Re-Thinking Obrenovac Lignite Complex

Transcription

1 Re-Thinking Obrenovac Lignite Complex UNECE Ad Hoc Group of Experts on Coal in Sustainable Development Seventh Session Geneva, 7-8 December 2004 By Aleksandar Kovačević

2 Comparisons of HDI and energy indicators for selected countries / regions and appropriate indicators for Serbia and Montenegro TPES/ Elec. TPES / TPES / CO HDI GDP Consump. 2 / CO 2 / CO 2 / Pop GDP TPES Pop GDP (PPP) / Pop Toe/capita Toe/ US$ Toe/ US$ PPP KWh / capita (t CO 2 / toe) (t CO 2 / capita (kg CO 2 / 95 US$) CO 2 / GDP (PPP) (kg CO 2 / 95 US$ PPP) World 0,722 1,64 0,29 0, ,36 3,88 0,69 0,56 OECD 0,905 4,68 0,19 0, ,35 10,99 0,45 0,50 Argentina 0,849 1,54 0,21 0, ,04 3,14 0,42 0,30 Ireland 0,930 3,89 0,13 0, ,88 11,20 0,38 0,39 Hungary 0,837 2,49 0,45 0, ,22 5,53 1,00 0,48 Costa Rica 0,832 0,90 0,23 0, ,38 1,24 0,32 0,14 Latvia 0,811 1,82 0,65 0, ,68 3,06 1,09 0,43 Russian 0,779 4,29 1,65 0, ,45 10,50 4,02 1,63 Federation Bulgaria 0,795 2,43 1,49 0, ,30 5,59 3,43 0,87 Macedonia 0,784 1,28 0,53 0, ,29 4,21 1,74 0,75 Georgia 0,746 0,46 0,92 0, ,55 0,71 1,42 0,29 Azerbaijan 0,744 1,43 3,10 0, ,26 3,22 7,00 1,20 Iran 0,719 1,86 1,08 0, ,69 5,01 2,92 0,91 Tajikistan 0,677 0,49 1,16 0, ,59 0,77 1,85 0,70 China 0,721 0,90 1,02 0, ,70 2,42 2,75 0,65 Serbia & Montenegro 0,68 0,74 Sources: UNDP HDR 2003, IEA Key World Energy Statistics 2003 Unsustainable energy efficiency and competitiveness 1,5 1,8 0,96 0, ,94 4,43 2,83 1,16 2

3 GDP and energy consumption in SCG Unsustainable % efficiency 120 trend 100 ENERGY CONSUMPTION GDP

4 Electricity Consumption in Serbia & Montenegro Unsustainable seasonal trends and households GWh 5000 electricity consumption Transmission Loses Large Industry. Pumps Consumption incl. Distr. Loses 4

5 City of Belgrade (1) City of Belgrade contains 4,1% of the area and cca 18% of population of Serbia and Montenegro without Kosovo. City consumes 24% of electricity in total while Belgrade households consume more than 26% of electricity consumed by households in Serbia. In addition to that, Belgrade households consume almost 50% of district heating services in the country. Over 33% of all motor fuels is being consumed in the City area. Unsustainable daily and seasonal demand peaks 5

6 City of Belgrade (2) When energy sector output is deducted, Belgrade area generates only 18% of GNP. More than 39% of companies is registered in the City employing more than 31% of total employment in Serbia without Kosovo. Over 37% of imports destine in Belgrade. Something about 40% of nominal profits is registered in the Belgrade area. Belgrade is essentially home for high margin low productivity entities. 6

7 Belgrade District Heating System Consumption area: About apartments with 13 million square meters of heated area More than 3 million square meters of business premises More than 2000 GWh heat energy delivered. About 2500 MW heat only boilers (HoB) installed capacity including 18 plants and 98 boiler installations. About tons of mazut (heavy fuel oil) equivalent consumed per winter, 80% of which from natural gas and 3% from lignite. 7

8 8 Capacity utilization of less than 1000 hours a year and about 140 kwh consumed per square meter per winter at average temperature +4,6 Centigrade for less than 5 Euros per square meter per year can hardly sustain

9 Belgrade District Heating System Obrenovac Belgrade pipeline 9

10 High households electricity demand over Winter season driven by insufficient DH services (more than half customers maintain electricity heating devices for security while 17% actively supplement) and low marginal cost of electricity against fuel wood. Unsustainable situation not likely to disappear by simple rise of electricity tariffs 10

11 Obrenovac Lignite Complex TPP Obrenovac A TPP Obrenovac B TPP Kolubara A TPP Kolubara B, under construction HoB Plant Vreoci Lignite drying facility, Vreoci Open pit lignite mines Field D, Field B, Tamnava East and Tamnava West See 11

12 Obrenovac A (2x210MW+ 4x309MW), view from Belgrade downtown Photo: A. Andjic from Stuck in the Past UNDP,

13 Obrenovac Lignite Complex About 80% of lignite production About 50% of electricity More than 50% of coal for retail market About 60% of emissions Less than 40% of EPS workforce About 3% of district heating services (City of Belgrade DH system more than 38% of DH services in Serbia) 13

14 City of Obrenovac with DH network 14

15 TPP Kolubara B kit 15

16 Field D panoramic view 16

17 Lignite drying facility in Vreoci village 17

18 jul sep nov Jan Planned and Actual Coal Output jul sep nov Jan-01 mar may jul sep nov Jan-02 mar may jul sep nov Jan-03 may 000 tona Kostolac ostv. plan Kolubara ostv. plan Overburden removal in open pit coal mines Diesel Consumption (minimal requirement 1100t per month) Jan-00 mar may jul sep nov Jan-01 mar may jul sep nov Jan-02 mar Tons sep nov Jan-01 mar may jul sep nov Jan-02 mar may jul sep nov Jan-03 may Period Kolubara Kostolac jul Jan-00 mar 000 m3 cvrs.m Kolubra ostv. Kostolac ostv. Jan-00 mar may

19 Specific Consumption of Coal kj/kwh TENT A TENT B Kolubara Morava Kostolac A Kostolac B Year 19

20 Specific Consumption of Mazut 600 kj/kwh TENT A TENT B Kolubara Morava Kostolac A Kostolac B Year Tons Total Year 20

21 Equivalent utilization of coal fired units during TENT A 1 TENT A 2 Hours Year TENT A 3 TENT A 4 TENT A 5 TENT A 6 TENT B 1 TENT B 2 Morava A 1 Kostolac A 1 Kostolac A 2 Kostolac B 1 Kostolac B 2 21

22 Functioning Plants are bound between one lignite supplier and fluctuating electricity market with unfavorable seasonal characteristic Households consumption with its peak demand and probability of outages in Obrenovac prevent better valorization of hydro resources. Part of peak demand met by Belgrade DH system that creates strain on natural gas network Risk of lignite quality fluctuation and financial liquidity constraints prevent sulphur remediation 22

23 Composition of electricity generation by coal fired units 100% Kost ola c B 2 Kost ola c B 1 80% 60% 40% 20% 0% Averge Standard Ye a r Kost ola c A 2 Kost ola c A 1 Morava A 1 Koluba ra A 5 Koluba ra A 4 Koluba ra A 3 Koluba ra A 2 Koluba ra A 1 TENT B 2 TENT B 1 TENT A 6 TENT A 5 TENT A 4 TENT A 3 TENT A 2 TENT A 1 23

24 Overall use of available time and outages per sort for major thermal units 100% Time 80% 60% 40% 20% Other outages Generator outages Turbine outages Boiler outages Planned outages Externalities Mazut shortage Coal shortage Cold reserve Production 0% Year 24

25 Environmental Impact within Obrenovac Air shed About tons of particulates, mt of SO x and mt of NO x. Impact to underground and surface waters including Sava river. Over 5 million tons of ash a year deposited to land fields along Sava river. Unsustainable cumulative process 25

26 Comparison with commercial lignite fired power plant that operates more hours a year Greece Obrenovac Solid particles <50 mg/nm mg/nm 3 SO mg/nm mg/nm 3 NOx mg/nm mg/nm 3 Sources: Externe, EPS 26

27 Soil acidification in Serbia throughout Obrenovac air shed Harmful impact to agricultural land complicates over time Source: Soil Institute, Belgrade, Serbia, ground sampling 27

28 International donors are shifting from preventing further deterioration of services to turn key investments in chosen facilities. Weak domestic management (no strategy and policy, lose of human resources, no least cost plans ), neglect of good practices (Kyoto and Aarhus conventions, UNECE guidelines, CDM mechanism), accountability and transparency (no energy balances ) and lack of complementary investments limit achievable outputs below commercially viable levels. Potential drain of resources that might be available for development and stuck with unsustainable patterns. 28

29 No cost effective and sustainable solution available within conventional development paradigm and introverted industry 29

30 The Case for Biomass EBRD consultant estimates that over 21 million tons of agriculture biomass per year were available in Serbia and Montenegro (excluding Kosovo) average in that included: maize, wheat, soybeans. Over tons of sugar has been produced in Average wet energy content were more than 30% higher per unit mass than the best domestic lignite. 30

31 The Case for Biomass Over 80% of available biomass is produced in Vojvodina and Belgrade region where over 1,2 million hectares of flat agricultural land is covered with over 1500 km of navigable channels and rivers, over 1000 km of railways and 8000 km of roads. More than 1 million tons of municipal waste is being produced annually in the same area. Over 2/3 of available energy is being consumed in the same area. Most of biomass is produced in Autumn and available during the winter when energy is most required. 31

32 Waterways in Vojvodina / Belgrade Area Obrenovac 32

33 The Case for Biomass Additional Remarks Major thermal power plants and refineries are located at major waterways: Danube and Sava rivers Fleet of barges, pusher tugs and self propelled cargo ships is readily available and supported by eight shipyards that use to be components of the most competitive Serbian industry from 1960 s till now. Despite unprecedented water infrastructure less than 1% of land is covered by watering systems while agricultural product per hectare dropped to ½ from its 1980 s levels. 33

34 The Case for Biomass: Ownership and Markets Biomass is the only available domestic fuel whose owner is known in every single case. Mercantile Exchange in Novi Sad is well established with tradition and skills. Market services (transport, terminals, handling, collection) are available from private providers and supported by industry with international reference. Growth potential is inherent and based on research capacity (Universities, Institutes, engineering companies, consultants), tradition and experience. 34

35 35

36 Rethinking Obrenovac Complex (1) Retire Obrenovac A1 and A2, Kolubara A1- A4 and Kolubara A5. Close down Vreoci HoB Plant and lignite drying facility Increase utilization of remaining units Result: Decrease of specific lignite consumption and emissions 36

37 Rethinking Obrenovac Complex (2) Introduce biomass for co-firing in Obrenovac A3-A6, B1 and B2 Introduce coal quality management Introduce natural gas as start up fuel Introduce imported low sulphur hard coal to support fuel quality Introduce lime from nearby mine into boilers to control SOx emissions Maintain level of employment in the complex while increasing productivity 37

38 Thermal Power Plant Obrenovac B 2x620 MW View from Sava river The most successful plant in the country that might become commercial generator by using 9.3 million tons of lignite, >2.8 million tons of biomass, > tons of hard coal and some natural gas to generate cca 8.7 TWh of electricity a year. 38

39 Rethinking Obrenovac Complex (3) Utilize waste heat for drying biomass Add seasonal heat storage to allow load shading (electricity / heat) during summer season and cover peak heat demand during winter Add gas engines as mechanical drives for pumps decrease plant internal electricity consumption and increases electrical output flexibility Add 140 MW combine cycle unit to flat natural gas load diagram and provide additional flexibility, start ups and reliability 39

40 Rethinking Obrenovac Complex (4) Utilize waste heat to Belgrade district heating system, provide heat to Obrenovac and Lazarevac and cover expected growth of these heating systems Provide summer heat utilization option for CCGT, waste to energy and peak shaving plants (distributed generation based on existing infrastructure) in the City of Belgrade Add a fuel wood drying facility to utilize fuel wood from land re-cultivation and put a price cap to fuel wood market in the region while providing cleaner fuel to suburban areas. 40

41 Heat utilization concept at Obrenovac A3-A6 41

42 Dedicated bridge and pipelines route from Obrenovac A to Belgrade 42

43 Rethinking Obrenovac Complex (5) District heating services likely to be reliable and capable to cover load fluctuations at low cost. Peak demand GWt and total winter demand about 3 TWh. Offsets a need for natural gas underground storage at fraction of investment cost. Allows commercial utilization of existing natural gas infrastructure. Supply of dry fuel wood during cold days at regular prices likely to remove incentive for electrical heating. Considerable fraction of cold days electricity peak load will be covered by this improvement in the quality of services 43

44 Heat handling details: heat storage, heat transfers and heat pumps Obrenovac A Ostruznica New Belgrade Tamnava East 44

45 Improvement potential: Lignite Decrease lignite use in TPPs for over 40% and eliminate lignite use in urban / suburban areas. Stabilize lignite production from viable pits to 17 million tons a year for next 20 years. Delay new less viable open pits. Use remaining life of TPPs and mining machinery in productive way. Cope with lignite quality fluctuations. Allow time and machinery to focus on land recultivation and use of resulting biomass. 45

46 Improvement potential: Biomass Remove 5 million tons of agriculture biomass that are currently burned at fields. Provide new market to farmers, improve security and competitiveness Improve utilization of existing fleet and infrastructure Open new investment opportunities in shipping while increasing useful life of the fleet Provide cost effective export transport capacity for agriculture Provide opportunity for lower quality agriculture land 46

47 Improvement potential: TPPs Better utilization of boilers and higher efficiency Fuel and supplier diversification and fuel flexibility Diversification of output (heat / electricity), better load flexibility and diversification of customers Improved environmental impact at low investment cost Extended useful life for the largest units Better market positioning 47

48 Improvement potential: Environment Particulates and SOx within prescribed limits while NOx emission level will depend on further investment No lignite burning in urban / suburban areas and low efficiency devices Decrease natural gas, heavy fuel oil and lignite use in the City of Belgrade Half ash output to amount that can be utilized via cheap waterborne transport provided at site. Might facilitate cost effective bioremediation of devastated agriculture land. Decrease biomass burning at open fields 48

49 Financial Summary (Same maintenance, operation and workforce costs. No effects from carbon credits. No full effects from environmental improvements and no political risk costs. Avoids investments in environment, some stranded costs, new open pits, gas storage, new HoB plants and new TPP) Investment costs including water and gas pipelines, biomass storage, handling and burning system, river terminals, heat storage, civil works, pumps and combine cycle power plant estimated to $530 million. Benefits including sale of heat, additional electricity from efficiency improvements, cost reduction from replacing lignite by biomass, sale of fuel wood and reduction of environmental costs estimated to over $120 million a year. At long term lignite prices, long term biomass prices, given DH prices. 49

50 Options for the Future IGCC based on biomass and lignite gasification using biomass terminals, supply and storage as well as electricity and civil infrastructure. Solar thermal and geothermal heat pumps coupled with seasonal heat storage, biomass drying and heat transmission system To cover stable heat and growing electricity demand Sufficient viability to cover decommissioning and reforestation Sustainable Industrial Cluster 50

51 Acknowledgements: Institutions and individuals that contributed to this exercise: Krsto Vukovic (TPPs), Rade Milojevic (DH), Branislav Adjanski (natural gas), Tom Burke (mines), Lazar Tadic (biomass), Serbian Chamber of Commerce, Institute for Public Health, Forestry Institute, Mining Institute, Institute for Urbanism, Soil Institute, Faculty of Agriculture and UNDP. 51