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Carbon Emission Avoidance Copyright © 2016 by Gap Engineering All rights reserved. TM Decreasing Carbon Emmission while Increasing Efficiency

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Carbon Emission Avoidance

Copyright © 2016 by Gap Engineering All rights reserved. TM

Decreasing Carbon Emmission while Increasing Efficiency

Meeting Carbon Emission Requirements While Increasing Profitability Can emissions compliance

yield a return on investment?

2 Gap Engineering

Rising demand for affordable electricity combined with

global climate change concerns and a tight capital market

presents power generators with a daunting challenge -

How to maintain generation capacity while reducing

carbon emissions and minimizing the significant capital

outlay represented by new generation construction?

Significantly improving existing coal-fired power plant

performance is one answer to addressing these

challenges.

1% efficiency improvement at thermal plants reduces

CO2 emissions 2-3%. For example this 1% improvement

would allow cost avoidance of one 5 Megawatt wind

turbine for a 500 Megawatt plant.

Copyright © 2016 by Gap Engineering All rights reserved. TM

4

All power generation technologies are

subject to the economics of their

construction, operation and

maintenance, fuel, and lifecycle and

replacement costs as well as the

uncertainties and inequities associated

with government regulations and

subsidies. Regulated or not,

generators must remain competitive in

order to be viable in the long-term.

Consequently, alterations to plant

assets and operations should yield a

return on investment regardless of the

ever changing economic and political

environments.

The introduction of the Clean Power

Plan further challenges the economic

viability of coal-fired power plants

because of the high cost of carbon

capture and sequestration. While

many view the solution to meeting the

Clean Power Plan’s emissions targets

as the shutdown and replacement of

the least efficient coal-fired power

plants with renewable electric

generation, there exists an alternative

that both reduces emissions and

improves utility economics.

Simply put, improve coal-fired

power plant performance so as to

not burn the coal or coke in the first

place.

Can emissions compliance yield a

return on investment?

Carbon Emission Avoidance

Copyright © 2016 by Gap Engineering All rights reserved. TM

The Clean Power Plan and Today’s

Coal-fired Power Plants

The Environmental Protection Agency (EPA) issued the Clean Power Plan

that, while currently stayed by the United States Supreme Court, proposes

significantly lower carbon emissions targets for coal-fired power plants.

This proposed rule requires the electric generating industry to reduce

carbon dioxide emissions by 32 percent below 2005 levels by 2030. To

achieve this goal, the EPA specified carbon emissions goals for each state

and identified four “building blocks” to make the required carbon emission

reductions:

improving power plant heat rates

using less carbon intensive electric generating units

deploying more low- or zero-carbon emitting generation

increasing demand-side energy efficiency

States must submit their plans to meet the proposed target by June 2018

or apply for an extension.

Coal-fired power plants account for 42 percent of America’s electric power generation and a sizable portion of many utilities’ asset portfolio. These plants, however, do not typically meet the aggressive emissions target set forth in the Clean Power Plan. Retrofitting these facilities with the required carbon capture and sequestration technologies is likely to be too costly an investment for most electric producers.

1,2,3,4 Thus, coal-fired power plant

operators must find other means of reducing their carbon emissions or risk premature decommissioning of these assets.

5 Gap Engineering

1. Cost-Benefit Analysis of Flexibility Retrofits for Coal and Gas-Fueled Power Plants, National Renewable Energy Laboratory, U.S. Department of Energy, December 2013

2. CCS Retrofit: Analysis of the Global Installed Power Plant Fleet, International Energy Agency, 2012

3. Carbon Capture Technology Options and Costs, Jared Ciferno, National Energy Technology Laboratory, U.S. Department of Energy, September 2008

4. Retrofitting Carbon Capture Systems on Existing Coal-fired Power Plants, L.D. Carter, American Public Power Association, December 2007

Copyright © 2016 by Gap Engineering All rights reserved. TM

6

Carbon Avoidance, the Alternative to Capture

and Sequestration for Existing Plants

The Clean Power Plan fails to address a proven, economic solution for

reducing carbon emissions – carbon emission avoidance.

Carbon emission avoidance represents a collection of operational approaches that effectively reduce the amount of fuel required to generate a megawatt of electric power. Consequently, all emissions – CO2, NOx, SO2, particulate matter, mercury, lead, heavy metals, CO, hydrocarbons, and arsenic – are reduced while simultaneously lowering overall fuel costs and avoiding carbon capture and sequestration efficiency penalties.

Source: Can Future Coal Power Plants Meet CO2 Emission Standards Without Carbon Capture and Storage?, EPRI, October 2015

Coal Technology CO2 Emissions Kg/MWh (Gross)

Typical Existing Coal Plant 1100

Advanced Utrasupercritical (USC) Steam Plant 750

2030 Clean Air Act Limit For Old Plants 726

Integrated Gasification Combined Cycle Plant 700

Advanced USC Plant + 12.5% Steam Utilization 636

EPA Standard for New Construction Coal Plants 636

USC Plant + 14.5% Steam Utilization 636

IGCC Plant + High Quality Coal 627

Integrated Gasification Supercritical Brayton Cycle Plant 603

Integrated Gasification Fuel Cell (IGFC) Plant 603

Advanced USC Plant + 25% Steam Utilization 568

IGCC Plant + 1700oC Combustion Turbine 567

Integrated Gasification Triple Cycle Plant 527

IGFC Plant + Catalyst Gasifier 501

IGFC Plant + Pressurized Solid Oxide Fuel Cell (SOFC) 498

Advanced USC Plant + 50% Steam Utilization 465

IGFC Plant + Catalyst Gasifier + Pressurized SOFC 430

Copyright © 2016 by Gap Engineering All rights reserved. TM

Carbon Emission Avoidance

7 Gap Engineering

Practical experience shows that

implementation of carbon emission

avoidance initiatives can enable

existing coal-fired power plants to meet

Clean Power Plan standards. This is

accomplished through a series of

projects that improve the energy

efficiency of coal-fired facilities.

Quick Win Energy Efficiency

Gains

Megawatt Recovery Program: Identify

and repair sources of energy loss

within the plant such as steam leaks.

Boiler Pressure Control Optimization:

Tune system controllers to maintain

constant boiler pressure and megawatt

loading thereby optimizing overall

system performance.

Soot Blower Cycle Optimization:

Enhance the soot blower control

system to eliminate unnecessary run-

time and heat loss.

Plant Efficiency Modifications

Soot Blower Steam Relocation: Move

the soot blower steam downstream to a

lower pressure source in order to save

energy.

Heat Integration: Heighten intersystem

heat integration to fully optimize heat

recovery and minimize emitted waste.

Fuel Treatment

Water Removal: Implement measures

to limit water impregnation and/or

evaporate absorbed water using heat

integration methods to improve overall

fuel efficiency.

Typical Coal-fired Power

Plant Emissions

A typical, uncontrolled coal-fired power plant generates the following undesirable emissions per year:

3.5 million tons of CO2

14,100 tons of SO2

10,300 tons of NOx

500 tons of particulate matter

170 pounds of mercury

114 pounds of lead

4 pounds of cadmium

720 tons of CO

220 tons of hydrocarbons

225 pounds of arsenic

Implementing carbon emission avoidance

mechanisms proportionally reduces these

emissions.

Source: Environmental impacts of coal power: air pollution, Union of

Concerned Scientists, 2011

Copyright © 2016 by Gap Engineering All rights reserved. TM

Coal / Coke Analysis and Blending:

Adjust fuel transport mechanisms to

better homogenize or ‘smooth’ BTU

rating changes thereby improving

boiler control and overall cycle

efficiency.

Coal / Coke Treatment: Apply

compounds to the coal / coke so to

limit material buildup on the boiler

tubes thereby improving overall heat

transfer.

Some coal-fired power plants have

implemented one or more of these

carbon emission avoidance

mechanisms and the best have

implemented several. Given the era in

which most coal-fired plants were built,

these mechanisms weren’t

implemented because this degree of

energy conservation and emission

reduction were simply not required.

Prior to electric deregulation, plants

focused mainly on increasing revenue.

Consequently, there exists tremendous

efficiency improvement opportunities at

most coal- and coke-fired plants;

leading to greatly improved bottom line

economies and compliance with the

Clean Power Plan’s 2030 emission

targets. The following table reveals the

commonly achievable economic and

carbon emission reduction benefits

attainable through implementation of

the recommended avoidance

initiatives.

8

Carbon Emission Avoidance

Mechanisms

% CO2

reduction

Capital

Cost

Yearly

Benefit

Quick Win Energy Efficiency Gains

Megawatt Recovery Program 0 – 5% $500,000 $1,500,000

Boiler Pressure Control Optimization 1 – 3% $100,000 $1,000,000

Plant Efficiency Modifications

Soot Blower Cycle Optimization and Steam

Relocation 1 – 2% $100,000 $200,000

Heat Integration 3 – 10% $1,500,000 $3,000,000

Fuel Treatment

Water Removal 5 – 15% $10,000,000 $14,450,000

Coal / Coke Analysis and Blending 1 – 5% $250,000 $1,000,000

Coal / Coke Treatment 1 – 3% $300,000 $300,000

Copyright © 2016 by Gap Engineering All rights reserved. TM

Carbon Emission Avoidance

Case Study

Situation Gap Engineering Process Control Engineers supported optimization of a diversified utility’s 615 MWe coke-fired power plant’s boiler management system; initially reducing fuel consumption by $3 million annually and increasing power generation output by 3 MWe. Project Approach Using proprietary analysis tools, Gap Engineering studied boiler management system performance to identify opportunities for energy savings and megawatt production optimization. The study yielded several projects driving more stable operation of the steam system including: Soot blowing system timing

modifications; optimizing boiler air injection

Soot blower steam relocation to downstream of the turbine’s first stage; minimizing steam system pressure swings

Coke Reclaimer stacking adjustments; homogenizing the BTU value and moisture content of the coke feed

Gap Engineering 9

Copyright © 2016 by Gap Engineering All rights reserved. TM

Case Study

Following study completion, Gap

Engineering personnel provided

programming, engineering, cutover,

commissioning, and startup support for

the PLC upgrade project; including

modifications to soot blowing system

timing. Follow-on projects remain to

relocate soot blower steam and adjust

Coke Reclaimer stacking.

Value Delivered

Process stabilization achieved through

soot blowing system timing adjustments

enabled more constant boiler

temperatures and megawatt output.

Consequently, coke and limestone

consumption was reduced by $3 million

annually and output increased by 3

MWe. Total emissions per MWe

generated were proportionally reduced.

Additional performance gains and

emission reductions remain available

through implementation of soot blower

steam relocation and Coke Reclaimer

stacking adjustments. All project work

was completed on-time, on-budget, and

on-quality; supporting aggressive

outage schedules.

10

Copyright © 2016 by Gap Engineering All rights reserved. TM

Carbon Emission Avoidance

Identifying the overall utility and individual coal-fired

power plant carbon emission avoidance value potential

and driving its realization through one or more initiatives

can be achieved using a five step approach that

includes:

Current State Assessment - Baselining the current

state performance of each generating unit/station and

the utility’s overall emissions base; identifying the

body of improvement opportunities, their costs and

impacts on utility total and station-specific carbon

emissions.

Vision and Strategy Development - Establishing the

utility’s long-term emissions goals based on rigorous

investment analysis; prioritizing the carbon emission

avoidance improvement opportunities.

Project Planning - Developing both a short-term

quick win carbon emission avoidance action plan and

long-term emissions reduction roadmap supported by

initiative specific business cases and funding.

The Path Forward

Gap Engineering 11

Copyright © 2016 by Gap Engineering All rights reserved. TM

The Path Forward

Implementation - Executing on the approved carbon

emission avoidance initiatives; enhancing

performance of the utility’s coal-fired generation

assets and operational programs.

Sustain and Improve – Monitoring and tuning the

utility’s overall and station level carbon emission

avoidance strategy and implementation efforts to

ensure gains made are locked-in and improved upon

in the long-term.

Fundamental to the success of this approach is an

organizational understanding of the economic,

environmental, and societal value drivers and their

contribution to revenue growth, operating margin

enhancement, asset efficiency improvements, and

stakeholder expectations.

Throughout the carbon emission avoidance

implementation process, senior utility leaders will need

to communicate these benefits to shareholders,

customers, employees, regulators, and the community

at large. Each group will be instrumental in a

successful implementation yielding heightened financial,

environmental, and goodwill returns.

12

Copyright © 2016 by Gap Engineering All rights reserved. TM

Carbon Emission Avoidance

In order to meet the rising demand for affordable electricity and address

concerns for global climate change, utilities must improve the performance of

their existing coal-fired power plants.

Even without the requirements of the Clean Power Plan and Clean Air Act, the

economic benefits associated with carbon emission avoidance initiatives

warrant their implementation.

Regardless of whether the Clean Power Plan’s 2030 emission standards are

upheld, carbon emission avoidance projects financially reward coal-fired

generation utilities and better position them for the emission standards of

tomorrow.

The Time to Act is Now

14 Gap Engineering

Copyright © 2016 by Gap Engineering All rights reserved. TM

Mike Homma

President and CEO [email protected] 281-804-6234

Sally White Chief Relationship Officer [email protected] 801-580-7757

We Can Help Take These Steps To The Next Level

In these difficult times, we are asking ourselves different questions. How do I save energy? How do I run more efficiently? How do we get the same amount of work done with less people? or How do I get more done with the same amount of people?

Although many of these questions have been on our minds, they are currently in the forefront and in many cases determine if you will be in business tomorrow. All of industry is building new projects to increase capacity, debottleneck plants and build additional infrastructure. Gap Engineering has some of the most senior people in the industry and can make bring these projects in on time and within budget. Call us today and let Gap Engineering take your business to the next level!

This publication contains general information only and Gap Engineering is not, by means of this publication, rendering business or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Gap Engineering, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2016 by Gap Engineering All rights reserved. TM

Gap Engineering

21703 Kingsland Blvd., Suite 103

Katy, TX 77450

(281) 578-0500

[email protected]