Dr Sacha Parneix is a seasoned professional with over two decades of experience in the power generation industry. Sacha currently holds the position of Steam Power Commercial GM of GE Power. Business Recorder Research had a sit-down with Sacha in Malaysia, and discussed challenges and opportunities surrounding coal power plants. GE’s presence in Pakistan and its work on the latest technology with a few power generation players in Pakistan was also discussed. Following is an edited excerpt of the conversation.
BR Research: General Electric (GE) has made headlines on championing the use of Ultra-Supercritical (USC) technology in Asia. It is believed to be 10 percent more efficient but is it also more expensive by the same magnitude?
Sacha Parneix: The 10 percent is in absolute points, if you have a global average efficiency for coal power plants in the range of 32-33 percent, the use of USC technology can take it up to 45-46 percent. GE actually holds the world record for coal plant efficiency at 46.5 percent. In relative terms, it is actually 30-40 percent more efficient.
In other words, for the same amount of kilowatt, 30-40 percent lesser fuel will be required enabling fewer emissions. On top of that, you will also emit fewer emissions, because you are burning less fuel.
BRR: How does GE’s USC technology compare to other alternatives in terms of upfront cost?
SP: Costs are project specific, depending upon site access, ease of execution, complications and other variables. In terms of technology, the use of USC ensures low emissions, without impacting the price of the power plant significantly. The cost may be higher but not more than 7-8 percent. With lifecycle cost and the cost of fuel in the overall equation, it is a no-brainer for companies to start adopting USC technology.
Fuel is the most critical aspect of overall costing. Some coal is easy to handle, some will be challenging to ignite. That means specific designs of power plants are needed to suit different types of coal. Emission and environment requirements are secondary. Location and access to facilities such as water are also a critical component in terms of assessing the technology needed and the cost.
BRR: How long does it take for GE to come up with a sizeable coal power plant of USC technology?
SP: Typically, from the time of investment to commercial operation date, it takes around three to four years.
BRR: If a plant is based on a particular coal type, is it possible to switch to another type of coal?? Pakistan, for instance, currently uses imported coal but will soon have access to locally extracted coal. Will it be possible to shift existing set up to match the needs of the new type of coal?
SP: It is doable. When you set up a project, you think and plan in advance and that is what many companies are doing. The idea is to plan a certain coal range, and to have the power plants designed accordingly. You will still have to tune the power plants, and with digital tools these days, we have a lot of applications that can make sense of date and adapt to the fuel that is pumped in.
It is nonetheless important to think the hardware design in advance to allow flexibility in fuel sourcing. This has to be thought through well in advance in the design phase of the power plant. A certain technology may not be needed today, but it can be ensured to design a plant in a manner that allows modifications some time later, in terms of carbon emissions.
Sometimes, the source of coal is going to vary. Turkey is an example, which is quite interesting for Pakistan. Pakistan is looking into looking its local coal for the very first time. Of course a lot of studies were conducted, but the quantity is so enormous that when you start digging, the coal characteristics may vary over time. This is exactly what happened in Turkey, as the quality of coal changed over time.
It could lead to a point that you may have to modify or improve the hardware design of the power plant to fit with the new coal characteristics. We are right now implementing a project in Turkey, where we are putting new technology in the existing 20 years old boiler, in order to accept more coal and allow the plant to continue running on full load.
BRR: Can the exiting coal power plants be upgraded to the USC technology?
SP: Going from subcritical to supercritical or from supercritical to ultra-supercritical is difficult as it involves completely different designs. The conditions are significantly different, and I have not seen upgrades in that regard, even though, theoretically it could be possible. You also have to make the economics work, and from that standpoint, I have not really seen any such upgrades.
BRR: Where do you see the demand for coal based power plants in the MENA and Asia Pacific region in the next five years?
SP: Right now, we see one very generic trend which is to diversify the source of energy, and that is a worldwide trend. Most studies converge to a picture of fuel mix where coal has its place. The characteristics of those coal power plants will change, because they need to be able to support the introduction of renewable energy. Therefore, flexibility as a characteristic of coal power plants is increasingly becoming important.
If we see the market for new power plants in general and in particular for coal, it is in emerging developing countries, which need to increase dependable capacity to support economic growth. We see those in South East Asia, Middle East, India and Africa. It will also be dependent on geopolitics with respect to each country and on access to coal.
BRR: GE’s USC technology is being pitched as more environmental friendly. Is the world view on coal based power generation also changing or it continues to remain the dirty fuel?
SP: If you see the press, coal has a reputation of dirty fuel, partly because it was the first fuel used for power generation. It is old, and has been around for a long time, and is typically viewed as a fuel from the past. Also, if you are not careful, burning coal can harm and it did harm the environment very significantly. The harm can take different characteristics, from global warming to local challenges. It may not impact the world as much, as it could impact the local communities living around a coal power station.
But today, technologies are available to mitigate that harm almost entirely. Proven technologies exist that removes pollution generated by burning coal. These plants can emit carbon levels as low as what is typically considered clean for gas based power plants. It is about making sure that when the project is being implemented; those technologies are put in place then and there. It does not add a lot to the costs. Dubai and Turkey are very good examples, where they took the courage of going way beyond the World Bank and EU regulations and requirements of carbon emissions.
The carbon emissions of USC technology coal fired plants are much lower, hence more cost effective, when compared to emissions coming from power plants in Europe, USA or China. This is quite attractive for a developing country to demonstrate that they can actually emit carbon levels, which range 30-40 percent lower than the Western countries.
BRR: Does the USC technology still emit more carbon than the likes of natural gas?
SP: Dubai decided to go for a coal power plant because the local emissions came to the same level as that of gas power plants. These have been operational there for decades. The technology does exist to actually reach those levels.
BRR: Does the financing for coal based power plants continue to be biased? We have practically seen the leading financers refusing to fund coal based projects, which is evident from Pakistan almost sole reliance on China in terms of coal power financing.
SP: Different lenders might have different interests in supporting certain technologies. Certain lenders prefer to avoid supporting coal projects, because of the reputation as they do not want to manage the risk in the long run. That said, the OECD and the World Bank are not preventing coal project financing. If you look at the project financing in the last three to four years, it has mostly come from the East, mainly China and Japan.