Columns: Comparisons against Experiments, Chemical Engineering Science, 2007, 62 (23), 6615–6630.

 

The authors can be reached at wengli@nicenergy.com and menzhuowu@nicenergy.com.

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

 

China’s Changing Energy Mix: An Interview with Fan Bi

An Interview with Fan Bi, Deputy Director General of the National Policy Research Office of the State Council, People’s Republic of China

By Li Xing and Chen Junqi
Copy Editors, Cornerstone

As a developing country, China faces accelerated industrialization as well as rapid urbanization. Such progress requires access to affordable, clean, and reliable energy. Today, China’s per capita energy usage is lower than the global average; however, energy is not always used efficiently and is dominated by coal-fired power plants. To gain insight into the future energy mix in China, Cornerstone sat down with Mr. Fan Bi, who is the Deputy Director General of the National Policy Research Office of the State Council, People’s Republic of China. Before his current position, Mr. Fan Bi was with the National Development and Reform Commission (formerly the State Planning Commission) Policy Research Center and Investment Research Center. Mr. Fan Bi has over 20 years experience in policy research focused on macroeconomics, energy, environment and other aspects of public policy.

Fan Bi

“Coal will remain the main source of energy in China for a long time. Therefore, high-efficiency and clean utilization of coal is an indispensable part of China’s clean energy development.”

Q: China is the only country out of the world’s top 10 energy consuming countries that has an energy mix dominated by coal. How is the energy mix in China expected to change in the future?

A: Global energy development is continually evolving and has already generally undergone a firewood era, coal era and the oil and gas era. China’s current coal-dominated energy mix, in addition to being determined by large coal reserves, is also related to the fact that China is a developing economy. In other words, coal is the energy source of the poor.

At present, most OECD nations have moved into an energy era dominated by oil and gas. However, in China, coal accounts for 68.8% of energy consumption, while oil and gas account for only 23.1%. For this reason, it can be said that China is still in an energy era dominated by coal.

Changes in China’s energy mix in the future will be consistent with global energy trends. It is expected that in 2020, fossil fuels will remain the dominant source of energy in China. The percentage of coal as an energy source will decrease, but will remain above 50%. The percentage of oil and natural gas in China’s energy mix will increase to some degree. The large-scale exploration of shale gas in North America will likely lead to price reductions for natural gas in the international market, thus natural gas will help meet increasing Chinese demand. In addition, shale gas exploration and use in China are also expected to rise considerably. As a result, the proportion of natural gas in China’s energy mix is likely to increase dramatically.

From the perspective of regional development, the location of energy-intensive industries is also changing. In the near term the proportion of service-based industries will increase while that of heavy industries will decrease. The energy-intensive industries will, for the most part, move towards west China where energy is more abundant.

It is important to note that in recent years in China energy-intensive activities are geographically moving towards the sources of energy production. The significance of these trends is: first, it reduces the cost of energy use; the price of electricity in west China is much lower than that in east China. Second, it reduces the risks associated with transmitting energy across long distances. Third, it ensures that the service-based industries developing in east China have sufficient resources to continue their growth, while also supporting economic development in west China. It is expected that by 2020, the growth rate of energy consumption of east China will decrease while that of west China will increase. This means that the gap between the development in the east and west will narrow. In other words, China will move towards a more balanced development.

Q: What is expected regarding the development of clean energy in the future?

A: Currently, the installed hydro power capacity is 249 GW. By 2020, the capacity is planned to increase to 380 GW. The installed wind power capacity in China now stands at more than any other country in the world. By the end of 2012, it had reached 60.8 GW. The installed solar power capacity is also increasing rapidly. By the end of 2012, it had reached 3.3 GW. The year of 2012 was the first time that the growth rate of solar power exceeded that of wind power. By 2020, wind and solar power capacity will rise quickly and the planned capacities will reach 200 GW and 50 GW, respectively. Wind and solar will play an important role as supplemental sources of energy.

Apart from hydro power, most renewable energy is characterized by instability. In addition, the cost is relatively high, thus making it difficult to make their use widespread. Even so, by 2020, China will implement strong policy to support and expand the use of renewable energy in the hopes that the costs can be reduced and renewable energy can gradually replace fossil energy.

Nuclear power is a safe, reliable, mature and clean source of energy. Therefore, the safe and efficient development of nuclear power is another strategic choice to supply power in the future. By 2020, the installed nuclear power capacity is expected to be 60 GW.

Coal will remain the main source of energy in China for a long time. Therefore, high-efficiency and clean utilization of coal is an indispensable part of China’s clean energy development. Regarding clean coal-fired power generation, at present China has installed the most ultra-supercritical power plants in the world. In addition, China has supported commercial-scale demonstrations of circulating fluidized bed and IGCC power plants. China also supported the research and development of high-efficiency coal-fired power generation, including 700° ultra-supercritical technology and oxyfuel combustion. It is expected that by 2020, China’s installed capacity of coal-fired power plants will still account for 65% of the national installed power generation capacity, but pollutant emissions will dramatically decrease by using world class efficiency and improved capture technologies.

Finally, China is the global leader for clean coal conversion to fuels and chemicals and has successfully launched a series of large-scale demonstration projects. By 2020 these technologies are expected to move from the demonstration scale to being considered fully commercial. After commercialization these technologies will be the foundation for a world-class clean coal conversion industry based in China.

Q: China is now proactively implementing the reform of its energy system. What is the direction of this reform?

A: Energy must be thought of in a strategic manner because it is directly related to national security. However, energy is also a commodity that is priced and distributed based on market forces. Since the 1970s, many world leaders have been working to engage in market-based energy reform. Most nations, whether they are considered developed or developing, are working towards deregulation of energy supplies, removing monopolies and introducing competition into the energy field.

In the planned economy period, China tightly controlled coal, electricity, oil and transportation, resulting in extended energy supply shortages and inefficient energy use. In 1993, China has lifted its control on coal prices in some regions and sectors, thus allowing the market to self-regulate through supply and demand, which stimulated an increase in coal output. In 2002, China allowed for the power plants and grid to be operated independently and electricity to be sold and purchased on a competitive market. Since then, the installed electricity capacity has been increasing by 100 GW annually. History has shown that the market-based energy system has triggered a significant increase in energy output and resulted in improved power plant efficiency. In the future, China will continue down this path of reform and even increase reform efforts to establish a modern energy market. In this way, the supply-demand relationship will completely determine the price of energy; competition will optimize and lead to resource distribution and contracts will control transactions.

Some sectors in the energy field are naturally monopolies. The key to the institutional energy reform lies in viewing competitive businesses and noncompetitive businesses differently. Competitive businesses should be opened to the market by introducing competition and diversified investors, and allow the demand-supply relationship to determine the price. For non-competitive businesses, reform could be carried out in order to ensure equitable access to energy, improved service reliability, and strengthened government supervision of its business operations, efficiency, cost and income. Another focus of the reform will be on improving government management abilities. For the fields where market based reform is not reasonable, the government will fulfill its duty of macro management, market supervision and public service.

Q: How do you view Chinese involvement in energy in the global context?

A: The market-based energy reform does not only include the reform of domestic energy, it also includes participating in the global community so that China can take full advantage of two energy markets: the domestic Chinese market and the international market. China will think about energy differently; energy security will be based on mutual beneficial cooperation, diversified development and coordinated security. Traditionally, the thinking around energy security was based on ever-increasing self-reliance for oil, as well as obtaining as much petroleum as possible from overseas. The thinking around new energy security will shift from self-reliance to collective security through cooperation. China will enhance the mutual international energy diplomacy with energy exporters and energy transit countries to improve political mutual trust and energy security. At the same time, China should actively promote and participate in the governance and administration of the global energy market.

China’s leaders were the first to advocate establishing the mechanism of a global energy market governance in the G20 framework, which received a positive response from the international community. China should make full use of G20 as a platform and push forward the dialogue among the energy supplying nations, energy-consuming nations, and energy transit nations, to encourage discussion of the important issues such as energy policies, market development, pricing mechanisms and security of transport routes, etc. This will lead to establish of a binding mechanism and campaign of collective action in the world. This is of great significance for the energy security of China and of the world.

World

This is of great significance for the energy security of China and of the world.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

The Development Strategy for Coal-Fired Power Generation in China

By Huang Qili
Member of the Chinese Academy of Engineering
Former Chief Engineer, SGCC Northeast China Grid Company

Coal is the Foundation of the Energy Mix in China

China is the largest coal producer and consumer in the world. In 2012, China produced 3.65 billion tonnes of coal. By the end of 2010, China’s proven coal reserves were 114.5 billion tonnes, approximately 13.3% of the total proven global reserves. Coal accounts for over 96% of China’s fossil energy reserves, and coal output accounts for more than 85% of all fossil energy output. Since 1990, the proportion of coal production and consumption in China’s total energy mix has always been greater than 70%, considerably higher than the approximately 20% in the U.S. and about 30% globally. It is predicted that, in 2030, China’s coal consumption will still account for more than 55% of its primary energy.

Shanghai Waigaoqiao Power Plant

Shanghai Waigaoqiao Power Plant, One of the Many Advanced Coal-Fired Power Plants Constructed in China in Recent Years

At the end of 2012, China’s total installed power generation capacity was 1,144.9 GW, of which 758 GW was from coal-fired power plants. Hydro power contributed 248.9 GW (including pumped storage of 20.31 GW) accounting for 21.7% of installed capacity. There were 38.27 GW of gas power, accounting for 3.3% of the installed capacity. The 12.57 GW of nuclear power contributed 1.1% of installed capacity. Wind and solar power contributed 60.83 GW (5.3%) and 3.28 GW (0.3%), respectively. These statistics are shown graphically in Figure 1. In 2012, coal’s contribution to China’s energy production was a larger percentage than its share of the installed capacity; the electricity production of coal-fired power plants was 3,680 billion kWh, accounting for 73.9% of the total 4,980 billion kWh of electricity produced.1

Development Strategy Figure 1

FIGURE 1. Current Electricity Power Generation Capacity in China

Coal has been in the past, and will continue to be, the dominant energy source for China, which can be largely attributed to the large proven coal reserves. Table 1 provides predictions for China’s coal-fired power generation installed capacity for 2015–2050.2 Because coal in China will play a continued role in the energy mix, those who construct and operate coal-fired power plants must lead the way toward high-efficiency, clean, and low-carbon utilization of coal in China.

Development Strategy Table 1

TABLE 1. Prediction of the Sources of China’s Power-Generation Installed Capacity, 2015–2050

Strategic Development of Coal-Fired Power in China

As China continues its industrial modernization and urbanization over the coming decades, coal-fired power plants will play a critically important role in making the energy mix of China cleaner and more efficient. According to the Development Planning Department of the National Energy Administration, from 2010 to 2050 China will consume approximately 150 billion tonnes of coal, of which approximately 99 billion tonnes, or 66%, will be used for power generation.3 As coal-fired power generation continues to develop, it is necessary to put a strong emphasis on further improving efficiency and reducing the emissions of criteria pollutants and greenhouse gases simultaneously. To accomplish this, it is necessary to think comprehensively about the strategy for coal-fired power development from a macroenergy perspective.

Several strategic suggestions for improving coal-fired power plants in China are offered below.

(1) The development of coal-fired power plants should be based on giving equal attention to “innovation” and “promotion” (i.e., widespread adoption). China’s new power plants should be designed and built to be the most efficient in the world. For existing plants, the best technology options must be implemented to improve efficiency and reduce emissions. China also should support the development of clean coal technologies and then, once they are commercial, make these technologies widely available to the power generation industry.

There are already examples of improving efficiency and reducing emissions through technology. Today, pulverized coal and circulating fluidized bed boiler technologies are widely used and considered to be well-developed power generation technologies in China; the larger scale units with higher steam temperatures and pressures have dramatically increased the efficiency of China’s fleet of coal-fired power plants. With further technology-based innovations, highly advanced ultra-supercritical pulverized coal plants and large-scale circulating fluidized beds power plants will continue to increase efficiency and reduce overall emissions. Today, China already operates some of the most efficient power plants in the world. It’s very important to apply mature and advanced technologies widely and enhance the overall coal-fired power generation technology in China.

(2) Coal should be efficiently utilized for different purposes to make full use of its potential. Therefore, China should strive to develop advanced ultra-supercritical generating units with higher steam parameters and increased efficiency. At the same time, we should develop staged coal conversion to produce liquid fuels and chemicals. Finally, technologies should be implemented to recycle heat, precious metals, and other byproducts of coal combustion and gasification that might otherwise be considered waste.

By fully exploring the conversion pathways of different components in coal (C, H, O, N, S), researchers will develop new ways to convert coal into desired products. Conversion of coal can be realized by combining the coal pyrolysis, gasification, and combustion processes. Through these different pathways, low-cost coal gas, tar, and steam can be produced as coproducts of a single system. When coal is gasified to create syngas, it can be used for the production of chemicals or used as a fuel. Tar from gasification can be broken down into various kinds of aromatic hydrocarbons, alkanes, and phenols, and it also can be made into gasoline, diesel, and other products through hydrogenation. The steam generated from coal can be used for power generation and heat. The ash resulting from coal combustion contains aluminum, vanadium, gallium, and other precious metals which may be obtained through extraction. Through these pathways, the energy and resources in coal can be used in such a way that waste is minimized.

The coal-to-chemicals industry should focus on coal as a resource while the coal-fired power generation industry should focus on the energy contribution from coal. China should integrate the coal-to-chemicals industry and coal-fired power generation industry to realize the most efficient use of coal through the cogeneration of power, chemicals, thermal energy, coal gas, and precious metals, all based on coal as the starting material.

(3) Energy from fossil fuels and emerging renewable energy power generation should be jointly developed to create hybrid power systems. In the past few years, wind and solar power have developed rapidly in China. However, electricity production from these sources is largely intermittent and unstable. Moreover, renewable energy potential and proximity to energy demand vary significantly. In addition to wind and solar, hydro power is strongly influenced by seasonal and regional characteristics. How best to integrate renewables, which are greatly affected by weather and seasons, with stable coal-fired power plants poses significant design and managerial challenges. These challenges must be solved through research and development, and should be solved so as to make full use of renewable energy and the high-efficiency of coal-fired units.

Key Technologies for the Continued Advancement of High-Efficiency Coal-Fired Power Generation

Advanced Ultra-supercritical Coal-fired Power Generation Technology

Since the beginning of the 21st century, China has made great advancements in improving coal-fired power generation. The first 1 GW ultra-supercritical coal-fired unit was placed in operation at the end of 2006 at the Zhejiang Yuhuan Power Plant. Since then, orders for 1 GW ultra-supercritical units are known to have far exceeded 100. By the end of July 2012, 46 units had been constructed and are operating. China has become a world leader in the number of installed and ordered large-scale (i.e., >1 GW) ultra-supercritical units.

Once ultra-supercritical power generation with 600°C steam temperatures was considered commercially mature, several countries launched plans to develop advanced ultra-supercritical power plants with steam temperatures above 700°C (e.g., the European AD700 plan, the American A-USC (760) plan, and the Japanese A-USC). The purpose of these plans is to increase coal-fired power generation efficiency to more than 50%. In addition, on July 23, 2010, the Chinese National Energy Administration announced the establishment of a “National Innovation Union of 700°C Ultra-supercritical Coal-fired Power Generation Technology,” formally launching China’s 700°C ultra-supercritical technology development plan. This plan is mainly focused on research related to the optimal design of unit systems and major equipment as well as the development of the necessary thermally resistant alloys.5,6 Construction of the 700°C steam temperature demonstration project is expected to begin in 2018; the targeted demonstration completion date is approximately 2020. The government should make great efforts to support relevant scientific research and project demonstrations, such as the ultra- supercritical demonstration, to support technology development. In addition, the government should also encourage widespread implementation of these highly efficient plants after they reach commercial maturity.

Shanghai Waigaoqiao Power Plant

The 1000 MW Ultra-supercritical Unit at the Shanghai Waigaoqiao Power Plant.

Shanghai Waigaoqiao Power Plant is an example of an ultra-supercritical plant that is already in operation. This plant is equipped with 2×1,000 MW ultra-supercritical units; construction and initial operation of these units were completed in March and June 2008, respectively. For these units, the designed coal consumption rate was 295 g/kWh with a design net efficiency of 41.6%. Subsequent to the initial power plant design and construction, several technological innovations were made, such as energy-saving desulfurization technology, elastic regenerative technology, steam heating launching technology, operation optimization and energy saving and comprehensive treatment technology of solid particle erosion, etc. Based on these improvements, the net unit efficiency has been improving year-after year. By the end of 2011, with an overall capacity factor of 75%, the actual net coal consumption rate was 276 g/kWh and the net plant efficiency was 44.5% (including desulfurization and denitration). Based on the original design, the plant efficiency would be nearly 46.5%, which is a 5% increase over the design value, demonstrating that energy savings and emissions reductions were simultaneously achieved.5-6

Circulating Fluidized Bed (CFB) Combustion

China is an international leader in technology development for circulating fluidized bed combustion for power generation. Because CFBs have unique advantages with regards to fuel adaptability, load following, emissions reductions, and operating costs, it is likely that the utilization of CFBs will continue. Currently, the total installed capacity of the CFBs in China is 73 GW, accounting for approximately 17% of the total coalfired power generation installed capacity.7 New CFBs are becoming increasingly efficient, larger, more reliable, and have decreasing emissions. The world’s largest and most efficient 600 MW supercritical CFB was placed into operation at the end of 2012.7

Through technical innovation related to evaluation of the gas-solids flow regime, Tsinghua University demonstrated substantial improvement of electricity utilization, combustion efficiency, and availability ratio. The technology demonstrated at Tsinghua University leads the way in the advancement of CFBs for power generation. It can be expected that, within this century, coal-fired CFB technology will experience continued development, and become increasingly important for obtaining high-efficiency coal-fired power generation.

Polygeneration Based on Coal Gasification

Generating synthesis gas after gasification of coal is the foundation for polygeneration (or coproduction). Using coal as the feedstock, polygeneration technologies can result in a range of products, such as electricity, chemicals, heat, liquid fuels, and natural gas. Both electricity and higher value products (e.g., chemical products and fuel gas used by urban residents) can be produced at the same facility. Integrated gasification and combined cycle (IGCC) technology is a combination of gasification used for the production of clean coal-based electricity production. Electricity generation based on IGCC has demonstrated significantly lower emission levels and can also facilitate the separation of CO2.

Power plants that implement polygeneration operate in such a way that they achieve the goals of efficient electricity production and full utilization of coal as a resource. This technology offers benefits across multi-disciplinary fields, and it is one of the best options for the high-efficiency, clean, and low-carbon utilization of coal. Therefore, development and demonstration of polygeneration facilities should be supported in such a way to promote the technology and increase the number of demonstration projects. China should strongly support research and development to tackle the problems facing polygeneration (such as overcoming issues with the combustion gas turbine and high-efficiency combustion chamber, etc.) so as to move polyproduction toward commercial maturity.

Use Coal and Renewable Energy as Hybrid Power Generation Options

In this century, China should begin to modify its energy mix to increasingly include clean energy options such as renewables. We should combine fossil energy with renewable energy to encourage the mutual development of coal-fired power and renewable energy generation. Renewable energy could assist the development of fossil energy and fossil energy could drive the development of renewable energy. For example, the heat energy produced by solar energy can enter the regeneration system of a coal-fired power plant to replace part of regenerative extraction steam; power generated by renewables such as solar, wind, and small hydro power can enter the local power plant’s electricity utilization system to supply more power without changing the levels of coal combustion; renewables could also be used to save coal capacity while still creating the same amount of total power. The huge regeneration system and power plant electricity utilization system of large-capacity coal-fired units can absorb the fluctuations associated with wind and solar power. If the geographical placement of the coal-fired power generation, renewable energy, and the power grid are considered together in comprehensive planning, the instability and geographical limitations associated with renewable energy can be mitigated to ensure the safe and high-efficiency operation of power generation systems based on both coal and renewables.

Conclusions

China’s energy reserves have predetermined that coal will dominate the energy mix in China for the foreseeable future. Coal-fired power plants account for an overwhelming majority of the installed power capacity in China. Making efforts to develop and promote high-efficiency, clean, and low-carbon coal-fired power generation technology has great significance to promote the scientific development of coal-fired power generation. This is an important policy that is directly related to the sustainable development of the national economy.

REFERENCES

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The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.