Coal Gasification : A PRB Overview

Mark Davies – Kennecott Energy

Outline• Background – Our Interest

• History – Development of IGCC

• Current status – Commercial Technology

• Poly generation - Synthetic Fuels

• Issues for PRB

• The Future

• Questions ???

Our Interest - Sustainable Development

“development that meets the needs of the present generation without undermining the capacity of future generations to meet their needs.”

Rio Tinto’s commitment to SD: Ensure our businesses,operations and products contribute to the global transition to sustainable development

Coal’s Sustainability Challenge

• Economic and social criteria make a compelling case for coal – the issue is environmental performance

• Climate change concerns present a complex challenge for the continuing use of fossil fuels and coal in particular

Integrated Gasification Combined Cycle (IGCC)

Twenty years ago oil refinery practice in North America and Europe underwent a fundamental change as available crude became heavier

This had two implications: • A significant increase in hydrogen demand to 'sweeten' the

heavier crude; and • Increased production of highly contaminated petcoke and

heavy refinery residues

Simultaneously, aerospace technology was being applied to the utility sector to create natural gas fired turbines; and coal based IGCC started becoming a viable technology

IGCC is essentially ready for use by the coal industry, which has largely been spared the expense of its development

Implication – Current commercial technologies were developed for Petcoke

• Natural gas• Gas turbine• Heat recovery steam

generator • Steam turbine• High efficiency • Low capital

• Simple vs. PC plants• Cookie-cutter design

• Low emissions

Natural Gas Combined Cycle (NGCC)

Integrated Gasification Combined Cycle (IGCC)

Gasification is essentially partial oxidation under pressure

IGCC + Carbon Capture and Storage

Current Commercial Technology

• Slurry feed• Refectory lined• Quench available• Not PRB capable

• Slurry feed• Refectory lined• 2 Stage• ???

• Lock hopper feed• Water cooled• Syngas cooler• PRB capable at cost

Shell GE (Chevron Texaco) ConocoPhillips (E-Gas)

Impact of Coal Type

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000

Coal Heating Value, Btu/lb HHV

Rel

ativ

e H

eat

Rat

e o

r C

apit

al C

ost

IGCC Capital Cost (E-Gas)

IGCC Heat Rate (E-Gas)

PC Capital Cost

PC Heat Rate

WY PRBTX Lignite

Illinois #6

Pittsburgh #8

Source: EPRI

• Any coal or biomass feedstock can be gasified• The issue is the economics! 

• Gasification is most efficient with low moisture, low ash and high heating value feedstock's

Issues for PRB

Indicative Cost of Electricity

0 5 10 15 20 25 30 35 40

Illinois coal

PRB Coal

Co

al

Cost ($/MWhr)Capital Cost ($/MWh)

Other Fixed Costs ($/MWh)

Fuel Expense ($/MWh)

Variable O&M ($/MWh)

• Capital cost disadvantage may be mitigated by fuel cost• Petcoke/PRB blends can be attractive

• New technology• DOE/Southern Transport Reactor• Alternate slurry technology• Commercial vendors have little ongoing development

Polygeneration

Syngas is a prime petrochemical feedstock

Traditionally produced by reforming natural gas

“Natural gas” from Syngas• Methane reformer

• CO + 2H2 + Catalyst => CH4 + clean up

Liquid chemicals from Syngas• Clean diesels• Methanol

Indicative breakeven – currenttechnology

• Liquid Fuels $30 - $35 bbl • Synthetic natural gas - $5.50 - $7 /MBTU*

* Source – DOE

IGCC + CCS + Poly generation

Barriers to IGCC Commercial Deployment

• Cost → 10-20% penalty for bituminous coal• Traditional PC can meet current environmental standards• IGCC financing costs higher than PC – perceived risk

profile• No reward for risk taking – new plants largely being built by

regulated utilities• Excess capacity in many regions - NGCC overbuild• IGCC needs more project development than NGCC or PC

• To date no standard IGCC design - this will change with GE entry

• Lack of familiarity with IGCC in the power industry (it is a chemical plant)

Future Issues

• Environmental regulation, community pressure, uncertainty – particularly carbon

• Sustained Federal research effort to resolve cost, reliability concerns• Especially on low-rank coals

• Critical to establish viability and acceptability of carbon capture and storage • e.g. FutureGen

• Development of of integrated, optimized designs• GE/Bechtel

• ConocoPhillips/Fluor

• Deployment incentives to overcome commercial penalty (e.g. incentives, production tax credits, etc)

• Costs should come down as new plants are built and improved designs become standard