THE DEVELOPMENT OF A VERSATILE IGCC TO MEET THE UK MARKET

Transcription

1 THE DEVELOPMENT OF A VERSATILE IGCC TO MEET THE UK MARKET Rob Smith, Brian Keenan, David Hanstock, Progressive Energy Peter Whitton, Progressive Energy Gasification Technologies 2002 San Francisco, California October 27-30, 2002

2 Presentation UK Market Context The Flexible IGCC Commercialisation in a UK Environment Summary

3 Development of a Versatile IGCC UK Market Context

4 UK Market Context: May you live in interesting times. Dash for Gas Environmental Concern Privatisation Energy Prices NETA Mergers & Acquisitions Kyoto Energy Review

5 UK Market Context: May you live in interesting times. Privatisation: Power pricing competition

6 UK Market Context: Historical Background Pre 1988 State owned integrated utility (CEGB) responsible for electricity generation, transmission and supply throughout UK 1988 Announcement by UK Government of intention to privatise electricity industry 1990 CEGB divided into separate entities covering England & Wales: - Generation (National Power, PowerGen & Nuclear Electric) - Transmission (National Grid, initially owned by Supply Companies) - Supply (12 Regional Electricity Companies) Generating / Supply companies prevented from cross-ownership, but for Scotland two integrated entities are formed (Scottish Power & Scottish Hydro-Electric) 1991 Initial Public Offerings in privatised entities Start of electricity trading through the Pool 1992/94 Period of relative stability as new market settles in 1994/95 Start of M&A activity with first hostile bid for a supply company 1995/2000 Increased M&A activity particularly with influx of American investors (most subsequently withdrawn) and relaxation of cross-ownership rules 2001 Introduction of New Electricity Trading Arrangements (NETA) to eliminate perceived weaknesses in the Pool system 2002 Continued M&A activity (PowerGen purchased by E.On while RWE purchases domestic business of National Power [Innogy]) UK Government Energy Review and Kyoto

7 UK Market Context: Power Price Trends / / / /94 $/MWh (Basis April 2001) 1994/ / / / / / / /02 Pool NETA

8 UK Market Context: May you live in interesting times. Privatisation: Power pricing competition Energy Review (February 2002): Need for large carbon emissions reduction Need to establish new sources of energy and energy conversion Recognition of cleaner solid fuel technologies Ratification of Kyoto Protocol (May 2002): Obligation to reduce emissions Further Shift in Generation Mix: Dash for Gas Impact of future plant retirements Ability of Renewables to cover future plant additions

9 UK Market Context: Generation Mix Coal Nuclear Natural Gas Oil Imports Renewables % 20% 0% 5% 2% 5% % 26% 37% 1% 3% 4% 2020? 5-10%?? 0%? 3% 20%?

10 UK Market Context: May you live in interesting times. Privatisation: Power pricing competition Energy Review (February 2002): Need for large carbon emissions reduction Need to establish new sources of energy and energy conversion Recognition of cleaner solid fuel technologies Ratification of Kyoto Protocol (May 2002): Obligation to reduce emissions Further Shift in Generation Mix: Dash for Gas Impact of future plant retirements Ability of Renewables to cover future plant additions Low Carbon Generation Development of CO 2 capture and sequestration technologies Potential H 2 economy

11 Development of a Versatile IGCC The Flexible IGCC

12 The Flexible IGCC: / Progressive Energy Major industrial gases company - most international presence Significant GW energy user Major on-site generator: 550+ MW of installed capacity Supply to and operator of gasification facilities Core competencies supplier of H2, CO, syngas and industrial gases; energy & process studies; plant optimisation; process engineering; plant operation Progressive Energy Specialist energy project development company Particular focus on IGCC power projects - unique in UK Formed in 1998 to progress the non-nuclear activities of Magnox Electric, the state owned electricity Generator Core competencies electricity and other energy markets; project concept definition; power project development

13 The Flexible IGCC: Flowscheme Raw Feed H 2 Co-products CO 2 Co-products / Sequestration Gasifier Raw Syngas Scrubber Pre Shift Heater Sour Shift IP Boiler N 2 Heater Deaerator IP Feed Heater LP Boiler AGR LP Steam GASIFIER BLOCK GAS CONDITIONING BLOCK Clean Syngas N 2 IP Feedwater LP Feedwater D/A Water Ash N 2 GTG NOx Control Steam O 2 Tonnage / Merchant Co-products ASU BLOCK ASU CCGT BLOCK Steam Turbine Generator HP Steam Hot Reheat Cold Reheat LP Steam Air IP Steam Condensate Cond Preheat Natural Gas Process Steam Electrical Power Gas Turbine Generator Heat Recovery Steam Generator

14 Technology Overview: Flowscheme Features Medium pressure quench gasifiers - matched to GT requirements - with sour shift Flexibility to include H 2 and / or CO 2 co-production as a later addition GT selection based on proven Frame F technology with capability to burn syngas and / or natural gas. Meets current UK environmental legislation. Has potential for economic carbon dioxide capture allowing sequestration and hence Ultra Low Emissions Proven triple pressure HRSG matched to GT, gasifier and fuel flexibility requirements

15 The Flexible IGCC: Typical Photomontage

16 The Flexible IGCC: Indicative Performance Operating Condition Gross / Net Power Gross / Net Efficiency Syngas without CO2 Extraction 517 MW / 450 MW 45 % / 39 % Syngas with CO2 Extraction 517MW / 405 MW 45 % / 35 % Natural Gas 406 MW / 394 MW 54 % / 52 %

17 Development of a Versatile IGCC Commercialisation in a UK Environment

18 Commercialisation in a UK Environment: Power Price Comparison Equity Return - % Baseload Electricity Price - $/MWh CCGT Base IGCC Optimised IGCC

19 Commercialisation in a UK Environment: Evaluation Base IGCC is more resilient to low electricity prices than CCGT, however both options require significantly higher power prices than current UK tax and support packages can optimise Base IGCC scheme and lead to competitive offering Current economics do not favour any new build, but modest power price increases would favour the Optimised IGCC Future CO 2 credits would further enhance case for IGCC

20 Development of a Versatile IGCC Summary

21 Summary UK electricity industry has undergone fundamental reform There is low expectation for new new builds in the near future The market fundamentals have moved towards IGCC. UK recognises need for future deep cuts in CO 2 and IGCC is ideally positioned for cost-effective, pre-combustion CO 2 removal Opportunity to move towards a hydrogen economy The flexible IGCC takes advantage of proven technology and fuel flexibility to give excellent operational / environmental performance A commercially competitive application of the flexible IGCC is possible, that represents lowest cost future new-entrant

22 THE DEVELOPMENT OF A VERSATILE IGCC TO MEET THE UK MARKET Thank you for your attention