ECONOMIC AND ENVIRONMENTAL BENEFITS SEEN FOR COPRODUCTION USING IGCC

In a paper prepared for the Advanced Coal-Based Power and Environmental Systems ’98 Conference held in Morgantown, West Virginia, in July D. Gray and G. Tomlinson of Mitretek Systems note that total energy consumption in the United States is forecast by the Energy Information Administration (EIA) to rise by 26 percent between now and 2020. Oil use is projected to increase by 33 percent, natural gas by 46 percent and coal by 28 percent. Most of the additional natural gas and all of the coal increase is forecast to be used for power generation. The resulting expected growth in carbon emissions as a result of this additional energy consumption is estimated to be 490 million tons or about 33 percent.

An analysis of both the world and the United States energy situations concludes that in the timeframe between the present and 2050, all fossil resources, including coal, will have to be used to satisfy continuing growth in energy demand. Concerns over the environmental impact of fossil energy use, particularly concerns over possible climate change, continue to influence public policy and debate. Even without a potential global climate change threat, it is prudent and responsible to use our endowment of fossil resources in the most efficient and least polluting manner, say Gary and Tomlinson.

The challenge, then, is to determine how to use the combination of oil and coal most efficiently with the minimum environmental damage. If coal, an inherently high carbon resource, must be used to provide energy, then it becomes an environmental imperative to develop and implement technologies that permit it to be used cleanly and efficiently.

The overall approach, says Mitretek, should be to optimize a mix of resources and technologies to provide a mix of energy needs. It can easily be demonstrated, for example, that natural gas is superior to coal in most applications from a carbon emissions perspective. This has led some to the conclusion that natural gas use should be emphasized in all applications. This is an erroneous conclusion unless one assumes that there is enough gas to satisfy all applications. If this is not the case and it is necessary to use a combination of gas and coal, then gas should be used in applications where its advantages are greatest, and coal used in applications where its advantages are greatest, and research and development efforts should be targeted to assure that coal is utilized in the most efficient and environmentally acceptable manner.

To this end, the United States Department of Energy and Mitretek Systems have evolved and evaluated a concept that combines the use of gas and coal for the highly efficient production of electric power and high-quality transportation fuels. In its simplest form, (shown in Figure 1) this coproduction cofeed (CoCo) concept consists of diverting coal-derived synthesis gas from the combined-cycle power block of an Integrated Coal Gasification Combined-Cycle (IGCC) unit to a liquid Fischer-Tropsch (F-T) synthesis reactor. The unreacted synthesis gas from the F-T reactor and imported natural gas are then combusted in the downstream combined-cycle power generation unit. Combining processes in this manner accomplishes the equivalent of natural gas to liquid synthesis while eliminating the conversion losses associated with the production of synthesis gas from natural gas.

Figure 1

This concept of using both coal and natural gas to coproduce power and transportation fuels utilizes both feedstocks in an optimum manner. Coal cannot be combusted directly in gas turbines; it must first be converted into clean synthesis gas. Once in gaseous form, the high efficiencies associated with gas turbine performance now become accessible to coal. This is the rationale behind the IGCC concept. However, once the synthesis gas has been produced from the coal it is even more efficient to use this gas to produce liquid transportation fuels through F-T synthesis technology. Using a once-through F-T process, the inefficiencies of carbon dioxide removal and synthesis gas recycle can be avoided and the unconverted synthesis gas can be directly combusted in the gas turbines thereby benefiting from the high efficiency of gas turbine power production. This sequence of coal-derived synthesis gas utilization to produce fuels and power is thus optimized. For natural gas, optimum efficiency is realized by direct combustion in the gas turbines as in the concept described here.

To quantify the carbon emissions advantages of this concept of cofeeding both coal and natural gas to an IGCC facility to produce both power and transportation fuels, it is necessary to compare this concept to the current way of producing electric power and liquid transportation fuels from conventional Pulverized fuel Combustion (PC) and petroleum. Mitretek has developed computerized system simulation models of these coal and natural gas conversion processes.

Figure 2 shows an example of how the benefits of coproduction were quantified with respect to reduction of carbon emissions. In this case a conventional pulverized-coal powerplant is replaced by a CoCo facility. For the conventional coal powerplant, 4,052 tons per day (tpd) of coal, equivalent to 2,877 tpd of carbon, produces 400 megawatts at an efficiency of 33 percent. In the CoCo plant, a combination of coal and natural gas is used to produce the same amount of power (400 megawatts) and 6,083 barrels per day (bpd) of high-quality F-T fuels. This combination of coal and natural gas required to produce this power and fuel is equal to 2,885 tpd of carbon, almost the same quantity of carbon needed to produce only the 400 megawatts of power in the PC case (2,877 tpd). Therefore, if one conventional coal-fired powerplant is replaced by a CoCo plant, the 6,083 bpd of fuels are produced for no additional increase in carbon.

Figure 2

Nationwide, if all existing conventional coal-fired plants were to be repowered or replaced by CoCo facilities to produce the amount of electricity currently produced from coal (1,671 billion kilowatt-hours of electricity), this would result in the use of 7 quads of natural gas and 14 quads of coal and the coproduction of 2.9 million barrels per day of high quality transportation fuels. Production of this fuel from domestic resources would save over 3 million bpd of imported crude oil with a resulting reduction in annual carbon emissions of over 150 million tons, almost a third of the EIA-projected increase in carbon emissions in the United States between now and 2020.

The capital cost of a grass-roots CoCo plant of the size described above is about $670 million. However, in many cases, it would be possible to reduce this by retrofitting or repowering existing coal-fired powerplants rather than completely replacing them.

The required selling price for liquid fuels from a CoCo plant is highly dependent on the value of the coproduced power. In Mitretek’s analysis, it is assumed that the power must be sold at a price competitive with power from a natural gas combined-cycle plant; that is, about 24 mills per kilowatt-hour when gas is $2 per million BTU rising to 37 mills per kilowatt-hour when gas is $4 per million BTU. Economic analysis of the CoCo plant estimates that, at a natural gas cost of $2.50 per million BTU, F-T fuels could be produced for about $29 per barrel of equivalent crude oil if the coproduced power is sold at 27 mills. This combination of sales would produce a return on equity of about 15 percent for the plant owners.

It is not only the price of oil and natural gas that influences the resulting costs of coproduced products. The capital cost of the technology has a significant impact. If continued research and development results in the deployment of advanced technologies that can reduce the cost of IGCC technology to about $1,200 per kilowatt, then the resulting cost of the coproducts can be reduced by about 25 percent.