Global Coal Developments and Climate Change Policy in 2012 and the Work of the IEA Clean

Coal CentreJohn Kessels

Senior Analyst

IEA Clean Coal Centre

Zimbabwe Coal Indaba30 March 2012

Johannesburg, South Africa

Introduction

Ø Who and what is the role of IEA Clean Coal Centre?

Ø IEA World Energy Outlook 2011 and implications for coal

Ø High efficiency low emissions (HELE) workØ IEA Clean Coal Centre workshops, conference

and reportsØ Increasing role of low quality coals

internationallyØ Conclusions

Organisation

Organisation for Economic Cooperation and Development

International Energy Agency

Implementing Agreements (40)Fuel cells, Motor fuels, Solar, Biofuels, Energy conservation, Wind

power etc

IEA Clean Coal Centre

IEA Greenhouse Gas R&D Programme

IEA CCC MEMBERS

Italy JapanRep. of Korea

UK

Xstrata

BHEL

Anglo American Thermal Coal

USA

S Africa

Netherlands Group

Austria

Canada

GermanyCEC

Beijing ResearchInst Coal Chemistry

Australia

Coal Assoc NZEletrobras Danish Power Group

SuekVattenfall

SchlumbergerBanpu

Poland

GCCSI

A source of unbiased information on the sustainable use of coal world-wide

Mission statement

IEA CCC will disseminate unbiased analysis and

information on the clean and efficient use of coal

worldwide according to a programme agreed with the

Membership.

Services will be delivered to governments and industry

through:

• direct advice

• review reports

• workshops and conferences

• facilitation of R&D

• provision of networks and

• web based instruments

www.iea-coal.org

CoalOnline

• Major undertaking providing World’s premier coal information resource – an encyclopaedia of coal!

• Series of modules or chapters based on IEA CCC reports

• Update of 1981 Chemistry of Coal Utilization

• Published on the Internet –website launched 2005 www.coalonline.info

• Project originally funded by US DOE

Reports completed in last 12 months

Market studiesGlobal perspective on the use of low quality coals Jan 11Prospects for coal & clean coal technologies in Ukraine May 11Prospects for coal & clean coal technologies in Kazakhstan Dec 11

Power generationUtilisation of low rank coals Apr 11Integrating intermittent renewable energy technologies

with coal-fired power plant Oct 11Coal propertiesOpportunities for fine coal utilisation Aug 11Expert systems and coal quality in power generation Aug 11

Reports completed in last 12 months (2)

Carbon abatementChemical looping combustion of coal Jan 11CO2 abatement in the cement industry Jun 11CCS challenges and opportunities for China Oct 11Pre-combustion capture of CO2 in IGCC plants Nov 11

Conversion & industrial useCoal-to-oil, gas and chemicals in China Feb 11Next generation coal gasification technology Sep 11

Emissions & ResiduesEfficiency and emissions monitoring and reporting Sep 11

Reports in draft

q Carbon management in emerging economies

q Cofiring high ratios of biomass with coal

q Legislation, standards and methods for mercury emissions control

q Non-greenhouse emissions from coal fired power plants in China

q Impact of international coal trade on domestic coal markets

Work in progress

CO2 emissions from future coal-fired plantTechnology status review – cofiring of secondary fuels with coalUnderstanding pulverised coal, biomass and waste combustion Coal resource utilisation Trace elements from coalCofiring high ratios of biomass with coalCarbon capture and storage – large scale demonstration updateUpdate on lignite firing Gaseous emissions from coal stockpiles Hybrid carbon capture systemsSustainability issues and public attitudes to biomass cofiringParticulate control - plant upgrade selection for poor quality coalRecent operating experience and improvement of commercial IGCC plant worldwideBest practice in upgrading & efficiency improvement for older coal-fired power plants

Global coal context

IEA WEO 2011

Ø In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher

Ø Coal – the “forgotten fuel” – has underpinned growth, but its future will be shaped by uptake of efficient power plants & CCS

Ø Power sector investment will become increasingly capital intensive with the rising share of renewables

Ø Despite steps in the right direction, the door to 2°C is closing

Global Context for Coal

Ø40% of the worlds power is generated from coal

Ø Very often the coal is indigenous, often poor quality – affects efficiencies

Ø About than 10% of coal used is traded internationally

Ø I.6 billion people have no access to electricityØ Shortage of water for cooling in some regions –

affects efficienciesØ China and India beginning to dominate as

global users, marginally interested in CCS

Fossil Fuel Reserves

COAL LASTS 119 YEARS

2x as long asgas (62 years)

3x as long as Oil (45 years)

• Abundant • Globally

distributed• Affordable &

stable in price

• Safe & reliable

Why is there confidence in coal?

• Coal remains a relatively stable commodity • and lowest price fossil fuel compared with oil and gas (even

when standardised to $/tce)• Current prices at 100-110 $/t still well above the cost of

production

0

50

100

150

200

250

300

350

400

450

500

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

US$

/tce

International fuel price comparison, US$/tce

Natural Gas average for EU CIF

Crude oil average for OECD CIF

Steam coal marker for NWE CIF

Coal’s Role and Technology Use

• Coal is still very much needed to tackle issues of energy security, providing electricity to meet a societies needs: it currently provides ~40% of electricity worldwide

• Pulverised Coal Combustion (PCC), represents about 98% of the total global coal-fired capacity

• Fluidised Bed Combustion, is about 2% of the total and growing

• Integrated Gas Combined Cycle (IGCC), relatively few power plants operating

• Coal is prominent in energy policy planning again in OECD countries and dominates energy supply in China, India and South East Asia economies

The world is building 220 new coal-fired stations

IEA CCC CoalPower Database (2010)• Globally, ~220 coal-fired stations were under

construction (or being repowered)• Totalling ~223,000 MWe (223 GWe)

Of which:• 58 GWe in China• 80 GWe in India• As well as 13 GWe in Indonesia, 16 GWe

Vietnam, and interest in smaller growth in Malaysia, Bangladesh, Pakistan, Philippines and Thailand

Modern coal efficiencies now regularly perform like old CCGTs

• In the 2000-10, the UK fleet of CCGTs averaged 45-47% efficiency

Coal plants designed to the highest standards ofefficiency and pollution control can achieve• Torrevaldaliga Nord (Italy) >44.7% (LHV)• Nordjylland 3 (Denmark) 47% (LHV)• Isogo 1 and 2 (Japan) 42% (LHV) achieving airborne pollution levels equivalent to amodern gas plant

Although modern CCGT remains unmatched at 60%

IEA WEO 2011: Fresh challenges add to already worrying trends

Ø Economic concerns have diverted attention from energy policy and limited the means of intervention

Ø Post-Fukushima, nuclear is facing uncertainty

Ø Some key trends are pointing in worrying directions:

Ø CO2 emissions rebounded to a record high

Ø energy efficiency of global economy worsened for 2nd

straight year

Ø spending on oil imports is near record highs

IEA WEO 2011: Emerging economies continue

to drive global energy demand

Growth in primary energy demand

Global energy demand increases by one-third from 2010 to 2035, with China & India accounting for 50% of the growth

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2010 2015 2020 2025 2030 2035

Mto

e

ChinaIndiaOther developing AsiaRussiaMiddle EastRest of worldOECD

IEA WEO 2011: Natural gas & renewables

become increasingly important

Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035

Additional to 2035

2010

World primary energy demand

0

1 000

2 000

3 000

4 000

5 000

Oil Coal Gas Renewables Nuclear

Mto

e

IEA WEO 2011: Coal won the energy race in the

first decade of the 21st century

Growth in global energy demand, 2000-2010

Coal accounted for almost half the increase in energy use over the past decade,with the bulk of growth coming from the power sector in emerging economies

Nuclear

0

200

400

600

800

1 000

1 200

1 400

1 600

Coal

Mto

e

Total non-coal

Natural gas

Oil

Renewables

The continuing importance of coal in world primary energy demand

0%

20%

40%

60%

80%

100%

Non-OECD OECD

All other fuelsCoal

Shares of incremental energy demand Reference Scenario, 2006 - 2030Increase in primary demand, 2000 - 2007

Demand for coal has been growing faster than any other energy source & is projected to account for more than a third of incremental global energy demand to 2030

Mto

e

0

100

200

300

400

500

600

700

800

900

1 000

Coal Oil Gas Renewables Nuclear

4.8%

1.6% 2.6%

2.2%

0.8%

% = average annual rate of growth

IEA WEO 2008

IEA WEO 2011: Asia, the arena of future coal trade

International coal markets & prices become increasingly sensitive to developments in Asia; India surpasses China as the biggest coal importer soon

after 2020

Share of global hard coal trade

0%

10%

20%

30%

40%

50%

60%

70%

2009 2020 2035

India

China

Japan

European Union

CO2 emissions growth the climate challenge (IEA WEO, 2011)

By 2035, cumulative CO2 emissions from today exceed three-quarters of the total since 1900, and China’s per-capita emissions match the

OECD average

EuropeanUnion

0

100

200

300

400

500

United States China India Japan

Giga

tonn

es 2010-2035

1900-2009

Cumulative energy-related CO2 emissions in selected regions

0

5

10

15

20

25

30

35

40

2010 2020 2025 2030 2035

Delay until 2017Delay until 2015

2015

Emissions from existing

infrastructure

The door to 2°C is closing,but will we be “locked-in” ?

Without further action, by 2017 all CO2 emissions permitted in the 450 Scenariowill be “locked-in” by existing power plants, factories, buildings, etc

456°C trajectory

2°C trajectory

CO2

emiss

ions

(gig

gato

nnes

)

What technologies will be used?

Conventional clean coal technologies

• Pulverised coal combustion (PCC)

• Circulating fluidised bed combustion (CFBC)

• Integrated gasification combined cycles (IGCC)

Future near-zero emission technologies - CO2 capture

• Systems based on combustion

• Systems based on gasification

• Other systems – e.g fuel cell cycles, hydrogasification, CO2turbines

both needed for first wave of ZETs plants

Total power generation capacity today and in 2030 by scenario

In the 450 Policy Scenario, the power sector undergoes a dramatic change – with CCS, renewables and nuclear each playing a crucial role

0 1 000 2 000 3 000

Other renewables

Wind

Hydro

Nuclear

Coal and gas with CCS

Gas

Coal

GW

1.2 x today

1.5 x today

13.5 x today

2.1 x today

1.8 x today

12.5 x today

15% of today’s coal & gas capacity

Today Reference Scenario 2030 450 Policy Scenario 2030

Average Annual Power Generation Capacity Additions in the 450 Stabilisation Case, 2013-2030

A large amount of capacity would need to be retired early, entailing substantial costs

22 CCS coal-fired plants (800 MW)

20 CCS gas-fired plants (500 MW)

30 nuclear reactors (1000 MW)

2 Three Gorges Dams

400 CHP plants (40 MW)

17 000 turbines (3 MW)

0 10 20 30 40 50 60

Other Renewables

Wind

Biomass and waste

Hydropower

Nuclear

Gas CCS

Coal CCS

GW

CCS an important technology

Power generation makes up 41% globalC02 emissions

2/3 of global power generation will stillcome from fossil fuel power plants in 2035

CCS is the only option that mitigates these fossil fuel emissions

IEAHigh Efficiency, Low

Emissions (HELE) Coal Technology Roadmap

(Work in Progress)To be published by IEA

c. July 2012

HELE Roadmap Rationale

Ø Coal-fired power plant build in China and India making the IEA’s 450 ppm scenario (2C temp rise by 2050) almost unattainable

Ø Whilst efficient there are no plans to incorporate CCS in the near or medium term – especially true in India

Ø SE Asia following an even less climate friendly path: many smaller units constructed for sub-critical operating conditions

Ø So best practice in terms of efficiency becomes relatively more important

Ø Clean air is also a driving force for improved design in many highly polluted urban locations

Ø Hence need for High Efficiency, Low Emissions (HELE) Roadmap for coal-fired power plant

Ø Energy Ministers from G8 countries at their June 2008 meeting in Aomori, Japan, declared their wish to have the IEA prepare roadmaps to advance innovative energy technology.

Ø HELE Coal Technology Roadmap will be part of the family of roadmaps published by the IEA since the first in October 2009.

High Efficiency, Low Emissions Coal Technology Roadmap

To date: • Biofuels• Energy Efficient Buildings• Carbon Capture and Storage• CCS Industrial Applications• Concentrating Solar Power• Cement• Electric & Plug-in Hybrid

Vehicles• Geothermal• Nuclear Power• Smart Grids• Solar Photovoltaic Power• Wind Energy

Content

Ø Milestones for the development of coal technologies for power generation to 2050

Ø Technical, financial, policy and other matters important to generation of electricity from coal

Ø Regional implications of this development pathway, particularly for major coal-using countries

High Efficiency, Low Emissions Coal Technology Roadmap

0

5

10

15

20

2010 2020 2030 2040 2050

Gt

CO2 1) Deploy USC/ A-USC and

retrofit to raise efficiency

4) CCS with low energy penalty

2) Close older existing coal plants 3) Replace coal plants by gas, renewables, …

Action items for CO2 reduction 1st step 2nd step

1st step (to 2030): 1) Deployment of USC/A-USC, 2) Closure of old plants, 3) Coal to gas/renewables

2nd step (beyond 2030):4) Deployment CCS with lower energy

penalty

USC and A-USC for new installation and retrofit will be largely deployed. Policies enacted to lead to closure of old existing plants. Replacement of coal plants by, eg gas and renewables to be promoted.

Following successful demonstration of large scale integrated plant and reduction of its energy penalty, CCS will be equipped for deployment in both newly installed and existing plants.

HELE Vision

Date ranges for technical developments(Draft – subject to change)

Technology 2012-2020 2021-2025 2026-2030 2031-2050PCC –bituminous coals

Commercial supercritical and USC plants; oxyfueldemos; R&D on A-USC

Commercial USC plants; commercial scale A-USC demo with CCS; supporting R&D; oxyfuelA-USC pilot/demo

A-USC commercial plants; oxyfuel A-USC demo

A-USC with full CCS commercially available, including oxyfuel

PCC – lignite Commercial supercritical and USC plants; lignite drying: 100% dry feed boiler demo and first commercial orders; oxyfuel demo; R&D on A-USC

Commercial USC plants with 100% fuel drying; A-USC lignite plant demos with lignite drying; oxyfuel A-USC pilot/demo

Commercial A-USC plants with 100% fuel drying; oxyfuel A-USC demo

Lignite A-USC incorpdrying fully commercially available with full CCS, including oxyfuel

CFBC Sales of commercial supercritical then USC CFBC boilers

Commercial USC CFBC A-USC CFBC commercial demo; A-USC oxyfuel demo; first A-USC commercial orders

A-USC CFBC with full CCS commercially available, including oxyfuel

IGCC Commercial plants with 1400°C-1500°C turbines; R&D on availability, low grade coals; pilot dry gas cleaning, non-cryogenic oxygen; dev of GTs

Commercial plants with 1600°C turbines for high hydrogen fuel for CCS capability; dry syngas cleaning; some non-cryogenic oxygen; supporting R&D

Commercial plants with 1700°C turbines for high hydrogen fuel for CCS capability; some non-cryogenic oxygen; supporting R&D

Commercial plants with 1700°C+ turbines for high hydrogen fuel with full CCS; non-cryogenic oxygen option

Data for hard coal-fired power plants from VGB 2007; data for lignite plants from C Henderson, IEA Clean Coal Centre; efficiencies are LHV,net

CO2 emission reduction by key technologies

Adoption of today’s best practice has the potential to reduce CO2 emissions from coal-fired power plants by around one third.

>2030

but deep cutsonly by CCS

Average worldwidehard coal

30.0%1116 gCO2/kWh

38%881 gCO2/kWh

EU av hard coal

45%743 gCO2/kWh

State-of-the artPC/IGCC hard coal

50%669 gCO2/kWh

Advanced R&DHard coal

gCO

2/kW

h

Latrobe Valley lignite

28-29.0%1400 gCO2/kWh EU state-of-

the-art lignite

43-44%

930 gCO2/kWh

55%

740 gCO2/kWh

Advanced lignite

IEA CCC Workshops and

Conferences

MEC - Mercury emissions from coal experts-only meeting

MEC1 Mitsui Babcock Glasgow May 2004

MEC2 CEA, Canmet Ottawa May 2005

MEC3 Nilu Polska Katowice May 2006

MEC4 NEDO, JCoal, METI

CRIEPI, U. of Gifu Tokyo June 2007

MEC5 HGCHT, T Wall Newcastle, NSW June 2008

MEC6 Jozef Stefan Inst Slovenia June 2009

MEC7 Strathclyde Univ Glasgow June 2010

MEC8 Dep’t Environment South Africa May 2011

Ø South Africa, 13-14 July 2011

Ø Excellent event, over 100 attendees, good programme

Ø Held in cooperation with Fossil Fuel Foundation and Eskom

Ø Opening address by Nobuo Tanaka, Executive Director, International Energy Agency

Ø 2 Keynote sessions; 20 Technical sessions

Ø 240 attendees from 32 countries

Ø ~100 Oral presentations

Ø ~50 Posters

CCT2013 in Thessaloniki, Greece, May 2013• Ash and slag• Biomass cofiring• Carbon capture and storage• Carbon capture solvents• Carbonate cycling and solid sorbents• Chemical looping combustion• Combustion• Gasification• IGCC and precombustion carbon capture• International and regional perspectives• Mercury and flue gas cleaning• Oxyfiring

IEA CCC reports

Country studiesLow value coals

Series of ‘country studies’

• indigenous energy resources (coal, oil, gas, nuclear, hydro, renewables) and the relative importance of each in the national economy

• coal production (types produced, status of national mining industry, and future prospects)

• coal imports and/or exports (coal types, scale, sources and locations)

• scale of national coal consumption and future prospects in all main market sectors

• environmental issues associated with the use of coal

• current deployment of clean coal technologies and future prospects in relevant market sectors; types of technologies being deployed or planned

• measures being adopted to encourage increased uptake of CCTs (funding programmes, energy policy, etc)

IEA CCC and low quality coals

Industry observers are convinced that the long-term future of coal-derived energy supplies will include the greater use of low rank and low quality coals, a trend that is already discernible in many parts of the world.

Growth in US production of subbituminous coal

IEA CCC reports on low value coals

Global perspective on the use of low quality coals• examines the global situation with regard to the

scale, location and major uses of low quality coals

Utilisation of low rank coals• Pulverised coal combustion plants• Circulating fluidised bed combustion power

plants• Gasification-based technologies• Drying of low quality coals• Upgrading of low quality coals• Coal cleaning

Lignite-fired power plants

Increasing use of low value coals

• half of the world’s estimated recoverable coal reserves comprise low value coals, mainly lignites, subbituminous coals, and high-ash bituminous coals

• steady decline in the quality of the coal produced • exhaustion of reserves of higher grade coals• many countries turning increasingly to the use of

indigenous reserves of lower quality coals, sometimes the only significant energy resource available

• low value coals can be mined relatively inexpensively via opencast techniques

• provide a secure source of energy• help reduce dependence on imported supplies

IEA CCC Members in 2010 for 1st Symposium

Proven reserves of lignite and subbituminous coals

Total world lignite reserves = 149,755 MtTotal world subbituminous coals = 266,837 Mt

Proven reserves Proven reserves of lignite +

subbituminous coals

Major Subbituminous Coal Producers

USA Subbituminous forms 37% of US demonstrated reserve base. Mainly in Montana

and Wyoming - Powder River BasinAustralia Deposits in Queensland, NSW, Tasmania, South Australia, Western AustraliaIndonesia Most deposits on islands of

Kalimantan and Sumatra. Mostly subbituminous(27%) and lignite (59%). Exports importantCanada Most subbituminous coal in

Western provinces

Upgrading of low value coals

Why upgrade low value coals? · to improve coal quality: e.g. reduced moisture content,

ash content and increased heating value· to suppress low-temperature oxidation/self-heating

during transport and storage· to improve the consistency of coal properties

How to upgrade?· washing· drying

· dry separation· ultra-clean coal processes· briquetting and pelletising

Lignite drying – Niederaussem K

Ultra clean coal – UCG Ltd Australia

Alternative utilisation of low value coals (1): coal-to-liquids

Existing and potential CTL projects

Location of worldwide UCG activities, inclusive of both past and present• UCG being considered particularly for utilising unmineable coal deposits and deeper seams

• To date, much UCG work has focused on lower rank coals

• Historically, major investigations undertaken in Russia and former USSR, Europe and the USA

• UCG technologies broadly comprise either Borehole or Man-made excavation

Alternative utilisation of low value coals (2): Underground Coal Gasification (UCG)

The Future

• Overall coal quality declining in many parts of the world• Continuing and growing dependence on low grade/rank coals

• Global lignite consumption forecast to continue increasing at ~1%/y• Especially important for power generation

By 2030, global coal production forecast to be 7 Gt/y

% electricity from lignite-fired plants

Conclusions• Coal will continue to play a key role in providing electricity

for emerging economies • Price of coal likely to increase due to demand and

shortage. Southern African countries will play an increasingly key role in supplying both steam and coking coal

• IEA WEO 2011 shows how coal won the energy race in the first decade of this century

• There are options to meet climate change policy requirements through first more efficient plants and later with CCS

• HELE roadmap will provide a guide for measures to be adopted to encourage increased uptake of CCTs

• Countries are likely to become more dependent on low quality coals

Thank you for listening

John.kessels@iea-coal.orgwww.iea-coal.org.uk