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Saturday, June 3, 2017

Does Australia have the world's silliest mining industry?

Setting a new benchmark in silliness, the Australian mining industry made not one, not two, but three laughable media releases last month.


On 11 May 2017 Minerals Council of Australia made a bold "projection" on the future of coal mining in Australia. The "projection" made from data from the Resources and Energy March Quarterly of a government department report was that the coal industry had a great future - at least until 30 June 2017 - when the value of exports of thermal and metallurgical coal was expected to be almost $55 billion.

Not many investment decisions are made on the basis of a "projection" of the final two months of the current fiscal year. On this "projection" the Minerals Council of Australia made the silly declaration: "Myth 1 Australia's thermal coal exports are in decline...BUSTED "

The Resources and Energy March Quarterly the Minerals Council of Australia thought worthy of quoting contains real projections for the value of Australia's coal exports to 2021-22.

Those projections show a dramatic decline from the peak of $55 billion in 2016-17 to just $39.8 billion in 2021-22.
Australia's metallurgical coal exports

Australia's thermal coal exports


On 17 May 2017 Minerals Council of Australia issued another media release with the puzzling title "New Report: Low emission coal technology key to growth in South-East Asia".
What is puzzling about this title is that a report referenced in the media release, "Sylvie Cornot-Gandolfe, ‘The role of coal in Southeast Asia’s power sector’, Oxford Institute of Energy Studies, December 2016" notes that combined cycle gas turbine power plants are superior to coal power plants for Asia:
Natural gas-fired power plants are, however, cheaper and quicker to build than coal-fired power plants, have higher efficiencies and greater flexibility in plant operation, and above all emit less CO2 than coal power plants. (The cost of capital expenditure for combined cycle gas turbine (CCGT) plants is around half that of coal on a per kWe capacity basis and their CO 2 emissions are also half that of coal.)

The levelized cost of electricity generation (LCOE)14 is commonly used in national power development plans to compare the costs of different technologies. Based on IEA assumptions for the costs of capital, operation and maintenance, and finance, and using 2015 prices for coal and gas ($63.5/t for coal and $10.3/MMBtu for gas), the generating cost of a new supercritical (SC) coal plant is 35 per cent cheaper than the generating cost for a new CCGT plant (Figure 6). However, at August 2016 coal and gas prices, the generating costs for coal and gas are similar – even slightly cheaper for gas.

14The LCOE includes fixed costs, variable costs (operation and maintenance and fuel) and financing costs for new power plants. In order to make meaningful comparisons, it is necessary to make a range of assumptions about various costs and operating parameters of competing technologies, as well as assumptions on future coal and gas prices. coal and gas prices, the generating costs for coal and gas are similar – even slightly cheaper for gas.


Keeping the silliest announcement till last on 29 May 2017 Minerals Council of Australia issued another media release with the cryptic title "Government takes balanced view on low emission strategy".
The media release begins:
The Australian coal industry supports the government’s sensible policy which recognises the role of our high quality coal in helping to curb emissions.

If the policy intent is all about reducing emissions we should have a technology neutral approach and that means considering the opportunity coal offers when utilising both high efficiency low emission (HELE) and carbon capture and storage (CCS).

Including CCS in the Clean Energy Finance Corporation (CEFC) ambit strengthens our capacity to lower emissions in the supply of electricity.
It is what the media release doesn't say that is incredibly silly: if a power station operator can release CO2 into the atmosphere for free, then it is absurd to imagine any investment in capturing and storing that CO2.

The government which is led around by the Minerals Council of Australia has ruled out imposing any scheme to put a price on the release of CO2 into the atmosphere.


Saturday, May 20, 2017

Coal lobby pushing obsolete technology in Asia


The coal lobby tries to lock-in dependence on coal imports
The coal lobby tries to lock-in dependence on coal imports

























Friday, May 19, 2017

Renewable natural gas

The Australian Petroleum Production & Exploration Association - "the voice of [one part of] Australia's oil and gas industry" - held its annual conference in Perth recently. The Twitter feed about the conference is under hash tag #APPEA2017

Approaches for increasing the supply of natural gas were on the agenda, but renewable energy production of natural gas didn't get a mention. The absence of Bioenergy Australia which is holding a Bioenergy Business Breakfast in Adelaide next week left the struggling oil and gas industry bereft of a host of ideas to address the intractable problem of rising costs of extracting natural gas. The problem it faces is that there aren't any more low-cost natural gas reserves to exploit.

New methods for producing natural gas from renewable energy are being developed and refined, continually lowering costs and improving efficiency.

At the same time:
  1. The cost of extracting coal seam gas is constantly increasing.
    Unconventional gas production involves significantly higher capital expenditure
  2. The domestic price of natural is continuing to rise.
    The wholesale price of natural gas in Australia has risen steeply
    The wholesale price of natural gas in Australia has risen steeply
These factors are making it more commercially attractive to produce natural gas from renewable energy. 

There are 3 underlying processes for making renewable natural gas no matter how the various technologies achieve them:
  1. Carbon dioxide can be converted into carbon-containing compounds and oxygen by algae and other plants using sunlight to drive photosynthesis.
     
  2. Carbon dioxide can also be converted into natural gas and water using hydrogen produced from electrolysis of water using electricity from renewable energy generation. Oxygen is produced as a by-product as in the first process.
     
  3. Any carbon-containing compounds including those produced by algae and plants in the first process described above along with farm waste and municipal waste, can be converted into a mixture of methane and carbon dioxide. About half the carbon in the input feed stock is converted into methane, and the other half into carbon dioxide. After the carbon dioxide produced as a by-product is separated, it can be converted into methane by recycling it into either of the first two processes. No "carbon capture and storage" required, avoiding a susbstantial cost of using natural gas from fossil fuel reserves.
     
    • Long established technologies use methane-producing bacteria that create methane and carbon dioxide in anaerobic fermentation ponds or tanks.
    • More recently plants have become available that use supercritical water as a gasification medium to create methane and carbon dioxide. These complete the gasification process more quickly and so don't need large tanks where methane-producing bacteria gradually transform the feed stock. This newer technology is especially well-suited for wet feed stock as there is no need to dry it.

These more recent technologies can also efficiently convert low-grade coal with high moisture content into natural gas. Existing coal-fired power could use this option to improve efficiency and lower emissions until it is feasible to decommission them.

Researchers at ENN Group, China and Carleton University, Canada recently investigated supercritical water lignite gasification technology. See "Coal-based Clean Energy Production", Advances in Energy Engineering (AEE) Volume 1 Issue 4, October 2013.

Supercritical Water gasification of wet biomass and low-grade coal
Supercritical Water gasification of wet biomass and low-grade coal


More recently the Lappeenranta University of Technology, Finland, completed an assessment of the option of Australia becoming a major exporter of renewable energy to Asia - making use of the Queensland LNG export facilities - to ship natural gas made with renewable energy. See "Can Australia Power the Energy-Hungry Asia with Renewable Energy?"

Sunday, May 7, 2017

Improving old coal-fired power stations

Existing coal-fired power stations using low-grade coal might continue to generate particulate and sulphur dioxide emissions until they are decommissioned. Some are fitted with scrubbers and other post-combustion filters to reduce these emissions. This approach reduces the efficiency of already inefficient coal-fired power stations:

The heating value of Indian coal is, on average, about 60 percent of the heating value of coal burned in the United States. This increases the amount of coal that must be burned to generate a given heat input, implying higher auxiliary electricity consumption to run coal grinding equipment, conveyors, and pumps.

Auxiliary generation... will also increase if electricity is used to run pollution abatement equipment, such as electrostatic precipitators ( ESPs ) and flue-gas desulfurization units ( scrubbers ) . We note although coal-fired power plants in both countries have ESPs, only three plants in India currently have scrubbers.1

In the meantime there are options to increase efficiency and reduce harmful emissions until it is feasible to decommission these coal-fired power stations.
Average Gross Thermal Efficiency of Coal-Fired Power Plants by Country

One of these options is to pre-process the low-grade coal before combustion. The technology available to do this has several advantages. It eliminates the particulate and sulphur dioxide emissions and, more importantly, increases the efficiency of these coal-fired power stations. Scrubbers and other post-combustion filters are no longer needed.

Low-grade coal contains relatively high levels of contaminants and moisture content. The moisture content reduces the energy available for power generation when its burned because energy is wasted converting the moisture into water vapour. The contaminants increase the energy that is used to run pollution abatement equipment.

To understand the available technology this simplified model gives a reasonable approximation of what takes place; Consider a process in which carbon and water are placed in a reaction vessel and an environment is created to promote a desired reaction that uses little or no external energy. The reaction breaks down some of the water into oxygen and hydrogen. The oxygen reacts with half of the carbon to form carbon dioxide and the hydrogen reacts with the remainder of the carbon to create methane. The energy released by the reactions with carbon provide the energy needed to break down water  into oxygen and hydrogen.
Hydromethanation - Carbon plus Water producing Methane plus Carbon Dioxide

The methane can be separated to use in place of low-grade coal in the existing coal-fired power stations. There are no particulates or sulphur dioxide to be removed from the exhaust gases. When methane burns, about half the energy is produced by the reaction of carbon with oxygen to produce carbon dioxide, and about half is produced by the reaction of hydrogen with oxygen to form water vapour. Note that the total amount of energy is the same as would have been produced if all of the carbon had been burned and not pre-processed into carbon dioxide and methane. The moisture content that was present in the low-grade coal has been separated, as water, before combustion. No energy is wasted converting that moisture into water vapour.
Supercritical Water Coal Gasification

Research on this technology was conducted in several countries interested in producing methane from biomass that contains significant amounts of water. That research has advanced into at least three commercially available products. These can be adapted to carry out the desired pre-processing of low-grade coal into methane:

Upgrading low-grade coal to methane
Upgrading low-grade coal to methane

1 Chan, Hei Sing (Ron), Maureen L. Cropper, and Kabir Malik. 2014. "Why Are Power Plants in India Less Efficient Than Power Plants in the United States?" American Economic Review, 104(5): 586-90. DOI: 10.1257/aer.104.5.586

Thursday, May 4, 2017

Commercial viability of coal seam gas

Australian coal seam gas is expensive to extract: about $4 to $5 a gigajoule. 
Rising cost of extracting coal seam gas
Rising cost of extracting coal seam gas
 The U.S. wholesale gas price is only $3 a gigajoule.
U.S. natural gas price
U.S. natural gas price
One option for increasing the natural gas supply in Australia, though it isn't the preferred option, is to import LNG from the U.S. 
The point to take away from this is that coal seam gas in Australia, facing competition from the U.S. that is rapidly expanding its LNG export capacity, is unlikely to be commercially viable within a few years. 
Expanding the unconventional gas industry that  has little prospect of long-term commercial viability isn't a good investment.
Another option for increasing the supply of natural gas is to make it from coal. Black coal in Australia is being sold into an over-supplied export market where the price is falling to around $2 a gigajoule.
Brown coal costs only about 50 cents a gigajoule.
 
New processes are available that can make methane from coal relatively cleanly. 
Supercritical Water (SCW) gasification of coal and wet biomass
Supercritical Water (SCW) gasification of coal and wet biomass

 Coal mixed with water and heated to 400 centigrade with solar thermal energy reacts to form approximately equal quantities of carbon dioxide and natural gas. 
Another way to heat the mixture is to add hydrogen produced by wind turbines or solar PV systems. With sufficient hydrogen, all of the carbon in the mixture reacts with the hydrogen to form natural gas and no carbon dioxide is created.

Sunday, April 16, 2017

Practical Energy

The requirement statement for practical energy -
The answer is surprisingly simple.

There are 4 or 5 processes that do more-or-less the same thing in slightly different ways. Each was designed with a different purpose in mind, but that doesn't mean they can't be used for other purposes the designers hadn't considered.

Bioenergy, waste-to-energy, renewable energy storage as synthetic natural gas, biogas and synthetic natural gas from coal are different ways of doing the same thing.

Synthetic natural gas can be used to store energy, to generate electricity on demand, and as feedstock in manufacturing processes. Synthetic natural gas can also be manufactured for export in the form of LNG.

It can be made from 100 percent renewable energy, 100 percent fossil fuel energy, or some combination of both renewable and fossil energy. This allows a transition to a 100 percent renewable energy future, achieving the  above requirement statement: ensuring reliable, affordable and clean energy.

The underlying process combines carbon dioxide, water and energy to create methane and oxygen:
CO2 + 2H2O → CH4 + 2O2
  • Photosynthesis by plants and algae to create biomass that methanogenic bacteria convert to methane is one way of doing this with solar energy.
  • Waste-to-energy can use methanogenic bacteria to produce methane using the solar energy embedded in the waste.  
  • Electrolysis of water to produce hydrogen that is reacted with carbon dioxide to make methane is another way of doing this with solar PV systems and wind turbines.
  • Biomass can be converted to methane in high temperature superheated water reactors. The thermal energy to do this can be from concentrated solar thermal energy, or from reaction with either oxygen or hydrogen created by electrolysis of water.
  • Biomass can be converted to methane in very high temperature gasifiers that create carbon monoxide and hydrogen that is reacted in a separate step to create methane. The energy for this high temperature process can be obtained by burning a portion of the feedstock in air. 
In each of the above processes that use biomass to produce methane, coal can be used in place of some or all of biomass.

When there is sufficient solar PV and wind turbine generating capacity, hydrogen can be produced whenever electricity supply exceeds demand. This hydrogen can be reacted with carbon dioxide to make methane for generating electricity whenever demand exceeds the supply.

With sufficient renewable energy generating capacity, synthetic natural gas can be manufactured for export - providing completely renewable energy to importing countries via existing LNG export, transport and import infrastructure.

Curiously, coal is presently being converted to synthetic natural gas in the most environmentally 'unfriendly' option available - burning a portion of the coal in air to create carbon monoxide and hydrogen that is reacted in a separate step to create methane. This technology has been criticised for its high level of carbon dioxide emissions and water usage.

Coal could be converted to methane by reacting it with hydrogen produced by electrolysis of water with electricity from solar PV systems and wind turbines. It can also be converted to methane in high temperature superheated water reactors. The thermal energy to do this can be from concentrated solar thermal energy, or from reaction with hydrogen created by the electrolysis of water.

This is most suitable for low-grade lignite such as that found in Yallourn Valley in Australia that consists of 50 percent or more water. With this process it can be converted to high-value synthetic natural gas, avoiding the need for coal seam gas.

Its use can be gradually phased-out as renewable energy generating capacity increases to the stage where it can completely replace it.

Sunday, April 9, 2017

Taking the blinkers off energy policy in Australia

The "Resources and Energy Quarterly" by the Office of the Chief Economist for March 2017 has the following Table of Contents:
Contents
Foreword4
About this edition 5
Resource and energy overview 6
Steel 25
Iron ore 33
Metallurgical coal 42
Thermal coal 51
Gas 61
Oil 73
Uranium 82
Gold 89
Aluminium, alumina and bauxite 97
Copper 113
Nickel 121
Zinc 127
Trade summary charts 133
Appendix 142

Renewable energy doesn't get a mention.

This oversight is the foundation on which opportunities for Australia's economic development are missed.

Two of the energy resources that are included - thermal coal and natural gas - are shown to have outlooks that aren't very promising in the case of coal and are at risk from high domestic production costs and low-cost competition in the case of gas.

Thermal coal exports for example are shown to decline in value by $5 billion per year to about $15 billion per year, though volumes are supposed to remain the same. Not all Australian coal mines will be commercially viable with this outlook that is actually describing export prices falling by 25 percent.

Australia's thermal coal export volumes and values


Natural gas exports as LNG are shown to have a large increase in capacity coming onstream at the same time as an even greater increase in U.S. LNG export capacity - with the U.S. exporters able to source feed gas at much lower prices than Australian exporters.

The quarterly report makes a courageous projection of rising volumes and value of Australian LNG exports even though noting some daunting obstacles:
  • Australia is not immune from supply-side competition. The United States will make the largest contribution to new capacity. The cost competitiveness of US exporters will largely be determined by the cost of their domestic gas, for which the reference price is Henry Hub. Henry Hub prices averaged US$3.0 per million British thermal units over the first quarter of 2017 (A$3.80 a gigajoule). 
  • While Australia's LNG exports are projected to rise, the capacity utilisation of Australian LNG export projects is expected to decline. The price competitiveness of Australian producers is one factor affecting the outlook for exports. Proximity to Asia will be an advantage, although the Panama Canal expansion in 2016 has lowered shipping costs from the US.
  •  A large cost for Australia's LNG plants is feed gas. The three LNG export terminals on the east coast — which are largely fed by CSG from Queensland’s Surat and Bowen basins — tend to have relatively high costs for feed gas. Unlike LNG ventures using gas from conventional reservoirs, LNG operators on the east coast will need to drill hundreds of new wells each year to maintain CSG production, with costs of over a million dollars per well.

Australia has an advantage with ample renewable energy resources to overcome the poor outlook for coal and the high-risk outlook for natural gas.

With the price of coal projected to decline to about $2 per gigajoule, and the cost of coal-seam gas likely to exceed the export price of LNG from US exporters, it is increasingly attractive, if not imperative, to export natural gas made from cheap coal and renewable energy.

Several processes are available to achieve this.

The bottom line is that these processes change 1 gigajoule of coal valued at perhaps $2 into 4 gigajoules of natural gas worth $32 by adding 3 gigajoules of renewable energy.


Available systems to make synthetic natural gas from cheap wet lignite and brown coal


Supercritical Water (SCW) Gasifier for Coal/Biomass