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Techno-Economic Considerations When Using Low-Grade Coal for Power Generation

By Chudi Egbuna, MSc.Eng. (Mech.) Pr Eng., Parsons Brinckerhoff Africa

March 1, 2013

The use of low-grade coal is becoming synonymous with circulating fluidized bed (CFB) power plants. Although CFB technology may often be a better choice than pulverized coal technology, that is not always the case. Owners and developers need to consider several technical and economic factors before making this decision.

Courtesy: Cleco


Regardless of a power plant’s objectives or the relationship between a plant and an associated coal mine, the availability of a low-grade coal resource creates the possibility for a symbiotic relationship. In order to harness the benefits of such a relationship between power generation and coal mining, certain techno-economic considerations should be kept in mind.

Because the variables are numerous, a few clarifications are in order to start. In this article, “low-grade coals” refers to lignite and subbituminous coals with a calorific value (CV) of less than 18 MJ/kg (7,725 Btu/lb) and ash quantities of greater than 40% by weight. These coals are further characterized by varying/inconsistent volatile matter (VM), high inherent moisture, high sulfur, and a low Hardgrove Grindability Index (HGI).

Steam Pro and Steam Master proprietary software (from Thermoflow Inc.) were used to generate some of the data used in this article’s charts and table. Efficiency, coal consumption, and capital expenditure (CAPEX) graphs assumed a 300-MW single-reheat subcritical steam cycle. The graphs only indicate the relationship among CAPEX, plant efficiency, coal consumption, and CV for this power plant design specification. What’s more, a power plant’s economic viability depends on several project-specific factors such as plant CAPEX and operating expenses (OPEX), the availability of a favorable power purchase agreement (PPA) and coal supply agreement (CSA), transmission infrastructure, coal and limestone costs, water costs, labor costs, and so on.

This article considers only plant CAPEX and OPEX as major factors contributing to power plant economic viability. Power plant OPEX constitutes variable and fixed operation and maintenance costs (such as coal, limestone, fuel oil, water, and labor). The OPEX discussion is limited to the cost of coal, including transportation, as a major contributor to power plant operating costs. Power plant and coal mine relationships and their interactions with CAPEX and OPEX depend on the specific circumstances of a project, which can be numerous. As a result, the described relationships and interactions have been limited and simplified somewhat.

Plant Technology

Subcritical power plants are known to achieve efficiencies between 30% and 36% on average, while supercritical and ultrasupercritical power plants can achieve efficiencies up to 40% and 45%, respectively. The CV of the coal generally affects the plants’ ability to achieve these efficiencies in that the lower the coal CV, the less likely a plant will operate in the higher regions of its efficiency class. This is especially true when a plant has not been designed to burn a specific grade of coal. To maximize a power plant’s potential to utilize low-grade coal, plant technology should be selected that is least likely to be affected by coal quality.

Most of the technologies used in thermal coal power generation are independent of the coal being used. The main technologies of concern are boilers, their associated fuel-handling and -processing equipment, and their emissions control technology.

Boiler Technology. Generally, a conventional pulverized coal (PC) boiler will function properly, provided there is minimal deviation from the range of coal specification for which it was designed. Significant variations in coal characteristics in PC boilers such as VM content are dangerous and could lead to tube rupture and boiler explosions. Arch-fired PC boilers by Foster Wheeler have been developed to address low-volatile coals but not a wider range of VM coal feed for a specific design. Figure 1 depicts the relationship between PC and circulating fluidized bed (CFB) boilers and coal grade.

1. Combustion characteristics. A conventional PC boiler will function properly, provided there is minimal deviation from the range of coal specification for which it was designed. Source: Adapted from S.J. Goidich, “Supercritical Boiler Options to Match Fuel Combustion Characteristics,” Foster Wheeler North America, 2007

Varying and inconsistent coal types can be processed into an acceptable fuel by several available coal beneficiation processes, in which case a PC boiler can be used, even for low-grade coals. However, where minimal downstream coal preparation is available, the CFB boiler is generally more capable of handling coal quality inconsistencies. Although CFB boilers are capable of handling a wider range of fuels by virtue of their fuel firing/coal combustion system, they are limited by their thermal design to a specific range of fuel. For this reason, multifuel combustion or cofiring with dual fuels such as biomass and coal in CFB boilers is not always achievable.

An important aspect of boiler choice is the auxiliary power consumption associated with fuel processing and emissions control. In PC boilers that use mills to grind coal, this is important from a fuel processing viewpoint. Generally, higher plant auxiliary loads result in lower plant efficiency. The finer pulverized coal required for a PC boiler results in higher auxiliary load requirements and lower plant efficiency. Therefore, for a specific plant design, a lower HGI will result in higher auxiliary power to achieve the required coal fineness and, consequently, a lower overall plant efficiency. CFB boilers, on the other hand, do not require fine coal, and so a PC plant’s grinding mills are replaced by crushers in CFB plants, which reduce coal processing auxiliary power consumption requirements (see table).

Power distribution summary. The first two data columns illustrate typical auxiliary and miscellaneous loads as a percentage of total auxiliary load required by a PC and CFB plant of the same capacity burning a low-grade coal with an HGI of 50. The last two columns illustrate a decrease in sulfur removal–related auxiliary power requirements to 13% and 6%, respectively, for the CFB and the PC plant. Source: Chudi Egbuna

Should the coal HGI decrease for the PC plant, there will be a consequent increase in auxiliary power requirements and a decrease in plant efficiency. This is not the case with CFB plants, which are less sensitive to coal HGI.

Where low-grade coals with high sulfur content (>1% sulfur by weight) are being used, the auxiliary power requirements related to sulfur removal in CFB and PC plants are negatively affected, the consequence being a reduction in plant efficiency. In CFB plants, this increase in auxiliary power consumption is experienced in ash handling due to the increase in sorbent requirement for desulfurization and a consequent increase in bottom ash mass flow. In PC plants, this increase in auxiliary power consumption is experienced at the desulfurization equipment. Desulfurization accounts for 15% and 13% of the total auxiliary and miscellaneous loads for the table’s specific CFB and PC plants, respectively.

The far right columns of the table illustrate similar CFB and PC plants using low-grade coal but with sulfur content less than 1%, and show a decrease in sulfur removal–related auxiliary power requirements to 13% and 6% for the CFB and PC plant, respectively. This reduction translates into higher efficiencies in both plants. Note that the single largest auxiliary power requirement in all conventional Rankine cycle steam plants is from the boiler feedwater pumps. Therefore, although the auxiliary power requirements for mills/crushers and sulfur removal are important in the choice of boilers, they account for a small percentage of overall plant auxiliary power requirements and have marginal impact on overall plant efficiency.

Emissions Control. For power plant projects requiring World Bank (WB) financing or financiers and for host countries requiring adherence to WB standards, proper emissions control equipment capable of achieving the prescribed emissions limits must be installed. PC boilers require additional equipment in the form of flue gas desulfurization (FGD) scrubbers to achieve WB emission limits on SOx. In CFB plants, this can be achieved with in-situ capture by the direct addition of limestone into the boiler furnace without the need for additional equipment. Sulfur content alone does not determine the grade of the coal, as some higher-grade coals exhibit higher sulfur contents than lower-grade coals. High sulfur content is an indicator of the coal grade and affects plant performance, as discussed previously. Regardless of the coal grade, the SOx capture methods for CFB and PC plants remain as introduced above.

NOx control in PC plants can be achieved using selective catalytic or selective noncatalytic reduction (SCR/SNCR) equipment and low-NOx burners. CFB plants inherently operate below temperatures at which NOx is typically formed (1,500C). The lower operating temperature of CFB plants is also ideally suited for the in situ capture of SOx. The low operating temperature of CFB boilers is usually sufficient for non-degraded airshed situations; however, in degraded airshed situations, SCR/SNCR may be installed to achieve the prescribed NOx limits.

Particulate matter (PM) control in both CFB and PC plants is identical and requires the use of electrostatic precipitators (ESPs) or baghouse fabric filters. Some low-grade coals exhibit high silica and alumina content in their ash, which increases ash resistivity, thus reducing the PM collection efficiency of ESPs. Low-sulfur coals also exhibit high ash resistivity and may necessitate the use of baghouse fabric filters. For CFB plants with in-situ SOx removal, the use of ESPs is not recommended. Baghouse fabric filters are therefore the preferred PM control technology as they are unaffected by ash resistivity.

Generally, if a coal mine can ensure a coal specification within a suitable range for a PC plant over the life of the plant (approximately 30 years), PC technology can be used. Achieving this range will normally require more downstream preparation (beneficiation) of the coal feedstock, especially if the coal supply consists of discards from coal mining. Where securing this range cannot be ensured, and where the range of coal feedstock is likely to be inconsistent and varied, or if the coal mine is unwilling to invest in beneficiation, then a CFB plant is the better choice. Most often, where discard coal is the source of feedstock, CFB plants are preferred.

Project Economics

Because low-grade coals have low energy content, larger quantities will be required to achieve a certain power plant output than would be required using higher-grade coal with higher energy content. The farther away the power plant is from the mine(s), the greater the fuel OPEX, especially where low-grade coals are used. Up to a 40% increase in boiler coal consumption can be required by decreasing the utilized coal’s CV from 20 MJ/kg to 14 MJ/kg. This could translate into significant coal transportation costs and, consequently, a higher OPEX.

Where a power plant’s owners intend to source from a single mine, that plant can be designed for the specific low-grade coal being supplied. When a power plant is not at a mine mouth, it may be worthwhile to improve the coal quality and thereby lower the cost of transportation to minimize coal OPEX. For a fixed power plant capacity and distance from a coal mine, a lower grade of coal at a lower price will incur higher transportation costs because of the higher tonnages to be transported. A better quality coal at a higher price will incur lower transportation costs because of the lower tonnages to be transported.

Where a power plant’s owners intend to source low-grade coal from multiple mines, the coal qualities could be similar or different. Sourcing coal from mines that are significantly distant from one another or on different coal seams typically means that coal blending will be required to achieve the coal specification for which the plant is being designed.

Power Plant–Coal Mine Dependencies

The following coal mine and power plant project relationships or dependency scenarios could exist.

The Power Plant Is Solely Responsible. In this scenario, responsibility for the power plant’s economic viability rests solely on the plant. The coal mine is not necessarily an exporter of coal or a supplier of coal for power generation, and the power plant decides what quality and price are needed. Because lower coal quality often implies a lower coal price, building a power plant designed to burn low-grade coal while maintaining acceptable plant efficiency may result in better plant economic viability than building a power plant to burn coal requiring greater OPEX. Figure 2 illustrates the relationship among CAPEX, efficiency, and coal CV for CFB and PC plants.

2. Showing Improvement. The percentage change in CAPEX and efficiency with calorific value (CV) for typical CFB and PC plants is illustrated. In general, the screening curves assume that as the efficiency of the plant increases with increasing CV, the CAPEX decreases (see Figure 4). For example, for a hypothetical CFB plant, a CV of 14,000 kJ/kg corresponds to an efficiency of 31.6% and CAPEX of $2,320 for a baseline design. If the quality of the fuel were improved to 21,210 kJ/kg, then the efficency increases 6%, to 33.5%, and the CAPEX decreases 15%, to $2,022/kW.  Naturally, the baseline design CAPEX depends on many site-specific design features as well as the contracting methods and equipment suppliers. Source: Parsons Brinckerhoff Africa

In both the CFB and PC plants, as the coal’s CV improves, CAPEX decreases and efficiency increases. This may be attributed to smaller boiler plant and equipment, smaller bulk material-handling infrastructure, and less auxiliary power consumption. An increase in CV, however, implies an increase in coal costs. The overall coal OPEX (cost at source plus transport costs) will depend on project specifics with respect to proximity of the power plant to the coal mine(s).

Viability Rests Partly with the Mine. In this scenario, the power plant’s economic viability rests slightly on the mine, in that it is in the mine’s interest to provide the power plant with as high a coal grade as it can, because the plant is the primary source of its revenue. Here, additional capital investments for beneficiation may be considered to attain the quality required by the power plant while achieving the required coal qualities for export. This implies that cost of the coal to the power plant (OPEX) may increase while some savings in power plant CAPEX may be achieved. This arrangement could lead to better overall economic viability for both the power plant and coal mine, assuming that both are owned by the same entity.

No Incentive for Beneficiation Equipment. This scenario is similar to the first scenario above in that responsibility for the power plant’s economic viability rests solely on the plant. The difference is that no incentive exists on the part of the coal mine for beneficiation equipment investment, and the low-grade coal is often a byproduct of the export coal beneficiation process. The power plant therefore must be designed and optimized around the low-grade coal. In such situations, CFB plants often are preferred. The power plant CAPEX may be relatively higher, but the plant can operate efficiently with a lower OPEX and be economically viable.

Mine and Power Plant Have the Same Owner. This scenario is similar to the second one, in which viability rests in part with the mine; however, the coal mine is fully dependent on the power plant for its revenue. This is often a situation where the mine and power generation project are owned by the same entity. There is, therefore, a need to optimize the CAPEX and OPEX of both the mining and power generation projects. The capital investment required to develop a power plant is usually far greater than that required to develop an associated captive coal mine. Certain coal mine infrastructural costs may be added to the power plant. These added costs may have a negligible effect on power plant viability but a significantly negative impact on the coal mine’s viability. If the coal mine is producing predominantly low-grade coal, it may be advantageous to minimize any capital investments for beneficiation and design the power plant based on run-of-mine coal. In such situations, a CFB plant is preferred.

Coal Consumption

CFB plants with the same thermal duty as PC plants typically have higher coal consumption. This is due to the higher combustion efficiency of PC boilers. The ultrafine coal particles (around 200 microns in size) in the PC boiler provide a larger surface area for more efficient combustion compared to the larger coal particles (typically 6 mm) in CFB boilers. CFB plants are therefore designed to recirculate the unburned coal particles so that combustion efficiencies approach those achievable in PC plants.

This higher coal consumption accounts for the marginally lower efficiencies achievable in CFB plants. Figure 3 illustrates this difference with an increase in coal CV. The CFB plant exhibits 1% to 2% higher coal consumption than the PC plant.

3. Coal burn. The CFB plant exhibits 1% to 2% higher coal consumption than the PC plant for a given fuel CV. Source: Parsons Brinckerhoff Africa

This 1% to 2% increase in coal consumption represents about 1.2 tons/hour (t/hr) more coal for the CFB plant than is required for the PC plant, and it implies that CFB plants have higher coal OPEX than PC plants. However, this does not necessarily imply that PC plants are more economically viable. To explain this notion, Figure 4 illustrates the effect of coal CV on plant CAPEX for CFB and PC plants. The figure shows that for the same coal CV, the CAPEX of a CFB plant is less (for lower CVs, more so) than that of a PC plant. This remains the case up to higher coal CVs on the horizontal axis, where the CAPEX values intersect. The figure also illustrates that CFB plants are less sensitive to variation in coal quality (in this case coal CV) than PC plants.

4. CAPEX change. For the same coal CV, the CAPEX of a CFB plant is less than that of a PC plant. This normalized data is used in the efficiency and CAPEX screening curves illustrated in Figure 2. Source: Parsons Brinckerhoff Africa

Assuming a low-grade coal of 16 MJ/kg with a price of $30 per metric ton and an average power plant capacity factor of 90%, an increase in coal consumption of 1.2 t/hr over a 30-year plant life totals approximately $8.5 million. For this coal’s CV, the CAPEX of a CFB plant is about 3% less than that of an equivalent PC plant. In present terms, the calculated $8.5 million increase in coal OPEX is only a fraction of the present 3% CAPEX savings achieved in building a CFB plant that uses lower-grade coal.

Optimizing the Design

Low-grade coal can be used advantageously for power generation. Although CFB plants offer some operational flexibility with respect to coal, PC plants are also capable of utilizing low-grade coal profitably, depending on the specific circumstances of the project.

In practice, limitations exist on the amount of information available to a developer/owner at project conceptualization to perform studies. There also are limits on the feasibility studies that can actually be performed economically. The result of being unaware of techno-economic considerations early in the project development phase is often a suboptimal project. Though this may not be a fatal flaw, it may account for irrecoverable and substantial losses in profitability.

Finally, the use of low-grade coal is dependent on the specific circumstances of the power generation project; using higher-grade coal ultimately may be a better option for long-term plant viability and profitability.

Chudi Egbuna is a thermal-mechanical engineer for power generation and works for Parsons Brinckerhoff Africa.
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