re-thinking obrenovac lignite complex · 2008. 11. 12. · hob plant vreoci lignite drying...

Re-Thinking Obrenovac Lignite Complex

UNECE Ad Hoc Group of Experts on Coal in Sustainable Development

Seventh Session – Geneva, 7-8 December 2004

By Aleksandar Kovačević

2

Comparisons of HDI and energy indicators for selected countries / regions and appropriate indicators for Serbia and Montenegro

HDI TPES / Pop

TPES / GDP

TPES/ GDP (PPP)

Elec. Consump.

/ Pop

CO2 / TPES

CO2 / Pop

CO2 / GDP

CO2 / GDP (PPP)

Toe/capita Toe/000 95 US$

Toe/000 95 US$

PPP

KWh / capita

(t CO2 / toe)

(t CO2 / capita

(kg CO2 /

95 US$)

(kg CO2 /

95 US$ PPP)

World 0,722 1,64 0,29 0,24 2326 2,36 3,88 0,69 0,56OECD 0,905 4,68 0,19 0,22 7879 2,35 10,99 0,45 0,50Argentina 0,849 1,54 0,21 0,15 2126 2,04 3,14 0,42 0,30Ireland 0,930 3,89 0,13 0,14 5917 2,88 11,20 0,38 0,39Hungary 0,837 2,49 0,45 0,22 3427 2,22 5,53 1,00 0,48Costa Rica 0,832 0,90 0,23 0,10 1598 1,38 1,24 0,32 0,14Latvia 0,811 1,82 0,65 0,26 2193 1,68 3,06 1,09 0,43Russian Federation

0,779 4,29 1,65 0,67 5319 2,45 10,50 4,02 1,63

Bulgaria 0,795 2,43 1,49 0,38 3854 2,30 5,59 3,43 0,87Macedonia 0,784 1,28 0,53 0,23 2799 3,29 4,21 1,74 0,75Georgia 0,746 0,46 0,92 0,18 1204 1,55 0,71 1,42 0,29Azerbaijan 0,744 1,43 3,10 0,53 2105 2,26 3,22 7,00 1,20Iran 0,719 1,86 1,08 0,34 1689 2,69 5,01 2,92 0,91Tajikistan 0,677 0,49 1,16 0,44 2172 1,59 0,77 1,85 0,70China 0,721 0,90 1,02 0,24 1069 2,70 2,42 2,75 0,65Serbia & Montenegro

0,68 – 0,74

1,5 – 1,8 0,96 0,40 2869 2,94 4,43 2,83 1,16

Sources: UNDP HDR 2003, IEA “Key World Energy Statistics 2003”

Unsustainable energy efficiency and competitiveness

3

0

20

40

60

80

100

120

90 91 92 93 94 95 96 97 98 99 00 2001

%

ENERGY CONSUMPTION

GDP

GDP and energy consumption in SCG

Unsustainable efficiency trend

4

Electricity Consumption in Serbia & Montenegro 1995 - 2002

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

GWh

Transmission Loses Large Industry. Pumps Consumption incl. Distr. Loses

Unsustainable seasonal trends and households electricity consumption

5

City of Belgrade (1)

City of Belgrade contains 4,1% of the area and cca 18% of population of Serbia and Montenegro without Kosovo.City consumes 24% of electricity in total while Belgrade households consume more than 26% of electricity consumed by households in Serbia.In addition to that, Belgrade households consume almost 50% of district heating services in the country.Over 33% of all motor fuels is being consumed in the City area.Unsustainable daily and seasonal demand peaks

6

City of Belgrade (2)

When energy sector output is deducted, Belgrade area generates only 18% of GNP.More than 39% of companies is registered in the City employing more than 31% of total employment in Serbia without Kosovo.Over 37% of imports destine in Belgrade.Something about 40% of nominal profits is registered in the Belgrade area.Belgrade is essentially home for high margin – low productivity entities.

7

Belgrade District Heating System

Consumption area:About 230000 apartments with 13 million square meters of heated areaMore than 3 million square meters of business premises

More than 2000 GWh heat energy delivered.About 2500 MW heat only boilers (HoB) installed capacity including 18 plants and 98 boiler installations.About 200000 tons of mazut (heavy fuel oil) equivalent consumed per winter, 80% of which from natural gas and 3% from lignite.

8

Capacity utilization of less than 1000 hours a year and about 140 kWh consumed

per square meter per winter at average temperature +4,6 Centigrade for less than

5 Euros per square meter per year can hardly sustain

9

Belgrade District Heating System

Obrenovac – Belgrade pipeline

10

High households electricity demand over Winter season driven by insufficient DH services (more than half customers maintain electricity heating devices for security while 17% actively supplement) and low marginal cost of electricity against fuel wood.

Unsustainable situation not likely to disappear by simple

rise of electricity tariffs

11

Obrenovac Lignite Complex

TPP Obrenovac ATPP Obrenovac BTPP Kolubara ATPP Kolubara B, under constructionHoB Plant VreociLignite drying facility, VreociOpen pit lignite mines Field D, Field B, Tamnava East and Tamnava WestSee www.eps.co.yu

12

Obrenovac A (2x210MW+ 4x309MW), view from Belgrade downtown

Photo: A. Andjic from “Stuck in the Past” UNDP, 2004

13

Obrenovac Lignite Complex

About 80% of lignite productionAbout 50% of electricityMore than 50% of coal for retail marketAbout 60% of emissions Less than 40% of EPS workforceAbout 3% of district heating services (City of Belgrade DH system more than 38% of DH services in Serbia)

14

City of Obrenovac with DH network

15

TPP Kolubara B kit

16

Field D panoramic view

17

Lignite drying facility in Vreoci village

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Planned and Actual Coal Output 2000-2003.

0

500

1000

1500

2000

2500

3000

Jan-0

0marmay julse

pno

vJa

n-01

marmay julse

pno

vJa

n-02

marmay julse

pno

vJa

n-03

000 tona

Kostolac ostv. plan Kolubara ostv. plan

Diesel Consumption (minimal requirement 1100t per month)

0100200

300400500600

700800

Jan-0

0marmay jul se

pno

vJa

n-01

marmay jul se

pno

vJa

n-02

marmay jul se

pno

vJa

n-03

Period

000

Tons

Kolubara Kostolac

Overburden removal in open pit coal mines 2000-2003.

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Jan-0

0

marmay julse

p

nov

Jan-0

1

marmay julse

p

nov

Jan-0

2

marmay julse

p

nov

Jan-0

3

000 m3 cvrs.m.

Kolubra ostv. Kostolac ostv.

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Specific Consumption of Coal

9000

11000

13000

15000

17000

19000

21000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

kJ/k

Wh

TENT ATENT BKolubaraMoravaKostolac AKostolac B

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Specific Consumption of Mazut

0

100

200

300

400

500

600

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Year

kJ/k

Wh

TENT ATENT BKolubaraMoravaKostolac AKostolac B

0

10000

20000

30000

40000

5000060000

70000

80000

90000

100000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

Tons

Total

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Equivalent utilization of coal fired units during 1994 - 2001

0

1000

2000

3000

4000

5000

6000

7000

8000

1994 1995 1996 1997 1998 1999 2000 2001

Year

Hou

rs

TENT A 1TENT A 2TENT A 3TENT A 4TENT A 5TENT A 6TENT B 1TENT B 2Morava A 1Kostolac A 1Kostolac A 2Kostolac B 1Kostolac B 2

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Functioning

Plants are bound between one lignite supplier and fluctuating electricity market with unfavorable seasonal characteristicHouseholds consumption with its peak demand and probability of outages in Obrenovac prevent better valorization of hydro resources.Part of peak demand met by Belgrade DH system that creates strain on natural gas networkRisk of lignite quality fluctuation and financial liquidity constraints prevent sulphur remediation

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Composition of electricity generation by coal fired units

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001 Averge S t anda rd

Ye a r

Kost olac B 2

Kost olac B 1

Kost olac A 2

Kost olac A 1

Mora va A 1

Koluba ra A 5

Koluba ra A 4

Koluba ra A 3

Koluba ra A 2

Koluba ra A 1

TENT B 2

TENT B 1

TENT A 6

TENT A 5

TENT A 4

TENT A 3

TENT A 2

TENT A 1

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Overall use of available time and outages per sort for major thermal units

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001

Year

Tim

e

Other outagesGenerator outagesTurbine outagesBoiler outagesPlanned outagesExternalitiesMazut shortageCoal shortageCold reserveProduction

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Environmental Impact within Obrenovac Air shed

About 34000 tons of particulates, 190000 mt of SOx and 37 000 mt of NOx.Impact to underground and surface waters including Sava river.Over 5 million tons of ash a year deposited to land fields along Sava river.

Unsustainable cumulative process

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Comparison with commercial lignite fired power plant that operates more hours a year

364-602 mg/Nm3190 – 200 mg/Nm3NOx

900-3100 mg/Nm3170 – 300 mg/Nm3SO2

82-568 mg/Nm3<50 mg/Nm3Solid particles

ObrenovacGreece

Sources: Externe, EPS

27

Soil acidification in Serbia throughout Obrenovac air shed

Harmful impact to agricultural land complicates over time

Source: Soil Institute, Belgrade, Serbia, ground sampling

28

International donors are shifting from preventing further deterioration of services to turn key investments in chosen

facilities.

Weak domestic management (no strategy and policy, lose of human resources, no least cost plans …), neglect of good practices (Kyoto and Aarhus conventions, UNECE guidelines, CDM mechanism), accountability and transparency (no energy balances…) and lack of complementary investments limit achievable outputs below commercially viable levels.Potential drain of resources that might be available for development and stuck with unsustainable patterns.

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No cost effective and sustainable solution available within conventional development

paradigm and introverted industry

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The Case for Biomass

EBRD consultant estimates that over 21 million tons of agriculture biomass per year were available in Serbia and Montenegro (excluding Kosovo) average in 1999 – 2001 that included: maize, wheat, soybeans. Over 360 000 tons of sugar has been produced in 2002. Average “wet” energy content were more than 30% higher per unit mass than the best domestic lignite.

31

The Case for Biomass

Over 80% of available biomass is produced in Vojvodina and Belgrade region where over 1,2 million hectares of flat agricultural land is covered with over 1500 km of navigable channels and rivers, over 1000 km of railways and 8000 km of roads.More than 1 million tons of municipal waste is being produced annually in the same area.Over 2/3 of available energy is being consumed in the same area.Most of biomass is produced in Autumn and available during the winter when energy is most required.

32

Waterways in Vojvodina / Belgrade Area

Obrenovac

33

The Case for BiomassAdditional Remarks

Major thermal power plants and refineries are located at major waterways: Danube and Sava riversFleet of barges, pusher tugs and self propelled cargo ships is readily available and supported by eight shipyards that use to be components of the most competitive Serbian industry from 1960’s till now.Despite unprecedented water infrastructure less than 1% of land is covered by watering systems while agricultural product per hectare dropped to ½ from its 1980’s levels.

34

The Case for Biomass:Ownership and Markets

Biomass is the only available domestic fuel whose owner is known in every single case.Mercantile Exchange in Novi Sad is well established with tradition and skills.Market services (transport, terminals, handling, collection) are available from private providers and supported by industry with international reference.Growth potential is inherent and based on research capacity (Universities, Institutes, engineering companies, consultants), tradition and experience.

35

36

Rethinking Obrenovac Complex (1)

Retire Obrenovac A1 and A2, Kolubara A1-A4 and Kolubara A5.Close down Vreoci HoB Plant and lignite drying facilityIncrease utilization of remaining unitsResult: Decrease of specific lignite consumption and emissions

37

Rethinking Obrenovac Complex (2)

Introduce biomass for co-firing in Obrenovac A3-A6, B1 and B2Introduce coal quality managementIntroduce natural gas as start up fuel Introduce imported low sulphur hard coal to support fuel qualityIntroduce lime from nearby mine into boilers to control SOx emissionsMaintain level of employment in the complex while increasing productivity

38

Thermal Power Plant Obrenovac B 2x620 MW

View from Sava river

The most successful plant in the country that might become commercial generator by using 9.3 million tons of lignite,

>2.8 million tons of biomass, >200 000 tons of hard coal and some natural gas to generate cca 8.7 TWh of electricity a

year.

39

Rethinking Obrenovac Complex (3)

Utilize waste heat for drying biomassAdd seasonal heat storage to allow load shading (electricity / heat) during summer season and cover peak heat demand during winterAdd gas engines as mechanical drives for pumps decrease plant internal electricity consumption and increases electrical output flexibility Add 140 MW combine cycle unit to flat natural gas load diagram and provide additional flexibility, start ups and reliability

40

Rethinking Obrenovac Complex (4)

Utilize waste heat to Belgrade district heating system, provide heat to Obrenovac and Lazarevac and cover expected growth of these heating systemsProvide summer heat utilization option for CCGT, waste–to–energy and peak shaving plants (distributed generation based on existing infrastructure) in the City of BelgradeAdd a fuel wood drying facility to utilize fuel wood from land re-cultivation and put a price cap to fuel wood market in the region while providing cleaner fuel to suburban areas.

41

Heat utilization concept at Obrenovac A3-A6

42

Dedicated bridge and pipelines route from Obrenovac A to Belgrade

43

Rethinking Obrenovac Complex (5)

District heating services likely to be reliable and capable to cover load fluctuations at low cost. Peak demand 2.5-3 GWt and total winter demand about 3 TWh.Offsets a need for natural gas underground storage at fraction of investment cost. Allows commercial utilization of existing natural gas infrastructure.Supply of dry fuel wood during cold days at regular prices likely to remove incentive for electrical heating.Considerable fraction of cold days electricity peak load will be covered by this improvement in the quality of services

44

Obrenovac A Ostruznica New BelgradeTa

mna

va E

ast

Heat handling details: heat storage, heat transfers and heat pumps

45

Improvement potential: Lignite

Decrease lignite use in TPPs for over 40% and eliminate lignite use in urban / suburban areas.Stabilize lignite production from viable pits to 17 million tons a year for next 20 years.Delay new less viable open pits.Use remaining life of TPPs and mining machinery in productive way.Cope with lignite quality fluctuations.Allow time and machinery to focus on land re-cultivation and use of resulting biomass.

46

Improvement potential: Biomass

Remove 5 million tons of agriculture biomass that are currently burned at fields.Provide new market to farmers, improve security and competitivenessImprove utilization of existing fleet and infrastructureOpen new investment opportunities in shipping while increasing useful life of the fleetProvide cost effective export transport capacity for agriculture Provide opportunity for lower quality agriculture land

47

Improvement potential: TPPs

Better utilization of boilers and higher efficiencyFuel and supplier diversification and fuel flexibilityDiversification of output (heat / electricity), better load flexibility and diversification of customersImproved environmental impact at low investment costExtended useful life for the largest unitsBetter market positioning

48

Improvement potential: Environment

Particulates and SOx within prescribed limits while NOx emission level will depend on further investmentNo lignite burning in urban / suburban areas and low efficiency devicesDecrease natural gas, heavy fuel oil and lignite use in the City of BelgradeHalf ash output to amount that can be utilized via cheap waterborne transport provided at site.Might facilitate cost effective bioremediation of devastated agriculture land.Decrease biomass burning at open fields

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Financial Summary(Same maintenance , operation and workforce costs. No effects from

carbon credits. No full effects from environmental improvements and no political risk costs. Avoids investments in environment, some stranded

costs, new open pits, gas storage, new HoB plants and new TPP)

Investment costs including water and gas pipelines, biomass storage, handling and burning system, river terminals, heat storage, civil works, pumps and combine cycle power plant estimated to $530 million.

Benefits including sale of heat, additional electricity from efficiency improvements, cost reduction from replacing lignite by biomass, sale of fuel wood and reduction of environmental costs estimated to over $120 million a year.

At long term lignite prices, long term biomass prices, given DH prices.

50

Options for the Future

IGCC based on biomass and lignite gasification using biomass terminals, supply and storage as well as electricity and civil infrastructure.Solar thermal and geothermal heat pumps coupled with seasonal heat storage, biomass drying and heat transmission systemTo cover stable heat and growing electricity demand Sufficient viability to cover decommissioning and reforestation

Sustainable Industrial Cluster

51

Acknowledgements:Institutions and individuals that contributed to this

exercise:

Krsto Vukovic (TPPs), Rade Milojevic (DH), Branislav Adjanski (natural gas), Tom Burke (mines), Lazar Tadic (biomass), Serbian Chamber of Commerce, Institute for

Public Health, Forestry Institute, Mining Institute, Institute for Urbanism, Soil Institute, Faculty of Agriculture and

UNDP.