Krzysztof DRESZER, Lucyna WIĘCŁAW-SOLNY, Lesław ZAPART ? Institute for Chemical Processing of Coal (IChPW), Zabrze, Poland
Please cite as: CHEMIK 2013, 67, 6, 490-501
Coal is one of the most important sources of electrical energy in the world economy. Applying appropriate technologies enables its use also in the chemical and fuel sector. The development degree of available technologies guarantees the possibility of manufacturing the desired chemical products with high efficiency and compliance with environmental requirements. The decisive element in applying those technologies is the viability of the used processes, and that depends on the market environment of a considered investment. The paper presents an analysis of technical and economical conditions of converting coal to liquid fuels.
Fossil fuels currently satisfy over 80% of world demand for energy. Still, the energy-climate policy of many countries, especially in the EU, aims at lowering their share in the fuel structure. The effect of such a policy in the EU was i.a. the 2008 adoption of the so called 3×20 climate package, which requires i.a. lowering the emission by 20% in relation to 1990 and a 20% increase of the share of renewable energy sources (RES) in energy production. Despite those actions, the increase of world energy consumption in the last decade was based on fossil fuels in 85%. Prognoses on world energy demand and the possibilities to satisfy it point to continuation of such dependence on fossil fuels . Bituminous coal, one of energy resources with the largest deposits in the world, shall maintain its leading role in electrical energy production processes. The possibility of converting coal to liquid and gaseous products and its attractive price make it an appealing chemical resource again [1÷3]. Considering the current demand for coal, its deposits shall last 200÷300 years; coal is relatively evenly distributed in the world, so a need arises to develop new, more rational and highly efficient technologies of its utilisation. The main challenge is related, on the one hand, to the need of radical reduction of the negative influence of coal utilisation processes on the natural environment (i.a. carbon dioxide emission reduction), and, on the other hand, to substituting of pure chemical products, currently obtained mainly from natural gas (hydrogen, methanol) and crude oil (liquid motor fuels). Thus, one of the basic methods of chemical coal processing, gasification, has become interesting also for the chemical industry.
When one looks many years ahead, development and implementation of advanced technologies ? ?pure? technologies of coal utilisation, aiming at efficient and maximum use of the chemical energy of this fuel ? require an integration of tasks connected with the mining, power and chemical industry.
Coal gasification is increasingly often becoming a process basis for advanced coal utilisation technologies. Equally often as regards gasification, systems producing ?pure? energy are integrated with producing chemical products and are accordingly referred to as socalled energy complexes [Polish: energopleks] or polygeneration. These combine producing electrical energy and chemical products from coal, mainly liquid motor fuels, methanol or hydrogen, which triggers development of chemical utilisation processes of coal.
Many research and innovation centres, including the Institute for Chemical Processing of Coal (IChPW) in Zabrze, conduct multidirectional works on coal gasification in experimental equipment of varying scale, from laboratory to semi-technical, but these are still experimental devices. The authors of this paper are currently not interested in analysing the state of technology in this scope. Substitution of large-scale products obtained from natural gas or crude oil with processes of coal conversion requires application of industrial solutions with high efficiency, availability and reliability. This is conditioned not only by scale-related benefits stemming from production cost limitation and sales optimisation, but also by investment demand for capital . The technical and economic analysis presented in this paper includes technical and technological solutions on a commercial scale, i.e. large-scale systems of coal gasification. Problems concerning production of liquid fuels, methanol and hydrogen via large-scale coal gasification have already been partially discussed in monthly magazine CHEMIK .
Availability of fossil fuels for chemical processing
According to the reports prepared by the United States Department of Energy and the European Commission, world energy consumption shall increase by 65?70% in the period of 2003÷2030 . According to all estimations, fossil fuels shall continue to dominate throughout the whole 21st century; among them, coal shall be a basic resource for the power industry and, increasingly often, a chemical resource, especially in countries with large coal deposits (e.g. China, India and Poland). On the world scale, coal use in the industry shall increase mainly due to China, which is related chiefly to the development of steel industry and the industry of producing synthesis gas for chemistry.
The process of efficient converting of coal to synthesis gas requires coal with relatively small ash content, preferably below 15% and not more than 25%, because the gasification process currently utilises so-called dispersion reactors, in which gasification takes place at ca. 1500?C. In such conditions, ash is discharged from the reaction zone in the liquid form and maintaining high availability of the reactor requires limited ash content. Moreover, higher ash content in coal equals its higher content in the produced gas, which often leads to exploitation problems in gas cooling zone. It is beneficial that gasification may utilise coals with high sulphur content because sulphur does not disturb the gasification process and is obtained during process gas purification, usually in the form of elemental sulphur (melted or fine-grained amorphous sulphur, so-called flowers of sulphur). Taking into account the predicted amount and expected properties, it is assumed that Polish coal resources enable providing appropriate amounts of coal that could be processed via gasification in the future .
Bituminous coal deposits in Poland are currently exploited in two basins :
? Upper Silesian Coal Basin (GZW), which has 80.2% of documented resources considered economical of bituminous coal. In principle, GZW features a full range of technological types of coal, from energy coal to anthracite. The average ash content equals 11 to 17%, while total sulphur content ? 0.59 to 2.3%. As of the end of 2011, bituminous coal resources equalled as follows: geological resources considered economical ? 38,914 mln Mg; industrial resources ? 3,858 mln Mg
? Lublin Coal Basin (LZW), which features mainly energy coals up to gas-coke coals (types: 31?34). The average ash content equals 14.63%, while total sulphur content ? 1.21% to 1.46%. As of the end of 2011, bituminous coal resources in LZW equalled as follows: geological resources considered economical ? 9,266 mln Mg; industrial resources ? 320 mln Mg.
Considering the available resource base of bituminous coal useful for the gasification process, one can currently take into account easily accessible resources, the so-called operational ones, in the areas of working mines. According to the data , these resources equal 4,178 mln Mg. Most of the operational resources are energy coal resources; this concerns in particular the mines of Katowicki Holding Węglowy SA, Południowy Koncern Węglowy SA, KWK Bogdanka SA and, first and foremost, Kompania Węglowa SA. Coke coal resources definitely dominate in the resources of mines belonging to Jastrzębska Spółka Węglowa SA, but the properties of those resources make them inappropriate when one considers the gasification process.
An important parameter characterising the energy coal resource base is its sufficiency in the operation period of the plant. An analysis of data of the Polish Geological Institute shows that for the period until 2030, the mines of Kompania Węglowa SA, Katowicki Holding Węglowy SA, KWK Bogdanka SA and Południowy Koncern Węglowy SA [2, 3] can be designated for the gasification process. Taking into consideration that fact and the chemical properties of coal, especially its reactivity, coal from the Ziemowit, Piast, Bogdanka and Janina mines can first and foremost be designated for the gasification process. Geological resources of lignite considered economical as of 31.12.2011 equal 22,663.08 mln Mg, while industrial resources (resources deposits already managed) ? 1,287.03 mln Mg. Most output comes from Poland?s largest deposit already managed, i.e. Bełchatów ?Bełchatów field (39.77% of national output), and Bełchatów ? Szczerców field (21.56% of national output of lignite) . The world resource base of lignite is large enough and enables management of new deposits, using both traditional and new technologies. A chance may lie in further development of technologies enabling chemical or energy conversion of lignite to gaseous and liquid fuels . The results of technical-economic analyses for the assumed conditions performed thus far are not fully encouraging; the most viable form of lignite utilisation is the traditional production of electrical energy.
Gasification as a basis for the development of coal utilisation technologies in the chemical industry
According to the database developed by the United States Department of Energy (DOE) (2010 ?Worldwide Gasification Database?) , the total production capacity of 144 working gasification systems, equipped with 412 gasification reactors, equals 70,817 MWth, expressed as thermal power in the produced gas. 11 gasification systems (with 17 gasification reactors) are currently under construction and further 37 systems (with 76 gasification reactors) are being planned. Among those 48 constructed and planned systems, scheduled for start-up in the period of 2011÷2016, a significant majority, i.e. 40, is intended for coal gasification. If all the planned investments are implemented, the production capacity of 192 gasification systems (equipped with 505 reactors) shall equal 122,106 MWth (thermal power in the produced gas) in 2016 .
Coal is the basic charge resource for gasification: its share in world synthesis gas production equals 51%. Process gas, obtained from coal gasification, is currently mainly utilised in the Fischer- Tropsch synthesis, which is used to produce liquid fuels and in the synthesis of synthetic natural gas (SNG). This is first and foremost related to the liquid fuel production plants working in the Republic of South Africa. Sasol Lurgi and the SNG plant in Great Plane (USA) use technologies of gasification in fixed bed (ca. 68% of synthesis gas). The remaining 32% of gas obtained from coal is used to produce various chemical substances (11%), gaseous fuels (11%) and electrical energy (10%). In the case of implemented systems, the generated gas shall be used mainly to produce chemical substances (75%) and electrical energy (24%). A dominant role in gas production via gasification is played by technologies offered by Sasol Lurgi (fixed bed), Shell (suspension reactors) and GE Energy (Chevron Texaco; suspension reactors), which constitute over 90% of the world market. Coal gasification technologies which currently undergo the most intense development are the processes using dispersion reactors. This is confirmed by the investment implementations scheduled until 2016, virtually all of which feature reactors of that type.
Process and financial analyses
This paper presents the results of updating the economic calculations (based on process calculations), which had been performed as part of ?Studium wykonalności projektu instalacji do produkcji paliw gazowych i płynnych z węgla kamiennego? [design feasibility study of a system for producing gaseous and liquid fuels from bituminous coal] developed for the Ministry of Economy (contract no.: 1/DGA/10001/2008) by Konsorcjum Energoprojekt Katowice SA and IChPW in 2008 . The results of that study were previously discussed in CHEMIK monthly . Let us recall that the gasification process was assumed to be conducted in a reaction system whose single gasification reactor had featured a capacity of 125 t/h of coal in a raw state. The following technological variants were considered:
Variant I ? a system for producing liquid fuels
Variant II ? a system for producing hydrogen
Variant III ? a system for producing methanol.
The selection criteria of the proposed technological solutions for each assumed variant were previous experiences with using a given technology and the possibility of its application in Polish conditions, investment costs and minimisation of the negative influence of system operation on the environment. Each analysed variant (all of them are presented in Figures 1÷3 in a simplified form) consists of a synthesis gas production system, i.e. a coal gasification system together with a synthesis gas purification and preparation system and a system of chemical synthesis of: liquid hydrocarbons (a crude oil substitute which can be converted to motor fuels in further refining processes) in variant I, hydrogen in variant II and methanol in variant III.
Variant I ? a system for producing liquid fuels
The Fischer-Tropsch synthesis yields a mixture of various products which can be classified into the following groups: technical propanebutane (LPG), fuel oil and a semi-product for fuel oil (not processed to the form of a commercial product). The Fischer-Tropsch synthesis enables obtaining a vast range of products, depending on the operation parameters of technological processes and on the method of final processing (refining) of synthesis products. It was assumed that the technological system would not include a product refining node with the processes of hydrocracking, hydroisomerisation and catalytic reforming. Thus, the synthesis product refining node, indicated in Figure 4 with a dashed line, had not been taken into account in process calculations and investment cost estimations.
Variant II ? a system for producing hydrogen
A product of the system is technical hydrogen. Hydrogen production must be considered in the form of being connected with a chemical plant where hydrogen would be used for manufacturing purposes. Investment cost estimation includes the whole investment scope of a hydrogen production plant.
Variant III ? a system for producing methanol
A product of the system is technical methanol ? a commercial product. Investment cost estimation includes the whole investment scope of a methanol production plant.
For variants defined that way, the following process assumptions were adopted:
? Variant I ? a system of 6 gasification reactors which uses ca. 5,600 000 tons of coal a year. The assumed coal processing scale stems from the analysis of demand for fuel products and from initial analyses of viability of liquid fuel production from coal: these analyses showed that, especially in Polish conditions, the work of a production system begins to be viable if it produces over 1 mln t of liquid fuels, which corresponds to the assumed coal consumption scale
? Variants II and III ? a system of 1 gasification reactor. The assumed scale allows for covering the demand for hydrogen (variant II) for a single Polish chemical plant. Variant III of producing methanol from gas generated in coal gasification in the given scale virtually satisfies Polish demand for that product, which is estimated at the level of 520 000 tons/year.
Carbon dioxide separated during the technological processes is subjected to compression to the pressure required by transport conditions, i.e. ca. 12 MPa, and is transported to be stored/stacked underground. For all variants, work time equal to 85% of the annual work time was adopted, i.e. 7446 hours a year. In order to determine the mass balance of the discussed variants of systems producing liquid and gaseous fuels, process calculations for gas produced in the Texaco gasification technology were performed. Mass balances for the presented technology variants were determined on the basis of calculations performed with use of the process code of ChemCAD v.6.0.2 for steady states of individual processes on the basis of developed process models. Balancing of processes in ChemCAD program is performed according to widely known principles of mass and energy conservation, based on physicochemical and thermodynamic parameters of chemical substances included in the particular balance streams. Tables 1÷3 show the obtained results of process calculations for the analysed production systems.
Basic data and economic-financial assumptions
The following key data and cost assumptions were adopted:
? all costs are presented as of 2011, with taking into account the price increase index for the period lasting till the end of 2012
? cost estimations were performed on the basis of fixed prices, not taking into account the inflation or price escalation in subsequent years
? system exploitation costs include: operation costs (fixed and variable), capital costs and the costs of coal, transport and CO2 storage and monitoring
? the systems for transport, storage and monitoring (TS&M) of CO2 enable transfer of required carbon dioxide amounts in a liquid phase through a DN 250 pipeline with a length of ca. 100 km without a pumping station on the way
? cost estimation was performed with an accuracy equal to that of the pre-feasibility study, i.e. ? 30% 
The remaining input and operation data of the system as well as the economic-financial assumptions are shown in Table 4.
A financial analysis and a sensitivity analysis were conducted for the following scenarios:
? scenario 1 ? basic: design functioning without the need to purchase CO2 emission allowance (EUA ? European Unit Allowances)
? scenario 2 ? referential, in which 100% of CO2 emission allowance is purchased after constructing the plant
? scenario 3 ? prospective, assuming the construction of a CO2 transport and storage system
Estimations concerning investment costs and operation costs of technological systems producing liquid fuels, hydrogen or methanol, a CO2 transport pipeline and a system for storing required amounts of CO2 were all determined on the basis of updated data from . The results of the investment operation costs are shown in Table 5.
The structure of investment costs for scenario 1 with a division into basic technological objects is shown in Figure 4. The structure of total production costs for the prospective scenario (3), which includes the operation costs of a CO2 transport and storage system and the obligation to purchase EUA, is shown in Figure 5.
A key indicator of financial effectiveness is the internal rate of return (IRR). IRR values for individual variants are shown in Figure 6.
The presented analysis yields the following conclusions:
? Variant I ? production of liquid fuels ? achieves the required IRR level in two proposed scenarios of development, i.e. design functioning without the need to purchase CO2 emission allowance and with a system for CO2 transport and storage
? Variant II ? production of hydrogen ? enables the return in the scenario without fees for carbon dioxide emission, but if one takes into account the possibility of introducing mandatory purchase of CO2 emission allowance, it becomes necessary to construct a system for CO2 transport and storage
? Variant III ? production of methanol ? achieves the best results of all the analysed variants.
Linking the viability of producing fuels in coal processing systems with crude oil and natural gas prices, as well as fundamental conclusions stemming from that linking, are presented in Figure 7. Production of liquid fuels shall be viable if the crude oil price equals USD 100, 115 and 160 per bbl for scenarios 1, 3 and 2, respectively. Production of hydrogen shall be viable if the natural gas price equals PLN 890/ths m3 for scenario 1, PLN 1100/ths m3 for scenario 3 and PLN 1300/ths m3 for scenario 2. Methanol achieves the minimum required rate of return when the natural gas price is below the current price in scenarios 1 and 3. The purchase of 100% of EUA (scenario 2) shall make it impossible to recommend methanol production for implementation. The sensitivity/risk analysis regarding the change of purchase price of CO2 emission allowance showed that in scenario 2, that price should drop from the assumed level of PLN 160 to 25.60 and to PLN 120 per ton for variant I, II and III, respectively. In scenario 3, the EUA purchase costs are borne only for small amounts of annual carbon dioxide emission after its separation with an efficiency reaching 85?90%, so the analysed designs shall be inefficient in the economic aspect only when the EUA price exceeds the assumed level significantly (by 100% and more). This means a small risk of investment implementation as regards the change of purchase price of CO2 emission allowance.
Gasification technologies shall be of essential importance among the methods of thermochemical conversion of coal. This stems mainly from the necessity to constantly increase energy production efficiency, lower the environmental nuisance of power industry processes, including radical reduction of CO2 emission, and return to the wide use of coal as a resource for chemical processing. The main directions of gasification application shall be systems producing pure energy and chemical products, mainly liquid fuels, methanol and hydrogen. Implementation of pure coal processing technologies shall enable partial substitution of crude oil and natural gas in the world economy in the 2nd half of the 21st century. The analysis of the available data concerning bituminous coal deposit resources in Poland and of information pertaining to predicted exploitation plans of coal producers led to the conclusion that in a long-term period (2010÷2030), coal from Kompania Węglowa SA can be first and foremost taken into account as regards the gasification process. One can also consider coal from Lubelski Węgiel ?Bogdanka? SA, Południowy Koncern Węglowy SA and, as supplementary coal, from Katowicki Holding Węglowy SA. During the analysis of coal availability, documented coal volume and ash content acceptable for the gasification process were taken into account.
The analysis of the current and future demand for liquid and gaseous fuels showed that:
? in the variant concerning production of liquid and gaseous fuels from bituminous coal, the basic product of the system for producing liquid and gaseous fuels from bituminous coal should be fuel oil or its component, owing to a quickly increasing demand for fuel oil on domestic markets (with slight downward tendencies demonstrated by the consumption of petrols)
? in another technological configuration, the basic product of the system for producing liquid and gaseous fuels from bituminous coal can be methanol, which can be a fuel or fuel component itself. Moreover, the huge demand for methanol on the part of Polish chemical industry is very important. This is caused by lack of methanol production in Poland: the whole demand for methanol is satisfied by import, mainly from Germany and Russia. As the analysis shows, key directions of coal gasification application in Poland should be the production of methanol and hydrogen to satisfy the needs of chemical plants. One technological gasification line with coal processing capacity of ca. 1 mln t a year would enable production of hydrogen in the amount equivalent to nearly 400 mln m3 of natural gas, while the amount of methanol would exceed the current domestic demand for it. Thus, coal gasification can be an alternative for natural gas import. Processing of 6 mln t of coal a year may satisfy the needs of all chemical plants in Poland which have used natural gas for their purposes so far, and that would increase the country?s energy security. One should remember, though, that the viability of those systems strongly depends on the prices of coal, natural gas and crude oil.
The proposed technological solutions match the worldwide tendencies to limit the emission of greenhouse gases to the atmosphere, owing to the possibility to separate and permanently store carbon dioxide in geological structures. The financial analysis and the sensitivity analysis showed that at the predicted price of CO2 emission allowance and the necessity to purchase the latter, production of liquid and gaseous fuels from coal shall not be viable. Installing CCS systems shall enable recommendation of the discussed technological systems for implementation, with methanol production being the most efficient economically. Production of liquid fuels shall be economically justified at the crude oil price exceeding USD 100/bbl and if carbon dioxide sequestration is assumed because this technological variant is very sensitive to price change of CO2 emission allowance.
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Krzysztof DRESZER ? Ph.D., (Eng), head of the Centre for Process Research of the Institute for Chemical Processing of Coal since April 1st, 2008. He obtained his M.Sc. Eng. (1971) and PhD (1976) degrees at the Faculty of Chemistry of the Silesian University of Technology in Gliwice. He is a specialist in the scope of chemical processing of coal. The main object of his professional activity revolves around research, designing, organizing and consulting (fuel processing and environmental protection in the industry). He is an expert of the Polish Chamber of Ecology in the field entitled ?Procedure concerning the environmental impact assessments?, a Board member of Fundacja Ekologiczna ?Silesia? [a foundation for ecology] in Katowice, a Board member of Fundacja Nauki Śląskiej [a foundation for Silesian science] in Katowice and a member of numerous local and supralocal institutions for environmental protection. He is also an author of approx. 50 published works and a co-author of 4 monographs. His achievements include 5 patents, over 50 unpublished scientific-research works, over 40 designs and design elaborations and over 50 papers.
email: firstname.lastname@example.org, phone: + 48 32 271 00 41
Lucyna WIĘCŁAW-SOLNY? Ph.D., (Eng), graduated from the Faculty of Chemistry of the Silesian University of Technology in 1998. She defended her doctoral dissertation entitled ?Obtaining catalytic coats on metallic grounds? in 2004. She is a specialist in the scope of chemical and process engineering. She works as a deputy head of the Centre for Process Research of the Institute for Chemical Processing of Coal in Zabrze.
email: email@example.com, phone: + 48 32 271 00 41
Lesław ZAPART ? M.Sc., graduated in mathematics from the Faculty of Mathematics, Physics and Chemistry (1982) and from the Postgraduate Course in Informatics at the University of Silesia in Katowice (1988). In 1997 he graduated from PhD studies (major: investments) at the University of Economics in Katowice. He has completed a wide range of courses and trainings and obtained accreditations and certificates (issued i.a. by PARP, GARR, DG DGA and UNIDO) related to the assessment of economicfinancial efficiency of investment projects. He is a senior specialist at the Centre for Process Research of the Institute for Chemical Processing of Coal. Specialty ? financial engineering and economic modelling.