DEVELOPMENT TOWARDS ELECTRICITY COST REDUCTION Presented by: - PowerPoint PPT Presentation

MINE MOUTH POWER PLANT DEVELOPMENT TOWARDS ELECTRICITY COST REDUCTION Presented by: Arnulfo A. Robles Ismael U. Ocampo & Mars T. Ocampo

Objectives of the Presentation • To demonstrate that mine mouth power plant development can greatly reduce the cost of electricity and provide energy security for the Philippines • To show that a non-nuclear and alternative path towards inclusive and sustainable economic growth by transitioning from fossil coal fuel to renewable biomass

How can this be achieved? 1. Promote mine-mouth power plant installation among Coal Operating Contract (COC) holders and energy investors 2. Prioritize the dispatch in the electricity market of mine-mouth power plants 3. Provide supply of electricity to host communities and upgrade the benefits to host communities 4. Develop biomass farms for producing wood chips to replace coal thus providing income to host communities and nearby areas

Table of Contents • Mine mouth power plant as least cost electricity generation option in North America, Thailand, Indonesia, Laos, Mongolia and the Philippines • The Power Plant Development of the Philippines -Coal resource & distribution in relation to the National Transmission Grid -Installed capacity & electricity production cost -Reduction of national average electricity rates -Additional benefits to the Philippine economy • Conclusion • Policy Recommendations

Commerciall lly Avail ilable le Power Generatio ion Technolo logie ies (1 (1/3) • Oil and Gas Thermal (Rankin steam cycle) • Piston Engine (SI gasoline, CI diesel) • Nuclear Energy (e.g. PHWR) • Open Cycle Gas Turbine (OCGT) – Brayton Cycle • Combined Cycle GT (CCGT) • Combined Heat and Power (CHP)

Commerciall lly Avail ilable le Power Generatio ion Technolo logie ies (2 (2/3) • Pulverized Coal (PC*) • Advanced Coal (CFB*, PFB*, IGCC**) • Geothermal Energy (vapor, flash, binary) • Hydro Power (large, pumped, mini) • Solar Energy (PV, CSP) • Wind Energy (on-shore, off-shore) ---------- *Rankin Steam Cycle **Combined Cycle (Brayton + Rankin Cycles)

Commerciall lly Avail ilable le Power Generatio ion Technolo logie ies (3 (3/3) • Biomass Energy (cogeneration, direct combustion, gasification/pyrolysis, WTE) • Ocean energy (OTEC, wave) • Tidal Energy (single pool, modulated, dual pool) • Fuel Cells (AFC, PAFC, PEM, MCFC, SOFC) • Energy Storage Technologies (pumped hydro, compressed air, utility scale battery, magnetic energy storage, flywheel)

What is a Mine-Mouth Power Plant (MMPP)? - It is a coal-fired generating plant built in proximity to its source of coal, a coal mine. Semirara’s 2 x 7.5 MW Power Plant

What is the Most Favored Technology Used in MMPP? - For MMPP that use low-heating value lignite, it is the Supercritical Circulating Fluidized Bed Combustion (SCFBC).

Widely Used Coal-Fired Power Technologies in Mine-Mouth Plants Pulverised Coal-Fired Power Plant* Circulating Fluidised Bed Advance Combustion (CFBC) * Subcritical Supercritical Ultra Supercritical General Supercritical <1990 1990 (USC) 2000 1995-2000 General Characteristics Installed worldwide - 3 GW - 1,000 GW Complexity Low Medium Usage Base/medium load Base/medium load Fuel range All coals, residuals, biomass All coals Technical Parameters Unit Size (2000) ≤460 MW 400-1,000 MW Live stream pressure (Mpa) 16.5 ≥ 22.1 27.5-30 ≥30 Mpa Live stream temperature ( O C) 540 540-560 560-600 ≥600 Max. GT applied - - Generating Efficiency (%) 48-50 43 38 41 44 46+ Environmental Parameters Desulphurisation 90% 90% SO 2 emission (2000) 0.66kg/MWh 0.6kg/MWh NO x emission (2000) 0.8kg/MWh 1.2kg/MWh CO 2 emission (2000) 860kg/MWh 760kg/MWh Financial Parameter Investment Cost c (2000) ** USD $1,120/kW USD $1,300/kW * Including flue gas desulphurisation or desulphurisation by dolomite addition (CFBC). ** Converted from Euro to USD exchange rate in year 2000 at 1.12 Euro/USD Source: Grammelis at al., 2002; Henderson, 2003, COORETEC, 2003, P. Lako, 2004 Table 1

North America • Canada - Mainly in Ontario, Eastern Canada and in British Columbia, Western Canada - Mostly mine mouth due to distance to coast • USA - Mainly in Pennsylvania, Kentucky, West Virginia and Wyoming which are in Eastern and Central US - Mine mouth plants avoid long distance transport thereby reducing cost by more than 50% - Coal sent to Georgia from Wyoming costs USD 29 in 1995 while it costs USD 13 in 2015

Western Canada In western Canada, the main coal mines include Boundary Dam, Paintearth, Poplar River, Highvale, and Sheerness mines which are all mine mouth operations. Combined, these mines fuel approximately 60% of the electricity generated in Alberta and Saskatchewan. Canada is home to 24 permitted coal mines – 19 of which are currently in operation. In addition, there are many more projects in the exploration phase or in the advanced stages of regulatory approval. More than 90% of Canada’s coal deposits are located in western provinces – in British Columbia, Alberta and Saskatchewan. • British Columbia has 10 mines • Alberta has 9 mines • Saskatchewan has 3 mines • Nova Scotia has 2 mines

United States of America • Wyoming, the nation’s leading coal producer since 1986, provides about 40% of America’s coal through the top 10 producing mines located in the Powder River Basin. Most Wyoming coal is sub- bituminous, which makes it an attractive choice for power plants because it has less sulfur and burns at around 8,400 to 8,800 BTUs per pound. Wyoming coal is considered clean burning, which means it is better for the environment. Wyoming coal has steadily gained a growing share of the nation’s total electricity over the past few decades for a variety of reasons. • It’s more affordable than Eastern coal and other fuels. • There are huge reserves in the state. • Wyoming’s supply of coal is reliable. • Wyoming’s low -sulfur coal can be produced and used in compatibility with the nations’ environmental objectives.

Jim Bridger Mine Mouth Power Plant, Point of Rocks, Wyoming, USA • The four Jim Bridger units (mine mouth power plants) were built between 1974 and 1979 to accommodate the adjacent mine, which also opened in 1974 under the Bridger Coal Co. – a joint venture between PacifiCorp and Idaho Power Co. • The plant supplies 2,100 megawatts to consumers on the Pacific Coast, as well as Idaho, Utah and Wyoming. • More capacity and more reliability means the Jim Bridger plant will continue to help power cities stretching all the way to the Pacific Ocean from its isolated home next to the Bridger mine.

Thailand

Mae Moh Mine Mouth Power Plant, Lampang Province,Thailand • In 1953, an abundant lignite resource was found at Mae Moh basin. That contributed to the project to construct Mae Moh lignite power plant. At first, two 75 MW generators were installed, but as the electricity demand has grown, the Electricity Generating Authority of Thailand (EGAT) has installed more generating units. • Mae Moh power plant consists of 13 generators with the total generating capacity of 2,625 MW that can totally provide an average annual energy output of 15,450 million kWh. • However, the generating units 1 and 2 were retired on March 1, 2000, while the unit 3 was taken out of service on September 13, 1999. As a result, the current total generating capacity of Mae Moh power plant is 2,400 MW.

Mae Moh Power Plant • Owned by Electricity Generating Authority of Thailand or EGAT - Constructed: 1976-1996 - Capacity: 2400 MW - Lignite supply: 40K tons/day or 14.6 million tons/year - Resource: 864 million tons - Electricity production cost: 60 satang/kwh or 1.6 US cents/kwh - Now constructing 600 MW Unit of Ultra- Supercritical to replace Subcritical Unit 4-7

Indonesia

Indonesia Energy Policy • The Indonesian government has a target to push the country’s electrification rate up to 99.4% by 2024. • A government program is under way to add 35GW of electricity generating capacity into the national grid by 2019. • Of this, 20GW is due to come from coal-fired power plants. • The 35GW program is the largest in the 70- year history of Indonesian independence.

Indonesia Mine Mouth Program • Mine Mouth Power Plant to contribute more than 10,000 MW out of 35,000 MW to be constructed from 2010 to 2020 • Incentive to coal miners of 15-25% margin over production cost with minimum of USD 16.36 base price for GAR 3000 or higher • Pre-bidding estimate of installation cost by PLN in 2014 was USD 1,104.40/kW • Target mine mouth power plant by 2020 is 11,500 MW

PT Adaro Mine Mouth Power Plant, South Kalimantan, Indonesia

Lao PDR