Historical Discontinuities within Coal Gasification Technology as Precursors for Future Developments

Transcription

1 Historical Discontinuities within Coal Gasification Technology as Precursors for Future Developments PS Baumann Sasol-Lurgi Technology Company (Pty) Ltd. Gasification Technologies Council San Francisco October 2005

2 Presentation overview Introduction Theoretical Framework Assessing a coal revival Conclusion

3 An energy landscape in flux

4 Transitions anticipated Marchetti, C From Carbon to Hydrogen: An Ecological Breakthrough via Large Energy Infrastructure. Austria: International Institute for Applied Systems Analysis.

5 Coal has many applications..

6 Questions.. Is the apparent global revival in coal reflected in the dynamics of coal gasification technology? Is the technology relevant? What were the drivers for historical discontinuities within the adoption of the technology? Ephemeral or sustainable? Are these drivers present in current developments? Where are the current markets? Where are the next developments expected to originate from? Where are the future opportunities?

7 Presentation overview Introduction Theoretical Framework Assessing a coal revival Conclusion

8 The history of coal. Coal used in China as early as 1500 BC Wood shortages in England & France enabled first transition Increased demand fueled mining development Mining required improved haulage Advent of steam engine Coal fueled industrial revolution Century of King Coal Introduction of crude oil & natural gas Internal combustion engine annexes transportation market Natural gas becomes dominant space heating fuel Coal today has only two primary markets Electricity production Steel Industry DAEMEN, J.J.K History of Coal Industry. Elsevier Encyclopedia of Energy vol. 1.

9 History of Gasification London Town Gas First pressurized gasification patent Cryogenic Air Separation Sasol I Sasol II Sasol III Cheap Oil s Higman, C. & Van der Burgt, M Gasification. United States of America: Elsevier.

10 Assessing a coal revival Sassin, W., Hoffmann, M. & Sadnicki, M Medium-term Aspect of a Coal revival: Two Case Studies. Laxenberg: International Institute of Applied Systems Analysis.

11 Assessments model. Raw material trends Consumption trends Technology Trends S-curve analysis Identify discontinuities Historical driver assessment Extended IIASA model Forward looking assessment Case Studies: Emerging China Lumbering India 1. Raw Material Trends Time 2. Technology Trends 3. Historical Driver Assessment Key Drivers 4. Forward-looking Assessment Key Drivers t 0 t 0 Time t 0

12 Presentation overview Introduction Theoretical Framework Assessing a coal revival Conclusion

13 Extended IIASA model.

14 Presentation overview Introduction Theoretical Framework Assessing a coal revival Conclusion

15 Results feedstock trends Coal consumption Global Coal Consumption, Million Short Tons Year Reference case High growth Low growth Energy Information Administration (EIA): Office of Integrated Analysis and Forecasting U.S. Department of Energy International Energy Outlook Washington DC, USA.

16 Global Gasification Technology Activities Results technology trend Coal gasification Number of Projects Year

17 Results historical drivers Key Driver Key Drivers from the South African Experience South Africa 1. Region should be a net importer of energy 2. Access to large reserves of low cost, low quality coal. 3. Location advantage close proximity to market 4. Existence of established coal infrastructure 5. Government incentives in support energy security and energy selfsufficiency Historical GDP growth ~ 2% Energy intensive economy ~ 1.14% of global energy consumption Produce only 42% of own daily energy requirements World s seventh largest coal producer P/R coal ~ 225 years P/R oil ~ 2.3 years P/R gas < 0 years High ash content coal Very low cost coal producer Major reserves in Mpumalanga, 150km from Gauteng Gauteng is economic centre of South Africa In excess of 500 kilometers from coastal port Fourth largest exporter of coal Government investment in Eskom coal infrastructure Well established mining and road / rail industry Isolation during Apartheid years Nuclear as alternative precluded due to political pressure Government provided incentives to establish Sasol as strategic objective

18 Results historical drivers Lessons from South Africa Key Drivers for Coal Based Energy System from the South African Perspective No 1 2 Extended IIASA Framework Energy Gap Attraction Potential of coal Key Driver / Enabler 1. Region should be a net importer of energy 2. Access to large reserves of low cost, low quality coal. 3. Location advantage close proximity to market. 4. Existence of established coal infrastructure 3 Socio-political drivers 5. Government incentives in support energy security and energy self-sufficiency.

19 Results current developments Key Driver Case Study 1: Assessment of Key Drivers in Chinese Context China 1. Region should be a net importer of energy 2. Access to large reserves of low cost, low quality coal. 3. Location advantage close proximity to market 4. Existence of established coal infrastructure Became net importer of oil in Requires equivalent imports of 5.56 mil bbl/day Expected to rise to more than 9.4 mil bbl/day by 2025 World s largest coal producer P/R coal ~ 111 years P/R oil ~ 20 years P/R gas ~ 46 years High ash content coal Natural gas more expensive than coal-derived gas Major reserves in North & West China North & West are targeted for major economic upliftment In excess of 500 kilometers from coastal port Coal accounts for more than 44% of GDP Thousands of mines Benefit of large scale, strategic infrastructure investment by government in major coal producing areas 5. Government incentives in support Energy security is top priority in current 15 year energy plan Economic Development Major Coal Reserves energy security and energy selfsufficiency Proven case studies of tax incentives to coal based ventures Governments seeks to protect coal industry as major employer Source: United States DOE: China Brief (2004:1)

20 Results forward looking perspective Key Driver 1. Region should be a net importer of energy 2. Access to large reserves of low cost, low quality coal. 3. Location advantage close proximity to market Case Study 2: Assessment of Key Drivers in Indian Context India All indigenous oil supplies due to be exhausted by 2012 without new discoveries Current imports 1.4 mil bbl/day Oil imports projected to be 3.5 mil bbl/ day by 2020 World s 3 rd largest producer of coal P/R coal ~ 236 years P/R oil ~ 18 years P/R gas ~ 30 years High ash content, low calorific vale coal already importing higher quality coal Most large reserves are inland in Bihar, West Bengal & Madhya Pradesh Major economic centers of New Delhi and Hyderabad are in close proximity 4. Existence of established coal infrastructure 5. Government incentives in support energy security and energy selfsufficiency Coal in industry already meets 66% of country s energy needs Established rail and road infrastructure Benefit of former colonial investment by Brittan New Singh administration has adopted strategy to pursue energy security Regional politics put external supplies at risk Governments seeks to protect coal industry is major employer

21 Current Sasol-Lurgi Activities. USA Coal Beneficiation Germany Liquid Fuels & Chemicals China SNG Reduction Gas IGCC Current SLTC Activities South Africa Liquid Fuels & Chemicals