The Value Proposition of Circulating Fluidized Bed Technology for the Utility Power Sector

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1 The Value Proposition of Circulating Fluidized Bed Technology for the Utility Power Sector Written by Robert Giglio Presented by Antonio Castilla Oliver Foster Wheeler Global Power Group IFSA November 2014, Johannesburg, South Africa Foster Wheeler All rights reserved. 1 P age

2 The Value Proposition of Circulating Fluidized Bed Technology for the Utility Power Sector ABSTRACT CFB combustion technology has been around for over 40 years, but over the last 4 years it has been commercially demonstrated at the 500 MWe scale at the Lagisza plant located in Bedzin, Poland. The CFB at the Lagisza plant has unique first-of-a-kind design features, like vertical-tube supercritical steam technology and a low temperature flue gas heat extraction allowing the plant to achieve a very high plant efficiency of over 43% (net LHV). Another unusual feature for a coal power plant is that this plant meets all its air emission permit levels without any post combustion De-NOx or De-SOx equipment like SCR or FGD. CFB clean coal power technology is coming into the utility power sector just in time to help deal with declining coal quality in internationally traded coals and to allow the large-scale use of very economical, low -quality domestic fuels. Due to their very attractive price discounts, growing supplies of low quality Indonesian coals are outpacing the supply of high quality Australian, Russian, and US coals. In Germany and Turkey, the use of their domestic lignites for power production provides a secure and very economical energy solution while creating domestic jobs. Conventional PC boilers will have trouble accepting these off-spec coals due to their narrow fuel specs typically calling for heating values above 5500 kcal/kg. But, this is not an issue for CFB technology due to its capability of burning both the worst and best coals with heating values ranging from 3900 to 8000 Kcal/Kg. This paper will provide an outlook for future coal supply, quality and price as well as a review of the technical and economic benefits of CFB technology firing low quality fuels for utility power generation. Advanced CFBs for Utility Power Generation When the Lagisza power plant, located in the Katowice area of southern Poland, began commercial operation in June 2009, it marked a new era in the evolution of circulating fluidized bed (CFB) technology. It is now celebrating its fourth year of successful commercial operation. Besides being the most advanced operating CFB steam generator in the world, the CFB at the Lagisza plant has unique first-of-a-kind design features, like vertical-tube supercritical steam technology and low temperature flue gas heat recovery system allowing the plant to achieve a very high net plant efficiency of 43.3% (based on the fuel s lower heating value). The Lagisza CFB has many innovative design features, but the most profound feature is that this plant meets all its air emission permit levels without any post combustion De-NOx or De- SOx equipment like SCR or FGD. 2 P age

3 Figure 1. Lagisza CFB Power Plant located in Bedzin, Poland Like the Lagisza plant owners (PKE), Korean Southern Power Company (KOSPO) also saw the value of CFB technology when they chose it for their 2200 MWe Green Power Plant project in Samcheok, Korea. The Samcheok plant which is now under construction will utilize four larger 550 MWe CFBs featuring ultra-supercritical steam conditions (257 barg, 603/603 C). These CFBs will then be the most advanced units in the world when this plant comes on line as expected in Figure MWe Green Power CFB Plant located in Samcheok, Korea Both PKE and KOSPO first considered conventional pulverized coal (PC) technology for their projects, but after studying the additional technical and economic benefits that the CFB brought to their projects, they ultimately chose CFB technology. There were many benefits from the CFB to sway their decision but two benefits that played a strong role in their decision were: The CFB s ability to reliably burn both low rank and high quality coals as well as biomass and waste coal slurries (Lagisza only) dramatically improved the potential for large fuel cost savings and high fuel procurement security. 3 P age

4 The CFB s ability to achieve air emission goals without FGD or SCR technology saved large amounts of capital, operating cost and water. CFB s Benefits are Rooted in its Unique Combustion Process The CFB s advantages of high reliability, low maintenance, wide fuel range, smaller and less costly boilers are rooted in its unique flameless, low-temperature combustion process. As shown in Figure 3, unlike conventional pulverized coal (PC) or oil/gas boilers, the fuel s ash does not melt or soften in a CFB which allows the CFB to avoid many of the fouling and corrosion problems encountered in conventional boilers with an open flame. Figure 3. Comparison of Conventional vs. CFB Boiler technology Supercritical Boiler Design Considerations For once-through supercritical boiler designs, the low, even combustion temperature and heat flux throughout the CFB s furnace minimizes the risk of uneven tube-to-tube temperature variations allowing the furnace walls to be constructed with cost effective and easy to maintain smooth vertical tubes. For additional protection, Foster Wheeler s (FW) s once-through CFBs utilize a patented lowsteam-mass-flux design providing a natural self-cooling charactersitic which uses bouyancy forces to increase a tube s water/steam flow proportionally with the amount of heat it recieves.this further minimizes tube-to-tube temperature variations and ensures low mecahnical stresses across the furnace extending furnace life. To cope with the very uneven temperature and heat absorbtion in the furnace, most conventional PC and oil/gas once-through boilers incline and wrap the furnace wall tubes around the lower section of the furnace to even out tube-to-tube heat absorption and temperatures. While this solves the heat imbalance problem, the spiral design has several disadvantages compared to FW s CFB vertical tube design. The spiral design requires a heavier more complicated boiler and boiler support system while making furnace tube repairs more difficult. Further, it has a high steam pressure loss due to its longer steam path and provides 4 P age

5 a natural location for slag build-up on the ledge formed at the spiral to vertical tube header interface.. Figure 4. Comparison of spiral vs. vertical tube once-through furnace design Furnace Size vs. Fuel Quality Since the fuel s ash doesn t soften or melt in a CFB, the size of the furnace doesn t grow as much as conventional boilers when firing lower quality fuels. As can be seen in Figure 5, in order to control fouling, slagging and corrosion, the furnace height of a PC doubles and its footprint increases by over 60% when firing a low quality fuel like high sodium lignite, whereas, the CFB boiler height increases by only 8% and its footprint increases by only 20%. This results in a smaller and lower cost CFB boiler as compared to the PC boiler. 5 P age

6 Figure 5. Impact on furnace size as fuel quality degrades PC vs. CFB Further, unlike a PC, a CFB doesn t need soot blowers to control the build-up of deposits and slag in the furnace since the ash doesn t soften and the circulating solids themselves remove deposits and minimize their build-up on the furnace walls, panels and coils. Superheater and Reheater Design Considerations Another very important feature of the CFB involves the final superheat and reheat steam coils. These coils operate at the highest metal temperatures in the boiler making them the most vulnerable to corrosion and fouling attack. This vulnerability increases significantly for supercritical boilers with high steam temperatures. As shown in Figure 6, in a conventional PC or oil/gas boiler these coils are hung from the furnace ceiling and are directly exposed to the slagging ash and corrosive gases (sodium and potassium chlorides) in the hot furnace flue gas. To cope with this undesirable situation, boiler designers use expensive alloys and recommend a high level of cleaning and maintenance for these coils. As shown in Figure 6, this design weakness is avoided in FW s CFBs by submerging these coils in hot solids fluidized by clean air in heat exchangers called INTREX es protecting them from the corrosive flue gas. The bubbling solids efficiently conduct their heat to the steam contained in the coils and since the solids never melt or soften, fouling and corrosion of these coils are minimal. Further, due to the high heat transfer rate of the solids (via conduction heat transfer), the coil size is many times smaller than those in a conventional boilers. Figure 6.Boiler design feature comparison: PC vs. CFB Boiler Fuel Delievery System One last important design issue involves the fuel delivery system to the boiler. A PC boiler requires the fuel to be finely ground and pneumatically transported and distributed to many burners. For low quality, high ash fuels, like brown coals and lignite, the maintenance and power consumption of the fuel pulverizers increase dramatically while the reliability of the 6 P age

7 entire fuel delivery system declines. For a CFB, pulverizers are not needed, the fuel is only coarsly crushed and fed to the CFB directly from the fuel silos via a simple gravity feed system. Overall Plant Reliability Based on these process and design differences, plants with FW CFBs have demonstrated plant availabilities well above conventional PC boilers. Figure 7 shows the results from a recent study comparing PC plant availability to Foster Wheeler CFBs. The availability shown in the chart represents the total time (as a % of total 8760 hours in a year) that the plant is operationally available accounting for both planned and unplanned downtime. As shown by Figure 7, the plants with FW CFBs had about a 5% higher availability than the PC plants and that this higher availability difference was maintained for even brown coals and lignites. For a 1000 MWe coal power plant, this 5% difference in plant availability can translate into a $160 million increase in power plant net income on a 10 year net present value basis as shown in Figure 8. Figure 7. Results from Reliability study of PC vs. CFB Power Plants. *Availability means total time plant is available to run accounting for both planned and unplanned downtime. The FW CFB plant availability values were based on client supplied data reported over the period for CFB plants mainly located in Europe. The PC values are based on client supplied data over period for PC units that are mainly located in Europe and reported in VGB s PowerTech Report, TW103Ve, published in Increase in Net Income for a 1000 MWe (Net) Supercritical Coal Power Plant 7 P age

8 Figure 8. Impact of plant utilization factor on annual plant net income for a 1000 MWe supercritical steam power plants operating at a utilization factor of 90%, receiving a 100$/MWe electricity tariff based on buying coal at 100 $/tonne. Environmental Performance and Equipment Need: PC vs. CFB From an environmental aspect, the low temperature CFB combustion process (850 C for CFB vs.1500 C for PC/Oil/Gas) minimizes NOx formation and allows limestone to be fed directly into the furnace to capture SOx as the fuel burns. In most cases an SCR or a FGD is not needed, dramatically reducing the plant installed and operating cost, as well as, water consumption while improving plant reliability and efficiency. For a 1000 MWe power plant, the saving alone for the SCR and FGD capital cost would be in the range of M$. A Permanent Change to the Global Coal Market Since 2005, Indonesian coal exports have grown faster than all other countries combined, nearly quadrupling to 400 million metric tons in 2013 (see figure 9). Future projections show Indonesia reaching nearly 500 million metric tons of annual exports by 2030, which is expected to be about twice that of Australia, the world s second largest coal exporter. Figure 9. Global coal exports. Source: Historical data and FW projections Today about 50% of Indonesian coal exports are low quality high moisture sub-bituminous coal with gross-as-received (GAR) higher heating values ranging between kcal/kg, well below the 6000 kcal/kg benchmark used in the international coal market for the last 50 years. Over the last 3 years, the quality of Indonesia s export coal has been declining, and this trend is expected to continue well into the future. Today about 60% of Indonesia s coal mines hold low rank subbituminous coals with the remaining 40% holding bituminous coals estimated to have heating values under 5200 kcal/kg. Figure 10 shows the historic trend and forecast of a steady decline in the heating value of Indonesia s export coals reflecting the impact of mining this lower quality coal. 8 P age

9 Figure 10. Average Gross Heating Value of Indonesian coal exports. Source: Marketing, Sales and Logistics Analyst, Banpu PCL The primary driver for the ballooning share of Indonesian coal in the international coal market is simple economics. Figure 11 shows the current and forecasted price discount between Indonesia s sub-bituminous 4200 kcal/kg Ecocoal and a 6000 kcal/kg Australian thermal coal, both on a net as received basis (NAR), which shows a 48% or 55 $/metric ton average discount for the lower quality Indonesia coal over the 2012 to 2020 period. Accounting for the difference in heating value which amounts to 30%, on an comparative energy basis, this translates to a very attractive net 18% discount for the Ecocoal, which goes right to the bottom line of a power plant s balance sheet. Coal Price Forecast, CIF South Korean Coast Australian Thermal Average 48% (55 $/tonne) Discount Indonesia Ecocoal Figure 11. Price comparison between Indonesian Ecocoal and Australian thermal coal delivered to the coast of South Korea. Prices shown are Nominal. Source: FW forecast. Since fuel cost makes up about 85%-90% of the total operating cost of a large power plant, the economic benefits of using low quality fuels are tough to ignore. We can see this in several domestic markets, where low quality coals and lignites play a major role in power production. For example, 77% of Germany s solid fuel power is produced from lignite with only 23% produced from hard coal. In the US, 54% of its solid fuel power comes from low quality sub-bituminous coals. Use of low rank coals and lignites for power production are growing in Turkey, India, China, Indonesia, Australia, South Africa, and Mozambique driven by the very low cost of these fuels relative to premium coals. 9 P age

10 Until recently, low quality coals and lignites have been confined to domestic markets and have not been part of the international coal market. This is because their economic benefit quickly erodes by their higher transportation cost due to their lower energy content. But today, we are seeing more low quality coals and even lignites coming into the global coal market driven by steep price discounts against a tight market for premium coals. For example, from 2001 to 2010 Korean imports of Indonesia coals (mostly sub-bituminous) increased 7 fold by 38 million tonnes vs. Korea s Australian coal imports which grew only 13 million tonnes. This trend is not expected to change anytime soon. Instead it looks to be a permanent shift toward a more flexible coal price vs. quality market, where buyers and sellers will trade price for coal quality, very similar to many other commodity and finished good markets. The Impact of a Changing Coal Market on Coal Boiler Technology This price vs. quality shift in the global coal market will likely be viewed as good news to some and bad news to others depending on their power plant technology position. PC power plants with tight coal specifications (think supercritical) will have a limited ability to use the discounted coals. These plants will have a choice to stay within the tightening premium coal market or venture into the broader coal market and trade lower plant output, reduced reliability and higher maintenance cost for fuel cost discounts. On the other hand, this would be good news for power generators utilizing CFB technology. Due to the CFB s fuel flexibility, plant owners could access the full range of discount coals (even for ultra-supercritical designs), buying fuels for maximum economic benefit while avoiding the high priced premium coals. Further, the risk of declining coal quality on plant output, reliability, and maintenance is minimized with the CFB, and the risk of future carbon regulation is lessened due to the CFB s ability to utilize biomass and other carbon neutral fuels. For new power plants, this trend clearly increases the value of fuel flexible coal plants like CFB technology and will likely accelerate the adoption of CFB technology in large coal fired utility plants. The timing seems right, since as discussed above, CFB technology has just proven its ability to serve the utility power sector. This is not to say that new PC boiler power plants can t be designed to burn these low rank fuels, because they can. The point for consideration is that once a PC is designed for a specific low rank fuel, it is difficult to burn other fuels without negatively impacting plant performance, reliability and maintenance. The Economic Benefit of CFB Technology at the Utility Scale To quantify the benefits of CFB technology at a large utility plant scale, FW conducted a study comparing both the technical and economic performance of two supercritical 1100 MWe (gross) power plants: one using conventional PC technology and the other using CFB technology. The study involved the development of full power plant financial models, heat and material balances, as well as conceptual plant designs for plant layout, sizing and cost estimate purposes. For comparison purposes, a broad range of performance metrics including: plant capital and operating cost, plant height and foot print, reliability, air emissions, solid and liquid input and waste stream were evaluated. The PC plant was configured with a single 1100 MWe ultra-supercritical boiler providing its steam to a single 1100 MWe steam turbine generator. The plant fires an Australian bituminous thermal coal with a NAR heating value of 5500 kcal/kg and a 0.35% sulfur content priced at $95 per metric ton. An SCR was installed in the boiler to control stack NOx 10 P age

11 emissions to 50 ppmv (6% O2 dry) and a wet limestone FGD was installed behind the boiler to control stack SOx to 50 ppmv (6% O2 dry). The CFB plant was configured with two 550 MWe ultra-supercritical boilers providing their steam to a single 1100 MWe steam turbine generator. The CFB plant fires an Indonesian sub-bituminous thermal coal (Ecocoal) with a NAR heating value of 4200 kcal/kg and a 0.27% sulfur content priced at $55 per metric ton. An SCR was installed in the boiler to control NOx emissions to 50 ppmv (6% O2 dry), but no separate FGD was installed behind the CFB boiler since the boiler itself uses limestone to control stack SOx to 50 ppmv (6% O2 dry). Comparing capital cost, Table 1 show the comparison of the boiler and pollution control equipment capital cost on a design and supply basis (excluding erection). The results showed that even though the two CFB boilers burning a low rank coal were about 11% higher in cost than a single large PC boiler burning a high quality coal, the larger 37% savings for meeting emissions without needing an FGD for the CFBs resulted in a net $93 million savings in capital for the CFB plant configuration. Table 1. Capital cost comparison between 1100 MWe supercritical PC and CFB power plant showing a $93 million capital saving for the CFB plant. Note 1: Absolute design and supply boiler cost depends on scope. Source: FW Study. Comparing operating cost, Table 2 shows that by using the discounted Indonesian coal, the CFB plant saves $66 million annually in fuel cost and when adding in the differences in other operating cost like limestone, ash disposal, gypsum sales, maintenance, etc., the $66 million grows to $69 million in total plant operating cost savings for the CFB plant, which works out to be worth $424 million in net present value over a 10 year period. A full financial proforma model for both the PC and CFB plant configurations was developed to calculate the levelized electricity production cost for each plant configuration. In addition to the plant total capital and operating cost, the proforma analysis takes into account plant utilization, financing conditions and terms. Figure 12 shows the comparative results from the proforma analysis and the components that make up the electricity production cost. As shown, the smaller capital and fuel cost components for the CFB plant results in a net savings of $10 per megawatt hour of electricity produced. This translates into $82 million dollars annually based on 90% plant utilization and is worth $503 million in net present value over a 10 year period as shown in Table P age

12 Finally, Table 4 show the comparison for other plant parameters and performance metrics, highlighting that both the CFB and PC plants meet the same stack emission limits, but since the CFB plant does not have a separate wet FGD for SOx control, it saves about 2 million cubic meter of water annually as compared to the PC plant. Table 2. Operating cost comparison between 1100 MWe supercritical PC and CFB power plant showing $424 million NPV for CFB plant. Source: FW Study Figure 12. Levelized electricity production cost comparison between 1100 MWe supercritical PC and CFB power plant showing 10 $/MWh cost benefit for CFB plant. Source: FW study. 12 P age

13 Table 3. Annual and NPV electricity production cost comparison between 1100 MWe supercritical PC and CFB power plant showing about $82 million per year ($503 million NPV) saving in electricity production cost for CFB plant. Source: FW Study Table 4. Emissions, plant efficiency, fuel, limestone, ash and FGD water flow comparison between 1100 MWe supercritical PC and CFB power plant. Source: FW Study 13 P age

14 Conclusions and Observations Four years of successful operation of the large supercritical once-through CFB boiler at the Lagisza power plant in Poland has proven CFB technology for utility power generation. KOSPO has reinforced this conclusion by selecting FW CFB technology for their 2200 MWe Green Power Project in Samcheok Korea. Because of its unique flameless, low temperature combustion process, CFB technology offer many benefits to utility power generation. Its fuel flexibility, reliability and ability to meet strict environmental performance with minimal post combustion pollution control equipment are high value benefits for utilities. Additionally, the CFB s load following flexibility (CFB has same load ramp rates as a PC with better turndown) is another important value for today s grids containing a high level of intermittent renewable power. As an example, the Lagisza unit cycles daily from 40% - 100% MCR to meet the requirements of the Polish National Grid. The CFB benefits become more compelling when considering low quality fuels. The technology is able to provide smaller, less costly boilers as fuel quality declines while achieving plant availabilities well beyond conventional PC boiler technology. The global coal market is moving away from its traditionally rigid single specification coal market toward a more flexible price-for-coal-quality market. The convergence of the coal market shift with the CFB s entry into utility power application, is expected to accelerate the adoption of CFB technology in the large utility power sector. Due to the large economic benefit, the use of domestic brown coal and lignite for utility power generation is growing in Germany, Turkey, and Indonesia which have abundant supplies of very economical low quality coal and lignites. It is also expected that CFB will be utilized more in these markets as well. A technical and economic study conducted by FW showed that a large utility CFB power plant has a compelling economic advantage over a traditional PC power plant due mainly to the fact that the CFB plant did not require post combustion FGD equipment and could utilize a low quality Indonesian coal. The results showed that a 1100 MWe CFB power plant would cost $93 million less to build and would produce a net saving in electricity production cost of about $82 million annually, worth $503 million on a 10 year net present value basis. In today s price sensitive global utility market these are serious numbers for consideration. 14 P age