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Coal: the critical challenge for major power operators

Desperately seeking  "clean coal"

From "Les Echos", October 30th.

Improving yields,  capturing and storing carbon and reusing CO2  are the various means set up by industry to improve coal performance as the sector does not intend to  give it up at all.
Indeed, coal is abundant, easy to extract, protected from geopolitical issues through a balanced distribution across major regions: coal presents some advantages that are worth its shortcomings. Its main industrial use meets a  major demand however: 40 % of the world power comes from coal. According to the IEA, some 30% of global CO2 emissions come from coal used in the production of power and heat; that’s why industrials strive to produce "clean coal " for years.
In order to meet this target, the first technology consists in improving coal plants performances. Burning coal at higher temperatures (over 600°C) and pressure (up to 290 bar) improves the yield up to some points: more power for the same amount of coal. As such, CO2 emissions are reduced by 20% for every kilowatt per hour. Alstom has delivered a "ultra supercritical” power plant in Germany and another one in Malaysia, whereas EDF is building its own model in collaboration with Datang in China. Japanese companies, such as Mitsubishi or Toshiba represent the other major sponsors of this trend. "This technology hardly represents 10% of this new market, but this market share is expanding quickly," says an industry expert.
However, this is far from enough: even with the best available technology, CO2 emissions per kilowatt hour are still two times higher than gas emissions. Another concept has emerged: "capturing" and storing carbon. The technological building blocks for the emergence of CCS ("carbon capture and storage") are mostly known, and dozens of pilot experiments were conducted with demonstrators featuring a reduced size. But the technology has not found its market as the price of carbon remains low and no power producer has shown an immediate economic interest in limiting its emissions. "A CCS project costs €1 billion at least, so only major power operators can afford it. But as oil price slumps and as power markets remain bearish, the appetite is not too much there, "highlights a leading industrial actor. "In Europe, we don’t need CCS anymore: every country  comes out of coal, including banks, on behalf of socially responsible investing," says Emmanuel Fages, project manager at Roland Berger office. In India and China, the development of this technology will depend on its profitability,  compared with other energy sources (solar, gas ...) and this profitability may be impacted by international pressure on pollution issues weighing on these countries.

"Ultimate Waste"

Moreover, CO2 storage becomes a thorny issue. If injected under pressure, CO2 becomes viscous and may leach into porous rock beds of sedimentary basin or salt cavities. "We are at the stage of modeling and implementing some drivers, but injecting CO2 sounds like a ultimate waste, comparable to a nuclear one," said Emmanuel Fages. "We made a capture driver, we saw that its implementation was difficult and expensive. And I question the actual feasibility of storing because you need to transport this CO2 afterwards, ", observed Claude Nahon, director of sustainable development of EDF Group recently. Nevertheless, Alstom hopes to take an investment decision next year for White Rose, a  CCS project to be developed on a commercial scale, in collaboration with British Oxygen in the UK; this project includes  a North Sea storage site, with a guaranteed price mechanism to ensure its funding.
An alternative to CO2 storage consists in using it in recyclable products, CCS thus becoming CCU ("carbon capture and use"). As such, CO2 may profit to oil producers who strive to improve oil recovery rates in the deposits, but also it may profit to chemists in urea production integrated in fertilizers production. Air Liquide, the industrial gas producer, will inaugurate a CO2 liquefaction unit in the coming days, whose production will be resold to industrials. "The use of CO2 may be interesting, but such use won’t be comparable to mass storage. It's more a financial opportunity rather than a remedy to climate change, "said Francois Kalaydjian from IFPEN (Oil French Institute- department of sustainable energies).
Veronique Le Billon, Les Echos
(in French)