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 Tintos commitment to SD: Ensure our
businesses,operations and products contribute to
the global transition to sustainable development
Coals 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
R
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H
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R
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o
r

C
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p
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C
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t
IGCC Capital Cost (E-Gas)
IGCC Heat Rate (E-Gas)
PC Capital Cost
PC Heat Rate
WY PRB
TX 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
C
o
a
l
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 + 2H
2
+ Catalyst
=> CH
4
+ clean up

Liquid chemicals from Syngas
Clean diesels
Methanol

Indicative breakeven current
technology
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