Report on FY2014 Feasibility Study for the Joint Crediting Mechanism (JCM): Highly-efficient power generation in Chile

Transcription

1 To Ministry of Economy, Trade and Industry Report on FY2014 Feasibility Study for the Joint Crediting Mechanism (JCM): Highly-efficient power generation in Chile March 16, 2015

2

3 Table of Contents 1. Energy and Climate Change Policies in Chile Selection and proposal of specific candidate sites Standard evaluation items for selecting a thermal power plant site Circumstances surrounding construction of coal-fired thermal power plants in Chile Facts behind construction of new coal-fired thermal power plants in Chile Chile's energy policy Chile's coal policies Results of interviews with the relevant government ministries in Chile Conclusion Description of circumstances surrounding Chile's power generation business Impact and Issues of Connections with the Grid Electrical power grids in Chile Electrical power grid planning process Impact study of generation connection Operation of the electrical power grid and issues with 500 MW class power source connections SING-SIC interconnection transmission lines Line interconnection observations Conceptual Design and Estimates on Construction Period and Costs Process flow and scope of supply of MHPS air-blown IGCC Outlines of air-blown IGCC technology Gasifier Gas purifier Gas turbine Main performance specifications of the plant Basic plant Design Conditions Summary of the plant s main performance indicators Overview Plant Construction Process Schedule MRV issues with existing power plants in Chile MRV Measurement and reporting flow (M-R) Verification flow (V) The MRV system in Chile Monitoring of operating history from existing power plants iii

4 5.6 Basic formula for the amount of CO2 emissions Monitoring method Parameters to be monitored Future issues with MRV roll-out Examination of the Emission Reduction Methodologies Examination of the methodologies applicable to power plants in Chile Issues related to eligibility criteria Trends in IGCC in other competitive countries Comparison with conventional coal-fired power generation systems Data for calculating CO2 emission reduction and CO2 emission factors Formulas for calculating CO2 emissions and CO2 emission factors Data from CNE, CDEC-SIC and CDEC-SING Data of existing power plants (Calculation of the reference CO2 emission factor) Monitoring data Issues on the reference emission factor Calculation of estimated emission reductions Policy Proposals iv

5 List of Figures Figure 2-1 Flow chart of Chile s power generation business... 9 Figure 2-2 CDEC-SING supply area and existing coal-fired thermal power plant sites Figure 2-3 CDEC-SIC supply area and existing coal-fired thermal power plant sites Figure 3-1 Overview of electrical power grids in Chile Figure 3-2 Overview of the SING electrical power grid Figure 3-3 Overview of the SIC electrical power grid Figure 3-4 SING-SIC interconnection plan 1 by ECL Figure 3-5 SING-SIC interconnection plan 2 by ECL Figure 3-6 SING-SIC interconnection line route image Figure 4-1 Overview Process Flow and Scope of Supply of Air-Blown IGCC Plant Figure 4-2 Principles of Air-Blown Two-Stage Entrained Flow Gasifier Figure 4-3 Overview Plant Construction Process Schedule Figure 5-1 Measurement and reporting flow Figure 5-2 Verification flow Figure 5-3 Pollutant Release and Transfer Register (PRTR) Figure 6-1 Changes in generation capacity of SIC ( ) Figure 6-2 Changes in generation capacity of SING ( ) Figure 6-3 Superiority of air-blown IGCC in efficiency Figure 6-4 Cost learning curve Figure 6-5 Progression of improvement in thermal efficiency of coal-fired power generation Figure 6-6 Expansion of coal types available Figure 6-7 Atmospheric environment characteristics (target values) Figure 6-8 Discharged coal ash and glassy slag Figure 6-9 Relationship between the BaU emissions, reference emissions and project emissions v

6 List of Tables Table 2-1 Standard approach for selecting a thermal power plant site... 3 Table 2-2 Major coal-fired thermal power plant development projects in Chile... 4 Table 2-3 Ratio of amount of primary energy consumption... 5 Table 2-4 List of existing coal-fired thermal power plants in Chile Table 4-1 Main Performance Indicators of 500-MW Class Air-Blown IGCC Plant Table 6-1 Breakdown of 56 CDM applicant projects under ACM Table 6-2 Changes in generation capacity (MW) by grid system in Chile, Table 6-3 Comparison of IGCC power plants Table 6-4 Advantages/disadvantages of each coal feeding method/ gasifying agent Table 6-5 Comparison of advantages between IGCC and conventional coal-fired power generation systems Table 6-6 CO2 emission intensity Table 6-7 Summary of advantages of IGCC in this project Table 6-8 Gross output, auxiliary power, plant thermal efficiency, etc. (common items) Table 6-9 Gross output, auxiliary power, plant thermal efficiency, etc. (common items) Table 6-10 Operation records of coal-fired power plants in SIC and SING grid systems in Chile (FY2012) Table 6-11 Operation records of coal-fired power plants in SIC and SING grid systems in Chile (FY2013) Table IPCC Guidelines Table 6-13 Availability of parameters necessary for calculation of the reference emission factor on the websites Table 6-14 Applied values of parameters necessary for calculation of the reference emission factor (Simulation I) Table 6-15 Calculated results of the reference emission factor (Simulation I FY2011) Table 6-16 Calculated results of the reference emission factor (Simulation I FY2012) Table 6-17 Calculated results of the reference emission factor (Simulation I FY2013) Table 6-18 Applied values of parameters necessary for calculation of the reference emission factor (Simulation II) Table 6-19 Calculated results of the reference emission factor (Simulation II FY2011) Table 6-20 Calculated results of the reference emission factor (Simulation II FY2012) Table 6-21 Calculated results of the reference emission factor (Simulation II FY2013) Table 6-22 Applied values of parameters necessary for calculation of the reference emission factor (Simulation III) Table 6-23 Calculated results of the reference emission factor (Simulation III FY2011) Table 6-24 Calculated results of the reference emission factor (Simulation III FY2012) Table 6-25 Calculated results of the reference emission factor (Simulation III FY2013) Table 6-26 Applied values of parameters necessary for calculation of the reference emission factor (Simulation IV) Table 6-27 Calculated results of the reference emission factor (Simulation IV FY2011) Table 6-28 Calculated results of the reference emission factor (Simulation IV FY2012) Table 6-29 Calculated results of the reference emission factor (Simulation IV FY2013) Table 6-30 Recommended values of various parameters necessary for calculation of the reference emission factor Table 6-31 Calculated results of the reference emission factor (2011) vi

7 Table 6-32 Calculated results of the reference emission factor (2012) Table 6-33 Calculated results of the reference emission factor (2013) Table 6-34 Calculated results of the reference emission factor ( ) Table 6-35 CO2 emissions per kwh of coal-fired power plants Table 6-36 Conditions of the model project Table 6-37 Calculated results of CO2 emission reductions (efficiency improvement=0.1%/y) Table 6-38 Calculated results of CO2 emission reductions (efficiency improvement=0.2%/y) Table 6-39 Calculated results of CO2 emission reductions (efficiency improvement=0.3%/y) vii

8 List of Abbreviations This report uses the following standardized units and abbreviations. Unit In this report Meaning Notes GJ/t, kcal/kg Net Calorific Value of Coal GWh Gross Electricity Generation Net Electricity Generation Kg-C/GJ Carbon Emission Factor Kg-C/kWh Specific Consumption MW Gross Generation Capacity Net Generation Capacity t-co2/kwh CO2 Emission Factor of Coal Reference Emission Factor t-co2/yr CO2 Emission Abbreviations In this report AFC AGR ASU CDEC CDEC-SIC CDEC-SING CNE CO2 COS DLN EPC GT GTCC H2S HRSG IGCC LNG LTGC MDEA NOx PPA PRTR Meaning Automatic Frequency Control Acid Gas Removal Air Separation Unit Centro Economico de Dispacho de Carga El Sistema Interconectado Central El Sistema Interconectado del Norte Grande Comision Nacional de Energia Carbon Dioxide Carbonyl Sulfide Dry Low NOx Engineering Procurement & Construction Gas Turbine Gas Turbine Combined Cycle Hydrogen Sulfide Heat Recovery Steam Generator Integrated coal Gasification Combined Cycle Liquefied Natural Gas Low Temperature Gas Cooling Dimetyletanolamine Nitrogen Oxides NO NO 2 N 2 O N 2 O 3 N 2 O 4 N 2 O 5 Power Purchase Agreement Pollution Release and Transfer Register viii

9 SC SCR SGC SRU Sox UFLS UNFCCC USC Super Critical Selective Catalytic Reduction Syngas Cooler Sulfur Recovery Unit Sulfur Oxides SO SO 2 SO 3 Under Frequency Load Shedding United Framework Convention on Climate Change Ultra Super Critical ix

10 1. Energy and Climate Change Policies in Chile Chile s power grid consists of four independent components including the Sistema Interconectado Norte Grande/Northern Grid System (SING) and the Sistema Interconectado Central/Central Grid System (SIC). The SING and the SIC are Chile s main power grid systems accounting for 99 percent of total power supply in the country. Currently these four systems are not interconnected, but the SING and the SIC are planned to be interconnected in 2017 or In 2013, the electricity generation of the SIC and the SING was 50,820 GWh and 17,230 GWh respectively. The production of both systems has increased by an average of more than 5 percent per year for the past ten years and more. Their production is expected to continue to increase by 6~7 percent per year until Accordingly a capacity expansion of more than 8,000 MW is needed by Chile depends on high-priced imported fuel for almost all of its fossil fuel needs. The electricity price in Chile is currently the highest in the South America region and higher than the OECD average. In Chile the government develops power generation programmes, but in light of economics in the liberalized market, decisions on the implementation of specific projects are made by private companies. Government s programmes are not binding but merely indicative. Therefore those programmes may not go as planned. The government s pledges, however, provide clues to prediction. The government aims to use renewable energy resources to produce 20 percent of the country s total electricity sold to end-consumers by 2025 (not in capacity terms). The government has also promised to expand the capacity of the existing LNG terminals and has indicated the possibility of constructing a new terminal. The coal-fired power plants currently being constructed or planned include Guacolda V (under construction to be completed in 2015) in the SIC and Cochrane U1 and U2 (scheduled to be constructed and completed in 2016) in the SING. According to the LNG and coal-fired power generation programmes in the government s Indicative Generation Expansion Plan, the SIC has four projects, namely, CCGT TalTal (to construct a LNG plant with a capacity of 120 MW by 2018), Coal VIII Region 01 (to construct a coal-fired plant with a capacity of 343 MW by 2026), Coal Maitencillo 02 (to construct a coal-fired plant with a capacity of 342 MW by 2028), and Coal Pan de Azúcar 03 (to construct a coal-fired plant with a capacity of 200 MW by 2029). The SING has three projects, namely, Tarapacá I (to construct a coal-fired plant with a capacity of 300 MW by 2027), Mejillones I (to construct a coal-fired plant with a capacity of 300 MW by 2029), and Tarapacá II (to construct a coal-fired plant with a capacity of 300 MW by 2030). As for the climate change policy, the Chilean government has implemented the following policies. Currently the government is reviewing the content of the Intended Nationally Determined Contribution (INDC) to submit to the United Nations. Once the content of the INDC is finally determined at COP21, the basic principles of the climate change policy in Chile will be in line with the INDC. Finalization of Chile's Initial National Communication (2000); Establishment of the National Programme for Energy Efficiency (2005); Passing of a Law for Non-Conventional Renewable Energies (2008); Development of the National Climate Change Action Plan NCCAP (2008); Creation of the Government Centre for Renewable Energies (2009); Establishment of Chilean Public-Private Agency on Energy Efficiency (2010) Teaming up of the Partnership for Market Readiness (2011); MAPS-Chile Project (2011); 1

11 Finalization of the Second National Communication (2011); Completion of two UNDP projects on Social Assessments of Climate Change (with the UK) and on Assessing Investment and Financial Flows for adaptation and mitigation of climate change in selected key sectors (2011); Finalization of the first Biennial Update Report (BUR) (2014); Finalization of the National Inventory Report (2015) 2

12 2. Selection and proposal of specific candidate sites 2.1 Standard evaluation items for selecting a thermal power plant site The following five standard evaluation items apply when selecting a site for constructing a coal-fired thermal power plant. (1) Access and availability to existing port facilities, ease of constructing new port facilities at the location (2) Secure site space for thermal power plant (3) Distance to nearby existing power lines, possibility of connections with the grid (4) Conditions for power plant management and operation (5) Sufficient transportation routes for power plant equipment and facilities Of these, the most important item affecting the economic feasibility (power generation cost) and sustainability (continuous reliable operation) of a power plant is the conditions of port facilities outlined in (1) above. The selection logic for the site of the coal-fired thermal power plant is largely affected by factors related to the coal-fired thermal power plant being planned for construction, including where the coal for the plant is sourced from (domestic, or imported from overseas), and whether it is a new site or an addition to an existing thermal power plant. Table 2-1 Standard approach for selecting a thermal power plant site Existing port facilities "Domestic Coal" Single Fuel Firing Can the amount of fuel received be increased without expanding existing port facilities? Can domestic coal be transported by land routes? "Imported Coal" Single Fuel Firing Can the amount of fuel received be increased without expanding existing port facilities? Site space for thermal power plant Can sufficient site space be secured to allow scraping of existing facilities and construction of new facilities simultaneously? Can sufficient site space be secured to allow scraping of existing facilities and construction of new facilities simultaneously? Replace existing thermal power plant Distance to nearby existing power lines Power plant management and operation Transportation routes of construction materials and equipment Existing port facilities What is the transmission capacity of existing power lines? Do power What is the transmission capacity of existing power lines? Do power lines need to be upgraded? lines need to be upgraded? Can boiler supply water and condensate cooling water, waste water treatment and supplies used during operation (auxiliary fuel, limestone) be increased in quantity? Location of nearby ports, availability of main roads, possibility of development of access roads? Can the amount of fuel received be increased without expanding existing port facilities? Can domestic coal be transported by land routes? Can boiler supply water and condensate cooling water, waste water treatment and supplies used during operation (auxiliary fuel, limestone) be increased in quantity? Location of nearby ports, availability of main roads, possibility of development of access roads? Can the amount of fuel received be increased without expanding existing port facilities? Site space for thermal power plant Can sufficient site space be secured for additional units? Can sufficient site space be secured for additional units? Additions, expansions of existing thermal power plant New site Distance to nearby existing power lines Power plant management and operation Transportation routes of construction materials and equipment Existing port facilities Site space for thermal power plant Distance to nearby existing power lines Power plant management and operation Transportation routes of construction materials and equipment What is the transmission capacity of existing power lines? Do power What is the transmission capacity of existing power lines? Do power lines need to be upgraded? lines need to be upgraded? Can boiler supply water and condensate cooling water, waste water treatment and supplies used during operation (auxiliary fuel, limestone) be increased in quantity? Location of nearby ports, availability of main roads, possibility of development of access roads? Availability of existing ports nearby? Can coal be unloaded at nearby ports? (availability of space, other restrictions) Can domestic coal be transported by land routes? Can boiler supply water and condensate cooling water, waste water treatment and supplies used during operation (auxiliary fuel, limestone) be increased in quantity? Location of nearby ports, availability of main roads, possibility of development of access roads? Availability of existing ports nearby? Can coal be unloaded at nearby ports? (availability of space, other restrictions) Can sufficient site space be secured for a new thermal power plant? Can sufficient site space be secured for a new thermal power plant? What is the distance to nearby existing power lines? What is the distance to nearby existing power lines? What is the transmission capacity of existing power lines? Do power What is the transmission capacity of existing power lines? Do power lines need to be upgraded? Connections to the grid possible? lines need to be upgraded? Connections to the grid possible? Can boiler supply water and condensate cooling water, waste water Can boiler supply water and condensate cooling water, waste water treatment and supplies used during operation (auxiliary fuel, treatment and supplies used during operation (auxiliary fuel, limestone) be procured? limestone) be procured? Can sufficient labor be secured? Can sufficient labor be secured? Location of nearby ports, availability of main roads, possibility of development of access roads? Location of nearby ports, availability of main roads, possibility of development of access roads? 3

13 2.2 Circumstances surrounding construction of coal-fired thermal power plants in Chile As outlined above, the logic used for selecting the optimum site for the power plant changes whether the coal-fired thermal power plant is new or an expansion of an existing plant, and whether the fuel is domestically-sourced or imported coal. With this in mind, the circumstances surrounding plans for additional coal-fired thermal power plants in Chile have been arranged and examined Facts behind construction of new coal-fired thermal power plants in Chile The construction process for every large-scale coal-fired thermal power plant being planned for construction has been plagued by delays due to protest movements by local residents. The main reason behind these protest movements are related to concerns over air and ocean pollution caused by waste discharged from coal-fired thermal power plants. Protest movements by local residents have gained momentum largely due to campaigns organized by environmental NGOs as well as the sales and marketing efforts of renewable energy suppliers. These organizations have been successful in convincing the general populace that renewable energy technology is capable of replacing the power generated by thermal power plants. Project Table 2-2 Major coal-fired thermal power plant development projects in Chile Power Generation Output (MW) Major Issues Current State Barrancones 540 Located near marine reserves Project canceled Castilla 2100 Mistakes in project presentation Port facilities and power generation facilities need to be operated simultaneously Project canceled Farellones 800 4th region. Near Barrancones Project canceled Campiche 270 Permission not granted as the planned site is already saturated Freeze put on construction for 1 year more Punta Alcalde 740 Site issues Project put on hold for several months Bocamina II 350 Permission not granted for plant construction of 350 mwc or more as the planned site is already saturated Delayed for 1 year more Chile's energy policy The main source of energy in Chile in recent years is highly dependent on hydrocarbon based fuels. Accordingly, the following priority policies have been outlined in Chile's energy policy, "Energy Agenda." This does not contain any policies that are linked to the development of coal-fired thermal power plants, such as encouraging the use of coal or the effective use of domestically-sourced coal. Encouraging the use of LNG for power generation Promoting renewable energy sources (including hydroelectric power generation, solar heat, wind power, geothermal power generation) Improving the use of firewood 4

14 Promoting improvements to energy efficiency Table 2-3 Ratio of amount of primary energy consumption Amount of Primary Energy Consumption 2013 Composition Energy Source (10 9 cal) Year-on-year Ratio (2013) (%) (%) Crude oil 96, , Natural gas 45,579 45, Coal 66,493 75, Hydroelectric power generation 17,336 16, Wind power Trees, biomass 88,778 98, Sunlight Biogas , , Hydrocarbon Series Total (%) Chile's coal policies Chile currently has no policies in place encouraging the use of coal. The "ENERGY AGENDA" only includes a note stating "The Chilean government will provide assistance for thermoelectric power generation projects that can supply energy reliably and at low cost. The Ministry of Energy will provide specific assistance to projects if environmental regulations stipulated by the Ministry of Environment are complied with. A number of actions were put into place in Chile after the 1970s, including coal mining development projects and establishment of laws to expand the use of coal, however all of them ended in failure. In 2013, a sub-bituminous coal mining project called the Mina Invierno Project began operating with a total investment of $530 million on an island called Isla Riesco, located 120 km northwest off the coast of the Punta area. This coal mine has 73 million t of reserves, which is capable of producing 6 million t per year for 12 years, making it the largest coal mine in Chile. One point to note is that the project was established with personal capital. The Chilean government only issued the order for permission to commence mining. In Chile, some thermal power plants use domestically-sourced sub-bituminous coal. The advantage of domestically-sourced sub-bituminous coal is its short transportation time, which means coal can arrived in around seven days if transported by sea. Coal imported from overseas takes 20 to 30 days just for transportation Results of interviews with the relevant government ministries in Chile The results of interviews conducted with the relevant Chilean government ministries indicate that the following points must be kept in mind when constructing a coal-fired thermal power plant in Chile. (a) The energy policy lists the tough goals of reducing power consumption by 20% by 2025, 5

15 while also raising the ratio of renewable energy to 20% of the power generation capacity (b) Local residents in Chile have a high level of environmental awareness, and opposition is expected from residents living near any constructed coal-fired thermal power plant (c) The power generation capacity of 500 MW estimated with this construction is extremely large compared to existing power generation facilities in Chile, and upgrades are expected to be required to grid facilities (d) Existing thermal power plants rely on imports from overseas for the majority of their coal. There are also no concrete plans in place for increasing the production of domestically-sourced coal in Chile Conclusion With the above circumstances in mind, finding new sites that are suitable for additional IGCC coal-fired thermal power plants in Chile will prove difficult, and it has been determined that aiming to replace or expand existing power plants will be the most practical choice available. The Chilean government, Ministry of Environment and Ministry of Energy have also provided their agreement to this project. The national character of Chileans is that they seem to be extremely sensitive to environmental issues, and there have been cases of power plant construction projects that have cleared environmental impact assessments being canceled following protests by local residents. The key point is ensuring that local residents are fully aware of the reduction in CO2, Nox and SOx emissions that will result by constructing an IGCC, which has a higher thermal efficiency than existing power plants and also incorporates environmentally-friendly equipment, on sites where coal-fired thermal power plants are already operating. While the physical distance to customers that the generated power is sold to is a vital factor when selecting a site, there are two types of customers expected. The first are major customers such as mines where power sales are liberalized, and with which a direct bilateral contract is concluded, however the sluggish mining industry in recent years means securing such customers may be difficult. The others are smaller consumers such as residential households in restricted fields, to whom power is sold by power distribution companies in each region. In these cases, bids can be placed on tenders for long-term, 15-year power sales contracts, or individual contracts can be bid on in the power market, with the former preferred from the perspective of reliable, long-term recovery of construction costs. The bid price placed on tenders includes wheeling charges incurred when using the grid, and even in these cases, cost competitiveness increases as power distribution companies, which purchase the power, are located closer. Chile is broadly categorized into three main areas: north, central, and south. Sub-bituminous coal that can be used with IGCC is mined in the southern area, so while there is the benefit of fuel used for transportation, demand for electrical power is relatively low there. As such, sales will be targeted at the north (SING) and central (SIC) areas. Demand for electrical power in areas in the north is mainly from copper mines, and sales will aim to conclude long-tern PPA with these major customers. Yet the grid in the area is lacking, and there is the risk that drastic improvements will be required to deliver this 500 MW power source. The SING area has almost no hydroelectric plants, and with thermal power plants required by law to maintain a 7% generation reserve margin (spinning reserve), the impact on the thermal efficiency and economic feasibility of power plants needs to be considered. There are, however, plans currently in place for the construction of power lines to interconnect the SING and SIC grids, with available information indicating that construction is slated for 2017 to 6

16 2018. There is a high possibility that these issues will be resolved. The SIC area has around three-fold the demand of the SING area, with a high ratio of demand from residential and business consumers. The target in this area will be to conclude a long-term sales contract with power distribution companies. The following is a summary of main assessment points when selecting a site for a coal-fired thermal power plant in Chile. (1) Access and availability to existing port facilities, ease of constructing new port facilities at the location In Chile, the majority of coal fuel is covered by imports from overseas, and ocean transportation of coal is required. Accordingly, the state of port facilities is the most important point. Reductions in power generation unit costs are expected following liberalization of electrical power, making expansion of port facilities financially difficult. Ideally, the current facilities should be able to handle the increase in quantity of coal being handled. The convenience of existing port facilities need to be assessed. The wave height and nearby ocean currents should be calm. Rough seas will reduce the number of days that ships can dock at the port, and reduce the processing capacity The port also requires a deep water layout, which will allow larger coal transport ships to dock. (2) Secure site space for thermal power plant Expansion of coal-fired thermal power plants is difficult if there is no room for additional power generation facilities Ideally facilities should be suspended on the primary side, however they could be replaced while operation is maintained (scrap and build), which will require even more space Site space required for the actual power plant, as well as for loading and storing coal, and burying coal ash and other uses must be considered In addition to securing a suitable site, various confirmations are also required, including whether local residents protest construction, the lack of need to relocate residents for additional facilities, and no environmental conservation areas located nearby (3) Distance to nearby existing power lines, possibility of connections with the grid Unit costs need to be reduced, however installing new power transmission lines can cause the cost to increase There are various issues related to new sites for power transmission lines including acquiring such sites, which can cause delays to construction time. A shorter distance for access is preferred to alleviate issues related to increase costs and delays to construction Analysis of grid connections is required to determine whether connection is possible 7

17 (4) Conditions for power plant management and operation Is boiler supply water and condensate cooling water available, what is water quality like and can waste water be treated? Is procurement is auxiliary fuel (such as diesel and LNG) easy Is securing labor easy? Is procurement of other materials (such as desulfurized limestone) easy? (5) Sufficient transportation routes for power plant equipment and facilities Transportation of large quantities of materials such as power plant equipment and heavy machinery is required. To achieve this, suitable access roads are needed. Key points include whether there are major roads or large ports located nearby. 2.3 Description of circumstances surrounding Chile's power generation business Construction of power plants is completely privatized in Chile, and as connection to the main grid is based on open access, selection of sites will be largely narrowed down to sites with existing coal-fired thermal power plant before collaborating with developers of candidate sites. Construction plans also need to be submitted to CNE, and the plans will be updated at the main transmission network development review meeting held by CNE once every four years. CDEC, TRANSELEC and other grid operators, utilities, power transmission operators and other businesses participate in the review meeting and share information to help propose plans for constructing the main transmission network before obtaining permission from the Ministry of Energy. These plans will also be reviewed on an annual basis. If construction of new main transmission facilities is decided as part of these plans, the business covering these facilities will be decided based on a tender system. The developer will also conduct an impact study one year before connecting to the main grid and submit an application for connection to CDEC. Construction plans for company power lines running to the main grid will be run by the developer. 8

18 Preparatory Studies Figure 2-1 Flow chart of Chile s power generation business MOE CNE CDEC Generation company Transmission Company Disribution Co. Large Customer FS(technical and economical) Environmental impact study Regulated Customer Generation PPA contract Submit Power Plant Construction Plan(a.s.a.p.) Submit impact study(1y before construction) Submit nordal demand forecast(indicative) Preparation of Generation expansion scenarios(indicative) Trunk Transmission System Transmission projects study Trunk expansion plan(every 4y) Revise TEP(every year) Bid for TEP Minimum annual tariff proposer will be the winner Approval of tariff(every 4y) Additional Transmission System Market Sell elecyricity through Sell elecyricity with regulated Market tariff (marginal cost of last bidder) Long Term Contract Electricity auction tender 9

19 5 CDEC-SING A,B 7 C 6 CDEC-SIC Figure 2-2 CDEC-SING supply area and existing coal-fired thermal power plant sites 10

20 Figure 2-3 CDEC-SIC supply area and existing coal-fired thermal power plant sites 11

21 Table Coal fired power plant in CDEC-SING area List of existing coal-fired thermal power plants in Chile name of power station Andina Hornitos Mejillone the startup year ~1998 owner output (MW) E-CL 165 Edelnor unit number total output (MW) Angamos 2011 AES Gener kind of the fuel coal petroleum coke biomass bituminous subbituminous bituminous subbituminous CFB type boiler remarks suppy most electricity to the copper mine Escondida 4 Norgener 1995 ~1997 AES Gener bituminous boiler:mhi subbituminous 5 Tarapaca 1998 Cia Termoelectrica TarapacaSA bituminous heavy oil total 1,678 2 Coal fired power plant in CDEC-SIC area name of power station the startup year owner output (MW) unit number total output (MW) kind of the fuel remarks 1 BocaminaⅠ 1970 Endesa Chile bituminous 2 BocaminaⅡ 2012 Endesa Chile bituminous 3 Santa Maria Ⅰ 2012 Colbun bituminous 4 Laguna Verde 1939 ~1949 AES Gener coal 5 Ventanas 1& ~1977 AES Gener SA bituminous heavy oil 6 Huasco Steam 1965 Endesa Chile coal Boiler trouble, now stoped 7 Guacolda 1995 ~2010 Emp Electrica Guacolda boiler:mhi bituminous subbituminous 0 #5 now on construct total 1,887 3 Enlargement plan of the thermal power station name of power station the startup year owner output (MW) unit number total output (MW) A Cochrane U AES Gener coal kind of the fuel CDEC-SING area remarks B Cochrane U AES Gener coal CDEC-SING area C Guacolda Ⅴ Guacolda coal CDEC-SIC area total

22 3. Impact and Issues of Connections with the Grid In Chile there are two major electrical power grids that are operated independently: the SING grid in the northern area, and the SIC grid in the central area. Construction plans are underway for the development of large-scale transmission systems and transmission lines to interconnect the SING and SIC grids by 2018, and connection of large-scale power sources is considered possible from 2018 and onwards. The impact study by the developer is necessary to connect new generators to the grid. It must be done as early as possible to avoid operational restrictions of new generators to be developed. 3.1 Electrical power grids in Chile There are two major power grids in Chile, El Sistema Interconectado del Norte Grande (SING) in the northern area and El Sistema Interconectado Central (SIC) covering the central area. There are also two smaller independent grids operating in the southern area. The largest electrical power grid is SIC, with the peak power demand of 7,282 MW recorded in In contrast, the peak power demand in 2013 for SING was 2,226 MW. The SING grid is operated CDEC-SING and the SIC grid by CDEC-SIC as independent operators of the electrical power grids. Figure 3-1 provides an overview of the electrical power grid in Chile. Source: 2013 Operation Statistics by CDEC-SIC Figure 3-1 Overview of electrical power grids in Chile 13

23 Power demand for SING's is mainly from industry such as mining, whereas SIC's power demand is supplied to general power consumers as more than 90% of Chile's total population resides in the region. Residential demands are charged an electric rate that is regulated by CNE, however industrial consumers are able to negotiate the electric rate directly with the generating companies, so the electric rate is set freely. Transmission lines are owned and maintained by power transmission companies. Figure 3-2 and Figure 3-3 provide an overview of the SING and SIC electrical power grids. The existing main grid of Chile is 220kV, however new 500 kv and 220 kv transmission lines and substations are under construction within the SIC grid. There are 16 main transmission line projects and 24 main substation projects in progress, with the majority of these planned to be completed by These developments will help to improve the performance of the SIC main transmission grid. Source: CDEC-SING website Figure 3-2 Overview of the SING electrical power grid 14

24 Source: 2013 Operation Statistics, CDEC-SIC Figure 3-3 Overview of the SIC electrical power grid 15

25 3.2 Electrical power grid planning process The power transmission business was unbundled by the Electricity Law that was enacted in 1982, allowing transmission lines to be constructed on the basis of the bilateral contract between the power transmission company and the user requiring the transmission lines. Yet allocating power transmission costs of existing facilities or use by free-riders that do not provide development costs meant that development of transmission lines was insufficient. Accordingly, the power system planning has shifted today to Central Planning, where the relevant companies work together to decide on plans for the development of main transmission system. The power system planning is established once every four years by the power regulator of CNE (the four-year main transmission plan). It includes power flow and voltage analysis, contingency current analysis and transient stability analysis. The transmission charge is also decided based on these plans, and the construction and maintenance costs are recovered based on this charge. The definition of the main transmission grid is the 220 kv or higher transmission grid from power plants to the grid excluding power generation lines and dedicated lines connecting to the large industrial customers,. In addition to the Ministry of Power, CNE and CDEC, power generation, power transmission companies and large-scale consumers are involved in the development of this plan, and the opinions of each company are taken into consideration to determine the final plan and transmission rate. The study selects the plans which minimize investment and operating costs over 15 years. Construction of new transmission lines is awarded to a bidder who proposes the lowest transmission cost (annual and O&M costs over 20 years) in the international bidding organized by CDEC. The transmission rate submitted as part of the tender is maintained for 20 years. CDEC reviews and updates the four-year main transmission plan every year based on the latest information such as demand forecasts, progress of construction work for transmission system and power plants. The updated plan is submitted to CNE, and CNE announces within 30 days transmission line projects that must begin construction within 12 months. When this happens, the relevant parties have another opportunity to object to the plans. The development of power generation lines required for connecting power plants to the main transmission grid or dedicated transmission lines for supplying power to large-scale industrial consumers that are not subjected to the regulated power tariff as well as the transmission costs are decided through negotiations between the owner of the transmission lines and the customers. There is the possibility that development of this IGCC may require the construction of new power generation lines (may not be needed if the power generators are replaced), however these transmission lines will be covered by the developer. 3.3 Impact study of generation connection To connect a power plant to the main grid, the development must conduct a study to assess the impact on the main grid given by the new power generation connection by at least one year in advance, and must submit this to CNE. CNE carries out the annual update of the four-year main grid plan in consideration of the submitted impact studies. Data on Chile's electrical power grid is available publicly, and the developer must conduct this impact study by themselves or employ a consultant to do so. If, for example, it is found that reinforcements of the main grid are required immediately before commercial operation of the power plant, the power plant must be operated within the restrictions after the commercial operation, which will result in unprofitable operation for the developer. In order to share the cost of the main grid reinforcement with other parties and to 16

26 avoid generation restrictions, the developer should conduct and submit the impact study report to CNE as early as possible. The Grid Code in Chile applies the N-1 criteria that does not allow overloading under a loss of single facility.. Construction of this planned large-scale 500 MW class power plant may cause overloading in the main grid under N-1 conditions..any costs required for the system reinforcement due to this new generation will need to be covered by the developer. Fault currents around the connection point of this new generation may exceed the rated current breaking capability of the existing circuit breakers (generally 500 kv: 50 ka, 220 kv: 40 ka). Any costs required to replace the breakers must be covered by the developer in the same way as transmission lines. The open access system in place in Chile means that anyone can connect to the grid, but also means that costs for the system reinforcement will need to be covered by all relevant parties if a study can prove contribution of other parties, even if it is the final cause of these violations. 3.4 Operation of the electrical power grid and issues with 500 MW class power source connections As outlined in 3.1, the peak power demand in 2013 was SIC: 7,282 MW and SING: 2,226 MW. In Chile, power plants are operated in accordance with a Merit Order based on the power generation unit cost of each power plant that has been provided in advance. If a power plant with a bilateral contract responsibility to supply power is not included in the power generation list of a particular day, the unlisted power generator will pay generation costs to the generation companies in the list, who are generating power.. If power generating companies have concluded a PPA with consumers, it is necessary to produce power including transmission losses to their customers, so entering a power supply contract with consumers that are located close to power plants is ideal when taking into consideration the transmission charge and transmission losses. The issues with connecting a 500 MW power source can be examined by looking at the impact of that power generation connection on the SIC grid, and the SING grid separately. The first is the case of connecting a 500 MW class IGCC power plant to the SIC grid. According to CDEC-SIC, there are a large number of general consumers on the SIC grid, and the frequency fluctuation is extremely small. While some transmission grids violate the N-1 criteria, they generally meet the criteria of the N-1 criteria. Based on past experience, the frequency dropped to 49.6 Hz under a 370 MW power plant. Even if, for example, a 500 MW class power plant is tripped, it would be unlikely that the system frequency reaches a threshold which activates Under Frequency Load Shedding (UFLS) relay. Accordingly, the SIC grid is considered to have enough margin of frequency stability. The next case is that of connecting a 500 MW class IGCC power plant to the SING grid. If, for example, multiple power generators equivalent to 500 MW within the SING grid are replaced with a single IGCC, this generator tripping means a loss of approximately 20% of the entire power generation, and it is easy to envisage that the system encounter the extremely severe condition. The allowable frequency fluctuation is from 49.8 Hz to 50.2 Hz in the Grid Code, however the actual fluctuation of the SING system generally ranges from 49.7 Hz to 50.3 Hz due to its system size and high ratio of the large industrial customers according to the interview. From past experience, there is typically an approximately 1 Hz drop in frequency when a 150 MW power generation is tripped, and if one of the largest 380 MW generator was tripped, the frequency dropped to 48.5 Hz, which activated UFLS, which is installed to maintain the frequency. The SING grid covers areas with large fault currents, and a new power generation connection may lead to violation of the rated current breaking capability of the existing circuit breakers, which means that replacement of the breaker will be required. 17

27 From the above points, connecting a 500 MW class power generation to the SING grid will have a major impact on the grid, and the connection of large-scale power generation to the SING grid should be avoided. There are also no hydroelectric power plants within the SING grid, and the spinning reserve is maintained with thermal power plants by reducing each power generator output by 7%. If, for example, an IGCC is connected, there is a high possibility that the output will need to be reduced by 7% for the spinning reserve. This will reduce the operating efficiency, and is another example why connecting to the SING grid should ideally be avoided. Yet as outlined in the next chapter, a plan is underway to connect SING and SIC systems, so the above will not be applied if the SING-SIC grids are connected. 3.5 SING-SIC interconnection transmission lines Several studies have been conducted on interconnecting the SING grid and SIC grid. Power interconnection contributes to more economically-feasible development of power generations, as well as increasing the level of supply reliability by supporting power system each other under emergency situations. Yet more detailed studies on interconnecting the grids are required, as a fault on one grid has the risk of adversely affecting the other grid, and even introduces the possibility of large-scale blackouts. Synchronized operation also requires standardized grid operation rules, which means reviews of the operation methods for each grid will be important. According to interviews in February 2015, it was announced that the SINC and SIC areas were to be connected with a new national 500kV transmission line, which is originally planned by E-CL who is the local subsidiary of GDF Suez. E-CL's original plan is shown in Figure 3-4 and Figure 3-5. Commercial operation is slated to begin in 2018, and studies are currently underway in earnest. A summary of results of these studies are planned to be released in March Source: ECL website Figure 3-4 SING-SIC interconnection plan 1 by ECL 18

28 Source: ECL website Figure 3-5 SING-SIC interconnection plan 2 by ECL In ECL's original plan, this SING-SIC interconnection transmission line spans 580 km connecting Mejillones within the SING grid with Copiapo within the SIC grid. In the current plan shown in Figure 3-6, the connection point within the SIC grid has been changed from Copiapo to Cardones. The transmission line length is approximately 600 km, with a transmission capacity of 1500 MW/circuit over two transmission circuits. Within the SING grid, an approximately 160 km 500 kv transmission line has also been planned to connect Mejillones and Encuentro as part of plans to develop a large-scale 500 kv power grid. This SING-SIC interconnection line is a transmission line that spans a long distance of 600 km, and with a transmission capacity restricted due to line impedance. Series capacitors are planned to be installed to compensate for the 55% line impedance to ensure larger transmission capacity. While the SING-SIC interconnection is still currently being studied, allocations of the spinning reserve may change drastically due to this interconnection. With the SING-SIC interconnection, there is the possibility that hydroelectric generators within SIC can be utilized for the spinning reserve for SING, which in turn may reduce or even eliminate the need for power generators within the SING grid to maintain a 7% spinning reserve. Breaking into the ancillary market in 2016 is also being examined, so extra care will be required to focus on any movement until development of new power sources. Changes to power generator output is currently being conducted manually by operators in Chile after the output is adjusted with governor free operation when the power generator output decreases due to events such as accidents involving power generators. Expansion of the grid following the SING-SIC interconnection will result in more complex grid control, and according to interviews conducted at CDEC-SIC, additional studies will be conducted into Automatic Frequency Control 19

29 (AFC) that automatically adjusts the output of power generators. Source: received from CNE Figure 3-6 SING-SIC interconnection line route image 20

30 3.6 Line interconnection observations As outlined above, completion of a large-scale 500 kv main transmission grid construction project in Chile by 2018 is expected to allow 500 MW class power generator to connect to either grid due to the interconnection of the SING grid and SIC grid around Yet there are concerns about the transmission line overloading and high fault currents in some areas, and detailed studies need to be conducted after specific candidates have been selected in order to select the final candidate site. 21

31 4. Conceptual Design and Estimates on Construction Period and Costs 4.1 Process flow and scope of supply of MHPS air-blown IGCC The overview process flow of the 500-MW class air-blown IGCC plant that will be introduced in the candidate site and the scope of supply that is used for estimating the construction period and costs for this study are shown in Figure 4-1. IGCC is the world s leading clean coal technology. IGCC grinds solid coal, gasifies the coal in a gasifier, separates and removes sulfur contents and other impurities in a gas purifier, and applies the syngas that has been obtained to a Gas Turbine Combined Cycle (GTCC) power generator, enabling for the first time the use of coal in GTCC power generation. In particular, the air-blown IGCC that was considered for this study is a rational system that elevates the pressure of compressed air extracted from the gas turbine compressor outlet and uses it as a gasification agent and therefore avoids the decline in performance (in the power of auxiliary machinery) and increased costs that result from installing a larger air separation unit (ASU) that is used in oxygen-blown IGCC. The combustible contents of the coal fuel, such as carbon and hydrogen, are converted into syngas, which is used as fuel in the gas turbine, and the ash contents are removed from the gasifier as slag. Because the slag is constituted by vitreous material, it does not cause elution of heavy metals that might occur in fly ash from pulverized coal boiler. The percentage of unburned carbon in the slag is also very small at less than 0.1 wt%, which makes it an exceptionally high-quality product for use in roadbed and concrete raw materials. On the other hand, the sulfur contents of the coal are separated and removed in the gas purifier and then recovered as by-products containing sulfur, such as in the form of gypsum. For this study, we examined gypsum recovery based on the lime-gypsum process. 22

32 Coal Bulk handling system Stack Coal bunker Air separation unit Start-up fuel facility Heat recovery Steam Generator (includes de-nox) In-house transformer Main transformer Switching station Water treatment unit Demin. water tank Coal grinding facility Demin. water pump Gasifier Gas purifier Gas turbine Air booster Steam turbine Condenser Generator Facilities for water intake/discha rge and water circulation Service water tank Service water pump Slag processing facility Gasification waste water processing Gypsum recovery facility Waste water Waste water processing Flare facilities Auxiliary boiler Controlled air facility Equipment cooling water facility Liquefied ammonia facility Slag Effluent Limestone Gypsum Effluent * For this study, we made estimates of the construction period and costs for the facilities enclosed in the red line in the above block flow chart. The estimates also include the following facilities and processes, which are not indicated in the above chart: - Electrical facilities and instrumentation attached to the equipment constituting the plant - Control assemblies of the entire IGCC plant and of the BOP system - Fire-fighting, lighting, and air-conditioning equipment in the IGCC plant - Plant maintenance and inspection facilities (turbine building cranes, hoists, etc.) - Civil. facilities (turbine buildings, electric rooms, facility foundations) and construction - Equipment transportation and installation work While existing infrastructure, such as the switching station and water intake and discharge facilities, could presumably be used for extension or replacement of existing facilities, all facilities for such extension or replacement have been included as shown in the above figure for this study. Figure 4-1 Overview Process Flow and Scope of Supply of Air-Blown IGCC Plant 23

33 4.2 Outlines of air-blown IGCC technology This section gives technical outlines on the gasifier, gas purifier, and gas turbine, which are the main components of the air-blown IGCC examined in this study Gasifier <Outlines of air-blown gasifier> The most prominent feature of an air-blown gasifier is that it uses air as a gasification agent. This makes the air-blown IGCC a rational system as it avoids the decline in performance (in the power of auxiliary machinery) and increased costs that result from installing a larger air separation unit (ASU) that is used in oxygen-blown IGCC. Another feature of an air-blown gasifier is that it uses the dry feed system, which improves efficiency as there is no loss of latent heat of the moisture that occurs in a slurry feed gasifier. However, to capitalize on these features, one needs to sufficiently ensure stable discharge of the slag and stable combustion quality of the gas turbine even with lowering of reactor temperature caused by inert nitrogen that is supplied to the gasifier. To ensure the stable discharge of the slag and stable combustion quality of the gas turbine, the gasifier in this study uses a two-stage entrained flow process consisting of two sections, namely, the lower combustor and the upper reductor. Details of this process are discussed in the following sections and illustrated in Figure 4-2. Generally speaking, it is a process that achieves both stable and continuous discharge of liquid slag and high conversion of carbon in the syngas in the single pressure vessel. <First stage: combustor> In the first stage, pulverized coal and recycled char are supplied to the combustor together with oxygen-enriched air at relatively high air-to-fuel ratio, causing both complete oxidation from C to CO2 and partial oxidation to CO (see Figure 4-2) and generating high-temperature combustion gas consisting mainly of CO and CO2. The water vapor that is used for the shift reaction in the second stage is also generated in the first stage as a product of combustion of volatile matters that include hydrocarbon released from the coal in a high-temperature environment. This high-temperature environment also brings about the separation of the ash contents of the coal, which takes the form of liquid slag, and the generated gas. The liquid slag falls to the bottom of the gasifier from the force of gravity. After it is quenched and solidified in the slag water bath, it is discharged outside the gasifier. 24

34 Syngas Heating Value Gas Temp. Decreasing Gas Temp. Increasing Syngas Heating Value Reductor Pyrolysis of Coal (Discharge of Volatile Matter) Gasification of Char Gasification(Endotherm.) C + CO2 2CO C +H2O CO + H2 Combustion of Coal/Char (Generating High Temp. Gas) Melting Ash Combustor Oxydizing(Exotherm.) C + O2 CO2 H2 + 1/2O2 H2O SGC (Syngas Cooler) Decreasing Syngas Temp. Heat Recovery by Boiler Feedwater Waterwall Coal Coal Air <Slag hole Monitoring Camera> Pressure Vessel Molten Slag Surface of Water bath Figure 4-2 Principles of Air-Blown Two-Stage Entrained Flow Gasifier Steam Feed Water To Gas Clean-up Char The air supplied to the combustor is enriched with oxygen. This oxygen enrichment contributes to improving the operational flexibility of the gasifier and the calorific value of the syngas that is supplied to the gas turbine. The gasifier basically adopts the water-wall system, which has a proven record in the field of pulverized coal boilers. With the water-wall system, there is no need to consider the potential increases in the operational and maintenance costs associated with the use of a refractory gasifier wall. <Second stage: reductor> In the second stage, pulverized coal is supplied to the reductor where it is mixed with the high-temperature gas that was generated in the combustor. At this stage, it is not necessary to supply gasification agents such as the air and oxygen for gasification. In this environment for high-temperature reduction, the char is gasified into CO, CO2 is reduced to CO, H2O is reduced to H2, and pyrolysis of coal occurs as the main reactions within the gasifier to generate combustible syngas, which is the most important output of the gasifier. Because these reactions are basically endothermic reactions, the gas temperature is decreased in the second stage. As the gas temperature decreases, solid particles, including char, solidify to prevent sticking during the downstream heat exchange section using heat exchange tubes. <Syngas cooler (SGC) and char recovery and supply facilities> The high-temperature syngas generated in the gasifier is cooled by heat exchange with high-pressure feed water in the syngas cooler (SGC). High-pressure steam is also generated in this 25

35 process. The steam is supplied to the heat recovery steam generator (HRSG) of the combined cycle plant where it is further superheated and fed into the steam turbine. The syngas that passed through the SGC is fed into the char recovery facility where cyclones and porous filters recover the char. The recovered char is recycled back to the gasifier. <Air separation unit (ASU)> In the air-blown gasifier, the air separation unit (ASU) is installed to produce nitrogen, which is used as a transportation medium and as inert gas for purging. The oxygen that is generated as a by-product is supplied to the combustor in the gasifier together with the air that is used as a gasification agent. However, because most of the gasification agent is supplied by the compressed air bleed from the gas turbine compressor, the ASU can be of smaller capacity and costs compared with one used in an oxygen-blown gasifier. As for the principle of ASU, the air is first compressed and then the water vapor in the air is removed through the molecular sieve column. The air is then cooled until it is partially liquified. The cooled air is fed into the rectification column where the air is separated into oxygen and nitrogen using differences in their boiling points. This process generates high-purity nitrogen with less than 1% residual O2 concentrations and by-product oxygen of 95% purity. After passing through various compression processes, both the nitrogen and oxygen are fed into the pressurized gasification process Gas purifier <Outlines> The syngas from the gasifier is filtered with porous filters to remove dust. Before the syngas can be fed into the gas turbine, it requires further clean-up to remove sulfur, chlorine, ammonia, etc. The outlines of the main processes of wet gas clean-up facilities are shown below. <Low temperature gas cooling (LTGC)> The syngas is first fed into the scrubber where chlorine and trace metals are removed. COS is also converted into H2S in the COS reactor. The syngas is then cooled through a variety of heat exchanges. At the same time, most of the moisture in the gas is condensed and separated. The syngas also passes through a wet scrubber to remove ammonia, etc. Finally, the syngas is cooled to around 40 degrees Celsius and fed into the H2S separation process. <H2S separation process (acid gas removal: AGR)> In the H2S separation process, H2S is removed from the syngas to a level required to meet environmental regulations. Specifically, the syngas undergoes gas-liquid contact with an organic solvent in the H2S absorption column, which results in H2S to be absorbed into the solvent. The clean syngas is discharged from the top of the absorption column and fed into the gas turbine. On the other hand, the sulfur contents that have been absorbed into the solvent and removed from the syngas are discharged through the bottom of the absorption column together with the solvent and fed into the regeneration column. 26

36 In the regeneration column, the solvent is heated. At the same time, the sulfur contents are released from the organic solvent and the gas is fed into the sulfur recovery unit (SRU). After the release of the sulfur contents, the organic solvent is recycled back into the H2S absorption column. <Sulfur recovery unit (SRU)> In the sulfur recovery process, by-products containing sulfur, such as elemental sulfur, sulfuric acid and gypsum, are generated. The type of products generated is basically determined based on the customer s needs. For this study, we considered the process of gypsum recovery based on the lime-gypsum process Gas turbine <Outlines> The M701F gas turbine has a successful operational record on a wide variety of fuels. As of September 2014, 125 M701F gas turbines have been shipped for delivery. As of 2014, 48 M701F gas turbines are operating on low calorific value fuels with accumulated operating hours of more than 2.5 million hours. The basic design principles of M701F gas turbines as syngas-fired gas turbines follow the same principles as employed in the 701D gas turbines that were used at 250 MW IGCC demonstration plant in Nakoso. The uniaxial gas-steam turbine structure with the generator installed at the cold end is also of the same structure as the one in the IGCC demonstration plant. <Combustor> The combustor uses low calorific value syngas during regular operations and start-up fuel for startup and shutdown. Diffusion flame combustion is employed during the syngas operation. The necessary design features for syngas combustion will be added to the Dry Low NOx (DLN) premixed combustion system used in the natural gas-fired M701F gas turbine. For the operation on start-up fuel for startup and shutdown, the backup fuel nozzle will be used. There are several approaches to NOx reduction, such as addition of diluents and saturation of clean syngas. To optimize the gas turbine performance, we are thinking of reducing NOx as needed through Selective Catalytic Reduction (SCR). It has been demonstrated in the above-mentioned 250 MW Nakoso IGCC demonstration gas turbine that the above design principles can be applied successfully in the operation in combination with wet gas clean-up facilities employing Dimetyletanolamine (MDEA). <High-temperature gas components> The design of the cooling structure of the high-temperature gas components is the same as the one used in the natural gas-fired M701F gas turbine. To reduce operations and maintenance costs, our company s state-of-the-art technology based on our abundant operational experience is reflected in the high-temperature gas components. <Air bleed unit> To supply air into the gasifier, a part of the compressed air is bled from the gas turbine compressor outlet. A booster is used to raise the pressure of the bleed air before it is fed into the gasifier. 27

37 In the sense that the air used for gasification is supplied by the bleed air from the gas turbine, this system achieves full integration of air. This plant configuration has also been successfully demonstrated in the operation at the 250 MW Nakoso IGCC demonstration plant and will be used in the commercial gas turbine that is based on M701F gas turbine. 4.3 Main performance specifications of the plant Basic plant Design Conditions The conditions for the basic design of the plant used in this study are summarized as follows: (1) Coal: Sub-bituminous coal - lower calorific value (as received basis): MJ/kg - ash contents of coal (as received basis): 3.4 wt% (2) Expected site: adjacent to a coastline (to minimize transportation limitations, seawater is used in the condenser and for low-temperature waste heat recovery) (3) Design atmospheric pressure: MPa-a (because the expected site is on a coastline, the altitude is set at 0 m) (4) Atmospheric temperature: 15 degrees Celsius (reflects the result of a climate survey of the region in which the plant is expected to be constructed; a condition for indication of plant performance) (5) Seawater temperature: 15 degrees Celsius (reflects the result of a climate survey of the region in which the plant is expected to be constructed; a condition for indication of plant performance) Summary of the plant s main performance indicators The main performance indicators of the 500-MW class air-blown IGCC plant that was examined in this study are summarized below in Table 4-1. A comparative assessment with subcritical-pressure pulverized-coal plant, which will be useful for benchmarking for emissions reductions, will be discussed in Chapter 6. Table 4-1 Main Performance Indicators of 500-MW Class Air-Blown IGCC Plant Item 500-MW class air-blown IGCC Fuel coal consumption (as received basis) 200 ton/h Plant output at generating end 534 MWe Plant output at sending end 473 MWe 28

38 Gross thermal efficiency (LHV basis) 53.8 % Net thermal efficiency (LHV basis) 47.7 % 4.4 Overview Plant Construction Process Schedule * This process schedule may be updated due to the reflection of further site survey and design progress. Figure 4-3 Overview Plant Construction Process Schedule 29

39 5. MRV issues with existing power plants in Chile In Chapter 5, the regulating authorities of operating data for existing power plants in Chile and the collection system has been examined based on information and data acquired from local consultants, and issues related to MRV as part of JCM have been organized. 5.1 MRV The scheme that involves measurement of the state of initiatives to reduce emissions of greenhouse gases, reporting on an international scale, and verification of the degree if reduction, is called MRV (Measurement, Reporting, Verification) taken from the first letter of each process. This scheme seeks to clarify and verify the accuracy of activities aimed at reducing emissions. As part of the Cancun Agreements that were adopted at COP16, developed countries must report on the amount of emissions reduced in accordance with tougher guidelines in line with degree of achievement of reduction targets, and conduct an international evaluation process aimed at promoting comparability and improving reliability. Developing countries must implement International Consultation and Analysis (ICA) via national MRV in accordance with general guidelines related to reduction activities conducted without receiving international assistance, and also conduct international MRV in accordance with reduction activities conducted with international assistance. MRV is relatively simple for projects in the field of electrical power. The reason for this is because the data used for calculating the amount of emissions reduced that can be measured within a power plant, is often measured, reported and verified as part of business operations in a similar way to the amount of power generated, and the measurement method is well established on an international scale. 5.2 Measurement and reporting flow (M-R) The measurement and reporting flow defined by the Ministry of the Environment of Japan is as follows. Step 1 Identify site boundaries Identify site boundaries using site maps and other information (such as documents submitted under the Factory Location Act or Building Standards Act) submitted or reported to public agencies. Step 2 Understand emissions activities, establish emissions sources covered in calculations Understand the emissions activities that are being conducted within the site boundaries. Identify the emissions sources using documents submitted under the Fire Service Act, High Pressure Gas Safety Act or other laws, equipment lists, purchase slips or other information. 30

40 Establish the emissions sources that are covered in calculations based on compliant calculation standards. Step 3 Identify minor emissions sources (*) Identify minor emissions sources from the emissions sources identified in "Step 2." If minor emissions sources are present, they may be able to be excluded from calculations. (*) Emissions sources with a small percentage of the total amount of emissions that are so low that the impact on the total amount of emissions can be ignored due to the inaccuracy or uncertainty of those emissions. These are often covered by measures in place for each system to simplify measurements and reporting, and to reduce the work required by staff conducting calculations. These emissions sources are called "minor emissions sources." Step 4 Develop monitoring method Examine the monitoring method used for the amount of activities (such as the amount of fuel consumption) for each emissions source covered by calculated established in "Step 2." The monitoring method should be examined by creating a specific picture of the work required, including defining the area to be monitored, data and monitoring frequency and the record method. Step 5 Develop and maintain the monitoring and calculation system Appoint a calculation supervisor and calculation staff for calculating the amount of emissions of greenhouse gases (manager of plants/work site), as well as a management supervisor and other staff of monitoring points. Organize and specify the methodology, roles and responsibilities, including "who" is "using which method" for monitoring or calculations at each department, and "who" is "using which method" for maintaining and managing data reliability. Step 6 Conduct monitoring and calculate the amount of emissions Use monitoring and collected data to calculate the amount of greenhouse gas emissions. Conduct calculations in accordance with compliant calculation standards (for example, a formula like "amount of activities (x net calorific value) x emissions coefficient"). Step 7 Report amount of emissions 31

41 Report the calculated amount of greenhouse gas emissions. The reporting media used depends on the objective. Figure 5-1 Measurement and reporting flow Source: Ministry of the Environment website Acquired February 23,

42 5.3 Verification flow (V) The verification flow defined by the Ministry of the Environment of Japan is as follows. Step 1 Understand overview Acquire information such as the type of business of the operator being verified, their activity conditions, identification of site boundaries/emissions sources/establishment processes for scope of calculations, monitoring method/system, calculation system, and data processing method. Step 2 Risk assessment From the examined overview, identify events that have the possibility (risk) of introducing errors in the reported amount of emissions, and assess the degree of risk (risk assessment). Create a sampling plan if required. Step 3 Develop verification plan Decide on the type of collection procedures, period and scope of evidence based on the risk assessment. Procedures include viewing records and documents, tours and observations of plants/work sites/facilities and other equipment, questions posed to relevant staff, and recalculations of the amount of emissions. Step 4 Implement verification plan Implement the procedures planned with the verification plan in Step 3. Collect evidence in accordance with plans for the identification of site boundaries/identification of emissions source/establishment of the scope of calculations, monitoring method for understanding the amount of activities, selection evidence for net calorific value/emissions coefficient, calculation process for the amount of emissions, and displays of calculation reports. Assess the collected evidence. Step 5 Assess implementation results Step 6 Form verification opinions 33

43 Form opinions based on assessment of evidence. Step 7 Create verification report Create a verification report. Step 8 Complete a quality management review and verification report Conduct a final review of the verification team's conclusions and details listed in the verification report as part of quality management procedures for each verification agency, and finalize the verification report as the verification agency. Step 9 Issue verification report Issue a verification report. Figure 5-2 Verification flow Source: Ministry of the Environment website Acquired February 23,

44 5.4 The MRV system in Chile The MRV system (Measurement, Reporting and Verification) is not currently officially established in Chile. The department in charge of development and establishment of an MRV system in Chile is the Climate Change Office in Ministry Environment. MRV is an extremely important system for the implementation of Nationally Appropriate Mitigation Actions (NAMAs), and Chile is making efforts to establish MRV for the following reasons. To implement national policies and other schemes related to climate change efficiently To prepare various types of information to be submitted to the United Nations Framework Convention on Climate Change (UNFCCC) The importance of information transparency if gaining economic benefits with international trading (carbon credits) To avoid duplicate counts of the amount of CO2 emissions To assign an order of priority to reduction challenges in each industrial field To identify and correct flaws in methodology To determine whether or not technical or economic assistance is required The specific work currently being conducted by the Ministry of the Environment is as follows. MRV for voluntary reduction targets (achieve 20% reduction by 2020) MRV for GHG by each field MRV for Nationally Appropriate Mitigation Actions MRV for economic assistance 35

45 5.5 Monitoring of operating history from existing power plants The Pollutant Release and Transfer Register (PRTR) database managed by the Ministry of the Environment are currently available in Chile. Figure 5-3 Pollutant Release and Transfer Register (PRTR) Source: Ministry of the Environment, Chile website Acquired Tuesday, February 24, 2015 The first item in this database includes the amount of CO2 emissions, however business operators are not obligated to report the amount of CO2 emissions, and the ease of reporting lower emissions compared to the actual amount of emissions (calculated from fuel consumption) is being noted. Data for 2006 was reported as being 34% lower in PRTR data when compared to the actual amount of emissions. Operating data related to the current field of electrical power is information on electricity owned by CDEC. CDEC is granted the right to own operating data on each power plant within the country by the National Energy Commission, and power generation operators must report the following details to CDEC at least once every six months. 1 hour operating data for each unit Unit model 36

46 Fuel Turbine Power output Amount of fuel consumption during ordinary operation Electrical power at transmission end Minimum unit electrical power Unplanned outage rate Unplanned outage rate (high load areas) Planned outage rate Nominal steam pressure Nominal power factor Chapter 167 of the "Regulation of the Electric Law" published by the Ministry of Mining stipulates that power generation operators are obligated to provide information requested by CDEC. To allow calculations of the amount of CO2 emissions (CO2-ton/MWh) from power generation operating data owned by CDEC, the amount of CO2 emissions published by the Ministry of the Environment is calculated based on this information from CDEC. 5.6 Basic formula for the amount of CO2 emissions The basic formula for the amount of CO2 emissions is as follows. PEy = FCpjy x NCVpjy x CCpjy x COpj x 44/12 (formula 5.1) REy = amount of CO2 emissions of reference power source for year y [ tco2/yr ] FCpjy = amount of coal consumption of project power source for year y [t/yr] NCVpjy = coal net calorific value for year y (lower weighted average by coal type) [GJ/t] CCpjy = carbon emissions factor for coal type used in the project power source [tc/gj] COpj = oxidation factor [ 1 ] The amount of CO2 emissions for the unit amount of power generation EFpj = PEy / EGpjy (formula 5.2) 5.7 Monitoring method If default values are utilized wherever possible, the monitoring items for a power generation operator are only the amount of electrical power at the transmission end and the amount of coal consumption, however to calculate the actual amount of CO2 emissions, the coal net calorific value and emissions factor (coal content for calorific value) ideally need to be monitored. 5.8 Parameters to be monitored If the amount of CO2 emissions at the project power plant is to be monitored, the following four types of parameters should be monitored. 37

47 Parameter name: EGpjy Description: Amount of net electricity generation supplied by the project power plant to the grid in year y Unit: MWh/yr Data source: Measurement by power generation operator Measurement method: Electricity meter Monitoring frequency: Constant QA/QC (quality assurance/quality control) procedures: Measured amount of net electricity generation cross-checked with receipts of electricity sold. Measurement equipment is calibrated regularly to national standards in the host country. Parameter name: FCpjy Description: Amount of coal consumed at the project power plant in year y Unit: ton/yr Data source: Measurement by power generation operator Measurement method: Coal flowmeter Monitoring frequency: Constant QA/QC (quality assurance/quality control) procedures: Measured amount of fuel consumption is cross-checked with the annual amount of coal handed based on fluctuations in amount purchased and stored. Measurement equipment is calibrated regularly to national standards in the host country. Parameter name: NCVpjy Description: Lower weighted average calorific value by coal type for year y Unit: GJ/ton Data source: Value listed by coal sales company in purchase slips, or measured by power generation operator Measurement method: Measurement that complies with national or international fuel standards (such as ISO1928) Monitoring frequency: Each transport of coal (annual weighted average value calculated) 38

48 QA/QC (quality assurance/quality control) procedures: Staff taking measurements must be certified with ISO17025, or can provide evidence of equivalent level of quality assurance. Measurement equipment is calibrated regularly to national standards in the host country. Parameter name: CCpjy Description: Weighted average coal emissions factor by coal type for year y Unit: ton-c/ GJ Data source: Value listed by coal sales company in purchase slips, or measured by power generation operator Measurement method: Measurement that complies with national or international elemental analysis Monitoring frequency: Each transport of coal (annual weighted average value calculated) QA/QC (quality assurance/quality control) procedures: Staff taking measurements must be certified with ISO17025, or can provide evidence of equivalent level of quality assurance. Measurement equipment is calibrated regularly to national standards in the host country. 5.9 Future issues with MRV roll-out The following results were obtained for the four parameters above after surveying numerous local power plants. EGpjy Meter installed to measure amount of electrical energy at transmission end, with records being confirmed as being taken. FCpjy Coal flowmeter installed, with records being confirmed as being taken. NCVpjy Coal calorific value confirmed as being measured regularly. CCpjy Coal elemental analysis confirmed as being conducted regularly. Power plants in many developing are not measuring the calorific value or conducting elemental analysis, with the majority of them using default values set by IPCC to calculate the amount of CO2 emissions. There are also only a small number of developed countries that conduct elemental analysis regularly (the majority is only industrial analysis). The calorific value is measured and elemental analysis conducted regularly in Chile, and the monitoring environment is considered to be well developed. The following items that could not be verified during the limited time available for this local survey, and are issues to address in the future. Whether instruments are calibrated at intervals defined by international standards 39

49 Whether the instrument calibration agency is internationally certified Whether measurements of calorific value and elemental analysis are conducted in accordance with international standards With regard to measurements of calorific value and elemental analysis, there needs to have a policy proposal for whether measurement and analysis organization is approved internationally. 40

50 6. Examination of the Emission Reduction Methodologies 6.1 Examination of the methodologies applicable to power plants in Chile In recent years, coal-based power generation faces stiff headwind in the international arena. In COP20 there was criticism of Japan for its measures against global warming by supporting high-efficiency coal-fired power plants in developing countries. In COP19, a proposal to exclude projects of coal-fired power plants without CCS from the CDM was discussed. Some of the main public funds in Europe and the US as well as development banks have already announced the suspension of support to coal-fired power plants. Among OECD countries, the US, the Netherland and Britain have called on the OECD Export Credit Group to restrict the lending to power plants with high emission factors (coal-fired plants without CCS) 1. Even in the US and China, the two great coal superpowers, have begun to step up their efforts to regulate the emissions of domestic coal-fired power plants. The demand for coal-fired power generation is still large in the developing countries. Japan s argument that if, one way or the other, coal-fired plants are introduced, the support in introducing high-efficiency ones would contribute to reducing emissions is reasonable. In the meantime, in facing the above-mentioned headwind, it is important to develop a reasonable and transparent methodology in particular in the crediting of coal-fired power technology as JCM. The MRV methodology that could be applicable to the introduction of high-efficiency coal-fired power technology is the CDM methodology ACM0013 (Consolidated baseline and monitoring methodology for new grid connected fossil fuel fired power plants using a less GHG intensive technology). At the 69 th CDM Executive Board meeting in September 2012, a revision of ACM0013 was made and Version was officially adopted. Since then no application of CDM projects had been filed (the last application was made in September 2011) up until January 2015, when the application of a gas-fired power generation project in Bangladesh was submitted as a project using ACM0013 for the first time in three years and a half. Table 6-1 shows the breakdown of a total of 56 CDM applicant projects under ACM0013. Out of 56 projects, six projects have been registered and only one project received CERs. This shows the difficulty of applying ACM0013. Table 6-1 Breakdown of 56 CDM applicant projects under ACM0013 Argentina Banglades h Brazil China India Iran Total At Validation Validation terminated Replaced At Validation 2 2 Replaced Validation 1 1 terminated Registered Rejected Total Emissions Reduction (kt-co2/year) CER Issuance (kt-co2/year) , , ,

51 Source) UNEP CDM Pipeline, 1 February 2014 In Version 5.0.0, it was made the key applicability condition that the fossil fuel to be used in the project concerned (coal in the current case) must be used as the main fuel in more than 50 percent of the total rated capacity of power plants which were connected to the grid in the most recent five years, that is to say that the number of power plants of the same fuel category (coal) must have greatly increased in recent years. Table 6-2 shows the changes in generation capacity by grid system in Chile during the past five years ( ). Figure 6-1 and Figure 6-2 depict the changes in generation capacity of the SIC and SING. According to these tables and figures, the SIC is one step away from meeting the applicability condition while the SING meets it. SING SIC AYSÉN MAGALLANES Table 6-2 Changes in generation capacity (MW) by grid system in Chile, Thermal Hydro Wind Solar Total Coal Petroleum Gas Others Pass Reservoir Year , , ,699 Year , , , Change Year ,072 2,089 2, ,598 3, ,404 Year ,417 2,346 2, ,242 3, , Change 1, ,743 Year Year Change Year Year Change Source) UNEP CDM Pipeline, 1 February 2014 Figure 6-1 Changes in generation capacity of SIC ( ) Figure 6-2 Changes in generation capacity of SING ( ) Even if the SING meets the applicable condition, in Chile where only subcritical power plants are available, there remains a problem that it is difficult to fulfill the conditions to identify the baseline technology requiring to identify at least five power plants that use the same fossil fuel category as the project plant, are comparable in size and load capacity to the project plant, and received a government permit within the past five years but have not yet started commercial operation. If the number of the identified plants is less than five within the boundary of the grid and the host country, the geographical area should be extended by including all neighboring non-annex I countries and then all non-annex countries in the continent. 42

52 Next the technologies applied in the identified power plants are stacked from lowest efficiency to highest, and the technology at the 80 th percentile in terms of planned generation capacity is selected as the baseline technology. The baseline emission factor shall be the lower value between (a) the emission factor of the baseline scenario technology (the lowest efficiency values are shown in the Appendix. Subcritical 38.7% (water-cooled) and 36.6% (air-cooled), supercritical (SC) 40.0%, ultra-supercritical (USC) not specified) and (b) a benchmark emission factor determined from the top 15% performer plants (to be corrected with the annual improvement factor (default value of 0.3%). In addition, ACM0013 requires the project participants to conduct feasibility studies for both the baseline technology and the project technology, which have the same level of detail for both technologies. Furthermore these feasibility studies must the ones that are used by the project proponent to make the investment decision and must be conducted based on the specific characteristics of the site where the project is to be implemented, taking into account ambient conditions, fuel availability and any other site-specific characteristics. It is believed that it should be necessary to ensure reasonability and transparency equal to or exceeding those of the above CDM methodology in examining JCM methodologies for IGCC. The method for calculating the reference emission factor in particular is a major issue. At the same time, the methodologies for other JCM projects applying similar concepts should be also examined. Examples of JCM projects so far proposed with similar concepts include a ultra-supercritical coal-fired (USC) power plant in Vietnam and a natural gas combined cycle (CCGT) power plant in Bangladesh. Deliberate consideration is required so as to prevent improper exclusion of proposed projects and unreasonable small number of CERs to be issued. 6.2 Issues related to eligibility criteria In each JCM methodology, eligibility criteria are defined, including assessment of both CDM applicability and additionality. Eligibility criteria in JCM methodologies shall contain the following: Requirements for the project in order to registered as a JCM project (basis for validation and evaluation for registration of the proposed project) Requirements for the project to be able to apply the approved JCM methodology (same as the applicability conditions in CDM methodologies) The interviews with Japanese major manufacturers suggested that if the condition is IGCC, then Japan would have an advantage. With the view to providing information for the consideration of the items to be adopted as eligibility criteria in JCM methodologies, the advantages of IGCC in this project are discussed below by examining the trends in IGCC in other competitive countries and comparing with conventional coal-fired power generation systems, based on the performance of a Japanese IGCC plant of Clean Coal Power R & D Co., Ltd. (presently Nakoso Thermal Power Plant, Joban Joint Power Co., Ltd.) (hereinafter called Nakoso No.10 ). In evaluating the advantages of IGCC, the following five items were analyzed: Reliability and maintainability Environmental characteristics Economics Thermal efficiency 43

53 Operability (coal type adaptability) Trends in IGCC in other competitive countries Table 6-3 Comparison of IGCC power plants Name of project Buggenum Wabash River Tampa Puertollao Clean Coal Power Project site Netherlands USA USA Spain Japan (NakosoNo.10) Start of operation (commissioning) Edwardsport USA Jan Jan 年 Sep March 1998 Sep June 2013 Gasification furnace Shell Dow(E-Gas) GE PRENFLO Mitsubishi Heavy Industries Coal feeding method Dry-feed Slurry-feed Slurry-feed Dry-feed Dry-feed Slurry-feed Gasifying agent Oxygen Oxygen Oxygen Oxygen Air Oxygen Coal throughput t/day 2,000 2,600 2,300 2,600 2,090 5,400 Output (Gross) Net efficiency (HHV) thermal Track record of continuous operation MW % h Approx.3,200 Approx.1,500 Approx.2,500 Approx.1,000 Approx.3,900 - Source: Material 5-2 p44 of the second evaluation and review meeting of the project cost subsidy for the Integrated Coal Gasification Fuel Cell Combined Cycle Demonstration Project, Council for Science, Technology and Innovation. Source: NATIONAL ENERGY TECHNOLOGY LABORATORY IGCC PROJECT EXAMPLES Table 6-3 shows the trends in IGCC in other countries. Following the first demonstration test of an IGCC plant conducted in the Netherlands in January 1994, demonstration tests of IGCC plants have been carried out as needed in the USA, Spain and Japan. GE There are a number of types of gasification furnaces by different plant manufacturers. Let us first examine the coal feeding methods and the gasifying agents that have major effects on the thermal efficiency of plants. As shown in Table 6-3, there are basically two types of coal feeding processes, namely, slurry-feed process and dry-feed process. The slurry-feed has advantages of easiness in pressure feeding into gasification furnaces and of having a lengthy track record, while it tends to have lower thermal efficiency than the dry-feed process because some of heat generated from partial combustion is removed as heat of vaporization and a large loss of water vapor occurs during the cooling process when combining with the wet gas purification system. On the other hand, when using the dry-feed method, it requires a consideration of the equipment organization to pressurize pulverized coal. As for gasifying agents, there are basically two types, namely, oxygen-blown method and air-blown method. The oxygen-blown method was developed based on the chemical plant technologies for the purpose of gasification of heavy oil (that is, purpose other than power generation). Its development has been preferentially promoted in view of its advantage of fast gasification reaction rate of coal fuel due to the availability of higher combustion temperature than the air-blown method. The oxygen-blown method, however, has the disadvantage of lower net plant efficiency with a larger ratio of auxiliary power being used to produce oxygen. Figure

54 Thermal Efficiency shows this comparison of thermal efficiency. Table 6-4 lists the advantages and disadvantages of coal feeding methods and gasifying agents as explained in the above. This project is under consideration to introduce a dry feed, air-blown IGCC system equivalent to Nakoso No.10, which has superiority over IGCCs in other countries in terms of net plant efficiency. Thermal efficiency comparison between Air-blown IGCC and Oxygen IGCC auxiliary power Gross plant efficiency Net plant Efficiency Oxygen-blown Air-blown IGCC IGCC Figure 6-3 Superiority of air-blown IGCC in efficiency Slurry-feed Dry-feed Table 6-4 Advantages/disadvantages of each coal feeding method/ gasifying agent Oxygen-blown IGCC With a larger ratio of auxiliary power (to produce oxygen), lower net plant efficiency Large loss of latent heat in moisture due to slurrying With a larger ratio of auxiliary power (to produce oxygen), lower net plant efficiency Smaller heat loss due to feeding in the form of powder Air-blown IGCC Very large loss of latent heat in moisture due to slurrying and not suitable for gasification With a smaller ratio of auxiliary power, higher net plant efficiency Smaller heat loss due to feeding in the form of powder Theoretically possible to achieve high thermal efficiency Next, let us consider the advantages in terms of plant reliability. As shown in the track record of continuous operation in Table 6-3, Nakoso No.10 had successfully achieved continuous operation for a lengthy span of 3,917 hours since starting the coal gasification operation in June 28, 2013 up until shutdown for interim inspection in December 8, This broke the previous record of 3,287 hours of Buggenum Power Plant in the Netherlands. In addition, all troubles and other problems in running Nakoso No.10 have been solved technically and all necessary measures have been taken. The IGCC system of this project, a scaled-up version of Nakoso No.10 based on its operational results, is to be introduced after further improving the reliability based on the actual experiences of two IGCC units scheduled to be installed in Nakoso Thermal Power Plant, Joban Joint Power Co., Ltd. and Hirono Thermal Power Station, Tokyo 45

55 CONSTANT DOLLAR CAPITAL COST/UNIT OF CAPACITY Electric Power Company in the early 2020s. From this, it can be said that the IGCC of this project will be a plant with higher technical reliability compared to IGCCs in other countries. The advantages of IGCC of this project over those in other countries can be summarized as follows: As it is a dry feed, air-blown IGCC system, a high net thermal efficiency is to be achieved. It can be continuously operated for lengthy hours, thereby with high reliability. High technical reliability can be expected in light of achievements in introducing and running of equivalent plants Comparison with conventional coal-fired power generation systems The next consideration is the advantages of IGCC of this project in comparison with conventional coal-fired power generation (USC, SC). Comparison was made with regards to eight items including construction cost, construction period, necessary site area, thermal efficiency, operability, utilities, environmental characteristics and wastes. The comparison results are shown in Table 6-5. Table 6-5 Comparison of advantages between IGCC and conventional coal-fired power generation systems Construction cost Comparison with conventional coal-fired power generation (USC, SC) Simplified cost estimate with incomplete date Available for commercial order Preconstruction and licensing period Finalized cost estimate Design/construction period First commercial service Estimate Development period cost estimates Actual Mature plant cost TIME Source: TAPPI JOURNAL, December 1997, p54 Figure 6-4 Cost learning curve Second plant in service Third plant in service Fourth plant in service Fifth plant in service The mountain of death generic capital cost trend for early commercial units of a new power plant technology, based on the Technical Assessment Guide of the Electric Power Research Institute (VI) Relatively high cost compared with conventional coal-fired power generation. The IGCC of this project, which is a new technology with less history of being applied compared to conventional coal-fired power generation technologies, is currently near the top of the learning curve. As mentioned above, two units are scheduled to be installed in Nakoso Thermal Power Plant, Joban Joint Power Co., Ltd. and Hirono Thermal Power Station, Tokyo Electric Power Company in the early 2020s. The project cost is expected to gradually decrease following the red dots on the learning curve towards the mature plant cost value of the fifth 46

56 Net plant 送電端効率 Efficiency (%LHV) (%HHV) Construction period Necessary area Thermal efficiency site and subsequent plants. Similar to conventional coal-fired power plants. Similar to conventional coal-fired power plants ( depending on the detailed design of plants, though). 50 IGCC(48~50%) IGCC(46~48%)by 1500 級 class GT GT IGCC(43~44%)by IGCC(45~46%) by 1300 class 級 GT GT IGCC IGCC 実証機 Demo (42%) plant(40.5%)by by 1200 級 1200 GT class GT 新鋭微粉炭火力 Newest conventional (41~43%) coal-fired plants(39~41%) 旧世代微粉炭火力 older conventional (40~41%) coal-fired plants(38~39%) Figure 6-5 Progression of improvement in thermal efficiency of coal-fired power generation Table 6-6 CO2 emission intensity IGCC (net plant efficiency 48%HHV) kg-co2 / kwh Conventional coal-fired plants Oil-fired plants LNG gas-fired plants (combined power plants) Source: Materials for the fifth meeting of the Demand and Supply Subcommittee of the Advisory Committee for Natural Resources and Energy Higher thermal efficiency compared with conventional coal-fired power generation. As it is possible to combine a steam turbine with a gas turbine by gasifying solid coal, the IGCC system of this project is expected to achieve net plant efficiency of about 48 percent while conventional coal-fired system provides an efficiency of about 40 percent. By this, it can reduce CO2 emission intensity by about 20 percent (about the same as oil-fired power generation) compared with conventional coal-fired power generation. 47

57 Operability Billion tons North America Coal for IGCC 高灰融点炭 : 微粉炭火力向き Newly available China India Australia S.Africa Indonesia Figure 6-6 Coal for IGCC Coal for conventional plant Expansion of coal types available As it is possible to expand coal types to be used, the operability is higher than conventional coal-fired power generation. Utilities Environmental charateristics As it is a technology to utilize coal that is a resource with abundant reserves and it can accommodate coal with low ash melting point, it is possible to expand coal types to be used, thereby enhancing the operability. Chile produces in a large volume coal with low ash melting point in the southern part of the country and therefore the applicability of the IGCC technology to this project in Chile is very high. Possible to reduce water consumption compared with conventional coal-fired power generation. In conventional coal-fired plants, the flue-gas desulfurization equipment consumes a large amount of water for smoke treatment at the smoke emitting stage after burning fuel, whereas in the IGCC of this project, smoke treatment is carried out at the fuel gas stage, allowing a great reduction of water consumption. SOx NOx Particulates Figure 6-7 Conventional Coal-fired plant IGCC Atmospheric environment characteristics (target values) Higher environment characteristics compared with conventional coal-fired power generation. It is possible to reduce sulfur oxide (SOx), nitrogen oxide (NOx) and dust emissions per electricity generation (kwh) through enhancing efficiency. It is also possible to reduce thermal discharge by approximately 30 percent compared with conventional 48

58 Wastes coal-fired plant. Coal ash (conventional coal-fired plants) Figure 6-8 Glassy slag (IGCC) Discharged coal ash and glassy slag Possible to make effective use of coal slag discharged compared with conventional coal-fired power generation. Conventional coal-fired power generation produces large amounts of coal ash, whereas the IGCC of this project discharges coal ash in the form of glassy slag, cutting volumes by nearly half. Slag can be recycled into cement material and road pavement material. The advantages of IGCC of this project over conventional coal-fired power generation can be summarized as follows: It has high thermal efficiency and can reduce CO2 emissions by approximately 20 percent. As it allows a wider range of coal types to be used, the operability is high. IGCC can accommodate coal types produced in Chile. It can reduce water consumption. It has high environmental characteristics as it can reduce sulfur oxide (SOx), nitrogen oxide (NOx) and dust emissions, and also can reduce thermal discharge by approximately 30 percent. It can make effective use of slag and generates fewer wastes. The following table shows the summarized results of the evaluation in terms of the five items. It could be concluded that IGCC that is under consideration to be introduced in this project has advantages in many aspects. Table 6-7 Summary of advantages of IGCC in this project Evaluation items Advantages In comparison with Reliability maintainability Environmental characteristics Economics and It can be continuously operated for lengthy hours, thereby with high reliability. High technical reliability can be expected in light of achievements in introducing and running of equivalent plants. It can reduce sulfur oxide (SOx), nitrogen oxide (NOx) and dust emissions. It can reduce thermal discharge by about 30 percent. It can reduce CO2 emissions by about 20 percent. It can reduce water consumption. It can make effective use of slag and generates fewer IGCCs in other countries Conventional coal-fired power generation Conventional coal-fired power 49

59 Thermal efficiency Operability (coal type adaptability) wastes. It has high thermal efficiency and can reduce fuel consumption. As it is a dry feed, air-blown IGCC system, a high net thermal efficiency is to be achieved. It allows a wider range of coal types to be used. IGCC can accommodate coal types produced in Chile. generation Conventional coal-fired power generation IGCCs in other countries Conventional coal-fired power generation At present, as far as the IGCC technology is concerned, it may be said that Japan maintains an advantage in terms of reliability and achievements. Yet, in light of future possibilities, further consideration is needed as to whether it is necessary to add other conditions than IGCC. In particular, it is desirable if any applicability condition can be added so that Japan s achievements in introduction and operation of IGCC can be taken into account in evaluation. 6.3 Data for calculating CO2 emission reduction and CO2 emission factors Formulas for calculating CO2 emissions and CO2 emission factors The basic formula for calculating CO2 emission reductions in the methodology applied to USC is as follows: ERy = REy PEy (Formula 1.1) ERy = Emission reductions in the year of y [ tco2/yr ] REy = CO2 emissions from the reference power plant in the year of y [ tco2/yr ] PEy = CO2 emissions from the project power plant in the year of y [ tco2/yr ] REy = EGpj,y EFre (Formula 2.1) EGpj,y EFre = Net electricity generation of the project power plant in the year of y [MWh] = CO2 emission factor of the reference power plant [t CO2/MWh] EFre = FCre,y NCVre,y Ccre Core 44/12 / EGre,y (Formula 2.2) FCre,y = Total coal consumption of the reference power plant in the year of y [t/yr] NCVre,y = Net calorific value of coal (low, weighted average by coal type) in the year of y [GJ/t] CCre = Carbon emission factor of coal types used in the reference power plant [tc/gj] Core = Oxidation factor [ - ] EGre,y = Net electricity generation of the reference power plant in the year of y 50

60 [MWh] PEy = FCpj,y NCVpj,y CCpj COpj 44/12 (Formula 3.1) FCpj,y = Coal consumption of the project power plant in the year of y [t/yr] NCVpj,y = Net calorific value of coal (low, weighted average by coal type) in the year CCpj of y [GJ/t] = Carbon emission factor of coal types used in the project power plant [tc/gj] COpj = Oxidation factor [ - ] Data from CNE, CDEC-SIC and CDEC-SING (1) Operation records of coal-fired power plants The following is a summarized power generation performance of thermal power plants during the most recent three years ( ) published on the websites of the National Energy Commission (CNE: Comision Nacional de Energia), CDEC-SIC (Economic Load Dispatch Center of the SIC) and the CDEC-SING (Economic Load Dispatch Center of the SING). 51

61 Table 6-8 Gross output, auxiliary power, plant thermal efficiency, etc. (common items) Unit Generation Capacity Specific Consumption Energy Efficiency Gross Capacity Net Capacity Auxiliary Power Capacity Auxiliary Power Ratio Gross Net Gross Energy Efficiency Net Energy Efficiency MW MW MW % kg-c/kwh kg-c/kwh % % Ventanas Ventanas Campiche SIC Nueva Ventanas Bocamina Bocamina Santa Maria Guacolda Ⅰ Guacolda Ⅱ Guacolda Ⅲ Guacolda Ⅳ 合計 2, , C.T.Mejillones C.T.Mejillones Unidad Unidad Unidad Unidad C.T.Andina SING C.T.Hornitos Norgener Norgener C.T.Tarapaca Angamos Angamos 合計 2, , SIC,SING 合計 4, , In Japan the gross generation capacity is defined as the term referring to rated output while the net generation capacity is not defined. This is because the net generation capacity changes during the course of operation as the auxiliary power changes. In the above data it is assumed that the net generation capacity is calculated by [ gross generation capacity - auxiliary power capacity ], using auxiliary power capacity which is the rated output. This approach is also applied to the calculation of net electricity generation in the operational record of each power plant as discussed below. The net electricity generation is not an actual measured value, but it is calculated by [ gross generation capacity (1 - auxiliary power ratio)]. Specific consumption refers to the value estimated when making parallel comparison of performance of coal-fired power plants of different types of coal. There are two kinds of thermal efficiency, namely, gross thermal efficiency and net thermal efficiency. As this ratio is consistent with the ratio of gross generation capacity and net generation capacity, it is assumed that the net generation capacity is not an actual measured value but that it was calculated by multiplying gross generation capacity by ratio of generation capacity. In Japan for calculation of gross thermal efficiency, a few methods including the Indirect Method are used. At this time the methods used in Chile for calculation of the data on the websites have not been identified and it is necessary to find out them in the future. 52

62 SIC Table 6-9 Gross output, auxiliary power, plant thermal efficiency, etc. (common items) Unit 2011 Gross Electricity Generation Net Electricity Generation Sales to the Grid Fuel Consumption (Declared to CDEC-SIC) Fuel Consumption (Estimated) Eq.Calorific Power GWh GWh GWh 1000ton 1000ton kcal/kg Ventanas ,500 Ventanas 2 1, , , ,212 Campiche Nueva Ventanas 2, , , ,101 Bocamina ,605 Bocamina Santa Maria Guacolda Ⅰ 1, , , ,448 Guacolda Ⅱ 1, ,662 Guacolda Ⅲ 1, , , ,000 Guacolda Ⅳ 1, , , ,659 合計 10, , , , , ,443 C.T.Mejillones 1 1, , , ,473 C.T.Mejillones 2 1, , , ,204 Unidad ,101 Unidad ,788 Unidad ,284 Unidad ,059 C.T.Andina ,866 SING C.T.Hornitos ,805 Norgener 1 1, , ,196 Norgener 2 1, , , ,140 C.T.Tarapaca ,886 Angamos 1 1, , , ,393 Angamos ,395 合計 11, , , , , ,495 SIC,SING 合計 21, , , , , ,025 Grid sales volume is calculated by multiplying the net electricity generation by the average transmission loss of the system grids (SIC and SING) in Chile. For the reference emission factor for this project, the net electricity generation is applied. It is assumed, however, that this net electricity generation is not an actual measured value but that it was calculated by [ gross generation capacity (1 - auxiliary power ratio)]. The unit of eq.calorific power (kcal/kg) is the same as the net calorific value of coal. However it does not indicate the calorific value but the value showing a correlation between fuel consumption (declared -based) and fuel consumption (estimated -based). 53

63 Table 6-10 Operation records of coal-fired power plants in SIC and SING grid systems in Chile (FY2012) Unit 2012 SIC SING Gross Electricity Generation Net Electricity Generation Sales to the Grid Fuel Consumption (Declared to CDEC-SIC) Fuel Consumption (Estimated) Eq.Calorific Power GWh GWh GWh 1000ton 1000ton kcal/kg Ventanas ,545 Ventanas 2 1, , , ,275 Campiche Nueva Ventanas 2, , , ,978 Bocamina 1, ,855 Bocamina ,744 Santa Maria 1, , , ,630 Guacolda Ⅰ ,654 Guacolda Ⅱ 1, , , ,817 Guacolda Ⅲ 1, , , ,612 Guacolda Ⅳ 1, , , ,748 合計 12, , , , , ,984 C.T.Mejillones 1 1, , , ,498 C.T.Mejillones 2 1, , , ,228 Unidad ,143 Unidad ,828 Unidad 14 1, ,321 Unidad ,094 C.T.Andina 1, , , ,537 C.T.Hornitos ,798 Norgener 1 1, , , ,172 Norgener ,116 C.T.Tarapaca ,827 Angamos 1 1, , , ,536 Angamos 2 1, , , ,538 合計 13, , , , , ,413 SIC,SING 合計 26, , , , , ,664 54

64 Table 6-11 Operation records of coal-fired power plants in SIC and SING grid systems in Chile (FY2013) Unit 2013 SIC SING Gross Electricity Generation Net Electricity Generation Sales to the Grid Fuel Consumption (Declared to CDEC-SIC) Fuel Consumption (Estimated) Eq.Calorific Power GWh GWh GWh 1000ton 1000ton kcal/kg Ventanas ,512 Ventanas 2 1, , , ,408 Campiche 1, , , ,909 Nueva Ventanas 2, , , ,062 Bocamina ,891 Bocamina 2 2, , , ,872 Santa Maria 2, , , ,119 Guacolda Ⅰ 1, , , ,814 Guacolda Ⅱ 1, , , ,848 Guacolda Ⅲ 1, , , ,681 Guacolda Ⅳ 1, , , ,671 合計 16, , , , , ,258 C.T.Mejillones 1 1, , , ,959 C.T.Mejillones 2 1, , , ,629 Unidad ,779 Unidad ,481 Unidad ,999 Unidad ,784 C.T.Andina 1, , ,945 C.T.Hornitos 1, , , ,970 Norgener 1 1, , ,145 Norgener 2 1, ,090 C.T.Tarapaca ,814 Angamos 1 1, , , ,571 Angamos 2 1, , , ,574 合計 14, , , , , ,536 SIC,SING 合計 31, , , , , ,393 (2) IPCC Guidelines The IPCC Guidelines define various values for the following five different types of coal according to their properties and uses. The coal-fired power plants in Chile use mainly lignite and sub-bituminous coal. Imported coal is mostly sub-bituminous coal. If using the IPCC Guidelines for calculating the reference emission factor this time, it would be appropriate to apply the values of sub-bituminous coal out of the coal types listed below. 55

65 Table IPCC Guidelines Net Calorific Value Carbon Emission Factor Oxidation Factor Anthracite Coking Coal Other Bituminous Coal Sub-Bituminous Lignite [GJ/t] [kg-c/gj] [ - ] Default Value Lower Upper Default Value Lower Upper Default Value Lower Upper Default Value Lower Upper Default Value Lower Upper Data of existing power plants (Calculation of the reference CO2 emission factor) Chile s power grid consists of four independent components and those grid systems are not interconnected. The IGCC coal-fired plant will be possibly connected to the two main systems of the SIC and the SING among four grid systems, in light of their transmission capacity and the size of customers. From this, the reference power plants will be those coal-fired power plants connected to these two grid systems. The reference CO2 emission factor (t-co2/kwh) (hereinafter called reference emission factor ) needs to be calculated for each grid system because the systems are independent of each other. However as the two, SIC and SING, are planned to be interconnected in 2018, there would be an option to calculate a single reference emission factor by combining values of the two systems. Here the reference emission factor applicable to IGCC was examined for each of three cases: (1) SIC, (2)SING and (3) SIC and SING combined. Based on the information available on the websites of CNS, CDEC-SIC and CDEC-SING as well as the above-mentioned values available in the IPCC Guidelines, the reference emission factor was calculated in four different patterns of simulation and then the most appropriate one was selected. The following is a summary of the availability of data necessary for calculation of the reference emission factor within the range of information obtained in the present situation. 56

66 Table 6-13 Availability of parameters necessary for calculation of the reference emission factor on the websites Data Unit Data availability on websites Remarks Net electricity generation MWh Available Fuel consumption T Available Net calorific value of coal Carbon emission factor GJ/t t-co2/gj None None Oxidation factor None Normally 1 When burning fossil fuels such as coals, the carbon contained in fuels is converted to CO2 and emitted to the atmosphere. The formulas to calculate energy-derived CO2 emissions and CO2 emission intensity are as follow: CO2 emissions [t CO2] = Fuel consumption [t] Net calorific value(low) [GJ/t] Carbon emission factor [tc/gj] Oxidation factor 44/12 CO2 emission factor [t CO2/MWh] = CO2 emissions [t CO2] Net electricity generation [MWh] (1) Simulation I <Approach for calculation> The net thermal efficiency, total heat capacity of coal (estimated by [fuel consumption net calorific value of coal]) and carbon emission factor (kg-c/gj) are calculated by back calculation, by applying the common items, specific consumption (kg-c/kwh) and eq.calorific power (kcal/kg), available in the operation records of each fiscal year to carbon emission factor and net calorific value of coal respectively, Table 6-14 Applied values of parameters necessary for calculation of the reference emission factor (Simulation I) Data Unit Application of website data Remarks Net electricity generation MWh Applied Fuel consumption T Applied Net calorific value of coal GJ/t Apply Eq.Calorific Power Carbon emission t-co2/gj None To be calculated 57

67 factor Oxidation factor 1 Normally 1 Carbon emission intensity t-c/kwh Apply Specific Consumption SIC SING Table 6-15 Calculated results of the reference emission factor (Simulation I Unit Gross Net Net Electricity Generation Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Net Energy Efficiency Carbon Emission Factor Oxidation Factor FY2011) CO2 Factor CO2 Emission Factor of Coal kg-c/kwh kg-c/kwh GWh 1000ton kcal/kg % kg-c/gj - 44/12 t-co2/mwh Ventanas , Ventanas , , Campiche Nueva Ventanas , , Bocamina , Bocamina Santa Maria Guacolda Ⅰ , , Guacolda Ⅱ , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 9, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad , C.T.Andina , C.T.Hornitos , Norgener , , Norgener , , C.T.Tarapaca , Angamos , , Angamos , Total 10, , , SIC,SING Total Specific Consumption , , ,

68 SIC SING Table 6-16 Calculated results of the reference emission factor (Simulation I Unit Specific Consumption 2012 Net Fuel Carbon Consumption Net Calorific Net Energy Gross Net Electricity (Declared to Emission Value of Coal Efficiency Generation CDEC-SIC) Factor Oxidation Factor FY2012) CO2 Factor CO2 Emission Factor of Coal kg-c/kwh kg-c/kwh GWh 1000ton kcal/kg % kg-c/gj - 44/12 t-co2/mwh Ventanas , Ventanas , , Campiche Nueva Ventanas , , Bocamina , Bocamina Santa Maria , Guacolda Ⅰ , Guacolda Ⅱ , , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 11, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad C.T.Andina , C.T.Hornitos , Norgener , , Norgener , C.T.Tarapaca , Angamos , , Angamos , , Total 12, , , SIC,SING Total 24, , , Unit Table 6-17 Calculated results of the reference emission factor (Simulation I Specific Consumption Gross Net Net Electricity Generation Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Net Energy Efficiency Carbon Emission Factor Oxidation Factor FY2013) CO2 Factor CO2 Emission Factor of Coal kg-c/kwh kg-c/kwh GWh 1000ton kcal/kg % kg-c/gj - 44/12 t-co2/mwh Ventanas , Ventanas , , Campiche , , SIC Nueva Ventanas , , Bocamina , Bocamina , , Santa Maria , , Guacolda Ⅰ , , Guacolda Ⅱ , , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 15, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad , C.T.Andina , , SING C.T.Hornitos , , Norgener , , Norgener , C.T.Tarapaca , Angamos , , Angamos , , Total 12, , , <Observations> As a result of back calculating net thermal efficiency, total heat capacity of coal 59

69 (estimated by [fuel consumption net calorific value of coal]) and carbon emission factor (kg-c/gj) from specific consumption (kg-c/kwh), the carbon emission factor (t-c/gj) obtained was too high, reaching nearly 40% above the value of lignite in the IPCC Guidelines. This value is not realistic even as the actual value of sub-bituminous coal. This suggests that it is not appropriate to apply the specific consumption (kg-c/kwh) to the reference emission factor. (2) Simulation II <Approach for calculation> The result of Simulation I suggested that it was not appropriate to apply the specific consumption (kg-c/kwh) to the reference emission factor. In Simulation II, not by applying the specific consumption (kg-c/kwh) to the reference emission factor, but by applying the default value of sub-bituminous coal in the IPCC Guideline to the carbon emission factor (t-c/gj), the reference emission factor is calculated. The net calorific value of coal (kcal/kg) is calculated from the net thermal efficiency (fixed value) of each power plant. Table 6-18 Applied values of parameters necessary for calculation of the reference emission factor (Simulation II) Application of website Data Unit Remarks data Net electricity generation MWh Applied Fuel consumption t Applied Net thermal efficiency % Applied Net calorific value of coal GJ/t Carbon emission factor t-c/gj Apply Guidelines IPCC Apply the fixed value of each power plant To be calculated from net thermal efficiency Default value of sub-bituminous coal Oxidation factor Apply 1 Normally 1 60

70 SIC SING Table 6-19 Calculated results of the reference emission factor (Simulation II Unit Energy Efficiency 2011 Gross Net Energy Energy Efficiency Efficiency Net Electricity Generation Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2011) CO2 Emission Factor of Coal % % GWh 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas , , Campiche Nueva Ventanas , , Bocamina , Bocamina Santa Maria Guacolda Ⅰ , , Guacolda Ⅱ , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 9, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad , C.T.Andina , C.T.Hornitos , Norgener , , Norgener , , C.T.Tarapaca , Angamos , , Angamos , Total 10, , , SIC,SING Total 19, , ,

71 SIC SING Table 6-20 Calculated results of the reference emission factor (Simulation II Energy Efficiency 2012 Unit Gross Energy Efficiency Net Energy Efficiency Net Electricity Generation Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor FY2012) CO2 Emission OxidationFactor Factor of Coal % % GWh 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas , , Campiche Nueva Ventanas , , Bocamina , Bocamina , Santa Maria , , Guacolda Ⅰ , Guacolda Ⅱ , , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 11, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad , C.T.Andina , , C.T.Hornitos , Norgener , , Norgener , C.T.Tarapaca , Angamos , , Angamos , , Total 12, , , SIC,SING Total 24, , ,

72 SIC SING Table 6-21 Calculated results of the reference emission factor (Simulation II Energy Efficiency 2013 Unit Gross Energy Efficiency Net Energy Efficiency Net Electricity Generation Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2013) CO2 Emission Factor of Coal % % GWh 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas , , Campiche , , Nueva Ventanas , , Bocamina , Bocamina , , Santa Maria , , Guacolda Ⅰ , , Guacolda Ⅱ , , Guacolda Ⅲ , , Guacolda Ⅳ , , Total 15, , , C.T.Mejillones , , C.T.Mejillones , , Unidad , Unidad , Unidad , Unidad , C.T.Andina , , C.T.Hornitos , , Norgener , , Norgener , C.T.Tarapaca , Angamos , , Angamos , , Total 12, , , <Observations> The net calorific value of coal (kcal/kg) (GJ/t) was calculated by back calculation by applying the net thermal efficiency (fixed value) of each power plant. It was calculated to be 7,000~9,000 (kcal/kg) even though it was sub-bituminous coal. LHV (net calorific value) of general sub-bituminous coal is around 6000 kcal/kg. The calculated result in this simulation is too high compared with general sub-bituminous coal. Assuming that the value of fuel consumption is right, the reason for the higher net calorific value is considered to be that the net thermal efficiency of each power plant applied in this simulation was lower than the actual value. As the thermal efficiency of power plants fluctuates with changes in annual utilization factor and daily load factor of power plants in the first place, it is believed that it is not appropriate to apply the net thermal efficiency (fixed value) of each power plant as the net thermal efficiency. (3) Simulation III <Approach for calculation> It was found in Simulation II that in spite of sub-bituminous coal, the net calorific value of 63

73 coal (GJ/t) was calculated to be 7,000~9,000 (kcal/kg) through back calculation using the net thermal efficiency (fixed value) of each power plant. This calculated result is too high compared with general sub-bituminous coal. This was probably because the net thermal efficiency of each power plant applied in this simulation was too low. Therefore in Simulation III, by applying the values of representative coal properties in SIC and SING, that is, 6,350 kcal/kg and 6,000 kcal/kg, respectively, as net calorific value of coal (kcal/kg), the net thermal efficiency and the reference emission factor are calculated. In this simulation as well, the default value of sub-bituminous coal in the IPCC Guidelines is applied. Table 6-22 Applied values of parameters necessary for calculation of the reference emission factor (Simulation III) Application of website Data Unit Remarks data Net electricity generation MWh Applied Fuel consumption t Applied Net thermal efficiency % Net calorific value of coal GJ/t Carbon emission factor t-c/gj SIC=6,350 kcal/kg SING=6,000 kcal/kg Apply IPCC Guidelines To be calculated from net calorific value of coal Apply standard properties in SIC and SING Sub-bituminous coal Oxidation factor Apply 1 Normally 1 64

74 SIC SING Table 6-23 Calculated results of the reference emission factor (Simulation III ユニット 2011 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2011) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche , Nueva Ventanas 1, , Bocamina , Bocamina , Santa Maria , Guacolda Ⅰ 1, , Guacolda Ⅱ , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , Total 9, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina , C.T.Hornitos , Norgener 1 1, , Norgener 2 1, , C.T.Tarapaca , Angamos 1 1, , Angamos , Total 10, , , SIC,SING total 19, , ,

75 SIC SING Table 6-24 Calculated results of the reference emission factor (Simulation III ユニット 2012 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2012) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche , Nueva Ventanas 2, , Bocamina , Bocamina , Santa Maria 1, , Guacolda Ⅰ , Guacolda Ⅱ 1, , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , Total 11, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina 1, , C.T.Hornitos , Norgener 1 1, , Norgener , C.T.Tarapaca , Angamos 1 1, , Angamos 2 1, , Total 12, , , SIC,SING total 24, , ,

76 SIC SING Table 6-25 Calculated results of the reference emission factor (Simulation III Unit 2013 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2013) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche 1, , Nueva Ventanas 1, , Bocamina , Bocamina 2 2, , Santa Maria 2, , Guacolda Ⅰ 1, , Guacolda Ⅱ 1, , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , Total 15, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina 1, , C.T.Hornitos 1, , Norgener 1 1, , Norgener , C.T.Tarapaca , Angamos 1 1, , Angamos 2 1, , Total 12, , , <Observations> The calculated values of net thermal efficiency were considered basically reasonable as the net thermal efficiency of general conventional coal-fired power plants, though some exceptional values were found for some thermal power plants. Those power plants with exceptional net thermal efficiency have evidently lower fuel consumption (declared-based) levels than other power plants. As far as evaluating based on the information available at present is concerned, the result of this simulation is considered most reasonable and appropriate. (4) Simulation IV <Approach for calculation> Among the data published, only two kinds of data ( net electricity generation and fuel consumption ) out of six which are necessary for calculation of the reference emission factor have been confirmed. In Simulation IV, by fully applying the IPCC Guidelines, the reference emission factor is calculated. Specifically, the default values of sub-bituminous coal in the IPCC Guideline are applied to the net calorific value of coal (kcal/kg) (GJ/t) and the carbon emission factor (t-c/gj). 67

77 Table 6-26 Applied values of parameters necessary for calculation of the reference emission factor (Simulation IV) Application of website Data Unit Remarks data Net electricity generation MWh Applied Fuel consumption t Applied Net thermal efficiency % Net calorific value of coal GJ/t Carbon emission factor t-c/gj Apply IPCC Guidelines Apply IPCC Guidelines To be calculated from net calorific value of coal Sub-bituminous coal Sub-bituminous coal Oxidation factor Apply 1 Normally 1 SIC SING Table 6-27 Calculated results of the reference emission factor (Simulation IV 2011 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2011) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche , Nueva Ventanas 1, , Bocamina , Bocamina , Santa Maria , Guacolda Ⅰ 1, , Guacolda Ⅱ , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , Total 9, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina , C.T.Hornitos , Norgener 1 1, , Norgener 2 1, , C.T.Tarapaca , Angamos 1 1, , Angamos , Total 10, , , , , , SIC,SING Total 68

78 SIC SING Table 6-28 Calculated results of the reference emission factor (Simulation IV 2012 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2012) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche , Nueva Ventanas 2, , Bocamina , Bocamina , Santa Maria 1, , Guacolda Ⅰ , Guacolda Ⅱ 1, , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , total 11, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina 1, , C.T.Hornitos , Norgener 1 1, , Norgener , C.T.Tarapaca , Angamos 1 1, , Angamos 2 1, , Total 12, , , , , , SIC,SING Total 69

79 SIC SING Table 6-29 Calculated results of the reference emission factor (Simulation IV 2013 Net Electricity Generation Net Energy Efficiency Fuel Consumption (Declared to CDEC-SIC) Net Calorific Value of Coal Carbon Emission Factor Oxidation Factor FY2013) CO2 Emission Factor of Coal GWh % 1000ton kcal/kg kg-c/gj - t-co2/mwh Ventanas , Ventanas 2 1, , Campiche 1, , Nueva Ventanas 1, , Bocamina , Bocamina 2 2, , Santa Maria 2, , Guacolda Ⅰ 1, , Guacolda Ⅱ 1, , Guacolda Ⅲ 1, , Guacolda Ⅳ 1, , Total 15, , , C.T.Mejillones 1 1, , C.T.Mejillones 2 1, , Unidad , Unidad , Unidad , Unidad , C.T.Andina 1, , C.T.Hornitos 1, , Norgener 1 1, , Norgener , C.T.Tarapaca , Angamos 1 1, , Angamos 2 1, , total 12, , , SIC,SING Total 28, , , <Observations> The net thermal efficiency calculated by back calculation from the net calorific value, by applying the value of IPCC Guidelines to net calorific value of coal (kcal/kg) (GJ/t), was as high as more than 45 percent. Generally speaking, those conventional types of coal-fired power plants in Chile could not have such a high efficiency. This suggests that the net calorific value of sub-bituminous coal used in Chile is higher than the default value of sub-bituminous coal in the IPCC Guideline (4515kcal/kg), that is to say that fairly good quality of sub-bituminous coal is used in Chile. Therefore this shows that it is not appropriate to apply the value of IPCC Guideline to net calorific value of coal in estimating reference emissions of the coal-fired power plants in Chile. 70

80 (5) Evaluation Result of Reference CO2 Emission Factor Table 6-30 Recommended values of various parameters necessary for calculation of the reference emission factor Data Unit Application data Remarks Net electricity generation MWh Website data Fuel consumption t Website data Net thermal efficiency % Net calorific value of coal GJ/t Carbon emission factor t-c/gj SIC=6,350 kcal/kg SING=6,000 kcal/kg Apply IPCC Guidelines To be calculated from net calorific value of coal Apply standard properties in SIC and SING Sub-bituminous coal 26.2 kg-c/gj Oxidation factor - Apply 1 Normally 1 SIC SING the Whole Table 6-31 Calculated results of the reference emission factor (2011) 2011 Net Calorific Value of Coal Carbon Emission Factor Oxidation Facto CO2 Factor Net Electricity Generation Net Energy Efficiency Reference emission factor kcal/kg kg-c/gj - 44/12 GWh % t-co2/mwh a 9, b 6,350 2, c 6, a 10, b 6, , c 5, a 19, Area b 6,172 3, c 12, * a: Average of all power plants b: Net energy efficiency top 15% c: Net energy efficiency top 50% SIC SING the Whole Area Table 6-32 Calculated results of the reference emission factor (2012) Net Calorific Value of Coal Carbon Emission Factor Oxidation Facto CO2 Factor Net Electricity Generation Net Energy Efficiency Reference emission factor kcal/kg kg-c/gj - 44/12 GWh % t-co2/mwh a 11, b 6,350 1, c 5, a 12, b 6, , c 6, a 24, b 6,153 4, c 12,

81 SIC SING the Whole Area Table 6-33 Calculated results of the reference emission factor (2013) Net Calorific Value of Coal Carbon Emission Factor Oxidation Facto CO2 Factor Net Electricity Generation Net Energy Efficiency Reference emission factor kcal/kg kg-c/gj - 44/12 GWh % t-co2/mwh a 15, b 6,350 4, c 9, a 12, b 6, , c 7, a 28, b 6,183 6, c 16, Table 6-34 Calculated results of the reference emission factor ( ) Net Electricity Generation Net Energy Efficiency Reference emission factor kcal/kg kg-c/gj - 44/12 GWh % t-co2/mwh a 36, SIC b 6,350 8, c 20, a 36, SING b 6, , the Whole Net Calorific Value of Coal Carbon Emission Factor Oxidation Facto CO2 Factor 2011~2013 total c 20, a 72, Area b 6,183 13, c 41, (6) Issues towards the establishment of the reference CO2 emission factor in Chile The following have been found from the calculation of the reference emission factor based on the data on the websites: The databases on the websites do not provide sufficient information necessary to calculate the reference emission factor. Some of data lack certain elements including the data sources (who submit the data), calculation grounds and calculation methods Among some data, a number of inconsistencies (underestimation of coal consumption, etc.) are observed. It was uncertain as to how wrong figures were obtained and posted during the course of data collection and whether they were recognized as wrong in the first place. In order to improve the accuracy of the reference CO2 emission factor in Chile as well as to establish MRV methodology, it will be necessary to conduct: Survey of each coal-fired power plant concerning generation records, present situation in regard to measurement, understanding and calculation of fuel properties, etc. 72

82 Survey of calculation methods of net thermal efficiency, etc. in each thermal power plant Confirmation of the definition of net calorific value of coal in each thermal power plant Survey of the route, frequency and content of sending the collected data on the plant operation from each thermal power plant to the CNE and the CDEC-SIC/CDEC-SING. Issues for each parameter: (a) Net electricity generation [MWh] Should be monitored. As it is the amount of electricity sold, the data must be managed in the normal business operations. However some problems remain in that there is a lack of uniformity among power plants with regard to time span of cumulative data such as monthly or yearly as well as methods of cumulative data including electricity generated by each unit or all units. (b) Coal consumption [t] Should be monitored. Each of power plant purchases coal with sales contracts and therefore it is assumed that the volume of purchased coal must be assessed without difficulty in the normal business operations. However the ways to assess net coal consumption is different among power plants. There are three major approaches (to measure the weight in the bunker, to measure the stock of coal, and to calculate based on gross electricity generation and thermal efficiency); and there remains some question as to the accuracy of measurement in all the above-mentioned approaches. (c) Net calorific value of coal (LHV) [GJ/t] As it would be a heavy burden for operators to analyze and manage coal calorific value of each power plant, a default value should be set for each coal type or grade. This study revealed that the calorific value of coal acquired from Chile is higher than calorific value of coal in IPCC guideline. On the other hand our study team got information; some power plants conduct the periodical measurement and management of the calorific value of coal. Therefore we need further research about method of analysis and measurement accuracy for calorific value of coal in each power plant, and then we need to judge about the desirable definition of this parameter. (d) Carbon emission factor [tc/gj] To determine carbon content per net calorific value of coal, ultimate analysis of coal is needed. To conduct ultimate analysis by operators would be a great burden for them. Therefore a default value in IPCC should be used for each coal type. This study revealed that Carbon emission factor in IPCC guideline is reasonable for Chilean power plant. On the other hand, our study team got information; some power plants conduct the measurement of the carbon contents from ultimate analysis periodically. Therefore we need further research about method of analysis and measurement accuracy for Carbon Emission Factor in each power plant, and then we need to judge about the desirable definition of this parameter. (e) Oxidation factor 73

83 The oxidation factor is determined based on the amount of unburned carbon remained in coal ash and according to the treatment methods of ash. Given that it would be a heavy burden for operators to measure the amount of unburned carbon in ash as well as to monitor how treated ash has been utilized, a default value should be set Monitoring data (a) Net electricity generation [MWh] Should be monitored. As it is the amount of electricity sold, the data must be managed in the normal business operations. The Net electricity generation should be measured in each unit and it is better to get daily-base MWh. (b) Coal consumption [t] Should be monitored. Each of power plant purchases coal with sales contracts and therefore it is assumed that the volume of purchased coal must be assessed without difficulty in the normal business operations. It is a problem that they can measure the coal consumption according to a unit. The ways to assess net coal consumption is different among power plants. There are three major approaches (to measure the weight in the bunker, to measure the stock of coal, and to calculate based on gross electricity generation and thermal efficiency); and there remains some researches as to the accuracy of measurement in all the above-mentioned approaches. (c) Net calorific value of coal (LHV) [GJ/t] As it would be a heavy burden for operators to analyze and manage coal calorific value of each power plant, a default value should be set for each coal type or grade. Therefore we need further research about method of analysis and measurement accuracy for Net Calorific Value in each power plant, and then we need to judge about the desirable definition of this parameter. (d) Carbon emission factor [tc/gj] To determine carbon content per net calorific value of coal, ultimate analysis of coal is needed. To conduct ultimate analysis by operators would be a great burden for them. Therefore a default value in IPCC should be used for each coal type. This study revealed that Carbon emission factor in IPCC guideline is reasonable for Chilean power plant. On the other hand our study team got information; some power plants conduct the periodical measurement and management of Carbon Emission Factor. Therefore we need further research about method of analysis and measurement accuracy for Carbon Emission Factor in each power plant, and then we need to judge about the desirable definition of this parameter. Therefore we need further study about method of analysis for carbon contents of coal in project power plant. (e) Oxidation factor 74

84 The oxidation factor is determined based on the amount of unburned carbon remained in coal ash and according to the treatment methods of ash. Given that it would be a heavy burden for operators to measure the amount of unburned carbon in ash as well as to monitor how treated ash has been utilized, a default value should be set. 6.4 Issues on the reference emission factor Next discussed is the reference emission factor, the largest issue. In JCM, the reference emissions are calculated to be below business-as-usual (BaU) emissions which represent plausible emissions in providing the same outputs or service level of the proposed project in the host country. This approach results in a net decrease of GHG emissions. Source: Joint Crediting Mechanism Guidelines for Developing Proposed Methodology in Mongolia Figure 6-9 Relationship between the BaU emissions, reference emissions and project emissions In the high-efficiency fossil fuel power plant projects in the past, following the approach of ACM0013, the focus of discussion was always on how to define the reference technology (or whether calculation is made without categorizing technologies), or which percentage of top performer plants should be chosen to determine the benchmark emission factor. For the following reasons, however, it has been concluded that it would be more reasonable to calculate the BaU emissions and then define the reference emissions below the BaU emissions (that is, at the point of higher efficiency by X percent). While the BaU emissions are defined as plausible emissions in providing the same outputs or service level of the proposed project in the host country, the reference emissions are defined only as calculated to be below BaU emissions. Therefore even if trying to find logical explanations, there is no basis for it. In the method of determining the reference emissions from the top X% performer plants, the relationship between the BaU emissions and the reference emissions is not clear (how much lower the reference emissions were determined than the BaU emissions or whether it was actually determined lower than the BaU emissions is not clear). In contrast, the method of fixing the reference emissions at the point of higher efficiency by X percent as compared to the determined BaU emissions results in a net reduction of emissions. The BaU emissions could be calculated based on the information on the existing power plants and, 75

85 if needed, the future power plants to be constructed. Yet its procedures should be clarified and guidance for the calculation should be developed so as to prevent a difference in interpretation among estimators or methodologies. The following are the options of methods for calculating the BaU emissions: (a) Determining the BaU emissions for each host country Categorize the coal-fired power generation technologies: subcritical, SC, USC and IGCC. Identify reference technologies in light of new construction projects, future plans and other national circumstances of the host country in in the most recent years (for example, during the past three years, five years). Take the average of technologies (cohort) that have emissions equivalent to the reference emissions concerned as the emission intensity to calculate the BaU emissions. (b) Determining the BaU emissions common to all the countries Assume technologies that have emissions equivalent to the BaU emissions common to all the countries and determine the efficiency level also common to all the countries. In calculating the BaU emission factor, the values to be used for that purpose are determined as follows: The electricity generation and the fuel consumption ( generating efficiency) are determined by a reasonable method in light of the national circumstances of the host country (development of power generation infrastructure, availability of data, etc.). It is proposed to determine them by applying: Actual values of the power plants constructed in the most recent years (for example, during the past three years, five years); Assumed values in the feasibility studies. Let us here consider the condition described in the definition of BaU: the same outputs or service level of the proposed project (IGCC model project) in the host country (Chile). The CO2 emissions per kwh of all coal-fired power plants during these ten years are almost the same level as ten years ago as shown in the table blow. All the power plants in operation in Chile are subcritical power plants as before. gco2 /kwh Table 6-35 CO2 emissions per kwh of coal-fired power plants average Source: IEA CO2 Emissions from Fuel Combustion 2014 According to the CNE s list of power plants scheduled to expand by 2020, there is no plan of coal-fired plant comparable in size to the model project and there are only plans of those equivalent in size to plants constructed in recent a few years. In the BaU situation, therefore, the trend during this decade (no active measures to be undertaken to improve efficiency) is expected to continue in the future and the average of subcritical power plants will be the BaU emission level in the next a few years. As the case where active measures are undertaken to improve efficiency in this BaU situation, the reference emission factor shall be fixed by improving the efficiency by X percent per year. 76

86 6.5 Calculation of estimated emission reductions The CO2 emission factor per MWh is calculated as follows respectively concerning each of three different cases of SIC, SIGN and SIC+CING, using the data of three years from 2011 to In the present analysis, a) average CO2 emission factor of all coal-fired power plants, b) CO2 emission factor of the top 15% performer plants, and c) CO2 emission factor of the top 50% performer plants are calculated. When using the values of reference emission factors of 6.3 Data for calculating CO2 emission reduction as BaU emission factors, and then a reference emission factor is determined based on the above BaU emission reductions by taking into account annual efficiency improvement, the emission reductions and the net decrease are calculated as the below. This analysis assumes that the efficiency will improve by 0.1, 0.2, and 0.3 percent per year from the present until the start of IGCC operation. In eventually examining the efficiency improvement factor, it is assumed that active measures for improving efficiency will be promoted. Then the comparison is made with BaU in the following scenarios: (1) Within existing power plants, to replace a part of the facilities with high-efficiency technology taking into account the lifetime of the facilities (the rest of the facilities continue the operation as is); and (2) to introduce high-efficiency technology into a new coal-fired power plant scheduled to be constructed in future. Table 6-36 Conditions of the model project Capacity 534MW (Gross) Coal Condition 17.87MJ/kg (LHV), 4,268kcal/kg (LHV) Gross Efficiency 53.8% (LHV, Gross) Output 3,976 GWh/year (PLF: 85%) Emission Factor t-co2/mwh Project Emissions 2,516,956 t-co2 Table 6-37 Calculated results of CO2 emission reductions (efficiency improvement=0.1%/y) Table 6-38 Calculated results of CO2 emission reductions (efficiency improvement=0.2%/y) 77

87 Table 6-39 Calculated results of CO2 emission reductions (efficiency improvement=0.3%/y) 78