The Study on Application of Integrated Solar Combined Cycle(ISCC) Power Generation System in Kuwait. Summary of Reports.

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1 Commissioned by the Ministry of Economy, Trade and Industry The Study on Application of Integrated Solar Combined Cycle(ISCC) Power Generation System in Kuwait Summary of Reports January, 2008 Japan External Trade Organization (JETRO) Kawasaki Plant Systems, Ltd. Toyota Tsusho Corporation

2 1 Summary of Reports Ministry of Electricity and Water (MEW) of Kuwait has been planning to enhance the installed capacity of power stations for coping with a high demand for electrical power and improving the efficiency of existing power stations with applying the most modern efficient power generation technology. Targets of this feasibility study are to plan and to propose an innovative ISCC (Integrated Solar Combined Cycle) technology and to evaluate both technical and financial feasibilities of constructing a new ISCC power plant. The new ISCC power plant will realize a large scale power generation by utilizing solar thermal energy most efficiently, and comprises a solar island of trough collector design and a gas turbine combined cycle island, which performs much higher efficiency and more rational power generation than a conventional solar thermal power generation plant and a conventional combined cycle power plant. In this study, a new ISCC power plant was planned with a capacity of nominal 280 MW and its feasibilities were analyzed. For implementation, it was proposed that the ISCC power project might as well be based on BOOT (Build, Own, Operate & Transfer) by IPP ( Independent Power Producer) of a private sector. As a result, it has been concluded that a new ISCC power plant of nominal 280MW in Kuwait is feasible both technically and financially. Point 1 Electric Power Sectors The electrical power demand in Kuwait has been almost doubled in these ten years and the power supply situation is becoming more serious nowadays. Furthermore, in Kuwait, there has been observed an extreme peak load in summer season. The peak load occurs every year and the figure tends to increase in relation to the size of increasing population. Stable power supply is essential for development of Kuwait and the government is accelerating establishment of a stable power supply system. MEW, monopolizing and controlling the power supply in Kuwait, is planning and constructing several new power projects. MEW is adopting the combined cycle power generating system of higher efficiency for new installations as well as replacement and revamping with aims of flexible operation, reducing fuel consumption and reducing greenhouse gas emission. MEW, in consideration of current achievement of power projects and the serious power demand and supply situation, is acknowledging to implement the power projects by private sectors and to construct new power plants with expecting a shorter construction period and earlier commissioning. 1-2

3 Point 2 Power Generation by Utilizing Solar Energy as Renewable Energy It is generally known that renewable energies available for power generation are, wind, biomass, photo voltaic, geothermal, hydropower, solar thermal and others. Solar thermal energy among these is the most suitable to Kuwait for power generation by utilizing renewable energies because of the following reasons. (1) Due to geographical location of Kuwait, solar thermal energy is so abundantly usable for being profitably converted to electrical power on a commercial basis. (2) Solar thermal energy is cost-free energy with giving a preferable influence to an operation cost. (3) Solar thermal energy can be used freely without any restriction of political, social and environmental. Point 3 The necessity of New ISCC Power Plant The ISCC technology is a more innovative power generating system by utilizing solar thermal energy as a substitute energy than conventional power generating systems operating on fossil fuels. It matches with the energy strategy of MEW and the application of a new ISCC power plant will satisfy the future power generation planning by MEW. The ISCC technology has the following technical advantages. (1) Enhancement of Efficiency of Combined Cycle Power Plant (CCPP) The steam generated by a heat exchanger depending on solar thermal energy is added to another steam being generated at a heat recovery boiler (HRSG). The combined steam drives steam turbine and increases its output power. Thereby, without increasing fuel supply, the total power output is increased owing to solar thermal energy and hence realizing better efficiency (η). The efficiency (η) means ( power output / combustible fuel consumption ) and is defined according to the equation; W η ( W + W ) NET GT ST = ( power output / combustible fuel consumption ) = = Q gas Q gas Here, W NET : Power output (W NET = W GT + W ST ) W GT : GT power output W ST : ST power output : Heat input from combustible fuel (Natural Gas) Q gas In case of 15 (ISO condition) with solar energy input 75MJ/s, η is calculated as follows; h = {(74, ,840) } 100 = 64.1% (47, ) 1-3

4 (2) Enhancement of Efficiency of Conventional Solar Thermal Power Plant In a conventional solar thermal power plant, an auxiliary boiler of gas firing is provided and operated for warming up every morning the entire plant including a heat transfer fluid (HTF) because they have been cooled down through the night. In case of the ISCC technology, instead of the auxiliary boiler and without using it, HRSG always generates steam and the steam is usable for warming up cool equipments; hence eliminating the energy loss of the water/steam cycle and realizing a better thermal efficiency. (3) Stable Operation of Conventional Solar Thermal Power Plant In the conventional solar thermal power plant, due to sudden weather changes such as clouds, strong winds and others, it may happen to shut down the solar field operation. And also, due to fluctuations of the solar thermal energy stored in HTF, the generated steam also fluctuates and therefore inevitably causes an unstable plant operation. In the ISCC power plant, two of thermal sources are provided, that is, a solar collector collecting solar thermal energy and a gas turbine exhausting hot exhaust gas; hence enhancing the redundancy of the steam cycle and securing a stable plant operation. Point 4 Effect of New ISCC Power Plant Effects of applying a new ISCC power plant in Kuwait are as follows. (1) Rational Solution against Increasing Power Demand and Peak Load The power demand curve in Kuwait has an extraordinary high peak load during daytime in summer season. Presumably, air conditioners are turned on one after another as the temperature starts to increase, while the solar thermal energy covering the ground also reaches to its peak. Catching simultaneously the increasing solar thermal energy and converting it to electricity by applying the ISCC technology is the most effective and the most rational method for compensating the peak demand; if solar thermal energy is a main reason for the peak demand, it can also be a decisive solution to compensate the peak demand. (2) Rationalization of Fuel Consumption Utilization of solar thermal energy as a substitute energy for power generation saves fossil fuels and contributes for rationalization of fuel consumption. (3) Reduction of Green House Gas Emission As solar thermal energy is the cleanest renewable energy of zero emission, its utilization performs a reduction of greenhouse gas emission and meets with the policy of Kuwaiti government to promote measures against global warming. 1-4

5 (4) Formation of Electricity Market by Renewable Energy Kuwait is located at the most suitable area for utilizing solar thermal energy. With making the best of the advantage, it is possible to build a new ISCC power plant of a commercial size and specifications. The new ISCC power plant planned in this study, as the first largest-scale ISCC power plant in the world, creates a new power market based on a renewable energy in the region. (5) In Kuwait, solar thermal energy is inexhaustibly available for power generation, and it is possible to establish an energy-sustained power supply system depending on the inexhaustible energy. Point 5 Proposal of New ISCC Power Plant As a candidate site for the new ISCC power plant, Al-Abdaliyah was selected. In planning, Direct Normal Irradiation (DNI) of solar thermal energy at the site location was surveyed to determine its specifications. As a result, it was confirmed that the DNI is 2,033 kwh/m 2 /year on average which was good enough for applying the ISCC technology and the new power plant will generate maximum 60 MW electricity by installing 54 loops of solar collectors. On the other hand, the combined cycle island to be coupled with the solar island was properly decided with a capacity of nominal 220 MW; therefore, the ISCC power plant was specified with a total capacity of nominal 280 MW. As the ISCC power plant generates additional electricity of maximum 60 MW by utilizing cost-free solar thermal energy during daytime without consuming additional combustible fuel, the plant efficiency can be enhanced and the economics of electricity generation is improved. 280, , ,000 ST Output from Solar 160,000 CCPP Output ST Output without Solar 120,000 80,000 80,000 40,000 GT Output from Solar 1-5

6 The clean solar thermal energy never emits any greenhouse gas. While an ISCC power output increases during daytime owing to solar thermal energy, fuel consumption rates and CO 2 emission amount do not increase but remain at the same level. In Kuwait, as solar thermal energy is especially enormous in its amount and inherently in-exhaustible in its use, with taking the great advantages of meteorological conditions of Kuwait, solar thermal energy can be used as a new energy. Point 6 Economical Feasibility of New ISCC Power Plant In case of the new 280 MW ISCC power plant utilizing cost-free solar thermal energy together with firing natural gas, the fuel consumption on natural gas base is assumedly reduced by 21,100,000 Nm 3 /year in comparison with the conventional natural gas-firing GT CCPP owing to solar contribution. Furthermore, in case that the new 280 MW ISCC power plant using solar thermal energy as well as a liquid fuel (gas-oil), the fuel consumption on gas-oil base is assumedly reduced by 146,000 barrel/ year in comparison with the conventional gas-oil firing GT CCPP owing to solar contribution. Point 7 Green House Gas Emission by New ISCC Power Plant Again, in case of the new ISCC power plant which utilizes clean solar thermal energy, the greenhouse gas (CO2) emission is reduced by 51,880 CO 2 -tons/year in comparison with a conventional CCPP. Furthermore, in comparison with a conventional oil-fired power plant and a coal-fired power plant, CO2 emission by the new ISCC power plant is approximately *35% less than that of the oil-fired power plant and approximately 50% less than that of the coal-fired power plant. *Note: In case of generating electricity of the amount 1,560 GW/year(net)which is equal to the total annual potential output of the new ISCC power plant, the ISCC power plant emits less CO 2 than the conventional heavy-oil firing power plant and the reduced CO 2 emission amounts to 405,600 ton - CO 2 per year. Point 8 Environmental Aspect of New ISCC Power Plant Although application of the new ISCC power plant to Kuwait is advisable and recommendable, the following points must be considered cautiously. The government of Kuwait is actively promoting measures for preserving the environment. As substantial parts of the land are preserved as Environmental Preservation Area (particularly coastal areas of Arabian Gulf ), constructing a large scale industrial complex is not allowed therein. Therefore, in a detailed feasibility study as a next step, a due attention must be paid to environmental regulations applicable to the 1-6

7 areas when selecting the site and planning of the new power plant in order to minimize unfavorable influences to the environment. Point 9 Financial Viability of ISCC Power Plant The construction cost of a new ISCC power plant was estimated and the financial feasibility on BOOT basis by IPP for 25 years duration was assessed by using a certain financial model. As a result, under the condition that MEW purchases the electricity at a price of (US$ per kwh), the figures of Project IRR =12.68% and Equity IRR =19.46% will be attained, and the power project will be executable. The electricity price is nearly equal to the current power generation costs of MEW power stations, it is probable that the feasibility will become much higher when considering the advantages such as creating a substitute new energy, saving fossil energy sources, rationalizing fuel consumption rates, reducing CO 2 emission and so forth. Point 10 Recommendation of Next Steps The study has reached to a conclusion that a new ISCC power plant on BOOT basis of 25 years duration by IPP is technically and financially feasible as an effective measure for coping with the increasing power demand and fulfilling an essential requirement for greenhouse gas emission reduction. As this study is based on various assumptions, if it is decided to proceed further to realization of the new ISCC power project, it is recommendable to execute a further detailed feasibility study including the following items. (1) Site investigation including ground survey and infrastructure. (2) Determining detail specifications and estimating costs of construction, operation and maintenance of the new power plant. (An alternative plan is also recommendable for an ISCC power plant having the same capacity and one power train.) (3) Executing an environment assessment. (4) Determining a master schedule showing milestones and Kuwaiti government scope items. (5) Assessing of power demands and elaborating the gist of the power purchase agreement (PPA). (6) Organizing of an IPP body. (7) Authorizing IPP business by legislation. (As described in Chapter 9, Kuwaiti government has been becoming more active in legislating for allowing and encouraging foreign investments in favor of IPP projects in Kuwait.) 1-7

8 All rights reserved. The copyright of this material is held by the Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry (METI). Reproduction of all or part of this material without express permission of the copyright holder is strictly prohibited. The Japan External Trade Organization (JETRO) was commissioned by METI to produce this material. Japan External Trade Organization (JETRO) Industry and Technology Division Industry and Technology Department Ark Mori Building 6F, Akasaka 1-chome, Minato-ku, Tokyo, JAPAN TEL: FAX: