Japan mulls thermal efficiency target rules
Japan is considering revising regulations for a minimum heat efficiency for the country's thermal power generation plants, to accelerate the phasing out of ageing and inefficient coal-fired capacity.
The working group to mull regulatory measures to phase out inefficient coal-fed plants by 2030, created in August under the trade and industry ministry (Meti), has proposed to set a new thermal efficiency target exclusive to coal-fired power plants although details of efficiency levels and collateral measures remained unclear.
Several commission members have voiced support for the proposal. But there are also concerns that this could result in over-regulation.
Meti has defined the minimum heat efficiency levels for coal, LNG and oil-fired power plants. The level should be at 41pc for existing coal-fired power plants and 42pc for new plants. Efficiency for LNG-fed plants should exceed 48pc for existing plants and 50.5pc for new facilities, while oil burning is encouraged to have at least 39pc efficiency for both existing and new plants.
But the current energy saving law lumps all thermal power units, only requiring electricity producers to achieve an average 44.3pc of heat efficiency. This means a power firm could achieve the target by using advanced, highly efficient gas-fired unit even if it continues using an inefficient coal-fed unit.
The working group has pointed out the current law does not necessarily guarantee the effectiveness of improving coal-fired power generation efficiency. Only 24 of 46 firms that operate coal-fired power plants have so far achieved 41pc efficiency, according to the Meti survey.
Meti in July proposed starting discussions to scrap inefficient coal-fired power plants, to help the country meet a 2030 goal to cut greenhouse gas emissions by 26pc from 2013-14 levels. The phase-out is targeted at units that are not equipped with the latest clean coal technology such as coal gasification combined-cycle and ultra-super critical infrastructure. This implies Japan may scrap or mothball 25.3GW of inefficient coal-fired units, or about half of the existing coal-fired capacity.
Japan's power sector aims to reduce carbon dioxide emissions by 35pc from 2013-14 levels to 0.37 kg/kWh by 2030, by complying with an energy saving law. Meti also requires power firms that sell more than 500 GWh/yr of electricity to observe a "sophisticated method of energy supply structures" law, to have a minimum 44pc of their fuel from non-fossil sources by 2030, to achieve the carbon dioxide reduction goal.
Carbon dioxide emissions by the country's power firms totalled 345mn t in 2019-20, equivalent to 0.444 kg/kWh, according to preliminary data released by the electric power council for a low carbon society, a group of 62 Japanese power producers. The 2019-20 emissions were lower by 7.3pc from 372mn t, or 0.463 kg/kWh, in 2018-19.
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Malaysia sets up cross-border renewable energy exchange
Malaysia sets up cross-border renewable energy exchange
Singapore, 17 April (Argus) — The Malaysian government is creating the Energy Exchange Malaysia (Enegem) to allow for cross-border "green electricity" sales to neighbouring countries, starting with pilot sales to Singapore. The auctioning process for cross-border sales of clean electricity will begin with a 100MW pilot run utilising the existing connection between peninsular Malaysia and Singapore, announced Malaysia's Ministry of Energy Transition and Water Transformation on 15 April. The auction will be open to renewable energy bidders in Singapore that have import licences issued by Singapore's Energy Market Authority. This pilot phase of 100MW is to "make sure that it works, and then if it does work, hopefully it can be expanded to a gigawatt level," said the chairman of the Energy Commission Malaysia Rashdan Yusof at the Atozero conference in Singapore on 17 April. "On the demand side, there will also be an auction for suppliers of renewable energy into the exchange," said Rashdan, adding that the exchange will aggregate all the renewable energy sector participants, predominantly in the solar sector, and then provide the energy to Singapore, depending on requirements such as load factors, among other things. Malaysia aims to catalyse the development of the Asean regional electricity grid and cross-border energy trading. There are "tremendous discussions" on future interconnections, said Rashdan. Malaysian state-owned utility TNB has signed six agreements with utility counterparts in Thailand, Vietnam and Laos, and has two feasibility studies planned with utilities in Indonesia and Singapore, he said, without providing additional details on these deals. There is great willingness to establish this regional power grid but one of the obstacles is that "each jurisdiction has different energy pricing systems," said Rashdan. There is a significant difference in energy pricing between Singapore and Malaysia, for example, as energy is largely subsidised in Malaysia. "These subsidies, I find, will be a core impediment in terms of the free flow of electrons," he added. "The energy exchange can level the economic and commercial playing field, so that money can flow. Once the money can flow, the electrons will flow. That's the aim of the energy exchange, to have that transparency and market-based system, without the distortion of price subsidies." There are a number of bilateral power agreements in the region, with some even crossing multiple borders, such as the Laos-Thailand-Malaysia-Singapore Power Integration Project, which connects renewable power supplies from Laos to Singapore. But Asean countries need to scale up to multilateral power trading to fully benefit from regional grid interconnectivity. Regional grid optimisation in Asean could cut the net present cost of full decarbonisation by 11pc from $7.2 trillion to $6.5 trillion, according to international classification society DNV's Asia-Pacific regional director for energy systems Brice Le Gallo last year. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BHP to expand gas-fired West Australia power station
BHP to expand gas-fired West Australia power station
Sydney, 17 April (Argus) — Australian resources firm BHP plans to increase power generation at its 154MW Yarnima gas and diesel-fired facility near the Pilbara iron ore mining hub of Newman in Western Australia (WA) state. The proposal, according to documents filed with WA's Environmental Protection Authority (EPA), will see output increase by 85MW to a total of 239MW through gas reciprocating engines and associated infrastructure with up to 120MW of nominal new capacity to be built in stages. Peak scope 1 greenhouse gas (GHG) emissions from the project are predicted to be 480,030 t/yr of carbon dioxide equivalent (CO2e), while scope 3 emissions related to supplying the gas are expected to be 37,260t CO2e/yr. Power demand at BHP's iron ore operations in the Pilbara is forecast to increase from 150MW currently to 1GW by 2040, as the company reduces its GHG emissions through electrification of its rail and mining fleets and must balance renewables with firmed generation. The iron ore mining sector is a large-scale producer of Australian GHG emissions through its Pilbara-based operations. Displacing liquid fuels such as diesel, which Australia consumes at an average rate of around 500,000 b/d by electrifying processes and switching to lower CO2-emitting sources such as gas, is expected to trend as Australia's largest polluters meet government mandates . Yarmina currently runs a 35MW diesel-fired temporary power station as part of its installed capacity. Canadian energy firm TransAlta earlier this year lodged plans to build a new 150MW gas-fired power station for BHP's Nickel West operations in WA's Northern Goldfields region. WA's domestic market is likely to be short on gas later this decade despite being Australia's largest LNG export state, the Australian Energy Market Operator (Aemo) has warned in its Western Australia Gas Statement of Opportunities. Aemo's modelling released last year shows the closure of WA's state-owned coal-fired power stations will drive increased requirements for gas-fired electricity generation in the next decade. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
AES closes 276MW coal-fired power in Chile
AES closes 276MW coal-fired power in Chile
Santiago, 16 April (Argus) — US utility AES has disconnected its two Norgener coal-fired plants from Chile's national grid, removing 276MW of combined capacity almost two years earlier than scheduled. The plants in northern Chile's Antofagasta region were originally due to close on 31 December 2025. AES has 3.4GW of generation assets in Chile of which now more than half are renewable, it said. The early closure of Norgener 1 and 2, which began operations in 1995 and 1997, respectively, is part of the country's commitment to close all coal-fired plants by 2040. To date, it has closed 11 coal-fired plants with combined capacity of nearly 1.7GW, or 30pc of the 5.5GW in operation in 2019 when the phase-out plan was announced. A further four plants with a combined capacity of 873MW are scheduled to close in 2025, according to the energy ministry. A public-private decarbonization working group is developing a roadmap through 2030 to speed up the closure of Chile's remaining coal plants. By Emily Russell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Ramaco adding production, sees market growth
Q&A: Ramaco adding production, sees market growth
New York, 16 April (Argus) — Randall Atkins is a founder and chief executive of metallurgical coal producer Ramaco Resources. He also has been involved in energy-related investment and financing activity for over 40 years. In this Q&A, edited for length and clarity, he discusses effects from the Francis Scott Key bridge collapse, his outlook for coal and the company's research projects. What effect has the Key bridge collapse and Port of Baltimore closing had on Ramaco and the US coal industry in general? Like most things of that tragic nature, it is going to take longer than everyone expects to actually solve the problem. I think where it is going to impact producers probably more is on the rails. There will be a need for...producers to rearrange stockpiles and to rearrange where they are going to try and ship, even at reduced levels. Particularly, CSX is going to have an immense logistical complexity to deal with over the near-term. We do not ship from Baltimore. We have not seen any problems, knock on wood, with our rail shipments post the incident. What are your long-term projections for metallurgical coal given expectations that low-volatile coal reserves will shrink in coming decades and the steel industry could be in oversupply? Low vol coal has traditionally been the highest priced coal and the dearest, if you will. High vol A coal has over the last few years grown in importance, and to the extent that there is any new increase in production in the US, it's high vol. What we perceive is that there is going to be a crowding in the high vol space. As a result, our increase in production is primarily in low vol. As far as the demand side is concerned, we do not believe that blast furnace steel demand is going to decline anytime soon. There's a lot of noise from the green community that hydrogen is going to replace coal in blast furnaces. We took some advice on that from the IEA…and when that question was posed (to IEA), the answer that was given was it would take about $1.5 trillion to build a pilot plant using hydrogen by 2035 and probably about another equal or greater sum to build a commercial facility by 2040. So, I don't lose a lot of sleep on the demand for coal for blast furnaces. What I do see shifting, however, is the US has held relatively steady at about 20mn short tons (18.1mn metric tonnes) of met coal demand over the last 10 to 15 years. The growth is clearly overseas, and the growth is clearly at the moment in Asia. When we started back in 2017, and 2018 was really our first year of production, we predominantly sold coal domestically; I think 80pc of our coal went to US steel mills. Now that is almost reversed. We're going to sell probably this year, 70pc overseas, and about a third or less domestically. With Europe moving towards electric arc furnace technology and significant new blast furnace capacity coming online in Asia, what kind of role will the US play as a coal supplier over the coming years? It is cheaper to use a blast furnace than electric arc. And the steel that they (Asian companies) mostly require is the heavier steel for cars and buildings and things of that nature. So, they have a bias towards blast furnace capacity. The US and Europe are very developed economies that are trying to go and wean away from coal, (while) the rest of the world is aggressively moving further into coal. People will shake their heads at the cost that European and American consumers will start to have to pay for that privilege. We see market growth is still there, but it's a different kind of growth. It will be more in the Asian markets, predominantly some in Europe, some in South America and Africa. The low vol coal demand in Asia is extremely strong because while they are able to buy high vol product from Australia very inexpensively, they do not have the low vol production. They need that to blend up to get the proper mix in their blast furnaces. There is a very good future for low vol, and that is the direction we are positioning ourselves. How confident is Ramaco about securing its investments in the longer run given the emphasis on ESG? What I see is sort of a dichotomy. In the thermal coal business, there's not a lot of investment in new mining there for the obvious reason that their customer base is declining. On the met side, it is a bit shortsighted from an investment standpoint because of the composition of the ownership of met coal companies. Virtually every major metallurgical coal producer except for us went through bankruptcy and post-bankruptcy proceedings. Their board composition became essentially distressed debt investors...Their interest was not developing a long-term coal company. Strategically their vision was: "How can we most quickly get money back out of that coal company?" We are certainly the only coal company that is doubling in size. We produced a little under 4mn st last year. We will be at about 4.5mn st this year. We can maybe go higher, depending upon the market. The market is not strong right now. The other issue (for coal producers) even when they weren't doing special dividends, is they've now shifted to doing large-scale share buybacks. You are starting to see the cost curve increase for most domestic coal producers. What you haven't seen, but I think you will probably find over the next probably 18 to 24 months, is you will begin to see depletion kick in. The amount of coal that they are able to produce from their existing operation will begin to decline. And that is strictly a result of not investing in new mine production. My approach was to kind of be a little bit of an outlier and then approach coal to products as an alternative use, certainly for thermal coal. And that, of course, brought us to rare earth (mineral extraction). Do you have funding for Ramaco's rare earth materials projects? Let me step back one step. We introduced the idea that we actually had rare earth (deposits) in May 2023….When we sent the samples to be tested, they tested them as if they were hard minerals. In other words, they did not combust off the organic material. What we have done since then, is we went back and we had samples that were probably 200-300 parts per million. From a commercial standpoint, we have kind of crossed the Rubicon that this is indeed sufficiently concentrated that it makes commercial sense. Now what we are doing is we are going through a process of further chemical analysis and testing to determine what is the best extraction and refinement technique. And the last point you raised was financing. We have a very nice growing mining metallurgical business, which can provide the funding to do whatever we want to do on rare earth. I am not too concerned about our financing capability. Any updates on your coal-to-carbon product projects ? We have looked at a number of different things with the national labs. We started looking at carbon fiber, which could be made from coal and we have got some patents around some very interesting processes. The areas that we are now focusing on...are using coal to make synthetic graphite. The other thing we are working on is using coal for direct air capture. We are considering going into a pilot phase sometime starting later this year with Oak Ridge National Laboratory on a synthetic graphite plant. As far as direct air capture, we probably have more work to do. We are also working on that with Oak Ridge. But I would hope that sometime by 2025, certainly 2026, we would perhaps have our first product, quote unquote, to be able to offer into the market. And it would be delightful if it was synthetic graphite. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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