China s coal gasification development and deployment programme Dr Geoffrey Morrison

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1 China s coal gasification development and deployment programme Dr Geoffrey Morrison Programme Manager IEA Clean Coal Centre

2 China s energy and environmental initiatives Five-year Planning Cycle for National Economic and Social Development. This provides: guidelines, policy frameworks, and targets for policy-makers at all levels of government top down overall objectives and goals related to economic growth and industrial planning in key sectors and regions

3 11th Five-Year Plan ( ) Key targets were to meet China s increasing energy demand, while simultaneously reducing pollution and ensuring a stable, reliable and clean energy supply To achieve a 20% reduction in energy consumption per unit of GDP and 10% reduction of major pollutant (sulphur dioxide) Improve coal power plant efficiency through the introduction of advanced high-efficiency units and the closure of small inefficient power plants Shut-down of obsolete, small steel-making and cement production units

4 12 th Five Year Plan ( ) Cut Energy consumption per unit of GDP by 16% from 2010 levels; Cut SO2 and NOx emissions by 8% and 10% respectively from 2010 levels; Cut CO2 emissions per unit of GDP by 17% from 2010 levels; Non-fossil fuel use to account for 11.4% of primary energy consumption; Expenditure on research and development to account for 2.2% GDP; and Cut water consumption per unit of value-added industrial output by 30%.

5 New coal chemical industry supply chain

6 Low and high value end products Low value products Higher value options

7 China s coal to chemicals development and deployment programme Aim is to establish a modern coal chemical industry include the upgrade of those demonstration projects that offer higher energy conversion efficiency a suitable geographical location, with both adequate suitable coal supplies and sufficient water availability offer prospects for extending the industrial chain to promote local economic and social development This will include a focus on the construction of projects for clean production, utilisation, processing and conversion of low-calorific-value coal

8 Phased development programme in line with the 11 th FYP ( ) Establish gasification technology to use coal as a feedstock for chemicals and fuels production Determine the technical viability of using gasification based coal conversion to produce both synthetic oil and gas, and to manufacture various chemical products (hydrogen and methanol) Assess economic viability of products from coal conversion technologies compared to imported alternatives

9 Wide range of coal gasification technologies being supplied in China by overseas vendors GE Energy Shell Siemens SES

10 Increasing use of domestic technologies also under way ECUST is the leading Chinese technology supplier, and has some 31 projects either operational or at the contracted design and construction stage. Now the 3 rd biggest gasifier vendor in the world Other Chinese suppliers include; TPRI H-TL Tsinghua U ICC-CAS MCSG Sedin

11 Phased development programme in line with the 12 th FYP ( ). Ensure coal to chemicals programme is in line with government goals to increase clean energy use and cut CO 2 emissions. Establish very large scale coal to SNG processes and possibly scale-up various coal to oil technologies. Apply large scale coal gasification for the production of olefins as a means to establish higher value-added markets for plastics and fibres. Continue assessment of other coal to chemicals techniques, especially coal to glycol and coal to aromatics processes. Limit any expansion of the lower end coal to chemicals processes and weed out those companies and industries with low production efficiencies and high energy consumption.

12 Indicative economic assessment for coal to oil products in China Indicative economic assessment Input coal price (US$/tonne) Crude oil production costs (US$/barrel) ICL DCL China Development Bank

13 Environmental considerations Chinese applications Standard coal consumption Water consumption tonnes/tonnes ICL CO2 emissions Coal to olefins Coal to ethylene glycol tonnes/1000 Nm3 Coal to SNG

14 Coal to SNG Some 14 coal gasification projects are under construction in China through to 2016 Total potential annual SNG output of just over 21 billion m 3 pipeline quality gas Target capacities are billion m 3 /year, although the timelines for these subsequent expansions have yet to be defined

15 Owner Coal to SNG projects for construction in China through 2016 Location Annual output (billion m3) 1 st phase Target Schedule 1st phase operations Guanghui Xinjiang Qinghua Xinjiang Datang Inner Mongolia Xinwne Xinjiang Huineng Inner Mongolia Huaneng Xinjiang Guodian Inner Mongolia Shenhua Inner Mongolia Sinopec Xinjiang Guanghui Xinjiang CPIC Xinjiang CNOOC Shanxi Hongshenggi Gansu Datang Liaoning

16 Coal to olefins Sixteen methanol-to-olefins (MTO) and methanol-topropylene (MTP) projects are due to come on stream by 2015, with a total annual production capacity of 10 Mt First four are commercial prototype demonstration units, and have commenced operation Product quality is at the lower end of the market range. Further development work is needed to introduce more highly efficient catalysts and to ensure operational stability

17 Non-power coal gasification projects in China at end of April 2013 Supplier Coal gasification projects Operational Design/construct Total GE Shell Siemens Lurgi variants SES (U-Gas) KBR (TRIG) ECUST TPRI HT-L Tsinghua U ICC-CAS MCSG Sedin Total

18 CCS opportunities for the modern coal to chemicals sector (end 2011)

19 Export opportunities and related initiatives Gasification technology exports and licenses Major engineering, procurement and construction role being established overseas Initiatives underpinned by the China Development Bank

20 Conclusions China offers a template for large scale coal to chemicals, gaseous and liquid fuels deployment, for all stages of the industrial development cycle. It has shown what can be achieved from a technical standpoint while demonstrating, as technology familiarisation has been achieved, that there are various routes that can then be followed to ensure that acceptable economic performance becomes a key factor. Water availability and the need to limit CO2 emissions will have to be taken into account, if sector is to continue to grow Scope for early CCS demonstrations on larger coal conversion units There will also be a strong market for the cost-effective deployment of water-saving and wastewater treatment technologies. Such activity will provide a significant stimulus to GDP growth at a time when export opportunities in other sectors may not be as strong as in the previous FYP period.

21 Thank you for your attention!