Review of EPA Works Approval Application from Dual Gas Pty Ltd

EXPERT S REPORT Review of EPA Works Approval Application from Dual Gas Pty Ltd Reviewer Malcolm McIntosh Qualifications BE (Mech) Hons Melbourne University BSc Melbourne University Diploma Mechanical Engineering Swinburne Institute of Technology Affiliations MIE Aust Member of Institution of Engineers, Australia FAIE Fellow of Australian Institute of Energy Experience Refer Curriculum Vitae (Appendix 6) for more detail More than 40 years experience in the power generation industry, particularly related to power generation from coal. A substantial part of this experience has involved research related to the utilisation of brown coal. Employment and experience includes: MTE Research Pty Ltd, a single purpose company 3 years as General Manager. Funding was obtained from the Commonwealth and State governments and participating Latrobe Valley generators to design, build commission and test a brown coal drying plant with a nominal input of 15 tonne/hr of raw coal. The MTE concept was based on the research undertaken by the CRC (see below). The pilot plant was located on a site at the Loy Yang Power Station. The Cooperative Centre for Clean Power from Lignite and its predecessor the Cooperative Research Centre for Power Generation from Low-Rank Coal (CRC) 11 years as Manager Technology Development. Programs initiated and undertaken included: development of a dewatering process known as Mechanical Thermal Expression (MTE); assessment of advanced technologies including IGCC for new power plant and for retrofit into existing plant to improve efficiency and reduce carbon dioxide emissions; review of coal drying for the purpose of pre-drying the fuel into a power plant; recommissioning and operation of a Circulating Fluid Bed pilot plant; recommissioning and operation of a pressurised fluid bed gasifier process development unit; and cost studies on various new technology plants. Former ABB Power Generation 5 years as Sales Engineer and Manager. Contract engineering of a major coal fired plant, preparation of the plant economics for Build- Own-Operate tenders involving gas turbine plant, preliminary conceptual engineering studies for clients, and preparation of tenders. Power Design Department of the former State Electricity Commission of Victoria (SECV) 5 years as the Senior Power Plant Development Engineer (and later Principal i

Design Engineer Performance and Development). Initiated and evaluated proposals for a new auxiliary fuel system later installed in the Loy Yang B power station. With others, evaluated various power generation systems for use by the SECV, including gas turbines and compressed air energy storage. Research and Development Department of the former SECV 17 years as a research engineer and later as research manager investigating combustion, heat transfer, fluid flow and fuel preparation for application in the SECV s brown coal fuelled power generating plant. Particular research focus was on the drying and milling of brown coal. Areas of Expertise Assessment of new coal based technologies for power generation Coal drying and milling Familiarity with Gas turbine technology Coal gasification Coal fired power generation Interest in Alternative forms of power generation Greenhouse gas issues Expertise to provide report Experience in the assessment and reporting of new coal-based technologies Experience with pressurised fluid bed gasification of Latrobe Valley and other low rank coals in a small pilot plant. Expertise in the drying and milling of brown coal Background in gas turbine technology Experience in technology development General knowledge of issues associated with power generation from brown coal and coal in general Scope of Report Refer EPA Project Specification (Appendix 5) for detail Provide advice to EPA about the proposed technology, the energy efficiency and greenhouse gas emissions associated with the proposal, and how this complies with the best practice requirements of SEPP (AQM) and the associated Protocol for Environmental Management Greenhouse Gas Emissions and Energy efficiency in Industry (PEM). Review the proposal and compare it with other relevant technology alternatives. Advise on whether the proposal meets the target Greenhouse gas emissions intensity set out in the Victorian Government s White Paper on Climate Change. ii

Facts, Matters and Assumptions on which Report is based The report is based on data supplied by the proponent in its Application and in its responses to specific queries directed through the EPA for further information. Sufficient information was obtained to enable assessment of the proposal as defined by the project specification. The data provided have been checked for consistency by independently calculating (modelling) the component heat and mass flows from the input quantities provided by the proponent in the Application and any additional information supplied. The reviewer has assumed that the data provided by the proponent on the syngas composition and the air flow and pressure developed in the gas turbine compressor when operated on syngas to be correct. These data were in any case compared with other data available to the reviewer to ensure that they were credible. It has been assumed that the pilot plant tests conducted by the proponent in its 10 MW Coal Gasification Development Facility (CGDF) at Morwell have provided the necessary data on which to base the design of the demonstration plant. The report includes an extensive list of references used in undertaking the review. Documents and other materials instructed to be considered SEPP (AQM) PEM EPA Works Approval Application by the proponent Identity of any person required by Expert to conduct tests Not applicable Summary of Opinion of Expert Refer Executive Summary of report Provisional Opinions Not applicable Completeness of Report The report is complete for the scope of work requested. I have made all the enquiries that I believe are desirable and appropriate and no matters of significance which I regard as relevant have to my knowledge been withheld from the Tribunal. Malcolm McIntosh iii

Report to EPA Review of EPA Works Approval Application from Dual Gas Pty Ltd to build and operate the Dual Gas Demonstration Power Station Malcolm McIntosh 11 April 2011 4

Executive Summary Dual Gas Pty Ltd (DG) has submitted a detailed proposal to EPA seeking Works Approval for its proposed power station to be located in Morwell in the Latrobe Valley. The plant is to be fired primarily on the reactive but high moisture content brown coal from the Latrobe Valley using a technology developed by HRL called Integrated Drying Gasification and Combined Cycle (IDGCC). The novel feature of the technology is that the coal is dried in the hot syngas produced in the gasifier. The syngas and evaporated coal moisture is used to fuel gas turbines arranged in combined cycle (CCGT) to recover exhaust heat from the gas turbines. It is intended that the proposed Dual Gas demonstration power station (DGDPS) will be operated essentially as a base-load plant (nominal output of 562 MWe, generated) whilst demonstrating and proving the IDGCC technology. Supplementary firing is also to be provided by a burner fuelled with natural gas located in the exhaust duct between each gas turbine and heat recovery steam generator (HRSG). This will provide a capability to increase steam generation, and hence output from the steam turbine to provide peaking and intermediate load capability as required to a nominal maximum generated output from the plant of 644 MWe. This report reviews the technology and in particular addresses how the DGDPS complies with the best practice requirements of the State Environment Protection Policy (Air Quality Management) (SEPP (AQM)) under clauses 18, 19 and 33 and the associated Protocol for Environmental Management Greenhouse Gas Emissions and Energy Efficiency in Industry (PEM). In particular clause 19.1 of the SEPP (AQM) states that: A generator of a new or substantially modified source of emissions must apply best practice to the management of those emissions. The PEM defines best practice as the best combination of eco-efficient techniques, methods, process, or technology used in an industrial sector or activity that demonstrably minimises the environmental impact of a generator of emissions in that sector or activity and that Expectations with respect to the adoption of best practice by individual businesses will depend on technical, logistical and financial considerations. The Application has proposed achieving the State Government s proposed target Greenhouse Emissions Intensity (GEI) of 0.8 tonne/megawatt hour (T/MWh) essentially by reducing the average annual CO2 emissions from the coal by operating part of the year on natural gas. The maximum CO2 emissions from the DGDPS based on contributions of 85% from operation on Morwell coal (MOC) syngas at maximum output including supplementary firing with natural gas (referred to in the Application as Case1) and 10% from natural gas at maximum output including supplementary firing with natural gas (referred to in the Application as Case 2) is 4.13 M tonne/year. The generated output for this scenario is 5.33 x 10 6 MWh which gives an average emission of 0.77 T/MWh generated. The alternative coal from the Yallourn North Extension was not investigated as it is relatively much drier and as such would be expected to have a better performance than would be achieved with Morwell coal. It should be noted, however, that the State Government s proposed target GEI has not specified whether the output is generated or sent-out. In its Application, DG has chosen to calculate the GEI for the DGDPS on a generated output basis which has a lower value than on a sent-out basis. The table shows the efficiency and GEI of the DGDPS on a generated and sent-out basis at both maximum and base-load output. For example, for MOC syngas the GEI at maximum output with supplementary firing on natural gas is 0.81 T/MWh 5

generated which is equivalent to 0.88 T/MWh sent-out. This can be compared with the Australian Government s 2010 election commitment to a Cleaner Future for Power Stations which has, as a starting point for consultation for new plant, a GEI of 0.86 T/MWh generated. For the purpose of benchmarking the DGDPS relative to other coal fired plant, the CO2 emissions have been compared for operation on coal alone. For the base-load case on MOC syngas, the only natural gas use as there is no supplementary firing. In this case, about 6% of the energy input is supplied by natural gas. The base-load case therefore gives a reasonable, albeit low, estimate of GEI for the DGDPS operating on coal of 0.86 T/MWh generated. If it is assumed that the coal and natural gas contribute to power output in proportion to the contribution of energy input, then the GEI for the coal component is 0.89 T/MWh generated. This compares with a GEI at base-load on natural gas of 0.44 T/MWh generated. Table Performance Data for Operation on Morwell Coal (MOC) Syngas and Natural Gas DGDPS Output (MWe) Efficiency (%, HHV ) GEI (T/MWh) E class gas turbine (SGT5-2000E) Fuel: MOC Syngas Max output (generated) Case 1 644 38.3% 0.81 supplementary firing with NG Max Output (sent-out) Case 1 593 35.2% 0.88 supplementary firing with NG Base load (generated) 562 38.0% 0.86 no supplementary firing ` Fuel: Natural Gas Max output (generated) Case 2 625 42.1% 0.44 supplementary firing with NG Max output (sent-out) Case 2 609 41.1% 0.45 supplementary firing with NG Base load (generated) 497 41.9% 0.44 no supplementary firing, steam required for NOX control Proposed Operation at maximum output 85% of time Case 1 644 38.3 0.77 10% of time Case 2 625 42.1 generated The DGDPS is, however, a demonstration plant that uses an older technology E class gas turbine. Although there are a number of issues to be resolved, it seems likely that more advanced gas turbines, which are currently under development for use in IGCC by the manufacturers, would be offered for future plant. The expected GEI for the more advanced technology F class gas turbines when operated at base-load would be 0.77 T/MWh generated. A process model has been developed by this reviewer by reference to the IDGCC patent, information included in the Application and its attachments, and from additional data provided by DG. The data calculated from the model are shown to be consistent with data given in the Application and additional process data provided by DG. 6

The Application addresses best practice as follows. The DGDPS offers a technology which has a substantially higher efficiency and hence a lower GEI than is obtained in the boiler plants currently operating on brown coal in the Latrobe Valley. The equivalent GEI on coal for the DGDPS at base-load is 0.89 T/MWh generated (after separating out the influence of the natural gas support) compared with 1.12, 1.14, 1.31 and 1.40 T/MWh generated for Loy Yang A, Loy Yang B, Yallourn W and Hazelwood power stations, respectively 1. The efficiency of the plant is competitive with the advanced boiler plant that is currently being installed in Germany from where most of the technology being used in boiler plant fired with brown coal was derived. Currently, the most modern brown coal units in Germany would have an efficiency of about 34.2% sent-out, HHV basis and a GEI of 0.99 T/MWh sent-out if fuelled with Morwell coal. (No plant has yet been offered with coal pre-drying, although development of the German WTA drying technology is well advanced. An IGCC plant with carbon capture and storage (CCS), which was proposed to be built and demonstrated, has been postponed while awaiting government approval for large scale CO2 transport and storage.) Other advantages of the plant and the IDGCC technology are: The DGDPS is able to operate flexibly on either syngas or natural gas, which is not possible with boiler plant. Although the GEI could be substantially reduced if the CCS technology became commercial, a low GEI can be obtained in the DGDPS, without modification of the plant, by burning natural gas. DG has proposed the co-use of brown coal and natural gas in its Application for the DGDPS to dilute the CO2 emissions to achieve an average annual GEI of less than 0.8 T/MWh generated. The capability to use natural gas to ensure a high plant availability and, in a worst case scenario, to provide a fall-back position of operation on natural gas if the IDGCC technology is unable to be commissioned. Much reduced water requirement relative to conventional boiler plant because only about a third of the output from the DGDPS is from a steam turbine. (The largest usage of water in a conventional power station is for condensing the steam exhausted from the steam turbine.) The water requirement in the DGDPS proposal has been further substantially reduced by the use of an air cooled condenser. The technology has the potential for CCS using pre-combustion capture, which involves smaller gas volumes and a higher CO2 concentration than those required for postcombustion capture, the latter being the only technology available for boiler plant. Commercial technologies for pre-combustion CO2 capture are regarded as near-term applications. As discussed in the Application, provision will be made in the DGDPS layout for installation of plant required for CCS and there is a substantial pre-combustion capture program under development by HRL. 1 GEI values as given in the DGDP EPA Works Approval Application 02 Sep 2010. 7

The potential to improve the efficiency of this technology by the use of higher efficiency gas turbines being developed for IGCC by the manufacturers. Although a more advanced gas turbine was not offered for the DGDPS, the use of proven older gas turbines in this demonstration project will reduce the risk of project failure from gas turbine issues. The potential efficiency and GEI for an F class gas turbine has been estimated to be 42.6% generated, HHV and 0.77 T/MWh generated when operated at base-load on MOC coal. A reduction in emissions of particulates, NOX and SO2 relative to existing boiler plant. NOX is substantially reduced relative to conventional coal fired power station because the syngas is scrubbed to remove ammonia (which if burnt tends to form NOX) and because the combustion temperature in the gas turbine is controlled to reduce thermal NOX. Although there are no controls applied to SO2 emissions, these are expected to be reduced in proportion to fuel use because of the higher efficiency of the DGDPS. In summary, IDGCC is an innovative technology which, if successfully demonstrated, will have a performance that is competitive with, or better than the performance of currently available technologies. It also has the potential for further development to improve efficiency and, importantly, to utilise CCS when the technology becomes commercial. 8

Glossary ACC Air-cooled condenser ASU Air separation unit Application Works approval application to EPA c carbon (% in coal, dry basis) CCGT Combined cycle gas turbine CCS Carbon capture and storage CO Carbon monoxide CO2 Carbon dioxide DG Dual Gas Pty Ltd DGDPS Dual Gas demonstration power station EPA Environment Protection Authority Victoria EU European Union GEI Greenhouse emission intensity (T/MWh) HHV Higher heating value (MJ/kg) HRL Parent company of DG and inventor of IDGCC technology HRSG Heat recovery steam generator IDGCC Integrated Drying Gasification Combined Cycle technology IGCC Integrated gasification combined cycle technology IDGCC is one particular version of IGCC technology LHV Lower heating value LNB Low NOX burner MJ Mega joule of energy MWe Mega watt electrical of power MWth Mega watt thermal of power MC Moisture content of coal, MCwb (wet basis), MCdb (dry basis) NOX Nitrogen oxide NG Natural gas PEM Protocol for Environmental Management Greenhouse Gas Emissions and Energy Efficiency in Industry SE Specific energy (MJ/kg, defined either as HHV or LHV basis) SEPP(AQM) State Environment Protection Policy (Air Quality Management) SO2 Sulphur dioxide USDOE US Department of Energy WTA Wirbelschicht Trocknung mit Äbhitzenutzung (fluid bed dryimg with heat recovery) Definitions Efficiency Power out (MWe)/{mass flow of fuel (kg/s) * SE (MJ/kg)} Where: Power out is defined as generated or sent-out. SE may be HHV or LHV. GEI Mass flow of CO2 (tonne/hr)/power out (MWe) Where: Power out may be generated or sent-out. The unit is tonne/(mwe.hr) which is abbreviated in the text to (T/MWh). 9