Replies to post #10938 on First American Scientific Corp. (fka FASC)

[ptrey]

TRCPA...This is long but worth the read:

Headline: RESPONSE TO DTI CONSULTATION ON A CARBON ABATEMENT STRATEGY FOR FOSSIL FUEL POWER GENERATION
Story Date: 12/10/2004

TABLE OF CONTENTS


TABLE OF CONTENTS 2
1. EXECUTIVE SUMMARY 3
2. MITSUI BABCOCK 5
3. LONG TERM ROLE FOR COAL FOR SECURE POWER GENERATION 5
4. NEED FOR EMISSIONS REDUCTION WORLDWIDE 7
5. TECHNOLOGY SOLUTIONS FOR CARBON ABATEMENT 8
Short-term (Efficiency improvement and biomass cofiring) 8
Longer-term (Carbon dioxide capture and storage) 9
6. RETROFITS OF INNOVATIVE TECHNOLOGIES 10
7. SUPPORT FOR RESEARCH, DEVELOPMENT AND DEMONSTRATION 10
8. CONSISTENCY WITH GOVERNMENT POLICIES 12
9. SPECIFIC RECOMMENDATIONS FOR THE CARBON ABATEMENT TECHNOLOGY PROGRAMME 13
10. ANSWERS TO SPECIFIC QUESTIONS 14
10.1 Rationale and Objectives 14
10.2 Scope of the CAT Strategy 18
10.3 Implementation of the CAT Strategy 19
10.4 Any Other Aspects 24


1. EXECUTIVE SUMMARY

1.1 Mitsui Babcock welcomes the development of the Carbon Abatement Technology strategy and the inclusion of coal as well as gas. It is clear that coal will remain the most important fuel for power generation globally and coal will continue to have a significant share, even if reduced, in the UK. The CAT strategy will support the government�s policies on security of supplies, emissions reduction, competitive energy prices and science and innovation.

1.2 When seeking to maximise environmental benefits, the government should look globally and not focus only on the UK. Carbon abatement solutions need to be suitable for global application if they are to make a worthwhile impact. In this context it should be recognised that Britain burns only 2% of the coal used for power generation worldwide. If this broad global view is taken it is clear that carbon abatement technologies will be needed for both coal and gas, for both new plants and existing plants.

1.3 The government should seek to maximise environmental and trade benefits through exports and technology transfer. Much larger global environmental benefits can be achieved if technologies researched, developed and demonstrated in the UK are exported overseas to the countries that use much larger (and growing) quantities of fossil fuels. Trade benefits can be achieved through a range of business models including licensing and technology transfer, joint ventures, etc. whilst the technology ownership is vested in the UK

1.4 The time for action is now. It does not help the global environment to wait for 2020 or to delay whilst uncertainties over CCS are resolved. New coal-fired plants are being built now, plants are being refurbished and all these could benefit from improved efficiency and being designed to be carbon-capture ready.

1.5 Carbon abatement technologies for fossil-fired power generation offer the government a twin track approach to carbon dioxide reduction. Short-term relatively inexpensive reductions are possible by efficiency improvements (more MW per tonne of CO2 emitted) to complement the reductions being achieved by introducing renewables and by energy efficiency measures. Efficiency improvement is one of the most cost-effective approaches to carbon abatement (less than £6/tonne of CO2). Longer term CATs offers high value in the area of creating a vital option for cutting carbon dioxide emissions by 60% by 2050. Efficiency improvement leading to more MW per tonne of CO2 emitted is an essential precursor to carbon dioxide capture and storage (CCS) and is necessary whether or not CCS is adopted. Both approaches are necessary on the route towards zero emissions.

1.6 The government should support industry-led R&D in Carbon Abatement Technologies through to demonstration of innovative technologies, including best available technology Advanced Supercritical retrofits to coal-fired power plant. Mitsui Babcock supports the technology development strategy proposed by the Advanced Power Generation Technology Forum (APGTF).


1.7 In the UK, given the uncertainties being widely expressed about the achievement of the government�s 2010 and 2020 targets for carbon abatement, increasing gas prices and the loss in confidence that the European Trading System (ETS) will drive reductions in CO2 emissions, more emphasis should be placed by the government on the short term elements of the carbon abatement strategy. Consideration should be given to how to achieve CO2 reductions from existing coal and gas-fired plant in parallel with the introduction of renewables.



2. MITSUI BABCOCK

Mitsui Babcock is a British company (HQ in Crawley; R&D, Manufacture and Services in Renfrew) established in 1891, and wholly owned by Mitsui Engineering and Shipbuilding Co. Japan, since 1995. We employ 4000 people worldwide (3800 in the UK). We serve all sectors of the Energy industry in UK and Europe. In Asia Pacific and the Americas our sole focus is coal-fired power plant. In the UK, whilst we have interests in nuclear, renewables, oil and gas, our largest business area is coal-fired power plant.

Approximately half of the coal-fired power plants in the UK have Mitsui Babcock boilers and more than half of the total have our Low NOx Burners. We have available a portfolio of NOx reduction technologies required for the implementation of the European Large Combustion Plant Directive.

In China, we have supplied 4000MW of coal-fired plant in the last decade and last year when more than 100GW of pulverised coal fired power plant was ordered we had around 15% of the boilers for this market, more than 12 GW being supercritical boilers.

As a UK company we support the government�s objectives in energy, the environment and enterprise. We have successfully developed cleaner coal technology products with the assistance of the DTI�s Cleaner Coal R&D programme and exported these.

During the last few years we have participated extensively in the deliberations and consultation on the Government�s Energy policy including the DTI�s Cleaner Coal Demonstration Review, the Advisory Committee on Cleaner Coal Technologies and the Advanced Power Generation Technology Forum.

The company welcomes the development of the CAT Strategy and looks forward to working in partnership with the government to implement the strategy and maximise the benefits which accrue.

3. LONG TERM ROLE FOR COAL FOR SECURE POWER GENERATION

Coal remains a vital energy source in the UK and worldwide, essential for security of supplies and for balancing the supply portfolio. This needs to be recognised in the ongoing debates on energy and environment policies and coal needs to be given prominence in the CAT Strategy.

Last year 37 per cent of the UK�s electricity was generated from coal. The Joint Energy Security of Supply Working Group (JESS) predicts a continuing dependence on coal (23 per cent of total generation in 2010) especially to meet peak winter demand (25 GW, 36 per cent in 2010).

There is a similar dependence on coal in the EU and in the two largest energy-using economies in the world, China and the USA, an even larger proportion of electricity is generated from coal.

In the EU, the countries most dependent on coal in 2000 were Poland 94 per cent, Greece 67 per cent, Germany 50 per cent, Denmark 47 per cent, UK 32 per cent and The Netherlands 26 per cent. As gas prices rise, advanced supercritical coal technologies are expected to be more competitive than gas combined cycle by 2015, according to the Work Energy, Technology and Climate Policy Outlook (WETO).

In China, electrical power production is growing rapidly (15.8 per cent year-on-year) and around 75 per cent is generated from coal. According to the IEA coal-fired generation is expected to triple between 2000 (1081 TWh) and 2030 (3503 TWh).

In the USA, in 2002 50 per cent of electricity generation was from coal (1900 bn kWh) and this is now forecast to rise as US power companies are turning back to coal amid fears about the availability of alternative sources and as rising natural gas prices choke off the dash-for-gas that characterised the early 90s.

Globally, the IEA, in its World Energy Outlook 2002, projects that global electricity demand will grow by 2.4 per cent per annum from 2000 to 2030. Total installed capacity will rise from 3397GW in 1999 to 7157GW. Fossil fuels will continue to dominate in global power generation and despite some shift to gas the share of coal-fired generation in the global mix will be at least 37 per cent. An additional 1400GW of coal-fired capacity will be added between 2000 and 2030. More recently, the US government has predicted that coal�s contribution to global energy consumption will double to 50 per cent by 2015 as developing countries, initially China and then India, increase their generation.

In a balanced generation portfolio comprising nuclear, coal, gas and renewables, coal has a number of attractive features:

· It is easy to store and transport and can be sourced from diverse stable suppliers worldwide. There are huge deposits in countries where there is a large demand (USA, China, Russia).

· Loads in coal fired power stations can be varied relatively quickly making coal-fired generation particularly useful in meeting peak demand, and in compensating for the intermittency of renewables

· Coal-fired generation (including emission control equipment to the latest stringent standards) is the lowest cost option for electricity generation (typically 1.6p/kwh for existing plant, 2-2.5p/kwh for a new plant).

Against the advantages of coal, has to be set the disadvantage of its carbon dioxide emissions, currently close to 1Te of CO2 per MWh for most of the plant installed around the world. If carbon dioxide emissions are to be reduced, then means must be found of reducing emissions for both existing plant through retrofits and for new plant. Furthermore if carbon abatement technologies for fossil fuels are to have a significant impact, then they must address the international market as well as the UK, and they must address coal as well as gas.

In parallel with seeking to meet its objectives for security of supplies, emissions reduction and competitively priced power, the government must seek to maximise environmental and trade benefits through exports and technology transfer. Much larger global environmental benefits can be achieved if technologies researched, developed and demonstrated in the UK are exported overseas to the countries that use much larger (and growing) quantities of fossil fuels. Trade benefits can be achieved through a range of business models including licensing and technology transfer, joint ventures, etc. This must be fully recognised in the CAT Strategy.

4. NEED FOR EMISSIONS REDUCTION WORLDWIDE

The need for emissions reduction is being recognised with investment in research, development and demonstration of clean coal technologies by national programmes including USA (Vision 21, Clean Coal Power Initiative and Futuregen), Canada (Clean Coal Power Coalition), Japan (New Sunshine Programme), Germany (COORETEC), Australia (Securing Australia�s Energy future) and the EU (Framework Programmes 5 and 6 and the Research Fund for Coal and Steel). The leader in terms of budgets is the US government with very large programmes targeting emissions reduction, and, longer-term, Zero Emission power generation (ZEPG).

In June 2004, the Australian government announced a 500 million Australian Dollar fund established to leverage 1 billion AUD of private investment in low emissions technology demonstrations. In August 2004 the US Department of Energy announced it had received proposals for a new generation of clean coal projects valued at nearly 6 billion US dollars, in the latest phase of President Bush�s Clean Coal Power Initiative (CCPI). Bush has pledged to spend up to 2 billion US dollars in federal funding over ten years to advance technologies that can help meet the nation�s growing demand for electricity while simultaneously providing a secure and low-cost energy source and protecting the environment.

In comparison with the above the UK�s investment has been modest but it has been effective. Through the DTI�s Cleaner Fossil Fuels programme and its predecessors, EU support and work for the IEA and oil companies such as BP, British based companies and organisations have begun to develop some of the Carbon Abatement technologies that will be needed and have laid the groundwork for international collaboration.

By the development of a UK CAT strategy we believe it will be possible to maximise the benefits of international collaboration. Continuation of RD and D in the UK will be essential to maintain the UK�s technological position �and seat at the table�. It is not possible to contemplate participation in long term international collaborative projects without the support of UK government funding.
5. TECHNOLOGY SOLUTIONS FOR CARBON ABATEMENT

We agree with a twin-track approach to carbon abatement for fossil fuels i.e. both efficiency improvements in the short term and carbon capture and storage (CCS) in the longer term. Efficiency improvement is an essential precursor to CCS. Both are essential steps towards zero emissions plant. Both require significant innovation and risk.

Short-term (Efficiency improvement and biomass cofiring)

In the short-term major improvements in carbon dioxide emissions are possible by improvements in generation efficiency (giving a reduction in carbon dioxide per megawatt of electricity generated) and by substituting a proportion of the coal by biomass (biomass cofiring).

For existing plant, reductions of up to 20 per cent in carbon dioxide emissions (and fuel consumption) are possible by retrofitting Advanced Supercritical Boilers and modifying the steam turbines within the existing power station building and support steelwork. Further reductions of 10 to 20 per cent are possible by use of CO2 neutral biomass (typically 5-10 per cent by pre-blending biomass with coal and a further 10 per cent by direct injection of biomass through dedicated ports or burners. Additionally, around 10% further reduction is possible by using gas turbines for Feed Water Heating. In total these measures can bring the carbon dioxide emissions down to the level of gas-fired CCGT plant.

For new-build, in China, Mitsui Babcock are supplying supercritical boiler plant of 42 per cent net efficiency (steam conditions up to 259 bar, 5710C) (reference plant at Hemweg in Holland and Meri Pori in Finland) and can offer advanced supercritical plants capable of 45 or 46 per cent net efficiency (steam conditions up to 295 bar, 5950C).

For new power plant, advanced supercritical boiler/turbine plants offer the highest efficiency and lowest CO2 emissions per megawatt. Comparative studies by IEA and by a number of utilities have shown that such plants, fitted with state-of-the-art emissions control equipment generally give the lowest cost-of-electricity, highest availability and lowest specific CO2 emissions for a wide range of coals from sub-bituminous through bituminous to sub-anthracite.

Competing clean-coal technologies such as Integrated Gasification Combined Cycle (IGCC) or Circulating Fluidised Beds (CFBs) have a complementary role to play for particularly high sulphur or high ash coals, albeit with slightly lower efficiency and higher costs.

The Mitsui Babcock Advanced Supercritical Boiler design is equally suited to retrofits and new-build. It is a two-pass design, similar in overall shape and size to the two-pass natural circulation boiler it replaces. The best available technology incorporates Mitsui Babcock�s low mass flux vertical tube once-through furnace with the advantages of a positive flow characteristic, reduced weight and faster response.

The time for implementation of efficiency improvements is now. It does not help the global environment to wait for 2020 or to delay whilst uncertainties over CCS are resolved. New coal-fired plants are being built now, plants are being refurbished and all these could benefit from improved efficiency and being designed to be carbon-capture ready. Currently the Best Available Technology ready for demonstration is now 300 bar/6000C (46% efficiency), and 350 bar/7500C (50+% efficiency) will become feasible in about five years within the timescale of the CAT strategy.

The CAT strategy needs to be capable of supporting both continuing R&D, component demonstrations and retrofit demonstrations of innovative efficiency improvement and co-firing technologies.

Longer-term (Carbon dioxide capture and storage)

Carbon dioxide capture and geological storage is a longer-term solution (CCS). This involves a chain of technologies for CO2 capture, transportation and storage.

Mitsui Babcock is particularly interested in the carbon dioxide capture technologies that can be retrofitted to existing plant as well as being utilised with new plant. The company has a long track record in R&D on oxyfuel firing of coal. The company carried out successful trials of oxyfuel-firing of coal in the mid 90s on its test-rigs in Renfrew. More recently it has joined two new EU-funded Framework 6 projects ENCAP (Oxyfuel firing) and CASTOR (Amine scrubbing) and is involved in several techno-economic design and feasibility studies on carbon dioxide capture in conjunction with Advanced Supercritical Boilers (ASC).

Early results from these studies indicate that ASC with CO2 capture by amine scrubbing or oxyfuel firing will be competitive with gasification and pre-combustion capture, and, significantly, give an electricity cost inclusive of CO2 capture and storage less than the cost of electricity from renewables such as offshore wind, wave, tide or photovoltaics.

Over the next three years, the current EU R&D and a number of design studies will be completed. There will be the opportunities for further collaborative R&D projects and small scale capture demonstration. In parallel R&D is needed on technologies to facilitate the identification and screening of suitable geological CO2 storage sites, measurement/auditing and monitoring.
Opportunities to demonstrate storage may arise, most probably on land, overseas, and associated with enhanced oil recovery. The CAT strategy needs to be capable of supporting involvement in all of the above.



6. RETROFITS OF INNOVATIVE TECHNOLOGIES

Retrofits allow innovative technologies to be proven in shorter timescales and at less risk and cost than on complete new plants, making demonstrations more affordable and more valuable within the CAT strategy.

For example, Mitsui Babcock�s Low NOx burners and Staged Combustion solutions were first demonstrated at full-scale through retrofits and then subsequently adopted on new boiler plant. More than 45,000 MWt of such burners have now been installed world-wide on Mitsui Babcock and other original equipment manufacturer�s (OEMs) plant. Another 30,000 MWt are being installed in China. Many such retrofits have included other boiler refurbishments and other plant improvements, in some cases involving replacement of almost all the boiler pressure parts (furnace, reheater, superheater, economiser etc.). Retrofits of Advanced Supercritical Boilers and associated turbines (HP and IP modification) will require additional work but the new Mitsui Babcock vertical tube low mass flux two-pass advanced supercritical boiler design retains the advantage that it can be installed quickly within the existing buildings and support steelwork.

A recent project in China demonstrates the speed with which major retrofits can be accomplished. At the thirty-year old Yaomeng Power Plant in China, Mitsui Babcock has replaced an existing Chinese UP boiler with a new subcritical vertical-tube once-through boiler of the Mitsui Babcock low mass-flux type. Output was raised from 270 to 323 MWe, boiler efficiency increased by 1.1 per cent, Heat rate reduced by 975 kJ/kWh, coal consumption by 10 per cent and availability improved to 100 per cent for 17 months out of 18. The outage during which the boiler was replaced was six months in duration.

For an advanced supercritical boiler/turbine retrofit on a 600MW unit it has been estimated in a recent study that a twelve month outage would be necessary. The cost of such a retrofit (circa £150/kWe) is such that the resultant marginal cost of CO2 abatement can be less than £6/tonne of CO2. This compares very favourably with the costs-of-abatement for renewable technologies, nuclear or CCS. Additionally there are benefits in improved plant flexibility, load response and availability. Retrofit designs can be �capture ready� � i.e. designed to allow subsequent CO2 capture by retrofitting amine scrubbing or oxyfuel firing.

Retrofits should thus have an important place in the CAT strategy � for both coal (boiler turbine and gasification) and gas, efficiency and improvement and CCS.

7. SUPPORT FOR RESEARCH, DEVELOPMENT AND DEMONSTRATION

Taking a carbon abatement technology from the research stage through product development and full scale demonstration to commercialisation and repeat orders requires a series of steps of progressively increasing cost. In the UK, there is already support for the University research end of the spectrum and there has been valuable support for R&D from the DTI�s Cleaner Fossil R&D programme.

Other governments are strongly supportive of the full-scale demonstration stage. This is being recognised with investment in research, development and demonstration of clean coal technologies by national programmes including USA (Vision 21, Clean Coal Power Initiative and Futuregen), Canada (Clean Coal Power Coalition), Japan (New Sunshine Programme), Germany (COORETEC), Australia (Securing Australia�s Energy future) and the EU (Framework Programmes 5 and 6 and the Research Fund for Coal and Steel). The leader in terms of budgets is the US government with very large programmes targeting emissions reduction, and, longer-term, Zero Emission power generation (ZEPG).

Power generators are generally risk averse and this is exacerbated by uncertainties due to environmental policies such as LCPD and ETS. To achieve take-up of novel carbon abatement technologies and correct the failure of the market to encourage innovation it is necessary to support the demonstration of first-of-class plant and thereby provide references for other potential customers at home and abroad.

Such support of innovative technologies is well recognised within the EU State Aid rules and accepted for other low carbon technologies which face similar hurdles. An example is the recently announced joint DTI Scottish Executive and Scottish Enterprise support for the Talisman Deepwater Offshore Wind Project. Another example is the New Technology Demonstration Programme (part of DEFRA�s Waste Implementation Programme) designed to encourage the building of first-of-class innovative commercial scale Waste-to-Energy plant.

The CAT strategy should include a comprehensive long-term programme of industry-led R&D and demonstration at commercial scale as recommended by the Advanced Power Generation Technology Forum. Whilst some potential demonstration projects (such as for example a full scale gasification plant with hydrogen production and CCS) would be very expensive and perhaps only possible through UK participation in international projects, other smaller scale demonstration projects (including component demonstrations and retrofits) are affordable and should be pursued.

Industry-led RD and D should be supplemented by:-

· Complementary University R&D through EPSRC, UKERC, Scottish Energy ITI etc., in each case with industrial involvement in programme management
· Complementary technology transfer programmes designed to engage customers/partner/government agencies in markets that have significant potential for environmental improvement an trade


8. CONSISTENCY WITH GOVERNMENT POLICIES

The recommendations made in this consultation response are consistent with a large number of government policies/statements:-

· The 10-year Science and Innovation Investment framework which highlights that energy RD&D will remain of the highest priority to meet climate change/energy challenges and emphasises the need for greater pull-through of innovative technologies to demonstration and commercialisation

· The Prime Minister�s speech on Climate Change on 14 September 2004 urges global leadership and argues that we need to invest on a large scale in existing technologies � �There is huge scope for improving energy efficiency and promoting the uptake of existing low carbon technologies like PV, fuel cells and carbon sequestration�.

· The objectives of the DTI�s Clean Energy MOUs with China and the USA

· The Energy White Paper announcement of a programme of support for advanced traditional cleaner coal technologies intended to bring forward demonstrator projects (para 6.64) reiterated in the House of Lords by Lord Sainsbury on 9 September 2004.

· The Advanced Power Generation Technology Forum�s strategy for Carbon Abatement for fossil fuels published in May 2004.

· The DTI Innovation Review which emphasises the importance of collaborative industry-led R&D

· The DTI report �Review of the Case for Cleaner Coal Technology Demonstration Plant 2001� which recommended support for small scale demonstrations including an Advanced Supercritical Retrofit

· The Scottish Executive�s Smart Successful Scotland strategy which includes Energy in its priorities

· The Scottish Executive�s new strategy on Green Jobs in Scotland

· The government�s announced intentions with respect to its priorities for the G8 Summit at Gleneagles and Britain�s Presidency of the European Council of Ministers

· The government�s participation in the CSLF (Carbon Sequestration and Leadership Forum)

9. SPECIFIC RECOMMENDATIONS FOR THE CARBON ABATEMENT TECHNOLOGY PROGRAMME

We agree with the recommendations of the Advanced Power Generation Technology Forum in all respects i.e.

· Technology development strategy for zero emissions (Chapter 6) including
- twin track approach (Efficiencies and CCS)
- short, medium and long term targets (2005+, 2010, 2020)
- culmination of each phase to be commercial demonstration

· Candidate future plant technologies (Chapter 7) i.e. pf +fgd, IGCC, GTs, Fuel cells and three generic approaches to CO2 capture post combustion, pre-combustion and oxyfuel combustion

· Themes for RD&D (Chapter 8). We would wish to see sufficient emphasis given to �Components and Technologies� and �Physical Demonstration� as these are the most important for delivery of the strategy.

· The way forward � Implementation (Chapter 9). We support the proposal for an integrated approach to
- an industry-led RD&D programme
- a technology transfer programme
- a parallel Academic Research programme

The RD&D programme should have two strands:

- a regular series (annual) of Calls-for-Proposals (similar to the current Clean Fossils Programme 4th Call)
- an �open-call� for proposals involving participation in International projects. This is essential to allow organisations to make the best possible response to opportunities which arise (similar to the current arrangements for Export Promotion and technology Transfer Projects).

With respect to the level of DTI funding indicated (section 9.4) we believe that much can be achieved for much smaller amounts than are being committed elsewhere (in Australia, Canada, USA etc.). Funding of the level indicated (£10Mpa increasing to £20Mpa after four years) will be valuable and will allow more progress than in the recent past.

However, is this level of funding (particularly the £1Mpa proposed for international collaboration) really commensurate with the government�s ambitions for global leadership? Is it consistent with the concern expressed by the Prime Minister and the Chief Scientific Adviser that Climate Change is the greatest challenge and force for change of the century? If funding is limited to the level of £10Mpa-£20Mpa then it will not be possible for the �UK Ltd� to have a leading role in the multi-million ZEPG demonstration projects that can be envisaged. The objectives should be

- to take a leading role in several key European demonstrations
and
- to take a subsidiary role in several other complementary international demonstrations.

The DTI funding budget needs to be sufficient to help the UK secure these roles.



10. ANSWERS TO SPECIFIC QUESTIONS

10.1 Rationale and Objectives

(i) Do you accept that Carbon Abatement Technologies (as defined in Annex D) are relevant to the future of UK energy supply?

Yes. The three groups of technologies are complementary. They can be applied independently or in combination.

(ii) In your opinion will the draft objective (in Section 3) provide adequate direction for government action in respect of CATs in order to achieve the aims of the Energy White Paper?

Yes, but we believe the objectives should be broader than meeting the aims of the Energy White Paper. The objectives should include maximisation of global environmental benefit and trade through exports and technology transfer:

· When seeking to maximise environmental benefits, the government should look globally and not focus only on the UK. Carbon abatement solutions need to be suitable for global application if they are to make a worthwhile impact. In this context it should be recognised that Britain burns only 2% of the coal used for power generation worldwide. If this broad global view is taken it is clear that carbon abatement technologies will be needed for both coal and gas, for both new plants and existing plants.

· The government should seek to maximise environmental and trade benefits through exports and technology transfer. Much larger global environmental benefits can be achieved if technologies researched, developed and demonstrated in the UK are exported overseas to the countries that use much larger (and growing) quantities of fossil fuels. Trade benefits can be achieved through a range of business models including licensing and technology transfer, joint ventures, etc. whilst the technology ownership is vested in the UK



(iii) Do you think the UK has strengths and weaknesses in any particular areas of CATs? Are there any particular areas of CATs that you think we should focus on?

Our own company�s strengths are in

(i) design and supply of coal-fired boilers including advanced supercritical

(ii) emission improvement retrofits

(iii) biomass co-firing for coal-fired plant

(iv) R&D in carbon capture (Oxyfuel firing or Amine Scrubbing)

(v) R&D in multipollutants reduction

The focus should include (i) to (v), and should certainly emphasise coal where Carbon Abatement Technologies will have a much greater impact than for gas. See Section 3.

(iv) Given that the power sector (and other sectors) are becoming increasingly global in ownership and operation do you consider that the UK should itself develop CATs or should it leave this to other countries (such as the USA) and buy these in when required?

UK based companies will only benefit from the export trade opportunities in the long-term if they have ownership of the technologies. The power generation equipment sector remains one where the UK can have a strong position based on existing companies, (consultancy, engineering, suppliers, generators etc.) track record, technology leadership and innovation. The groupings of companies involved in the DTI 4th Call project on Advanced Supercritical Retrofit with CO2 capture demonstrate the UK�s strengths: The consortium comprises Mitsui Babcock Energy Limited (a leading designer and manufacturer of coal fired boiler plant with references in Supercritical Boilers and an R&D track record in Advanced Supercritical, NOx control and Oxyfuel firing), Alstom Power UK Ltd (leaders in turbine-generator retrofits for efficiency improvements); E.ON UK (leading UK based generator and power plant consultant with a track record in emissions control, plant optimisation); Air Products plc (specialist in Air Separation, CO2 purification and compression, and systems integration); and Imperial College (focusing on cycle optimisation). Drax Power and EdF are committed to support the project. Fluor Ltd (major international contractor with Amine Scrubbing capability) will be acting as sub-contractor.

The future position of UK companies in export markets is dependent on them having a strong home market. Quoting the Prime Minister, �To acquire global leadership on this issue, Britain must demonstrate it first at home.�. See Section 7.

(v) What do you think would be the economic benefits for the UK in developing CATs both in terms of the UK economy and its role in global markets? In addition to power generation what other sectors do you think would benefit from a CAT programme and why?

Economic benefits would accrue from:

- growth of the science and technology base of the country
- innovation in industry (new products, services and business models)
- exports of equipment and technology licences
- high quality jobs in the UK in Consultancy, R&D, Design, Engineering, Project Management as well as Manufacturing
- long-term services business which follows from installation of equipment

We believe the opportunities in power generation substantially outweigh those in other sectors. However, technology developed for power generation may be useful in the other sectors.

(vi) Given the opportunities for hydrogen production from fossil fuels, how do you think this should feature in the Strategy?

Hydrogen production from fossil fuels is already proven technology. In the future if the �hydrogen economy�, primarily for transport, grows then there will be a need for some new coal-fired power plants fitted with CCS to produce hydrogen and hydrogen production with CCS should therefore be part of the longer term objectives of the Strategy.

Opportunities for projects for hydrogen production from fossil fuels with CCS are likely to arise under the EU FP6 or FP7 programmes. Opportunities should be sought for the UK to participate in EU projects in this area. This may require some DTI support by way of top-up funding.

(vii) What do you consider to be the potential barriers to the development and introduction of CATs? In your view how can the Government help to address them, for example through pricing of CO2 emissions through emissions trading or similar policies?

The current barriers to CATs in the UK are the uncertainties around:-

- the implementation of the LCPD
- the impact of the Emissions Trading System (future price of CO2 credits, Allocation Plans post 2008). Currently the CO2 price is too low to drive change. This is a consequence of CO2 allocations in other EU countries being too generous. Utilities are nervous that in 2008 allocation plans will be significantly tighter.
- the future price and availability of gas.
- lack of government support for first-of-class demonstration coal power plant. Such demonstration funding is available for Wind, Wave/Tide and Photovoltaics but not for fossil-fuelled plant.

The market is failing to drive the emissions reductions that are required, except perhaps in the area of biomass where the subsidy in the form of ROCs justifies the relatively modest investments to allow co-firing.

Hence despite the relatively low cost of carbon abatement for efficiency improvement on a coal-fired plant (less than £6/tonne of CO2 for an advanced supercritical retrofit based on a very conservative plant life of 10 years), the utilities are unable to justify the investment.

There is no logic in a policy which supports by subsidies (ROCs) the reduction of CO2 emissions by substituting coal burn by more expensive renewables but does not support reduction of CO2 by improving the efficiency of the coal-fired plant, or by capturing the CO2 and using it for enhanced oil recovery.

The policy in Germany on NAPs supports the adoption of Best Available Technology. Plants which meet specific CO2 emission criteria corresponding to Best Available Technology for either coal or gas will be given generous Allocations of credits.

To change this situation the government should introduce incentives for all means of CO2 reduction and should guarantee appropriate CO2 allocations for plants which will meet specific BAT CO2 emission criteria for periods long enough to justify investment.

(viii) What do you think are the key features for CCS systems? How do you think CO2 storage should be monitored in the long term?

The Strategy must recognise that Carbon Capture Systems (CCS) will be needed for coal and for gas, for existing plant (retrofits) as well as new plant, and that several approaches to storage are likely to emerge, both onshore and offshore, including but not limited to EOR.

The most widely applicable technologies will probably be those suitable for use on land (for EOR or just for storage) and may not be optimum for offshore use.

For pulverised coal boiler/steam turbine plant, increased combustion and conversion efficiency is an essential first stage to CCS. It counters the efficiency penalty of capture and storage.






10.2 Scope of the CAT Strategy

(i) To what extent do you think that a strategy should focus on CATs for coal plant and natural gas plant? Should it, for example, give equal weight to reducing CO2 emissions from both fuels?

CATs should be focused on coal and natural gas power plant because these plants account for the largest percentage (29.4%) of CO2 emissions. Furthermore the most likely ways of reducing emissions from the second largest sector (Transport) will involve power plants producing more electricity (for battery-driven vehicles) or hydrogen (for hydrogen fuelled vehicles).

Also carbon emissions from power plant worldwide are forecast to grow significantly (e.g. in China they will more than triple from 2000 to 2030).

More emphasis should be given to coal than natural gas because:

· Coal resources are much larger and more sustainable than gas
· Coal is used for a much larger share of power generation than gas (globally 39% of 17% in 2002)
· Coal is needed for security of supplies
· Coal derived CO2 emissions are double those of natural gas and more in need of abatement

(ii) Do you agree that the CAT Strategy should cover all major sources of CO2 emissions from fossil fuel use, not just power generation? If so why?

The emphasis should be on power generation but where technologies for Carbon Abatement on power generation plant have application elsewhere such application should be recognised and encouraged.

Technologies specific to other sources with no application to power generation should be excluded.

(iii) What businesses and organisations do you think we should involve as stakeholders in a new CAT Strategy?

It is important to involve businesses and organisations in all three areas of CATs

- efficiency improvement
- carbon dioxide capture
- geological storage

and to proceed in parallel with all three �strands�.

For efficiency improvement, the main players are the equipment manufacturers and the utilities, as represented in the Advanced Power Generation Technology Forum.

For carbon dioxide capture, the main players are process engineers/project developers, utilities, oil and gas companies and equipment manufacturers (boilers, turbines, oxygen separation units, flue gas scrubbers etc.) as currently represented on the DTI PSAG subgroup on CCS.

(iv) In your view, what should be the main components making up the scope of a CAT Strategy?

The CAT strategy should have two components:

(i) Technical: how to encourage technical developments that are capable of making a significant impact on CO2 emissions globally. See Section 5.

(ii) Non-Technical: how to encourage implementation of CATs in the UK or elsewhere both to help the UK meet its energy policies (security, emissions, cost of energy) and to help set an example to the rest-of-the-world.


10.3 Implementation of the CAT Strategy

(i) What do you see as the critical technologies for development over the next 15 years?

For coal-fired boiler steam turbine plant (new and retrofits) the critical CATs technologies for development and demonstration over the next fifteen years are:-

· Capture-ready advanced supercritical boiler/steam turbine retrofits (300 bar/6000C/ 46% efficiency) with biomass cofiring as an option and cost effective reduction of other pollutants (NOx, SOx, Hg, VOCs, etc.)
· Capture-ready THERMIE 700/AD 700 supercritical boiler/steam turbine new plant and retrofits (350 bar/7500C / 55% efficiency)
· More efficient and cost effective CO2 capture using either post combustion scrubbing (probably amine) or pre-combustion air separation and oxyfuel firing.

(Note: capture-ready means a design which can be readily retrofitted with carbon dioxide capture equipment.)

Much of the R&D is already complete or underway and key to successful implementation is component and full scale demonstrations of these technologies. There will be a role for continuing underpinning R&D but R&D without demonstration will be pointless.


(ii) Do you think the CAT Strategy should follow a two-track approach supporting incremental improvements to fossil fuel combustion technologies as well as CCS?

Yes, with immediate priority given to the first track (improvements to fossil fuel combustion technologies) as these will give benefits more quickly and in any case are a precursor to CCS.

The time for action is now. It does not help the global environment to wait for 2020 or to delay whilst uncertainties over CCS are resolved. New coal-fired plants are being built now, plants are being refurbished and all these could benefit from improved efficiency and being designed to be carbon-capture ready.

The first track is a no-regrets action (reduced pollution, reduced CO2, improved security of supplies, capable of widespread replication) whilst the second track opens up complementary options that will otherwise not be available.

(iii) What do you think should be the balance between CCS and other CAT technologies?

In the short-term we would envisage the balance of expenditure would be towards Efficiency Improvement Technologies, and in the medium-term it would swing to more expensive CCS technologies � which may require more investment and possibly more government support � unless the result of the oil price increases make the economics for CO2-EOR favourable. Some broad brush figures based on 30% support (the EU norm for a demonstration of an innovative technology in a project with an R&D element) indicate the levels of support that may be needed for a range of opportunities.


Efficiency Capital Cost Government Support for First of Class Demonstration Plant Note 1 Cost of Carbon Abatement £/tonne CO2Note 2
Advanced Supercritical Retrofit (600MW) 43-44% £100M £30M £6/t
AD 700 Supercritical Retrofit (600MW) 47-50% £150M £50M £4.5/t
New IGCC (450MW) 41% £400M £120M N/A
AD700 Supercritical 600MW New-Build 50% £350M £105M N/A
EOR in the North Sea using CO2 captured from Power Plant (includes demo of capture) £500M £150M £20-25/tNote 3

Note 1: based on 30% support which is the EU norm for a demonstration of innovation technology in a project with an R&D element
Note 2: costs are for subsequent plant and are relative to the plant retrofitted i.e. they exclude the benefit of government support for demo plant
Note 3: Neglects benefit of EOR credits


(iv) Do you think we should have a further programme of supported R&D activity in the UK alone or should we place the emphasis more on international collaborative projects with some UK funding?

Both a UK Programme of Research, Development and Demonstration and international collaborative projects with some UK funding are necessary, as recommended by the APGTF.

Continuation of RD&D in the UK is essential to maintain the UK�s leadership. It is very difficult to contemplate participation in international collaborative projects without the support of UK funding.

(v) Do you agree with the classification of CATs given in Annex D and what actions should we take to mesh with the work done in other areas and programmes, such as the work of the Research Councils?

We agree with the classification.

We would like to clarify that efficiency improvements and cofiring with CO2 neutral biomass each offer reductions of 10 to 20% and these are additive. (The worst existing plants improved to AD700 conditions with the addition of biomass cofiring (20%) would give about 50% reduction in CO2.)

With respect to meshing with work done in other areas: we would recommend that in future the ACCAT or the APGTF should have a formal Advisory Role in other government programmes (EPSRC, UKERC, Carbon Trust �etc.) where these encompass Carbon Abatement technologies. There should also be a link to the activities of Regional/Devolved Authorities in this area (e.g. Scottish Executive Energy ITI).



(vi) Do you think there are any specific actions needed to ensure that there is effective cooperation between academic and industrial research programmes on CATs?

Yes. Our concern � expressed frequently in responses to consultations � is that there is too much emphasis on the Research end of the RD and D spectrum and not enough on the Demonstration end. To counter this RD&D should be industry-led. The R&D programme sponsored by BCURA and the DTI is an excellent model. Industry should be represented on the Advisory Boards /panels of UKERC, EPSRC, Carbon Trust etc.

(vii) Do you think a large-scale demonstration project would be worthwhile in the near future? What do you think should be its objective and scope?

Yes, a project to demonstrate an Advanced Supercritical Boiler/Turbine retrofit is overdue. The concept was first suggested during the DTI�s review of demonstration of Cleaner Coal Technologies in 1990, and was one of the recommendations of the report produced at the time.

The objective would be to demonstrate at commercial scale innovative British advanced supercritical boiler/turbine technology capable of giving 46% efficiency on new plant or 43/44% on a retrofit. The retrofit would be designed to be carbon-capture ready � i.e. capable of being further retrofitted with CO2 capture (post combustion or oxyfuel). A UK site or a site in China would be chosen.

Such a demonstration executed as a retrofit would prove that ASC technology can give Carbon abatement at a cost of less than £6/tonne of CO2 and would be an excellent reference for both new plant and retrofits for a wide range of coal types.

In the longer-term the plant could be fitted with CO2 capture and the combination used as a technical and commercial demonstration of the whole chain.

(viii) Do you think the UK should seek to host such a project and, if so, how should we seek to capture the benefits; or would we gain better value by collaborating with a project elsewhere?

It would be preferable to host the demonstration in Britain, but the alternative suggested in China is very attractive:-

- less expensive
- shows a commitment to China
- larger market opportunities and environmental benefit via replication

The benefits would be captured through the participant company�s ownership of the technology. This would be exploited through further sales and technology licensing arrangements.

Other collaborators/funders may be found to share the cost.

The UK can gain the value of all the prior R&D work by leading the demonstration.

A further similar opportunity will arise in future when the AD700 supercritical boiler/turbine technology will be ready for demonstration.

(ix) Do you think there should be broad collaboration with a large group of countries (such as the CSLF) or should we concentrate on setting up further bi-lateral collaborations with key partners?

Experience shows that the broader the collaboration the less direct the benefit. On balance we may prefer some bilateral arrangements with China, Germany, USA and Japan.

(x) Do you agree with the key issues for CCS technologies identified in the DTI�s feasibility review of CCS technologies? Are there other issues or barriers that government should be addressing?

Yes. However, given the impetus for EOR and CO2 reduction we believe these issues can be dealt with satisfactorily.

(xi) How do you think CATs should be positioned against other long-term abatement options?

CATs should have a much higher priority than they have currently. This is because the growth of fossil fuel usage around the world threatens to completely wipe out any benefits gained by use of renewables or energy saving in the UK. The government should put more emphasis on the potential global environmental advantage. CATs are very competitive in terms of cost of carbon captured and cost-of-electricity.

Expenditure on RD and D for CATs should at least match the highest levels committed to other abatement options. Currently expenditure on Cleaner Fossil at £4Mpa falls well short of the expenditures on other abatement options such as onshore wind, offshore wind, wave and tide despite the fact that the combined market share postulated for such technologies is much smaller (20% in the EU, 1.5% in Japan, 2% in China).

(xii) What actions do you think the UK Government should undertake to facilitate an informed public debate on the choices that will need to be made?

Government leadership is required rather than more debate. The present consultation should suffice to justify the level of investment being suggested in what is a common-sense strategy.

(xiii) Do you consider that we should retain the Technology Transfer and Exports Promotion activities of the old Cleaner Coal Technology programme in the new CAT Strategy?

Yes, these activities have been very valuable and should be continued. In our view they are closer to the activities of the Clean Coal Programme (or future CAT programme) than the activities of UK TI.

(xiv) What, if any, additional actions do you think the UK Government should be undertaking to assess risks associated with CCS, either alone or in collaboration with other countries?

Not our area of expertise.

(xv) What, if any, additional actions do you think the UK Government should be undertaking to develop emissions inventory, monitoring and verification methods for CCS, either alone or in collaboration with other countries?

Not our area of expertise.




10.4 Any Other Aspects

1. Are there any other issues that you think we should be considering in developing this Strategy?

Please see our Executive Summary. We believe more emphasis should be placed on the potential global environmental impact of promoting carbon abatement technologies.

2. We would welcome your views on whether there will be a regulatory impact as a result of this Strategy being implemented

No opinion




J M FARLEY
Director of Technology Policy Liaison
Mitsui Babcock Energy Limited
Porterfield Road
Renfrew
PA4 8DJ

Tel: [phone]
e-mail: [e-mail]

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[Jagman]

TRCPA, the horse buggy makers probably ganged up on Ford too, the maket of supply and demand usually wins out. Right now though, a large portion of my money is in the oil, oil service, and natural resources businesses. I agree, FASC was smart to target some emerging markets, but can they survive there?
Market says no right now, IMO.