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"The resource endowment of the region is privileged and the potential development in diverse sources of energy is still very important," Alfonso Blanco, executive secretary of the Latin American Energy Organization, made the comment in recent days at a carbon forum in Montevideo.
One company tapping the region's resources as part of efforts to reduce the carbon footprint of countries is Sumitomo SHI FW.
To learn about the company's operations on this front, BNamericas spoke to John M. Hernandez (pictured), regional VP for the Americas and Iberia strategic business development.
BNamericas: What role does Sumitomo SHI FW's CFB technology play in Latin America and the Caribbean where there is a push to reduce fossil fuel-fired power generation?
Hernandez: Sumitomo SHI FW's [SFW] circulating fluidized bed [CFB] boilers are recognized for their ability to fire a wide range of fuels, emitting lower emissions, providing higher boiler efficiency and operating with some of the highest boiler availability averages, in the industry. Our CFB boilers are capable of firing nearly all solid fuels, including waste products that would have otherwise been land filled and biomass, which are a keen focus for Latin America which is embracing non-conventional renewable energy (NCRE) and waste-to-energy projects into the generation matrix.
SFW CFBs have been used for many waste-to-energy projects worldwide where municipal solid waste [MSW] is converted to refuse derived fuel [RDF] and burned in our CFBs to generate steam for power and/or processes, greatly alleviating the strain on landfills, costs of eliminating the MSW and creating a new source of revenue from improved recycling/metals recovery.
Therefore, the use of SFW CFBs allow for the use of NCRE sources, waste fuels and fuel mixes helping Latin America reach goals of reduced greenhouse gas emissions.
BNamericas: I understand that the company's regional footprint has included projects for plants in Argentina, Brazil and Chile. How has the technology performed at these sites, for example, in terms of reducing emissions?
Hernandez: SFW have supplied our fluidized bed boilers for many projects across Latin America. This includes CFBs and bubbling fluidized bed [BFB] boilers in Brazil, CFBs in Argentina and Chile. Specific to Chile we have supplied 2x165MW CFBs for the Engie Mejillones complex and 1x75MW CFB for the ENAP PeroPower complex in Talcahuano. For all of these projects, owners saw the advantage of our CFBs' fuel flexibility, ability to meet emissions requirements and ability to burn difficult-to-burn fuels. Many of these projects are multi-fuel capable units which means they can fire a combination of solid fuels such as coal/petroleum coke [petcoke] and biomass. This ability to co-fire with biomass allows for the reduction of the overall carbon footprint of the plant while at the same time using NCRE to generate power.
In Latin America there is a great untapped NCRE source which is biomass. For example, in Chile's southern region where biomass is abundant, CFB technology could allow for this NCRE source to play a larger role in the energy matrix, not to mention the stimulation of the national forestry industry.
SFW have supplied biomass units from 10MWs to 300MWs firing 100% biomass such as forest residue, wood chips or wood pellets.
BNamericas: Are regulatory and environmental requirements more stringent for these projects because of the solid fuels involved, for example petcoke?
Hernandez: Any power/cogeneration project must comply with national and, depending on the financing source, international emission limits. This is true regardless of the fuel whether firing coal, petcoke, waste fuel or biomass. An SFW CFB/BFB allows for owners to meet the most stringent emission requirements, in many cases, without the need of expensive emissions control equipment such as flue gas desulfurization systems [FGD] or selective catalytic reduction [SCR] systems, thus reducing the overall capex of the plant and operation and maintenance [O&M] costs, over the life of the plant.
BNamericas: What are the investment costs involved in implementing the technology? Does the client recover its spend in a relatively short period?
Hernandez: The total investment costs will vary greatly depending on the size [MWs] of the plant, fuel and region where the plant will be installed and operated. This is true for a CFB project or a project using conventional boiler technology or other source to generate power. One of the advantages of a CFB is its wide fuel flexibility which allows clients to fully take advantage of fuel market arbitrage. This results in improved fuel security, protection against fuel quality degradation and access to carbon neutral fuels.
This ability to procure lower grade fuels at lower prices without adversely impacting plant reliability or environmental performance has a direct impact on the client's bottom line, representing annual saving on fuel costs which can reach into the millions of dollars a year. This coupled with improved plant reliability for CFB, reduced O&M, no FGD and no SCR can result in net present value savings over the life cycle of the plant of over US$90mn, depending on the size/fuel of the plant.
BNamericas: What is the potential upside of the region's solid fuels to make use of the technology? Is there one fuel of type - biomass, coal or petcoke - that is more prevalent?
Hernandez: As previously mentioned, SFW's CFB/BFB technology allows for clients to burn the widest variety of solid fuels such as coal, waste-fuels/RDF, biomass and petcoke. All of these fuels are available across the region.
For our clients in the oil refining sector, our CFBs can cleanly and efficiently convert petroleum coke into valuable steam and power that they need to run their refineries. This concept, which we call PetroPower, offers a high value strategic proposition, yielding solutions and benefits to refiners across the region.
Most oil refineries blend vacuum tower residue with higher petroleum liquids - kerosene, diesel, gasoil - to produce heavy high sulfur fuel oils [HSFOs] with significant sulfur levels. This HSFO, which is known as bunker C, is primarily used as fuel for ships. This blending step decreases the value yield from the crude since it uses higher value liquids to produce a lower value product. By eliminating the blending, the value yield from the crude can be greatly increased.
This is important because tightening fuel sulfur and engine efficiency standards for ships have been imposed by the International Maritime Organization [IMO]. These regulations are expected to put a strong downward pressure on the demand for HSFO maritime fuel beginning in 2020. Since the shipping industry consumes about 75% of the HSFO produced in the world today, refiners will need to find ways to cut back HSFO production or see prices fall for this product dramatically.
An alternative to producing this HSFO and eliminating the blending with high value liquids is to further refine the vacuum residuals using a delayed coker unit [DCU] which increases the yield of valuable hydrocarbon gases, naphtha and light oils. Many refiners across the region already employ DCUs in their processes. However, the DCU produces petroleum coke as a byproduct, which is typically sold into the global petcoke market at steep discounts.
PetroPower is one solution that couples the DCU with SFW CFB technology to fully convert heavy refinery residues into valuable products, power and steam. It eliminates the value losing, vacuum residue blend step and provides the path for refiners to exit the HSFO market and diversify into growing power and steam markets.
By applying a DCU to a refinery, refined product yields can be boosted 25-30% while the SFW CFB plant converts the petcoke into valuable power and steam needed by the refinery. In most cases and as now allowed in many countries across the region, excess power and steam can be exported to other industrial facilities and local power grids, adding additional revenue to the refinery equipped with a PetroPower plant.
BNamericas: Could you highlight some of Sumitomo SHI FW's projects under development or planned in the region?
Hernandez: SFW continues to be a market leader in the supply of CFBs globally. We are at the forefront of sub-critical, super-critical [SC] and ultra-supercritical [USC] CFB boilers. SC and USC operate at higher steam pressures and temperatures than conventional sub-critical plants, thus improving overall plant efficiencies by above 43% for USC applications.
Our Samcheok USC plant in South Korea is comprised of 4x550MWg CFBs burning low grade coal and biomass. It has been successfully operating for over a year.
Our Lagisza SC plant in Poland is comprised of a 1x460MWg CFB burning coal and has been successfully operating since 2008.
Currently in the construction phase is our MGT Teesside project. This project involves the supply of a 299MWg CFB which will fire 100% wood chips and pellets, a project which we believe will define the future for utility scale biomass power plants. Once completed this will be the largest 100% biomass fired CFB in the world, a distinction currently held by our Polaneic 1x205Mg project in Poland. This CFB fires 100% wood residue and up to 20% of agricultural byproducts, and has been operating since 2015.
A further example of our multi-fuel CFB application is our Dangin Bio-1 project in S. Korea. This 105MWg CFB will burn palm kernel shells, wood pellets, recycled wood and sub-bituminous coal, and has been operating since 2015.
Our Fortum Silesia combined heat and power [CHP] plant in Poland is a 75MWg CFB plant burning waste-RDF, biomass and bituminous coal, which will begin commercial operation this year.
Especially for Latin America, we believe that the above multi-fuel, biomass and waste-to-energy plants are the most value-added application of our CFB technology, leading to an increased percentage of NCRE in the generation mix, a reduction of O&M across the life cycle of the power plant and offering a valuable alternative for refiners who already have a DCU or are considering the addition of this technology to an existing refinery.