COLLABORATIVE RESEARCH ON THE ECONOMICS OF COAL-BASED ENERGY

Hugh Mellanby Lee

Economic Assessment Service IEA Coal Research

U.K.

Paper to the IIASA Workshop on "Coal: Issues for the Eighties"

in Szczyrk, Poland, 5-9 November, 1979

COLLABORATIVE RESEARCH ON THE ECONOMICS OF COAL-BASED ENERGY

P a p e r t o t h e IIASA workshop on "Coal

-

I s s u e s f o r t h e E i g h t i e s " i n S z c z y r k , P o l a n d , 5-9 November 1979 by Hugh M e l l a n b y Lee (Economic A s s e s s m e n t S e r v i c e , IEA C o a l R e s e a r c h )

The e x p a n s i o n o f c o a l a s a n e n e r g y s o u r c e w i l l r e q u i r e a w o r l d w i d e change i n t h e p a t t e r n o f c o a l p r o d u c t i o n , t r a n s p o r t , c o n v e r s i o n a n d u t i l i z a t i o n . T h i s p a p e r d e s c r i b e s some o f t h e c o l l a b o r a t i v e r e s e a r c h on c o a l b e i n g done u n d e r t h e ' a u s p i c e s o f t h e I n t e r n a t i o n a l E n e r g y Agency; p a r t i c u l a r e m p h a s i s i s g i v e n t o some o f t h e c o n c l u s i o n s r e a c h e d s o f a r by t h e Economic A s s e s s m e n t S e r v i c e .

The I n t e r n a t i o n a l E n e r g y Agency (IEA) i s a n i n t e r - g o v e r n m e n t body. The member c o u n t r i e s a r e t h e USA and Canada, J a p a n , A u s t r a l i a and New Z e a l a n d a n d most o f W e s t e r n Europe ( A u s t r i a , Belgium, Denmark, t,he F e d e r a l R e p u b l i c o f Germany, G r e e c e , I r e l a n d , I t a l y , Luxembourg, N e t h e r l a n d s , Norway, S p a i n Sweden, S w i t z e r l a n d , Turkey and t h e U n i t e d Kingdom). I t was e s t a b l i s h e d w i t h i n t h e framework o f t h e OECD ( O r g a n i s a t i o n f o r Economic C o - o p e r a t i o n and Development) i n November 1974 a f t e r t h e e n e r g y c r i s i s o f t h e p r e v i o u s w i n t e r . The p u r p o s e o f t h e IEA i s c o - o p e r a t i o n among i t s member c o u n t r i e s t o r e d u c e e x c e s s i v e dependence o n o i i t h r o u g h e n e r g y c o n s e r v a t i o n and development o f a l t e r n a t i v e e n e r g y s o u r c e s , i n c l u d i n g c o a l .

Among i t s many a c t i v i t i e s , t h e IEA h a s a Working P a r t y on C o a l R e s e a r c h a n d Development. T h i s working P a r t y h a s i d e n t i f i e d v a r i o u s p r o j e c t s where i n t e r n a t i o n a l collaborative r e s e a r c h would b e b e n e f i c i a l and would

f u r t h e r t h e a i m s o f t h e IEA. (See F i g u r e 1 . ) So f a r 1 4 c o a l p r o j e c t s h a v e b e e n e s t a b l i s h e d . Each o f t h e s e p r o j e c t s i s funded by some, b u t n o t a l l , o f t h e IEA member c o u n t r i e s . One p a r t i c u l a r c o u n t r y i s d e s i g n a t e d t h e " O p e r a t i n g Agent" b u t some o f t h e s t a f f a r e o f t e n s u p p l i e d by some o f t h e o t h e r c o u n t r i e s . ( S e e F i g u r e 2 )

Four o f t h e s e c o a l p r o j e c t s a r e p a r t i c u l a r l y i n t e r e s t i n g t o t h i s IIASA workshop. They a r e t h e T e c h n i c a l I n f o r m a t i o n S e r v i c e , t h e World Coal R e s e r v e s and Resources Data Bank, t h e Mining Technology C l e a r i n g House and t h e Economic Assessment S e r v i c e .

The o b j e c t i v e of t h e T e c h n i c a l I n f o r m a t i o n S e r v i c e (TIS) i s t o d i s s e m i n a t e i n f o r m a t i o n r e l a t e d t o a l l a s p e c t s of c o a l . I t h a s c r e a t e d a c o m p u t e r i s e d d a t a b a s e of a b s t r a c t s on p u b l i s h e d a r t i c l e s on c o a l from t e c h n i c a l j o u r n a l s , r e s e a r c h r e p o r t s and c o n f e r e n c e p a p e r s . A Coal Thesourus h a s been d e v e l o p e d t o i n d e x t h i s d a t a b a s e and it i s hoped t h a t o n - l i n e a c c e s s t o i t w i l l b e a v a i l a b l e s o o n . By t h e end o f 1979 some 25 000 a b s t r a c t s w i l l have been i n c o r p o r a t e d . These a b s t r a c t s come n o t o n l y from t h e c o u n t r i e s f u n d i n g TIS b u t a l s o from many o t h e r c o u n t r i e s ; f o r example, a b o u t a hundred E a s t e r n European j o u r n a l s a r e c o v e r e d .

TIS p u b l i s h e s a monthly p e r i o d i c a l ' C o a l A b s t r a c t s ' which c o n t a i n s a l l t h e a b s t r a c t s which have been added t o t h e d a t a b a s e . The i n d e x d o e s n o t c o n t a i n a s p e c i f i c e n t r y f o r Systems A n a l y s i s o r O p e r a t i o n a l R e s e a r c h b u t any p a p e r p u b l i s h e d i n t h i s f i e l d is i n c l u d e d i n ' C o a l A b s t r a c t s '

.

I t a l s o i n c l u d e s t h e Coal C a l e n d a r g i v i n g d e t a i l s o f a l l f o r t h c o m i n g c o n f e r e n c e s and o t h e r e v e n t s r e l e v a n t t o t h e c o a l i n d u s t r y .

TIS a l s o p u b l i s h e s t e c h n i c a l r e v i e w s . These a r e c r i t i c a l l i t e r a t u r e r e v i e w s , w i t h e x t e n s i v e b i b l i o g r a p h i e s , o f s e l e c t e d s u b j e c t s i n o r r e l a t e d t o t h e f i e l d o f c o a l p r o d u c t i o n and u s e . Seven o f t h e s e r e v i e w s have been p u b l i s h e d s o f a r i n c l u d i n g one on underground t r a n s p o r t and a n o t h e r on methane p r e d i c t i o n .

The World Coal R e s e r v e s and Resources Data Bank (WCRRDB) i s e s t a b l i s h i n g a c o m p u t e r i s e d d a t a bank on c o a l i n p l a c e . I t i s c o l l e c t i n g p h y s i c a l and c h e m i c a l d a t a ( d e p t h , seam t h i c k n e s s , e n e r g y c o n t e n t e t c . ) on e v e r y c o a l f i e l d i n t h e world from t h e l i t e r a t u r e , supplemented by d i r e c t e n q u i r y . The i n f o r m a t i o n from d i f f e r e n t c o u n t r i e s i s b e i n g s t o r e d , b o t h i n i t s o r i g i n a l form and i n comparable t e r m s , on a c o m p u t e r i s e d d a t a bank which h a s c o n s i d e r a b l e f l e x i b i l i t y . WCRRDB i s a l s o d e v e l o p i n g a l e x i c o n of t h e t e r m s used i n a s s e s s i n g r e s e r v e s and r e s o u r c e s i n d i f f e r e n t c o u n t r i e s . Some r e s e a r c h h a s a l s o been done on t h e r e l a t i o n s h i p between mining c o s t s and t h e p h y s i c a l d a t a on c o a l i n p l a c e .

The purpose of the Mining Technology Clearing House (YTCH) is to help increase the effectiveness of the coal mining R S 9 (research and development) in its funding countries. It covers all activities connected with coal mining from exploration to market preparation of the product. It collects information on the .mining R S 9 projects being carried out in each country and then collates and analyses i: in order to facilitate the exchange of information between countries and to promote active liaison and collaboration. It is compiling a number of registers

of R&D projects in the same field, including one on 'Planning and

Management' which broadly covers all systems analysis acd operational research projects.

MTCH has published over twenty papers and reports. Some .of these are register critiques which analyse the number and nature of projects in a particular field; they indicate where valuable experience lies which may be of use to other countries. Some of the papers are technical investigations which have included 'Hydrotransport of Solids Underground' and 'Mining Methods to Improve Reserve Recovery'. X T C I I have also organised technical meetings of researchers working in the same field.

The purpose of the Economic Assessment Service (EAS) is to provide economic studies to support the development of the international coal industry. It makes economic assessments of coal production, transport, conversion and utilisation in order to assist the funding countries in the formulation of new research projects and in evaluating the application of coal technologies to their own needs. With a professional staff of eight, it is not set up to provide ~ t s own basic data; rather its aim is

-

to review reported information, and accept or adjust it in the light of developing knowledge and personal visits,

-

to put the information on a consistent and relatively independent basis, particularly with regard to economic conventions, and

-

to extract any message, free of conventions, pointing out where uncertainty remains.

The x o r k programme o f EAS i s d i v i d e d i n t o f o u r a r e a s :

-

Coal s u p p l y , t r a n s p o r t and t r a d e

-

Economics o f c o a l c o n v e r s i o n t e c h n o l o g i e s

-

E n v i r o n m e n t a l s t u d i e s

-

R e l a t i v e economics o f c o a l - b a s e d e n e r g y .

E i g h t r e p o r t s have b e e n p u b l i s h e d c o v e r i n g a v a r i e t y o f t o p i c s i n t h e s e a r e a s and s e v e r a l more a r e i n d r a f t . A number o f i n t e r e s t i n g c o n c l u s i o n s h a v e b e e n r e a c h e d s o f a r : t h e s e a r e d e s c r i b e d i n t h e r e s t o f t h e p a p e r .

Y e a r l y a l l t h e p u b l i s h e d s t u d i e s on e n e r g y s u p p l y and demand a g r e e t h a t w o r l d c o a l demand w i l l i n c r e a s e s u b s t a n t i a l l y by t h e end o f t h e c e n t u r y . T h e r e a r e a r g u m e n t s f o r and a g a i n s t a number o f d i f f e r e n t s c e n a r i o s : a h i g h e n e r g y g r o w t h s c e n a r i o ( b a s e d m a i n l y on a r a p i d e x p a n s i o n o f n u c l e a r e n e r g y ) g i v e s a n i n c r e a s e i n c o a l demand o f a b o u t 250% by t h e y e a r 2000 a n d a low e n e r g y g r o w t h s c e n a r i o ( b a s e d on s u b s t a n t i a l e n e r g y c o n s e r - v a t i o n ) g i v e s a n i n c r e a s e i n c o a l demand o f 65%.

A c e n t r a l view o f c o a l demand i s g i v e n i n F i g u r e 3. T h i s shows t h a t t h e l a r g e s t i n c r e a s e i n demand ( i n a b s o l u t e t e r m s ) w i l l come from t h e e l e c t r i c i t y g e n e r a t i o n m a r k e t . However, t h i s m a r k e t w i l l o n l y a c c o u n t f o r 50% o f t h e t o t a l demand a n d e a c h o f t h e o t h e r m a r k e t s w i l l be i m p o r t a n t : f o r e x a m p l e , s y n t h e t i c o i l a n d g a s w i l l o n l y a c c o u n t f o r a b o u t 5% o f t h e demand b u t t h i s r e p r e s e n t s o v e r 200 Mtce.

T h i s i n c r e a s e i n c o a l demand ill b e s u p p l i e d by o n l y a r e l a t i v e l y s m a l l number o f c o u n t r i e s . T h e r e a r e e i g h t c o u n t r i e s which c o u l d i n c r e a s e t h e i r c o a l p r o d u c t i o n b y 100 Mtce o r more between now and t h e end o f t h e c e n t u r y : A u s t r a l i a , Canada, C h i n a , I n d i a , P o l a n d , S o u t h A f r i c a , t h e USA a n d t h e USSR. The o t h e r c o a l p r o d u c i n g c o u n t r i e s and p o t e n t i a l c o a l p r o d u c i n g c o u n t r i e s w i l l o n l y be s i g n i f i c a n t a t t h e m a r g i n .

I n t e r n a t i o n a l t r a d e i n c o a l w i l l a l s o i n c r e a s e c o n s i d e r a b l y . A t p r e s e n t most o f t h e c o a l t r a d e i s i n c o k i n g c o a l and most o f t h e s t e a m c o a l t r a d e i s between n e a r b y c o u n t r i e s . T h i s s i t u a t i o n w i l l b e r e v e r s e d by t h e y e a r 2000: most o f t h e t r a d e w i l l b e s t e a m c o a l and it w i l l b e between d i s t a n t c o u n t r i e s . I n p a r t i c u l a r , Western Europe and J a p a n w i l l b e i m p o r t i n g

s u b s t a n t i a l q u a n t i t i e s o f steam c o a l b e c a u s e t h e y c a n n o t expand t h e i r own c o a l p r o d u c t i o n s u f f i c i e n t l y .

T h e r e i s a l i m i t t o t h e e x p o r t c a p a b i l i t y of most o f t h e e i g h t c o u n t r i e s mentioned above which c o u l d expand t h e i r c o a l p r o d u c t i o n by 100 Mtce o r more. I n d i a and Poland w i l l p r o b a b l y consume i n t e r n a l l y a l l t h e e x t r a c o a l t h e y produce and China and t h e USSR w i l l n o t b e a b l e t o e x p o r t v e r y much c o a l f o r t h e same r e a s o n s . A u s t r a l i a , Canada and S o u t h A f r i c a w i l l i n c r e a s e t h e i r e x p o r t s enormously b u t t h e r e a r e c o n s t r a i n t s i n t h e s e c o u n t r i e s on b o t h t h e e x p a n s i o n of p r o d u c t i o n and t h e e x p a n s i o n of t r a n s p o r t and p o r t f a c i l i t i e s . T h i s l e a v e s t h e USA which w i l l become t h e m a r g i n a l world s u p p l i e r o f c o a l , d e s p i t e t h e f a c t t h a t a t p r e s e n t i t i s n o t e x p o r t i n g any steam c o a l ( e x c e p t t o Canada) b e c a u s e i t s p r i c e s a r e t o o h i g h .

There a r e a number of f a c t o r s which w i l l c a u s e a r e a l i n c r e a s e i n c o a l mining c o s t s , e s p e c i a l l y i n t h o s e c o a l f i e l d s whose o u t p u t i s g o i n g t o r i s e s u b s t a n t i a l l y . I n o r d e r t o r e c r u i t more m i n e r s i t w i l l b e n e c e s s a r y t o i n c r e a s e t h e i r wages more t h a n o t h e r workers (whose wages t e n d t o i n c r e a s e by 1% p e r y e a r i n r e a l terms i n any c a s e ) . I n any p a r t i c u l a r c o a l f i e l d t h e r e a r e u n l i k e l y t o b e g r e a t improvements I p r o d u c t i v i t y t o o f f s e t t h i s wages i n c r e a s e a n d , i n some c a s e s , environmerltal r e g u l a t i o n s w i l l have a n e g a t i v e e f f e c t on p r o d u c t i v i t y . M a t e r i a l s c o s t s p e r t o n n e have a l s o been i n c r e a s i n g i n r e a l terms i n t h e p a s t decade and t h i s i s l i k e l y t o c o n t i n u e . F i n a l l y , c a p i t a l c h a r g e s w i l l i n c r e a s e b e c a u s e t h e e x t r a i n v e s t m e n t w i l l r e q u i r e a h i g h e r r a t e of r e t u r n .

A l l t h e s e f a c t o r s w i l l l e n d t o ' a s i g n i f i c a n t i n c r e a s e i n t h e c o s t of c o a l a t t h e mine-mouth. However, t h e i n c r e a s e i n t h e d e l i v e r e d c o s t o f c o a l w i l l n o t b e s o g r e a t b e c a u s e much o f t h e i n c r e a s e i n p r o d u c t i o n w i l l come from l o w e r - c o s t c o a l f i e l d s and b e c a u s e t r a n s p o r t c o s t s w i l l n o t ' r i s e by s o much. Moreover, t h e r i s e i n world o i l p r i c e s i s l i k e l y t o b e much h i g h e r t h a n t h e i n c r e a s e i n c o a l c o s t . The p r i c e of c o a l w i l l n o t be l i n k e d t o t h e p r i c e of o i l b e c a u s e t h e r e w i l l be s u f f i c i e n t c o m p e t i t i o n between t h e d i f f e r e n t c o a l p r o d u c i n g c o u n t r i e s : i n t h e USA, where t h e r e i s c o m p e t i t i o n between t h e c o a l p r o d u c i n g companies, t h e p r i c e of c o a l r e l a t i v e t o t h e p r i c e o f o i l has v a r i e d enormously o v e r t h e p a s t d e c a d e .

The i n c r e a s e i n p r o d u c t i o n w i l l m a i n l y come from c o a l f i e l d s which a r e a v e r y l o n g d i s t a n c e from t h e i r m a r k e t s . F o r example, t h e e x t r a c o a l i n t h e USSR w i l l come from t h e S i b e r i a n and o t h e r E a s t e r n c o a l f i e l d s which a r e some t h o u s a n d s of k i l o m e t r e s from t h e main demand c e n t r e i n t h e European p a r t of t h e c o u n t r y . S i m i l a r l y t h e e x t r a p r o d u c t i o n i n A u s t r a l i a , Canada, S o u t h A f r i c a and t h e USA w i l l b e a l o n g way away from t h e home o r e x p o r t m a r k e t s . So t h e t r a n s p o r t of c o a l o r c o a l - b a s e d e n e r g y w i l l become more i m p o r t a n t t h a n i t h a s been i n t h e p a s t .

? l o s t t e c h n o l o g i e s f o r t r a n s p o r t i n g c o a l u s e o i l a s t h e m o t i v e power.

T y p i c a l l y f u e l c o s t s a r e a b o u t a t h i r d o f t h e t o t a l c o s t s p e r t o n n e t r a n s p o r t e d ; t h u s c o a l t r a n s p o r t c o s t s w i l l t e n d t o i n c r e a s e a s world o i l p r i c e s i n c r e a s e . However, t h e r e a r e some p o t e n t i a l improvements o r changes i n t r a n s p o r t t e c h n o l o g y . The u n i t - t r a i n c o n c e p t h a s a l r e a d y r e d u c e d r a i l t r a n s p o r t c o s t s c o n s i d e r a b l y and t h e r e i s a v e r y l a r g e p o t e n t i a l t o improve t h e l a b o u r p r o d u c t i v i t y o f t h e r a i l w a y s i n most c o u n t r i e s ; i n a d d i t i o n , r a i l w a y e l e c t r i f i c a t i o n w i l l r e d u c e t h e dependence on o i l . Coal s l u r r y p i p e l i n e s o f f e r a v i a b l e a l t e r n a t i v e f o r o v e r l a n d t r a n s p o r t and t h e y c o u l d be c h e a p e r t h a n r a i l t r a n s p o r t f o r l o n g d i s t a n c e s and h i g h t h r o u g h p u t s , p a r t l y b e c a u s e p i p e l i n e pumps c a n b e powered by e l e c t r i c i t y ; more r e s e a r c h n e e d s t o b e done on t h e d e w a t e r i n g o f c o a l s l u r r y t o r e d u c e i t s c o s t s and e n v i r o n m e n t a l e f f e c t s . Cable b e l t c o n v e y o r s c a n a l s o be c o m p e t i t i v e w i t h r a i l t r a n s p o r t f o r h i g h t h r o u g h p u t s and d i s t a n c e s up t o 100 km. However, n e i t h e r s l u r r y p i p e l i n e s n o r conveyor b e l t s a r e a s f l e x i b l e a s r a i l t r a n s p o r t .

F o r j o u r n e y s by s e a , l a r g e r s h i p s have a l r e a d y reduced c o a l t r a n s p o r t c o s t s c o n s i d e r a b l y and t h i s t r e n d w i l l c o n t i n u e . S e l f - u n l o a d i n g s h i p s a r e t h e o n l y mode of c o a l t r a n s p o r t on t h e G r e a t Lakes of N o r t h America;

t h i s c o n c e p t c o u l d p r o f i t a b l y be e x t e n d e d t o t h e s h o r t s e a d i s t a n c e s w i t h i n Europe and i t c o u l d b e used f o r much l o n g e r d i s t a n c e s i f i t saved t h e c o s t of c o n s t r u c t i n g a n e x p e n s i v e new p o r t f o r a new c o a l c o n v e r s i o n p l a n t . The t e c h n o l o g y of s l u r r y s h i p s f o r c o a l h a s n o t y e t b e e n c o m m e r c i a l i s e d b u t i t c o u l d o f f e r s a v i n g s i f i t i s used i n c o n j u n c t i o n w i t h s l u r r y p i p e l i n e s i n b o t h t h e e x p o r t i n g and i m p o r t i n g c o u n t r i e s .

T h e r e a r e a number o f s y s t e m s p r o b l e m s a s s o c i a t e d w i t h c o a l t r a n s p o r t . The c h o i c e between f l e x i b i l i t y a n d c o s t h a s a l r e a d y b e e n h i n t e d a t a b o v e . The c o a l i n d u s t r y i s n o t v e r t i c a l l y i n t e g r a t e d i n c o m p a r i s o n w i t h t h e o i l

i n d u s t r y : c o a l p r o d u c t i o n , c o a l t r a n s p o r t and c o a l c o n v e r s i o n a r e u s u a l l y done b y s e p a r a t e c o m p a n i e s . T h i s makes t h e s y s t e m s p r o b l e m s more d i f f i c u l t t o s o l v e . A c o a l c o n v e r t i n g company u s u a l l y w a n t s a d i v e r s i t y o f c o a l s u p p l i e r s f o r s e c u r i t y b u t t h i s c a n a d d t o t h e c o a l q u a l i t y and b l e n d i n g p r o b l e m s . T h i s i s a l s o i n h i b i t i n g t h e d e v e l o p m e n t o f l a r g e new m i n e s b e c a u s e s a l e s c o n t r a c t s w i t h s e v e r a l d i f f e r e n t consumers and t h e i r a s s o c i a t e d t r a n s p o r t c o n t r a c t s h a v e t o b e a r r a n g e d f i r s t .

When c o a l i s t o b e c o n v e r t e d i n t o e l e c t r i c i t y , it i s u s u a l l y c h e a p e r t o t r a n s p o r t t h e c o a l a s c o a l a n d t o s i t e t h e g e n e r a t i o n p l a n t n e a r t o t h e demand f o r e l e c t r i c i t y . However, when r a i l p r i c e s a r e e x p e n s i v e and no o t h e r mode o f c o a l t r a n s p o r t i s p r a c t i c a l , it c a n b e c h e a p e r t o g e n e r a t e t h e e l e c t r i c i t y a t t h e mine-mouth a n d t o t r a n s m i t i t by o v e r h e a d d i r e c t c u r r e n t l i n e s . When c o a l i s t o b e c o n v e r t e d i n t o g a s , i t i s a l w a y s c h e a p e r t o t r a n s p o r t t h e c o a l and c o n v e r t i n n e a r t o t h e c e n t r e o f t h e demand f o r g a s . When c o a l i s t o b e c o n v e r t e d i n t o a l i q u i d f u e l s , it i s a l w a y s c h e a p e r t o do t h i s a t t h e mine-mouth a n d t r a n s p o r t t h e l i q u i d s ; however, where i n t e r n a t i o n a l t r a d e i s i n v o l v e d , t h e i m p o r t i n g C o u n t r y may p r e f e r t o h a v e t h e c o a l l i q u e f a c t i o n p l a n t w i t h i n i t s b o r d e r s f o r s e c u r i t y and b e c a u s e o f i t s v a l u e t o t h e economy.

T h e r e i s a w e l l e s t a b l i s h e d t e c h n o l o g y f o r g e n e r a t i n g electricity from c o a l : t h e p u l v e r i s e d f u e l b o i l e r w i t h a s t e a m c y c l e . F o r d e l i v e r e d c o a l c o s t s of 1 t o 2 $/GJ, t h e f i n a l e l e c t r i c i t y c o s t s a r e s i a i l a r t o t h o s e f o r n u c l e a r g e n e r a t i o n a n d t h e c h o i c e between c o a l and n u c l e a r i s made o n g r o u n d s o t h e r t h a n c o s t .

T h r e e new t e c h n o l o g i e s f o r g e n e r a t i n g e l e c t r i c i t y from c o a l a r e u n d e r d e v e l o p m e n t and c o u l d b e commercial by t h e mid 1 9 9 0 ' s . T h e s e a r e :

-

^The a t m o s p h e r i c Z l u i d i s e d bed b o i l e r i n c o r p o r a t i n g l i m e s t o n e a d d i t i o n f o r s u l p h u r removal a n d u s i n g a s t e a m c y c l e f o r e l e c t r i c i t y g e n e r a t i o n .

-

The p r e s s u r i s e d f l u i d i s e d bed b o i l e r i n c o r p o r a t i n g d o l o m i t e a d d i t i o n f o r s u l p h u r r e m o v a l . E l e c t r i c i t y g e n e r a t i o n i s by combined c y c l e u s i n g b o t h g a s and s t e a m t u r b i n e s .

-

Air-blown c o a l g a s i f i c a t i o n t o p r o d u c e a c l e a n f u e l g a s which i s u s e d t o g e n e r a t e e l e c t r i c i t y i n a combined c y c l e s y s t e m . A number o f p r o c e s s v a r i a n t s a r e u n d e r d e v e l o p m e n t .

The a d v a n t a g e of t h e s e new t e c h n o l o g i e s i s t h a t t h e y p r o m i s e a s i g n i f i c a n t s a v i n g i n e l e c t r i c i t y c o s t s when e n v i r o n m e n t a l r e g u l a t i o n s r e q u i r e s u l p h u r r e m o v a l . T h a t i s when t h e y a r e compared w i t h a c o n v e n t i o n a l f u r n a c e b u r n i n g p u l v e r i s e d f u e l , u s i n g a s t e a m c y c l e f o r e l e c t r i c i t y g e n e r a t i o n and w i t h a w e t l i m e s t o n e s c r u b b e r f o r removal o f s u l p h u r d i o x i d e from t h e s t a c k g a s . A l l t h r e e new t e c h n o l o g i e s g i v e a s i m i l a r s a v i n g of 11-16% f o r h i g h s u l p h u r (3.5%) c o a l and 85% s u l p h u r r e m o v a l ; t h e a c t u a l s a v i n g d e p e n d s on t h e c o a l p r i c e , d i s c o u n t e d r a t e o f r e t u r n , t h e t a x a t i o n p o l i c y e t c . F o r low t o m o d e r a t e c o a l p r i c e s t h e a t m o s p h e r i c f l u i d i s e d bed i s t h e most economic; f o r h i g h c o a l p r i c e s e i t h e r o f t h e o t h e r two new t e c h n o l o g i e s a p p e a r t o b e more a t t r a c t i v e . When s u l p h u r c o n t r o l i s n o t n e c e s s a r y , t h e p r e s s u r i s e d f l u i d i s e d bed i s t h e most f a v o u r a b l e o p t i o n , b u t t h e s a v i n g s a r e o n l y 7-9% compared w i t h a c o n v e n t i o n a l p u l v e r i s e d f u e l b o i l e r .

The c o s t o f c o n v e r t i n g c o a l t o s u b s t i t u t e n a t u r a l g a s (SNG) i s 3 t o 4 d o l l a r s p e r G i g a J o u l e o f SNG. The e f f i c i e n c y i s a b o u t 65% and s o , when t h e c o s t o f t h e c o a l i s added i n , t h e t o t a l c o s t o f SNG i s 4 t o 9 $ / G J . The lower end o f t h i s r a n g e c o r r e s p o n d s b r o a d l y w i t h t h e u p p e r end o f t h e

r a n g e o f c o s t s f o r ' f r o n t i e r ' g a s and LNG ( l i q u i d n a t u r a l g a s ) from o v e r s e a s g a s f i e l d s . T h i s s u g g e s t s t h a t SNG from c o a l i s n o t a v i a b l e s h o r t - t e r m o p t i o n . M o r e o v e r , t h e c o s t s o f c o n v e r t i n g c o a l t o low o r medium e n e r g y c o n t e n t g a s e s a r e o n l y s l i g h t l y l e s s , s o t h e s e a r e a l s o n o t v i a b l e o p t i o n s .

T h e r e a r e t h r e e b o r a d r o u t e s f o r c o n v e r t i n g c o a l t o l i q u i d s : p y r o l y s i s , s y n t h e s i s and s o l v e n t e x t r a c t i o n w i t h h y d r o g e n a t i o n . A l l t h r e e r e q u i r e some c o a l g a s i f i c a t i o n .

Pyrolysis is the distillation of coal to separate a liquid/gas fraction from a char residue. The main disadvantage of this route is the low yield of liquids and gases.

Synthesis is the gasification of coal in oxygen to produce a carbon-monoxide and hydrogen mixture from which liquids and gases can be more or less selectively synthesized. The advantages of this route are, firstly, it is already working on a commercial scale at the SASOL plant in South Africa, secondly, it is easier to produce transport fuels and, thirdly, much of the cheaper coal is high in oxygen and water which is advantageous for this route.

Solvent extraction with hydrogenation involves dissolution of the coal in a solvent, followed by some degree of hydrogenation and subsequent separation of liquids/gases by filtration and/or distillation. The newer processes being developed for this direct route promise significant improvements over the Second' World War state of the art, but none of these processes have yet worked on a sizeable scale.

All coal liquefaction processes produce more than one product. Moreover, each of the processes has a different range of products, which makes comparisons between them difficult. In general, processes with a low investment and a high efficiency produce more boiler fuel, while the high investment low efficiency processes tend to. produce more productt Ilrom the top end of the barrel, which are more valuable.

At present no coal liquefaction process seems to be commercial viable, except in the special circumstances of South Africa where a combination of cheap coal and a desire to be independent of foreign oil supplies has led to the development of the Fischer-Tropsch process on a commercial scale by SASOL. As oil prices increase coal liquefaction will become viable provided that coal prices and plant investment costs do not increase at the same rate.

GOVEHNMENTS Ministers

*

INTERNATIONAL ENERGY AGENCY Civil service Emergency Long-term + Diplomats oil policy

I

WORKING PARTIES ~~ency COAL WIND NUCLEAR NUCLEAR FUSION SAFETY SOLAR BIOMASS OTHERS representatives* Funding + staff

r

- 7 9 -

Im Dokument Szczyrk Conference Papers -- Part II. Coal: Issues for the Eighties (Seite 74-86)