2.11 REALIDAD NACIONAL E INSEGURIDAD CIUDADANA

Coal-fired steam-electric power plants - in this Chapter denoted as ‘Pulverised Coal-fired power, PC’ - are a mature technology, in use for over a century. The basic components of a pulverised coal-fired power plant include coal storage, handling and preparation section, a boiler, and a steam turbine-generator set. Coal is ground to fine particles, blown into the boiler, and the heat generated by burning the fine coal particles is used to drive the steam turbine-generator. Ancillary equipment and systems include flue gas treatment equipment and stack, an ash handling system, a condenser cooling system, and a switchyard and transmission interconnection. Environmental control has become increasingly important and since the 1980s, PC plants are typically equipped with low-NOx burners, Flue Gas Desulphurisation (FGD), filters

for particulate removal - generally Electrostatic Precipitators - and closed-cycle cooling systems. Selective Catalytic Reduction of NOx (SCR) is becoming increasingly common.

Beginning in the late 1980s, the economic and environmental advantages of gas-fired Combined Cycle (CC) power plants resulted in that technology eclipsing pulverised coal-fired power technology for new resource development in North America and European countries. In the last few years, however, there is a switch back from gas-fired plants to new coal-fired power plants.

Experience curves and coal-fired power plants

Three studies describe learning effects for pulverised coal-fired power plants or coal-fired boilers:

• Ostwald and Reisdorf (1979) analyse learning effects for a relatively large number of coal- fired power plants in the USA, from 1957 to 1976.

• Joskow and Rose (1985) analyse the technological, regulatory, and organisational factors that have influenced the cost of building pulverised coal-fired power plants over a 25-year period.

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• Yeh and Rubin (2007) review the history of PC power plants, with a specific focus on the technological progress of PC boiler technology over the last century.

The first study, Ostwald and Reisdorf (1979), focuses on 25 coal-fired plants in the USA with a cumulative capacity of approximately 10 GW. The authors report a Progress Ratio of 92-93% for the specific investment cost of these power plants for the entire period of the analysis, viz. 1957- 1976. They note that environmental regulation since 1973 has incurred significant costs, in particular due to desulphurisation equipment. If these additional costs are assumed to occur from 1973 onwards, the aforementioned PR of 92-93% may be disentangled in a PR of 87-93% in the period 1957-1973 and a PR of 99-113% for the period after 1973.

Joskow and Rose (1985) make an analysis of the specific investment costs of approximately 400 coal-fired power plants in the USA in the period 1950-1982. They distinguish technological change on the one hand and economies of scale on the other hand. For economies of scale, a PR of 82% is determined, but the authors note that the exploitation of scale economies requires a switch from (moderate-scale) sub-critical PC plants to large supercritical PC plants. This technological change in itself has a cost penalty (PR>100%).

Table 3.9 Overview of experience curves for Pulverised Coal-fired power plants/boilers Source Cost factor

analysed PR Period Region N a R2 Data qual. Notes Ostwald and Reisdorf, 1979 Specific investment cost 92-93% 1957-

1976 USA ~ 7 0.35-0.90 I Focused on specific investment cost of 25 PC units with a cumulative capacity of approx. 10 GW Joskow and

Rose, 1985 Specific investment cost, scale economies

82% 1950-

1982 USA N/A N/A II An attempt is made to distinguish between technological change and, e.g., scale economies; PR 82% for scale economies, is technology specific Specific investment cost, technological change >100% 1950-

1982 USA N/A N/A II For large coal-fired plants, supercritical PC becomes state-of-the-art; the aforementioned PR of 82% can only be achieved by switching from sub- critical to supercritical PC, resulting initially in a cost penalty (PR>100%) Yeh and Rubin, 2007; Rubin et al, 2007 Specific investment cost of sub- critical PC boiler 94% 1942-

1988 ~ 9 0.71 I Higher-efficiency supercritical coal units have not been built in large numbers in the USA

Operation and

maintenance cost of PC plants

92% 1929-

1997 USA ~ 15 N/A I Operation and maintenance cost adjusted for changes in GDP (GDP price deflator), real wages (wage and salary for utilities employees, and plant utilisation

a N = number of doublings of cumulative capacity.

I Data based on prices of coal-fired boilers for a long period of time.

II Data based on disentanglement of different factors governing cost reduction (Joskow and Rose, 1985). III Data based on scarce evidence or assumption.

Sources: Ostwald and Reisdorf, 1979; Joskow and Rose, 1985; Yeh and Rubin, 2007.

Yeh and Rubin (2007) note that other studies with regard to learning for PC power sometimes lack sufficiently long timeframes. They analyse inter alia learning effects with regard to the specific investment cost of sub-critical pulverised utility boilers in the timeframe 1942-1988, and

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find a PR of 94% (Figure 3.21). They also determine a Progress Ratio of 92% for the operation and maintenance costs of PC plants in the period 1929-1997 (Figure 3.22). Table 3.9 shows a number of generic parameters of the experience curves in these studies. The data refer to prices of, e.g., pulverised coal-fired power plants or coal-fired boilers built in the USA.

Figure 3.21 Experience curve for sub-critical pulverised coal-fired boiler. s Source: Yeh and Rubin, 2006.

Figure 3.22 Experience curve for operation and maintenance cost of PC power plants. Source: Yeh and Rubin, 2006

Yeh and Rubin (2007) also determine a PR of 103.8% for the generating efficiency of PC plants, based on the U.S. plants from 1920 to 1985, supplemented by data of PC plants in the rest of the world. Finally, Rubin et al. (2007) present inter alia experience curves for the specific investment cost of Flue Gas Desulphurisation (FGD) and Selective Catalytic (NOx) Reduction

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Economics

In a balanced energy generation portfolio comprising nuclear, coal, gas and renewables, coal has a number of attractive features (Internet Source 26):

• Coal is easy to store and transport and can be sourced from diverse stable suppliers worldwide;

• Pulverised coal-fired power stations offer unique load carrying flexibility, particularly useful in meeting peak demand, and in compensating for the intermittency of renewables;

• Coal fired generation (including emission control equipment to the latest stringent standards) is one of the lowest cost options for electricity generation.

According to DoE (1999), plant costs are dependent on technology, time frame, and site. Increasing environmental regulations cause plants to add more equipment (e.g., FGD systems), lose potential capacity, and lose efficiency. Advanced technologies may have a higher capital cost, but may reduce operating costs, thereby reducing production cost. The specific investment cost of a large pulverised coal-fired power plant - the twin-unit 1,560 MW pulverised coal-fired power plant constructed by RWE at the Eemshaven, Netherlands- is approximately € 1,410/kW (RWE, 2007b). According to RWE, the global boom in coal-fired generation equipment orders, rising material costs and margin improvement by suppliers have forced new-build power station costs up by as much as 30% since 2005 (RWE, 2007c).

Policy measures

Pulverised coal-fired power technology is among the most mature power generation technologies (Jamasb, 2007). In IEA countries, public R&D budgets are available for further research and development with regard to coal-fired power. However, public funds are generally used to further novel technologies like Integrated Gasification Combined Cycle (IGCC) plants, rather than pulverised coal-fired power. IGCC plants offer prospects for CO2 (Carbon) Capture

and Storage (CCS), as the fuel gas is available at a higher pressure and hardly diluted by nitrogen compared to flue gas of a PC plant. Therefore, IGCC technology receives incentives from R&D funds in various countries.

Reasons for cost reductions / bottom-up assessments

In the past, cost reduction for PC power plants was generally related to technological changes and scale economies, viz. larger capacities. Technological changes in the past have significantly contributed to higher generating efficiencies, which currently amount to approximately 45%. Whereas technological development used to be limited to national boundaries in the period until the 1950s, after that improvement of the pulverised coal-fired power technology became more and more a global phenomenon. Nowadays, so-called Ultra Supercritical Coal-fired (USC) power plants are not only built in Europe, but also in other industrialised countries and China.

Future scenarios and cost reduction potentials

There are a few options for further technological development, e.g.:

• Ultra-supercritical steam parameters for PC boilers and steam turbines, as investigated in the framework of the so-called EU project ‘AD 700’ (Internet Source 27). One of the objectives of the project is a generating efficiency in the range of 52-55% (Figure 3.23). • Pressurised pulverised coal combustion, an innovative long-term option (Förster, 2007).

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Figure 3.23 Efficiency improvements of pulverised coal power plants, 1975-2000. Sources: Otter, 2002; Lako, 2004.

Cost reduction of pulverised coal-fired power plants will almost certainly be incremental. Only in case of a change of technological concept, e.g., a switch to IGCC or pressurised pulverised coal combustion, more substantial learning effects may occur, be it from an initially elevated level of specific investment costs (compared to the mature PC technology).

There are only few dedicated scenarios for the deployment of pulverised coal-fired power technology in the next decades (DoE, 2002), as it is one of most widely utilised power generation technologies. Alternative technology like IGCC may deserve attention with regard to learning effects and cost reduction potential. In some cases, countries analyse the effects of R&D policies with regard to advanced power generation technologies, among which USC power plant.

Lessons for policy makers

Pulverised coal-fired power generation is a mature technology that will show incremental technological improvement. There are a few options for breakthroughs, e.g., IGCC and pressurised pulverised coal combustion. Also, combination with Carbon Capture and Storage (CCS) is closely related to technological development of coal-based power generation. Therefore, publicly financed R&D will remain important in order to achieve targets with regard to greenhouse gas emissions reduction, partly based on these innovative technologies.

General discussion

It has been noted that pulverised coal-fired power stations offer load carrying flexibility, particularly useful in meeting peak demand, and in compensating for the intermittency of renewables. This means that coal-fired power plants, based on pulverised coal technology or IGCC and without or with CCS, will remain important for many industrialised and developing countries. Coal-based power generation still offers a lot of scope for technological innovation, which is why this kind of technology may also be included in international agreements on greenhouse gas emissions reduction: technological innovation and technology transfer (Jansen and Bakker, 2006).

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3.2.3 Carbon dioxide capture and storage (CCS) technologies