feasibility study project for the jcm (2014fy) (jcm f/s to ... · 3 al-jouf cement 2014/12/11...
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Feasibility Study Project for the JCM (2014FY)
(JCM F/S to introduce photovoltaic power generation
and gas-fired combined power generation facilities in
Saudi Arabia)
March 2015
Mizuho Bank, Ltd.
Table of Contents
1. JCM-related policies and measures ............................................................. 1
1.1 Discussion with the KSA Government ................................................... 1
(1) 1st visit of KSA [from 7 Sep to 11 Sep, 2014] ...................................... 1
(2) 2nd visit of KSA [from 11 Dec to 16 Dec, 2014] .................................. 6
(3) The other visits ..................................................................................... 9
1.2 JTVT (Japan Technology Visit Tour) ................................................... 11
1.3 Government Tender / Procurement Law .............................................. 17
2. Identification of the project candidates suitable for the JCM scheme ..... 20
2.1 Priority types ......................................................................................... 20
(1) Project information provided by the DNA ......................................... 20
(2) Project information provided from companies .................................. 22
3.2 Identification of high priority types ...................................................... 23
(1) High priority types ............................................................................. 23
(2) GHG reduction potential .................................................................... 24
3. Investigation of the project plans by applying the JCM framework ........ 25
3.1 Project candidates ................................................................................. 25
(1) Energy efficiency project of the seawater desalination plant ........... 25
(2) Energy efficiency project of the gas-fired power plant ...................... 35
(3) Waste heat recovery in the cement plant .......................................... 39
3.2 Superiority of Japanese technology ...................................................... 44
4. Draft of JCM methodology and estimate of GHG emission reductions .... 45
4.1 Target types ........................................................................................... 45
4.2 Reference scenario ................................................................................. 45
4.3 Eligibility criteria .................................................................................. 46
4.4 Calculation method of emission reductions ......................................... 47
4.5 Calculation of emission reductions ....................................................... 50
5. Business opportunity and project candidate ............................................. 51
1
1. JCM-related policies and measures
1.1 Discussion with the KSA Government
In order to implement the JCM projects in the Kingdom of Saudi Arabia (KSA), the investigation
team made hearing and discussions with the governmental bodies, state-own companies, provate
companies in KSA, Japanese private companies and governmental bodies, those are potential parties
concerned.
(1) 1st visit of KSA [from 7 Sep to 11 Sep, 2014]
At the beginning of the investigation, our team visit KSA to join the Workshop for JCM supported
by Ministory of Economic, Trade and Industry of Japan (METI). At the Workshop, our team had
meetings with Designated National Authority Saudi Arabia (DNA) and other entities to get
acquaintanceship. Then the folloing days our team made some discussions with some governmental
entities.
Table1 Visiting companies and governmental entities
Visit to Date Participants
1 Workshop for JCM 2014/ 9/7 Japan side) METI,
Embasy of Japan in Riyadh, Mizuho Bank, Ltd.,
Mizuho Saudi Arabia Company
KSA side)
DNA, Ministry of Water and Electricity, Ministry of
Commerce and Industry, SWCC, SEC, Saudi
Aramco, KACSTand so on.(About 20 persons)
2 JETRO/ Japan Cooporation
Center for Middel East
2014/9/8 (2 persons)
3 Sasakura Engeneering 2014/9/8 Sasakura Engeneering Co., Ltd. / Arabian Company
and Sasakura for Water and Power
Itochu Plantec inc.
(3 persons)
4 Designated National Authority
Saudi Arabia (DNA)
2014/9/9 Mr. Abdullah N. Al-Sarhan (Secretary General),
Dr. Taha M. Zatari (Senior Consultant),
2
Visit to Date Participants
Dr. SK Noim Uddin (Senior Advisor),
Eng. Mahammed A. Al-Saeed (Tech Consultant)
5 ESDM 2014/9/9 Mr. Tom Marren (Managing Director)
Eng. Donal O’Donnell (Operations Manager)
Eng. Dareen Ayyad (Project Engineer)
6 Embasy of Japan in Riyadh 2014/9/9 (1 person)
7 King Abdullah City for Atomic
and Renewable Energy
(KACARE)
2014/9/10 Research & Development & Innovation:
Eng. Wail Khalid Bamhair (Researcher)
Eng. Mohammed A. Altamimi (Researcher)
Eng. Omar S. Al-Shesha (Consultant)
8 Ministry of Water & Electricity 2014/9/10 Eng. Wail Khalid Bamhair (Researcher)
Eng. ohammed A. Altamimi (Researcher)
Eng. Omar S. Al-Shesha (Consultant)
(Research & Development & Innovation)
9 Saudi Aramco 2014/9/11 Mr. Jasim Yousuf Kooheji (Domestic Joint Ventures
Department)
10 JGC Gulf International Co. Ltd. 2014/9/11 JGC Gulf International CO. Ltd.
JGC Corporation
Table 2 Meeting contents
Visit to Contents
1 Workshop for JCM Presentation on the structure of JCM by METI and our team.
DNA requested KSA attendee to submit the list of potential
projects for JCM.
2 JETRO/ Japan
Cooporation Center for
Middel East
KSA come to be conscious of energy efficiency in accordance
with the gradual increase of petro consumption recently.
Japanese government had been proposing to supply the
Japanese energy efficiency technology, but proposals of
action plans by the western countries are mainly introduced
currently.
In order to introduce Japanese technology, it could be a better
way to present a package of technology such as EPC and
maintenance as a spec-in.
The preferencial for local companies is given by Aramco in
10% of price. SEC place emphasis not only on price but also
3
Visit to Contents
on quality in the tenders.
3 Sasakura Engeneering Having a meeting with Sasakura Engeneering they were
vising KSA as business trip at that time.
Sasakura had concluded a MoU with KACARE in 2012 and
continued to implement a substantiative experiment regarding
desalination technology using the solar heat for 2 years.
Sasakura have business experience in KSA more than 30
years. As a supplier of desalination plants, they had been
traded with SWCC through thir group company in KSA,
Arabian Company and Sasakura for Water & Power (APS),
which is also invested by both Itochu Corporation and
ACWA. Their business target is both new plants and
lihabilitation.
Sasakura uses RO membrane made by Japanese companies.
Japanese RO manufacturer’s global share is approximately
60%.
4 Designated National
Authority Saudi Arabia
(DNA)
DNA is willing to introduce some companies those have
seeds of JCM project as listed in the information sheet
provided by DNA if requested.
The candidates for JCM project DNA can introduce are the
waste heat recovery projects planned by the following cement
companies.
Najran Cement Company
Al Jouf Cement Company
Saudi Aramco, SEC and Solar Fronteer are planning to
enhance the PV solar project developed in the Farasan Island
from current 5MW to 10MW.
SEC is planning to enhance the solar desalination plant in
North Kafuji science city.
Ministry of Water and Electricity is developing a wind project
in the suburbs of Riyadh. KACARE is researching the wind
condition in the area.
5 ESDM ESDM is established by PCMC (Petroleum, Chemicals &
Mining Company Ltd) and CES Energy (Irish energy
consultant) as their joint venture company for environmental
4
Visit to Contents
consuting and investment company, based in Jeddah.
ESDM had an experience to develop a CDM project.
Now ESDM understands that the possibility to realize the
CDM project in KSA is almost diminished and considering to
utilize the JCM scheme.
ESDM is investing a JV for manufacring ORC (Organic
Rankine Cycle) steam turbine with Mitsubishi Heavy Industry
in Italy. The projects using products could be a JCM.
6 Embasy of Japan in
Riyadh
Open bid for KSA public sector is tied by the quite strong
request by Ministry of Finance, so it is difficult to make
optional contract with those public sector.
PV Solar projects are developed by Saudi Aramco.
Waste power generation is supervised by SABIC.
DNA is considering that to implement the the first project is
important even small one.
7 King Abdullah City for
Atomic and Renewable
Energy
(KACARE)
KSA’s renewable policy (draft) can be accessible through the
White Paper at the KACARE’s website.
This paper could be changed through the discussion with the
concerned parties in the government and private sector.
Saudization is one of the important elements for developing a
project in KSA.
8 Ministry of Water &
Electricity
In KSA, there is big demand for electricity and SEC is
concerned about the shortage of supply. It will be more
important to install the more renewable energy for supply side
and energy efficiency for demand side. The plan of renewable
installment drafted by KACARE is under process of
government approval. MOWE think that PV, CSP and wind
power generation could have bigger potential amoung the
renewable energies.
The priority between PV and CSP is now investigated by
MOWE.
The target for wind installment is 7-9GW currently;
KACARE is making the resource assessment and north west
area is expected as the best wind condition area.
FIT system is reviewed by KACARE.
5
Visit to Contents
The modification of the national grid had been implemented
by MOWE in these years, but it still has some problems.
MOWE is also planning to connect the national grid with
GCCs and Egypt.
9 Saudi Aramco The JCM related departments in Saudi Aramco are as
follows;
Power System Admin.: Development of renewable
projets (PV, IGCC etc.)
New Business Development: Planning of JV
establishment ⇒ through Board meeting’s approval
Domestic Joint Ventures: Operation of JV
Corporate Planning : Business planning of whole
company and energy efficiency
10 JGC Gulf International Co.
Ltd.
In case JGC group participate in JCM project in KSA, JGC
Gulf will be the participant as the representative and take a
roll of EPC.
JGC (Japan) have experienced supplier of the PV solar. And
JGC Gulf’s business is mainly petrochemical area.
JGC had an experience to participate in the PV demonstrative
project in the suburban area of Riyadh with Tokyo University
and KACARE. It was lightly affected by sandstorm.
6
(2) 2nd visit of KSA [from 11 Dec to 16 Dec, 2014]
Based on the information obtained in the 1st visit, our team visited KSA to identify the project
candidates.
Table 3 Visiting companies and governments
Visit to Date Participants
1 Saudi Designated National
Authority (DNA)
2014/12/14 Mr. Abdullah N. Al-Sarhan (Secretary General)
Dr. SK Noim Uddin (Senior Advisor)
Eng. Mahammed A. Al-Saeed (Tech Consultant)
2 Ministry of Water &
Electricity
2014/12/14 Mr. Saleh H. Alawaji (Deputy Minister for
Electricity / Chairman of SEC)
Eng. Wael A. Al-Ghamdi (Director General of
Energy Efficiency Department)
3 Al-Jouf Cement 2014/12/11 Al-Jouf Cement
Mr. Khalid H. Al-Motairy (Finance Manager)
Mr. Haani Yousuf Al-Kutami (Manager,
Materials Department)
DNA
Eng. Mohammed A. Al-Saeed (Technical
Consultant)
Mr. Abdulmalik M. Al-Obra (Projects Engineer)
4 Taqnia
(Advanced Water
Technology)
2014/12/15 Mr. Todd Leyland (Consultant)
Eng. Khalid M. AlHabib (Business
Development)
Eng. Ibrahim N. AlSubeh (Engineering
Manager)
5 ACWA Power 2014/12/14 Ms. Yara Anabtawi (Director, Business
Development, Renewables)
6 Saline Water Conversion
Corporation (SWCC)
2014/12/14 Eng. Othman Y.I. Al-Najdi (Deputy governor for
operation)
Dr. Absulmajeed S. Al-Twaim (Technical
Affairs & Production Manager)
Mr. Mohammed Moghram Alghamdi (Power
Specialist Engineer)(join from Jeddahthrough
telesystem)
7
Visit to Date Participants
7 Saudi Electric Company
(SEC)
2014/12/15 Mr. Manish Manchandya (Head, Corporate
Finance Treasury)
8 Solar Frontier K.K.TSO 2014/12/16 1 person (General Manager)
9 JGC Gulf International Co.
Ltd.
2014/12/16 1 person (Senior Manager, Finance &
Accounting Department)
Table 4 Meeting contents
Companies Contents
1 Saudi Designated
National Authority
(DNA)
Regarding MOU of JCM can be concluded in April 2015 at the
earliest.
DNA would like to set a discussion meeing with investigation team
and Al-Jouf Cement to introduce thir planning waste heat revovery
project.
DNA would like to introduce the two waste landfill methane
recovery projects as JCM potential projects.
Jeddah: municipal organization would be main project owner.
CDM experienced. PV solar combined is also planned.
Medina: 8MW by private company.
MOWE is planning a 10MW wind project in the suburban area of
Riyadh.
It will be good idea to hold the side event in the next COP (Paris)
on JCM, in which presentations should be made by governments,
F/S team and KSA counterparts.
2 Ministry of Water &
Electricity
It would be good strategy to find specific projects owned by SEC
or SWCC.
There are many projects with large potential in both energy supply
sides and demand sides.
SEC’s key person on the JCM is in the procurement department.
3 Al-Jouf Cement Waste heat recovery project in the cement plant has been
investigated.
That project is proposed by the Chinese company which
constructed the existing plant.
Plant capacity is 5,000 -10,000 ton/d; construction cost is estimated
as 70 million SAR (25 million USD); and construction period is
estimated as 9 months.
8
Companies Contents
Interest in introducing Japanese technology.
4 Taqnia
(Advanced Water
Technology)
Regarding water supply in KSA, by applying energy efficient
technology, they would like to reduce OPEX.
JCM candidate projects:
Surplus electricity in the desalination plant which is to be
purchased by the grid.
No experience but interest on renewable energy.
Geothermal energy.
5 ACWA Power The following project types are suitable for JCM:
Power generation that has the capacity less than 5MW
(speedy)
Off-grid power generation by the hybrid of solar power and
diesel genset. (The Government intends to reduce the
consumption of diesel oil.)
ACWA Power can participate in the JCM project of renewable
energy as IPP/IWPP or EPC.
6 Saline Water Conversion
Corporation (SWCC)
SWCC has the plans to construct desalination plants including
Al-Jubail phase 3 and 5 small plants in Jeddah.
There are also the plans to construct small desalination plant
combined with solar power in Al-Khafji, 2015, and desalination
plant combined with cogeneration in Al-Jubail.
SWCC has good and long relationship with Sasakura.
SWCC has interest on JCM, except for the concern to limit the
project possibility only on the bilateral framework with Japan.
There is possibility to avoid the tender process for smaller projects.
7 Saudi Electric Company
(SEC)
SEC held gas turbine suppliers’ meeting in Tokyo, June 2014.
SEC highly rates the technologies of GE, MHI and Siemens.
Investment is decided by the Investment Committee.
JCM financing scheme is preferable to SEC.
8 Solar Frontier K.K.TSO Experience of the solar power project in the Farasan islands.
Interest on the new type technologies including power stabilization
using battery, connection and operation of mini-grid.
9 JGC Gulf International
Co. Ltd.
Interest on the waste recovery project in the cement plant and
energy efficiency project in the seawater desalination plant.
9
(3) The other visits
Table 5 The other visits
Visit to Date Participants
1 Saline Water Conversion
Corporation (SWCC)
December 2, 2014 SWCC:
Eng.Othman Y.I. Al-Najdi (Deputy Governor)
ACWA Power Sasakura:
Al-Ajmah (President & COO)
Sasakura:
Mr. Miyamura
2 Saudi Electric Company
(SEC)
December 18, 2014 Abdullah Alsohibany (Executive Director,
Contracting)
3 Saudi Basic Industries
Corporation (SABIC)
December 23, 2014 SABIC:
Dr. Ahmed Al-Hazmi (General Manager,
Environmental Affairs), Mr. Zaour Israfilof
(Climate Change & CDM Specialist)
Daikin Saudi Arabia:
Mr. Shimada (GM)
Daikin McQuay Middle East:
Mr. Michel (Manager)
Table 6 Meeting contents
Companies Contents
1 Saline Water Conversion
Corporation (SWCC)
Sasakura has the interest to participate in the SWCC’s expanding
plans of seawater desalination.
5 members of SWCC have taken part in the Workshop held on
September 7, 2014.
Sasakura made proposal to apply both the Tri-hybrid technology
and modification technology onto the existing plants.
Mizuho proposed to utilize the JCM framework for those
developments.
Deputy Governor of SWCC is the member of DNA committee, and
set a high value on environmental and energy-related issues, and he
regards it good approach to apply JCM scheme.
2 Saudi Electric Company
(SEC)
Spec-in by the Japanese companies is welcomed. Japanese
technology and maintenance service are highly rated.
10
Companies Contents
Open bid is mandatory process for all projects.
JCM scheme is in accordance with SEC’s policy:
Spec-in of Japanese companies is welcomed.
Improving energy efficiency is required by the Saudi
Government.
In the process of open bid, the priority of technical performance is
higher than the price. And, Japanese companies are always highly
rated regarding technology along with some EU and US companies
(Siemens or GE).
Financial backup provided by the Japanese Government will
definitely contribute to increase the opportunity for Japanese
companies to win the bid.
3 Saudi Basic Industries
Corporation (SABIC)
With Daikin Industries, we made proposal to improve energy
efficiency by optimizing air-conditioning as the JCM project.
There are some project candidates in SABIC to apply JCM scheme,
which will be investigated later.
As for Spec-in of the Japanese companies, if better than the other
companies, they will make a recommendation to the related
division.
11
1.2 JTVT (Japan Technology Visit Tour)
As mentioned later, the project type to improve energy efficiency of the seawater desalination
plant (introduction of the Tri-hybrid technology to new facilities, modification of existing plants) by
utilizing advanced technology owned by Sasakura is considered to be candidate for the JCM
demonstration project. So we have invited SWCC to Japan on 3-6 March 2015 and have arranged
the meetings with the following companies and the government.
Mr. Othman (vice governer of SWCC), who is responsible on SWCC’s policy to introduce good
technology, has nominated the visiting members.
As a result of the tour, SWCC’s members have deepened further understanding and interest on
Japanese technology, which will contribute to the future plans of SWCC through the feedback to the
vice gocerner. This activity is also one of the fruits of the DNA’s support.
Table 7 Visiting Entities in Japan
Date Visit to Purpose
2015/3/3 (tue)
MHPS
Takasago works (Hyogo)
Visit gas turbine manufacturing
factory
Sasakura Engineering
Headoffice / factory / “Techno-plaza”(Osaka)
Visit seawater desalination plant
manufacturing factory
2015/3/4 (wed) TOYOBO
Iwakuni factory (Yamaguchi)
Visit RO Membrane
manufacturing factory
2015/3/5 (thu) TEPCO
Kawasaki thermal power station (Kanagawa)
Visit operating thermal power
generation plant
2015/3/6 (fri) METI
(Tokyo) Understand about JCM
Table 8 List of Saudi counterpart
No Name Title/ Institution
1 Dr. Mohamed Osman Saeed Research Scientist and Head Environment & Biology Dept, SWCC
2 Eng. Ahmed M. Al-Zahrani Jubail Plant Manager, SWCC
3 Mohamed A. Al Mutair Plant Chemist, SWCC
4 Eng. Naif Issa Askari Senior Efficiency Engineer, SWCC
12
Table 9 Results of the visits
Companies Contents
1 MHPS
(MITSUBISHI HITACHI
POWER SYSTEMS)
Company’s activities
For the business of the thermal power generation,
Mitsubishi Heavy Industries (65%) and Hitachi (35%)
have invested and established the company in February
2014.
In the Takasago works, mainly gas turbine and steam
turbine are manufactured.
Many expierences in Saudi Arabia (gas turbines 35,
steam turbine 35 and boilers 45)
Gas turbine technology
Various lineups to meet customers’ needs
1,600 degrees class gas turbine “J Series” has large
capacity (simple cycle 327MW, combined-cycle
470MW) and high efficiency (thermal efficiency 62%:
LHV)
Figure 1 Capacity of GTCC1
1 MHPS
13
Companies Contents
Figure 2 GTCC Thermal efficiency2
Plant tour
Gas Turbine
R&D Center
T-point (demonstration facility for gas turbine
combined-cycle power generation plant)
Remote Monitoring Center
Technical Q&As
Figure 3 In front of the works
2 MHPS
14
Companies Contents
2 Sasakura Engineering Presentation on the technology
Modification of exsting plant
Tri-hybrid
Tour of “Techno-plaza”
Technical Q&As: SWCC stated that Sasakura has many
experiences to introduce facilities to SWCC and high
technical reliability than the other companies.
Figure 4 Meeting
3 TOYOBO Presentation on the technology
RO (Reverse Osmosis) Membrane
Surface area of the membrane is larger than
conventional products, therefore superior in
recovery ratio.
Periodical exchange (e.g. 15% per year) is necessary
to guarantee the performance.
Instead of higher initial cost, it has high efficiency
and high durability.
FO (Forward Osmosis) Membrane
Power generation utilising membrane movement
TOYOBO’s activities in KSA
Arabian Japanese Membrane Company (AJMC) was
established as joint venture of ACWA Holding, Itochu
and Toyobo. The headoffice is located in Riyadh.
TOYOBO’s RO Membranes are applied for large
15
Companies Contents
desalination plants in KSA including Al-Jubail Phase II
and Ras Al Khair.
Factory tour
Technical Q&As
Figure 5 Meeting
4 TEPCO
(Tokyo Electric Power
Company)
Overview of the power station
Group 1:
500,000 kW * 3 units
1,500 degrees grade combined cicle (MACC);
thermal efficiency 59%
Manufactured by Mitsubishi Heavy Industries
Group 2:
500,000kW * 1 unit (2nd and 3rd units are under
construction)
The first unit is 1,500 degrees grade combined cycle
(MACC); thermal efficiency 59%. The second and
third units are 1,600 degrees grade combined cycle
(MACC II); thermal efficiency 62%.
Manufactured by Mitsubishi Heavy Industries
Plant tour
Exibition center and central control room
Turbine
HRSG (Waste heat steam generator)
Q&As on the details of facilities and O&M.
16
Companies Contents
Figure 6 Meeting
5 METI
(Ministry of Economy Trade
and Industry)
Outline of JCM
Questions from SWCC:
Difference between JCM and CDM
Advantages of the JCM demonstration project
Construction of Joint Committee in KSA
Diffirence between BaU and reference scenario
Comment on JCM
JCM is very simple and useful scheme.
Please speedup the agreement with KSA government.
Figure 7 Meeting
17
1.3 Government Tender / Procurement Law
Government tender and procurement procedures in KSA are established as the “Government
Tender and Procurement Law” issued on 2006, and its rules of implementation issued by Minister of
Finance in 2007. All Saudi governmental entities have obligations to implement tenders (open-bid)
for companies that are appropriately licensed by the Government. In addition, Saudi governmental
entities should give priorities on products and services supplied by domestic companies.
In the stage of application of the law and rules, there should be some flexibility.
Government Tender and Procurement Law (2006)
Rules of Implementation (2007)
Table 10 Government Tender and Procurement Law3
Summary
- Government can purchase directly as urgent treatment if the amount less
than 1 million SRA (approximately 30 million yen).
- Preference shall be given to national industries, products and services and
those of equal classification.
- All government tenders shall be advertised in two local newspapers and
electronic advertisement media.
- The works of a special nature for which no local contractors are available
shall be advertised outside the Kingdom in addition to local advertisement
means.
- Purchases shall be made and works executed at equitable prices that do not
exceed the prevailing prices.
Bidding Process
- Bids shall be submitted inside sealed envelopes and may be submitted and
opened through electronic means.
- The bid shall be accompanied by a preliminary deposit ranging from 1% to
2% of its value.
- Validity period of bids for public tenders is 90 days from the date of
envelopes opening.
- Two committees are in charge: The envelope opening committee and The
bid evaluation committee
- Bid evaluation committee may negotiate with the lowest price bidder, if
fails to reach the specified price, the committee shall negotiate with the
3 Government Tender and Procurement Law(2006)
18
next bidder, and so on.
- No bid may be excluded on the pretext of low prices unless it is 35% less
than the estimates of the prevailing prices.
Contract
Execution and
Duration
- Contracts and related documents shall be executed in Arabic; another
language may be used beside Arabic but Arabic text shall govern.
- Service contracts of a continuous nature; like maintenance, operation and
catering shall not exceed 5 years.
- The work site shall be handed over to the contracting party within 60 days
from the date of award.
- Prior signing, all government agencies shall present contracts to Ministry of
Finance for review if the execution period is more than one year and the
contract value is 5 million Saudi Riyals.
Bank Guarantees
- The successful bidder shall submit a final guarantee equal to 5% of the
contract amount within ten days from the award date. No final guarantee in
case of direct purchase.
- The final guarantee for continuous contracts shall be reduced annually by
the percentage of work completion, but should not be less than 5% of the
value of remaining works.
- The final guarantees shall be accepted in a form of a bank guarantee letter
issued by a local bank or by a foreign bank through a local bank.
Payment of
Financial
Compensation
- The value of contracts shall be paid in Saudi Riyals, though it may be paid
in another.
- The government agency may make an advance payment equal to 5% of the
total contract value to the contractor, if the payment amount does not
exceed 50 million Saudi Riyals, against a bank guarantee equal to the same
amount.
- The dues of the contractor shall be paid as per the percentage of completed
works against invoices.
- The final payment, which should not be less than 10% of contract value,
shall be paid after the provisional acceptance of works of the delivery of
purchases.
- The total value of the contract shall include and cover all related costs
including fees and taxes.
- The requirements of the government agency may be procured through direct
purchase in urgent cases provided that it does not exceed one million Saudi
Riyals, at least three bids shall be solicited.
Penalties and
Extension of
Contracts
- If the contractor delays contract completion, a delay penalty shall apply
with not more than 6% of the value of the contracts.
- The penalty shall be waived if the delay results from an emergency.
- The government agency may withdraw the work from the contractor if it is
19
found that the contractor has offered a bribe to any official or if the
contractor delays work commencement, slows down execution of the
contract or fails to fulfill any contract conditions.
- Contracts shall be concluded directly with the authorized contractor. No
mediation may be accepted.
It would be very difficult for any foreign companies to avoid tender / bidding for the public
institution including national enterprise business. To match those laws and rules with JCM project
development, the following ways should be considered:
The agreement between Japanese and KSA companies to apply Japanese technology
should be incorporated into a kind of technical requirements (e.g. RFP).
Those technical requirements and JCM methodology (Eligibility criteria) should have
the consistency.
Figure 8 Spec-in inclusion into tender / bidding process4
4 Mizuho Bank
Discuss the Japanese technical application
Consistency with JCM methodology (Eligibility
criteria)
Implement JCM demonstration project
Bidding Process JCM Process
JCM F/S, Business preparations
Spec-in (to be investigated in the detailed F/S)
Successful bid
Bidding
Present technical requirements (KSA)
Technical review
20
2. Identification of the project candidates suitable for
the JCM scheme
2.1 Priority types
Based on the project information provided by the DNA and several companies, we have identified
the project candidates as priority types which are probable to proceed to the JCM demonstration
project stage.
(1) Project information provided by the DNA
We have taken project information list from DNA, which includes projects on the way of CDM
development (not registered yet).
Table 11 Project list provided by the DNA
Project type Site Capacity etc. Counterpart
1 Simple to combined cycle
conversions
Faras power
plant
NA SEC
2 Simple to combined cycle
conversions
Hail NA SEC
3 Simple to combined cycle
conversions
Riyadh NA SEC
4 Simple to combined cycle
conversions
Riyadh NA SEC
5 Simple to combined cycle
conversions
Qaseem NA SEC
6 Crude oil pipeline Qaseem NA SEC
7 Simple to combined cycle
conversions
Qurayat NA SEC
8 Simple to combined cycle
conversions
Rabigh NA SEC
9 Simple to combined cycle
conversions
Rafha NA SEC
21
Project type Site Capacity etc. Counterpart
10 Simple to combined cycle
conversions
Tuhama NA SEC
11 Sub critical boiler to supercritical
boiler
Al-Khufgi NA SEC
12 Sub critical boiler to supercritical
boiler
Shqaiq NA SEC
13 Flare gas recovery Safaniyah oil
field- Riyadh
GHG reduction
116,577tCO2/y
Saudi Aramco
14 PV panel on the rooftop 10.5MW Dhahran City GHG reduction
10,834tCO2/y
Saudi Aramco
15 Landfill gas Jeddah GHG reduction
362,688tCO2/y
NA
16 Tri-Generation System Jeddah GHG reduction
6,865tCO2/y
NA
17 Landfill gas Madinah GHG reduction
141,266tCO2/y
NA
18 High efficiency power generation Jeddah 2,650MW SEC
19 Flare gas recovery Jubail 11MMSCFD Saudi Aramco
20 Flare gas recovery Hofuf city 6MMSCFD Saudi Aramco
21 Flare gas recovery Hofuf city 6MMSCFD Saudi Aramco
22 Flare gas recovery Jubail 5MMSCFD Saudi Aramco
23 Flare gas recovery Dhahran 6MMSCFD Saudi Aramco
24 Energy optimization of the
fertilizer plant
Jubail Industrial
city
1,271Mt/d Al Jubail Fertilizer
Company, Al-Bayroni
(SABIC)
25 Energy optimization of the
fertilizer plant
Jubail Industrial
city
129.25Mt/h *3 Al Jubail Fertilizer
Company, Al-Bayroni
(SABIC)
26 Water cooled chillers using 134a
refrigerants
Mekkah 55,000TR Central District Cooling
Company
27 District cooling plant Hadeed, 30,000TR Energy Central
22
Project type Site Capacity etc. Counterpart
Al-Jubail Company
28 Centralized district cooling plant Jubail Industrial
city
GHGreduction
850,000tCO2/y
SAFCO
29 Waste water recycling plant using
the RO membrane
Jubail NA United Complex
30 Windrow composting Al Kharj NA Al Safi Dairy
31 Waste water recycling plant using
the UF / RO membrane
Jubail 12KTA Ibnzahr
32 Waste heat recovery from boilers Jubail GHG reduction
57,000tCO2/y
SABIC
33 Optimization of steam utilization
in the petrochemical plant
Jubail GHG reduction
48,000tCO2/y
Kayan
34 Flare gas recovery from the
petrochemical plant
Jubail GHG reduction
25,000tCO2/y
SABIC
(2) Project information provided from companies
In addition to the project information provided from DNA, we have gathered project information
from various companies, including Saudi Aramco, Saudi Electric Company (SEC), SWCC, etc.
Table 12 Project information provided from companies
Project type Site Capacity etc. Counterpart Japanese
participants (assumption)
1 Tri-hybrid system for
seawater desalination plant
Al-Jubail Saline water
production
20,000 t/d
SWCC Sasakura
2 Modification of seawater
desalination plant
NA NA SWCC Sasakura
3 Waste heat recovery in the
cement plant
Al-Najran Cement
5,000 -10,000 t/d
Al-Jouf
Cement
JGC, Taiheyo
Engineering
4 Simple to combined cycle gas
turbine
NA 1600 degree
grade gas turbine
SEC A Japanese
manufacturer
23
Project type Site Capacity etc. Counterpart Japanese
participants (assumption)
5 Optimization of air
conditioning by using BEMS
NA NA SABIC Daikin Industries
3.2 Identification of high priority types
(1) High priority types
On the assumption that (1) Japanese companies participate in the project; (2) There will be many
needs in KSA; and (3) Business potential is large, the following three types of project / technology
are regarded as the candidates of JCM projects.
(1) Energy efficiency project of the seawater desalination plant (Tri-hybrid and modification of
existing plants);
(2) Energy efficiency project of the gas-fired power plant (simple-cycle to combined cycle); and
(3) Waste heat recovery in the cement plant
Table 13 Identification of high-priority types
Applied technology Reasons for selecting
1 Energy efficiency project
of the seawater
desalination plant
(Tri-hybrid and
modification of existing
plants)
(Tri-hybrid)
Technologically demonstrated with the pilot plant by SWCC,
Sasakura and Water Reuse Promotion Center.
Next phase would be commercial plant operation
(Modification of existing plants)
Sasakura has the lisence of construction method.
2 Energy efficiency project
of the gas-fired power
plant (simple-cycle to
combined cycle)
By installing steam turbine on the existing simple cycle gas
turbine system additionally, thermal efficiency is expected to
increase by 10-20%.
Japanese products are superior comparing with the same
capacity.
24
Applied technology Reasons for selecting
Japanese products are also highly rated on the maintenance.
3 Waste heat recovery in
the cement plant
Reliability and easiness to maintain of the Japanese products
are superior to the other countries’ products.
Japanese products are also highly rated on the maintenance.
(2) GHG reduction potential
By diffusing the JCM project all over KSA, the following GHG reduction is roughly expected in
the future, at the maximum.
Table 14 GHG reduction potential
Applied technology GHG reduction potential
1 Energy efficiency project of the seawater
desalination plant (Tri-hybrid and modification of
existing plants)
Tri-hybrid: 0.488 million tCO2/y
Modification: 1.46 million tCO2/y
2 Energy efficiency project of the gas-fired power
plant (simple-cycle to combined cycle)
16 million tCO2/y
3 Waste heat recovery in the cement plant 2.66 million tCO2/y
25
3. Investigation of the project plans by applying the JCM
framework
3.1 Project candidates
(1) Energy efficiency project of the seawater desalination plant
(a) Application of the Tri-hybrid technology for the newly-built desalination plant
Sasakura (Sasakura Engineering Co., Ltd.) has successfully developed the “Tri-hybrid technology”
for the seawater desalination plants, in cooperation with SWCC.
By utilizing that technology, the plant can be compact-scale and energy-efficient. It is expected
that the technology is applied in KSA that has large demand of saline water.
Outline of the technology
There are mainly two types of conventional technology for seawater desalination:
- Evaporation method: Seawater is heated and distilled. It has been mainstream method because
of its simpleness. One of the representative ways is MED (Multiple-effect
distillation), which consists of multiple stages or “effects”. However, large amount of
steam is required for evaporation.
- RO membrane method: Many types of molecules, ions and bacteria are removed by using RO
(Reverse Osmosis) membrane with making pressure into seawater. Energy efficiency
is higher than the Evaporation method because it does not use steam; however, the
technical applicability depends on the quality of raw seawater.
The Tri-hybrid method of seawater desalination technology is composed by Evaporation method,
RO membrane method and NF (Nanofiltation) membrane method, which realizes advantages
including followings:
- It can operate with higher temperature: Scale content including sulfic acid ion is removed by
using NF membrane, and as a result, it becomes not necessary to keep TBT (Top
Brine Temperature) low to avoid precipitation of scale contents inside MED stages.
TBT can be raised to approximately 125 degrees without scale content, comparing
with approximately 70 degrees with scale content. Then, effective temperature gap
can be expanded, and steam for evaporation is to be reduced by approximately 50%.
26
- Energy efficiency is high: TBT is to be raised as shown above, and recovery ratio of RO
membrane is to be raised to approximately 50% compared with approximately 30%
of the conventional methods.
As a result, saline water production is to be almost doubled with the same energy
input with the Evaporation method (only MED), which means that energy
consumption for the same amount of saline water is almost halved.
- Japanese company has the technological superiority: Only Japanese companies can apply the
Hybrid technology.
Figure 9 MED/TVC unit (6,000 t/d)5
Figure 10 Tri-hybrid unit (20 MIGD)6
5 Sasakura (MED/TVC Unit: Multiple Effect Distillation process with Thermal Vapor Compression) 6 Sasakura (MIGD: Million Imperial Gallon per Day)
27
Figure 11 Water flow of the Tri-hybrid system (200 kt/d)7
Reduction of energy consumption
By applying the technology, steam consumption can be reduced drastically comparing with the
Evaporation method as shown in the following table.
Table 15 Comparison among technologies (10 kt/d)8
Parameters TRI-HYBRID CONVENTIONAL MED RO
SWRO production 4,000 t/d 0 t/d 10,000 t/d
MED/TVC total production 6,000 t/d 10,000 t/d 0 t/d
Plant total production 10,000 t/d 10,000 t/d 10,000 t/d
Top brine temperature 125oC 67oC -
Steam requirements 1) 12.5 t/h 41.7 t/h 0 t/h
Electricity requirements 1,171 kWh 954 kWh 1,629 kWh
Seawater Intake 1,485 t/h 3,390 t/h 1,447 t/h 1) Without vent ejector steam
7 Sasakura 8 Sasakura
28
Without application of the Tri-hybrid technology, the most probable technology is either (1) RO
method; or (2) conventional Evaporation method (MED), which is regarded as the reference scenario
of JCM. Raw seawater is polluted, or, available heat is limited in some sites along the Persian Gulf,
which means it is technologically hard to apply only RO membrane method in such sites. Along the
Persian Gulf of KSA, the ratio of sites where the technology (1) or (2) is applicable is thought to be
approximately 3:7.
SWCC has the policy to introduce both conventional proven technology and newly developed
technology. For example, for one of the latest project (Ras Az Zawr Phase 1, October 2009), SWCC
specifies the capacity of the Evaporation method (70% at minimum) and the RO membrane method
(30% at maximum).
Figure 12 Requirements for the desalination project of Ras Az Zawr Phase 19
9 SWCC
29
Figure 13 Locations of Raz Az Zawr and Al Jubail along the Persian Gulf
Now we decide the JCM reference scenario as the weighted average of (1) RO membrane method
by 30% and (2) conventional Evaporation method by 70%, in the condition of the project sites along
the Persian Gulf of KSA.
The following table shows the comparion between the project scenario and the reference scenario
in case of the capacity of 200 kt/d.
Table 16 Comparison between the scenarios (200 kt/d) (1)10
Project Scenario Reference Scenario
70% 30%
Weighted Average
Tri-hybrid NF/RO/High Temp
MED
Conventional MEDat TBT 67 degC
RO
Production (m3/day)
MED 120,000 200,000 -
NF / RO 80,000 -
RO 200,000 -
In Total 200,000 200,000 200,000 200,000
Steam Requirements
t / hr 12.5 * 20 = 250 41.7 * 20 = 834 0 583.8
kt / y 2,190 5,114
Electricity Consumption
kWh / y 1,171 * 20 = 23,420
954 * 20 = 19,080
1,629 * 20 = 32,580
23,130
10 Sasakura (revised)
30
Cost
Initial investment is roughly estimated as 40 million USD (in case of 20 kt/d). As shown below,
initial investment (CAPEX) of the technology is almost the same with the conventional MED
method, and expensive than RO membrane method under the same condition. Meanwhile,
operational cost (OPEX) of the technology is also cheaper than the reference scenario, so the life
cycle cost of the project is better estimated than the reference.
It has been difficult to make the application of the Tri-hybrid system as a precondition of the
projects in KSA, because all project owner is obliged to conduct tender process in principle, and
manufacturers except for Japanese ones tend to bid with much cheaper price, therefore, price
competition has been hard for the Japanese manufacturers.
Table 17 Comparison between the scenarios (200 kt/d) (2) 11
Project Scenario Reference Scenario
Tri-hybrid NF/RO/High Temp MED
Conventional MED at TBT 67 degC
RO
Production (m3/day)
MED 0 200,000 m3/d 0
NF/RO 80,000 m3/d 0 200,000 m3/d
High Temp. MED 120,000 m3/d 0 0
Total 200,000 m3/d 200,000 m3/d 200,000 m3/d
CAPEX (US$/m3-product) 0.2091 0.2088 0.1332
OPEX (US$/m3-product) 0.4077 0.7220 0.2971
Life Cycle Cost (US$/m3-product)
0.6168 (100%)
0.9308 (150.9%)
0.4303 (69.8%)
(Conditions)
Operation Year : 30 Years
Availability : 355 days/Year
Discount Rate : 4% / Year
Inflation Rate : 2.4% / Year
Electricity Cost : SR 144/MW (Saudi Price) = US$ 38.4/MW
Construction period
Approximately 2 years.
11 Sasakura (revised)
31
(b) Modification of the existing plants
There are many seawater desalination plants in KSA, and then energy reduction potential would
be very large by improving energy efficiency.
Outline of the technology
There are the following two representative methods to improve energy efficiency of the existing
seawater desalination plants:
- Rehabilitation: Scale content includes insoluble minerals within seawater, which decreases
thermal efficiency of the plant by precipitating and adhering on the heating surface
and avoiding heat transfer. Therefore, as the rehabilitation, original thermal efficiency
is regained by removing scale precipitation using acids.
SWCC has been developing the project to remove scales to improve energy
efficiency as the CDM project (by making use of FS12 technology owned by Therma
Chem, UK). CDM methodology NM0363 has already been approved by the CDM
Executive Board, and has been registered as ACM0054 “Energy efficiency
improvement through on-line fire side cleaning technology applied to fossil fuel fired
steam boilers in existing energy and other industries” (October 2013). CDM project
by utilizing that approved methodology has not been validated nor registered yet.
Figure 14 Before and after the rehabilitation12
12 PDD (draft version) “Energy efficiency improvement at Saline Water Conversion Corporation by means of FS12
Utilization”
32
- Modification: In case of MSF, by increasing the number of stages, the effective temperature
gap is to be increased, which improves energy efficiency. Performance Ratio (PR) is
the index that roughly represents saline water production per heating steam, and the
more stages increases, the more PR also increases.
Figure 15 Impact of number of MSF stages on Performance Ratio13
The modification is feasible to implement after the rehabilitation, by utilizing
additional budget (variation order), not under the tender process. If the first
modification project is conducted in advance, it is regarded as a pilot project, and the
payment is not made until energy efficiency improvement is demonstrated.
The patent of the modification technology is taken by Westinghouse Electric (US)
about 30 years ago, and its life has already been terminated. However, the technology
has not applied to any commercial plant all over the world. Patent application of the
construction method of its rehabilitation has been already submitted by Sasakura.
Reduction of energy consumption
In the proposed rehabilitation project, by increasing number of stages from 17 to 33, heat recovery
ratio of the circulating brine (concentrated seawater in the evaporator) is raised, and then heating
steam in the brine heater is decreased.
As a result, it is rougly estimated that the Performance Ratio will be increased by approximately
20%.
13 Sasakura
33
Figure 16 Vapor Temperature and Brine Recirculation Temperature before and after
modification (red: before, blue: after)14
Figure 17 Vapor Temperature and Brine Recirculation Temperature before and after
modification (red: before, blue: after)15
14 Sasakura 15 Sasakura
BH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Brine Heater
TBT 112.8 deg. C
107.64 C
106.63 C
5.16
C
6.17
C
TV(before modification)TV(after modification)
34
In principle, BaU (continue using without rehabilitation nor modification) may not be identified as
JCM reference scenario. It is thought to be one idea to regard the energy consumption of original
design (after rehabilitation) as the reference scenario.
Cost
Initial investment is roughly 3.5 -4 million USD for each unit.
Construction period
Approximately 4 months.
35
(2) Energy efficiency project of the gas-fired power plant
In this F/S, we have groped the JCM project candidate required by SEC, supported by DNA. And
we have discussed with a Japanese manufacturing company on the adequate technology suitable for
the needs of SEC.
Table 18 Needs of SEC16
Counterpart SEC (Saudi Electric Company)
Project site Not identified yet
Applied
technology Add-on to simple cycle gas turbine (conversion to combined cycle)
Needs for
JCM projects
Technology:
SEC has already launched the plan to introduce GTCC (Gas Turbine
Combined Cycle).
Spec-in for Japanese companies is welcomed. Japanese technology and
after-sales service is highly regarded.
Process of introduction:
Investment is decided by the Investment Committee.
In principle, it is obliged to make open tendering, which is hardly to be
changed. Generally, SEC’s tender process set a highest value on the applied
technology, compared with the price. And regarding the technology, Japanese
manufacturers are always highly rated with a part of EU/US companies (e.g.
Siemens and GE).
In June 2014, the suppliers’ meeting was held in Japan, targeting gas turbine.
JCM:
Finance supporing scheme for JCM project is good and acceptable.
JCM scheme is consistent with SEC’s policy:
- Spec-in by Japanese companies are especially welcomed;
- SEC is required to promote energy efficiency by the Government;
- By utilizing financial support provided by the Japanese Government, initial
cost will be decreased, which will lead to increase the opportunity of Spec-in.
16 SEC (December 2014)
36
Outline of the technology
In the project, to the existing gas turbine, steam turbine is attached additionally (Add-on:
conversion from simple-cycle to combined cycle). By conducting Add-on project, thermal efficiency
is to be improved drastically.
Combined cycle means the system which is composed by multi power generation system.
Currently, mainstream is GTCC (Gas Turbine Combined Cycle) which is composed both by gas
turbine and steam turbine. GTCC utilizes waste heat from gas turbine to drive steam turbine, which
achieves the high efficiency and small fuel consumption.
Figure 18 GTCC 17
The proposed project expects the following combination of facilities:
Table 19 Facilities for Add-on project 18
Gas turbine Existing facility
Steam turbine
Installed additionally. And by increasing the turbine blade stage,
further efficiency is achievable:
Ex) HP Turbine ⇒ Increase 3~4 stages
LP Turbine ⇒ Increase 2~3stages
Steam turbine generator Installed additionally. And by utilizing H2 Cooled Generator
instead of Air Cooled Generator, further efficiency is achievable.
HRSG (Heat Recovery Steam
Generator) Installed additionally.
17 A Japanese company 18 A Japanese company
37
Figure 19 A Japanese power station after “Add-on” installation19
A Japanese company has also been developing the GTCC system, in which gas turbine, steam
turbine and Quick Start Controlling System are combined, and it aims to achieve thermal efficiency
62% (LHV). (* It is not Add-on system but completely newly-built GTCC.)
Reduction of energy consumption
Two cases are shown below. In each case, thermal efficiency was increased by 23%, from 34%
(simple cycle) to 57% (combined cycle).
Table 20 Cases of Add-on application 20
Before After
Japanese power
station A
Configuration: 3 x GT
Output: 265MW x 3
Efficiency: 34%+
Fuel: Natural Gas
Configuration: (GT+HRSG+ST) x 3
Output: 416MW x 3
Efficiency: 57%+
Fuel: Natural Gas
19 A Japanese company 20 A Japanese company
38
Before After
Japanese power
station B
Configuration: 3 x GT
Output: 265MW
Efficiency: 34%+
Fuel: Diesel Oil
Configuration: (GT+HRSG+ST) x 1
Output: 416MW
Efficiency: 57%+
Fuel: Diesel Oil
Conditions for the proposed project would be different from Japanese cases shown above, so
improvement of energy efficiency would also be different. Now, tempolarily, the following case is
supposed:
Table 21 Assumption of Add-on project 21
Before After
80MW×4 = 320MW
Thermal efficiency: 30%
450MW including additional steam turbine
130MW
Thermal efficiency: over 40%
In principle it is difficult to apply BaU emissions as JCM reference scenario, so we cannot sum up
total CO2 reduction between before and after the installation. It has to be investigated how to set up
the reference scenario.
Cost
Based on the assumption above, initial equipment cost for the Add-on project is supposed to be
approximately 100 – 200 USD/kW22.
21 A Japanese company (November 2014) 22 A Japanese company (November 2014)
39
(3) Waste heat recovery in the cement plant
In this F/S, we have identified the following JCM project candidate, supported by DNA.
Table 22 Outline of waste heat recovery project23
Counterpart Al-Jouf Cement
Project site Najran
Applied
technology Waste heat recovery power generation system in the cement plant
Outline of the
project
Intends to implement the waste heat recovery project in the end of 2015.
Proposed by a Chinese contractor that has constructed existing plant.
To be installed in the existing plant that has the production capacity of 5,000 –
10,000 tons/d, constructed in 2010.
Cost of construction is estimated as 70 million SAR (25 million USD), and
construction period is estimated as 9 months.
Hopes to reduce heavy oil consumption by approximately 35%.
Interest on the Japanese technology applied as JCM project.
We made a discussion with Taiheiyo Engineering as follows:
Outline of the technology24
Waste heat emitted from cement plant is recovered and utilized to generate electricity by using
turbine generator. In Japan, almost 100% of large-scale cement kiln have the waste heat recovery
system.
Approximately 90% of energy input into cement plant is consumed in the calcination process as
the thermal energy. In the calcinations process, cement clinker is made by firing materials over 1,450
degrees, so large amount of heat is consumed.
Within the heat consumption in the calcinations process, effective energy for making cement
clinker is approximately just 55%, while the rest 45% is emitted as sensible heat of exhaust gas from
preheater (PH), sensible heat of exhaust gas from clinker cooler (AQC), sensible heat taken out with
clinker and heat radiation. Among these, approximately 10% of exhaust gas heat is utilized for
23 Al-Jouf Cement (December 2014) 24 Taiheiyo Engineering
40
drying materials and coals. However, remaining 35% is emitted through dust precipitator into the air,
without utilizing again.
To recover waste heat, by using the proposed technology, WHR boilers are installed, and
generated steam is used to generate electricity.
The following figure shows the case in Japanese cement plant, which utilizes 18% energy
additionally.
Figure 20 Heat balances in a Japanese cement plant25
The system flow is shown below; it is the technologically proven system that has been used for
long time in Japan. Sensible heat in exhaust gas emitted from PH and AQC is recovered by WHR
boiler, and electricity is generated by driving steam turbine.
Except for this conventional technology, there are more energy-efficient waste heat recovery
technologies which use heat medium of low boiling point. However, to date, they are expensive
because of complicated design. Therefore, we suppose to use conventional waste heat recovery
technology for JCM projects.
25 Taiheiyo Engineering
Heat from material/air4%
Clinker burning reaction53%
Drying raw material/coal 9%
Exhaust gas heat 9%Clinker heat 3%Others 8%
Recovered by WHR powergeneration 18%
Combustion of fuel 96%
EffectiveEnergy80%
ExhaustedEnergy 20%
41
Figure 21 System flow of waste heat recovery power generation system26
Water is conveyed from PH and AQC to boilers, converted to high-pressure steam through coal
economizer, evaporator and heater, and sent to turbine generator. So as to utilize heat efficiently, a
part of heated water emitted from coal economizer is flushed, and generated mid-pressure steam is
sent to turbine generator, then it is operated with mixed-pressure steam.
The generated electricity is used inside the same cement plant (it is impossible to cover all power
consumption27). Hence, generated electricity by the waste heat recovery power generation system
replaces the same amount of electricity purchased from the power grid or provided directly from
power generators.
Superiority of Japanese technology
Superiority of Japanese technology regarding waste heat recovery includes followings:
Table 23 Superiority of Japanese technology28
Exhaust gas from preheater contains many dusts, and there have been many cases to decrease
heat exchanger effectiveness because of adhesion of dust onto heat-exchange tube of the boiler,
if the facility is cheap one made by manufacturers of China etc.
26 Taiheiyo Engineering 27 Taiheiyo Engineering (January 2015) 28 Taiheiyo Engineering (January 2015)
42
In some cases, remaining dust without brushed off adequately influences badly on operations of
the kiln (e.g. enough amount air is not obtained).
Furthermore, tube abrasion during long-time operation is concerned.
Japanese technology is designed to raise heat exchange efficiency, and it has proven facilities to
brush dust off and to avoid against tube abrasion.
Japanese waste heat recovery system operates without any maintenance more than 10 years,
which will be one of the eligibility criteria of JCM methodology (spec-in).
Although some European manufacturers have excellent technology, Japanese advantage is the
stable operation technology established from long-time experience.
Reduction of energy consumption
Actual reduction of energy consumption has to be investigated by taking into consideration of
project conditions.
Al-Jouf Cement, the counterpart candidate of the project, hopes to reduce heavy fuel consumption
by 35%, while in a Japanese case approximately 18% of energy reduction is supposed. CO2
reduction is calculated by using the reduction estimate of electricity consumption. According to the
JCM cases, approximately 20% of electricity consumption is estimated to be reduced.
Figure 22 Waste heat balance power generation system
Combustion
of fuel
The other
Effective
Exhausted
Effective
Exhausted
Power
Generation
Electricity
consumption
Without
WHR With WHR
Recovered by WHR
Heat input Heat utilization Consumption of electricity
Correspond to CO2 reduction
43
Energy reduction or CO2 reduction under the JCM scheme have be estimated by investigating the
reference scenario.
Cost
Initial cost of the conventional waste heat recovery power generation system is supposed to be
approximately 1,500 – 3,000 USD/kW29.
Supposing to introduce 10MW power generation system for the cement plant of 5,000-10,000
t-cement/day (proposed by Al-Jouf Cement), initial cost of equipments will be 15-30 million USD.
The following table shows the cost comparison among technology types, including new
technology (Kalina Cycle and ORC Cycle).
Table 24 Cost comparison among waste heat recovery power generation technologies30
Conventional Kalina ORC
System Simple Complex Complex
Generation Efficiency 23% @1.5MPa Higher Higher
Media Water Ammonia Thermal oil
Cost info* (US$/kW) 1500-3000 5000- 5000-
Others Many applications No application Suitable to small plant
* From published source
29 Taiheiyo Engineering (January 2015) 30 Taiheiyo Engineering
44
3.2 Superiority of Japanese technology
On the highest and high priority project types, there are supposed to be superiorities of
Japanesetechnologies as follows:
Table 25 Superiority of Japanese technology 31
Type Performance Cost
Energy efficiency project of the seawater desalination plant
Seawater desalination plant Japan) Tri-hybrid Other) MED/RO
Tri-hybrid technology is owned only by the Japanese companies.
Energy consumption (mainly steam) can be almost halved32.
Technical demonstration has been conducted in the pilot plant. The next phase would be introduction of commercial plant.
Initial investment would be almost the same with MED and cheaper than RO33.
Operating cost would be cheaper than both MED and RO34.
Waste heat recovery in the cement plant
Waste heat recovery power generation system in the cement plant
If they introduce cheap facility, heat exchange efficiency is often decreased and also become out of condition35.
Japanese advantage is high efficiency and the stable operation technology36.
Although general comparison is difficult, there is a case study that made comparison between Japanese and Chinese similar technologies for developing JCM project37: Initial investment is different by
10%. A part of boiler defectives in the
third year which requires repair costs.
Because of the shutdown for installing new boiler, power generation is halved within that year.
After the fourth year, power generation is decreased by 20% from expected.
Energy efficiency project of the gas-fired power plant
Add-on Japanese manufacturers have experience than European ones, which may result the difference of thermal efficiency by 1-2%38.
Almost the same level with European manufacturers39.
31 Mizuho Bank 32 Table 16 33 Table 17 34 Table 17 35 Table 23 36 Table 23 37 JFE Engineering 38 Anonymous Japanese manufacturer 39 Anonymous Japanese manufacturer
45
4. Draft of JCM methodology and estimate of GHG
emission reductions
4.1 Target types
We regard the following types as one the targets of JCM project, for which draft JCM
methodology is to be made:
Target types
(a) Application of the Tri-hybrid technology for newly-built plants
(b) Modification of existing plants
4.2 Reference scenario
On two project types shown above, reference scenarios (draft) are supposed to be as follows:
Table 26 Reference scenarios (draft)
Project type Reference scenario
(a) Application of the Tri-hybrid
technology for newly-built plants
For newly built plant
Evapolation method : RO membrane method = 7 : 3
Steam is supplied from adjacent power generation plant
(b) Modification of existing plants
For existing plant
Rehabilitation is implemented before modification
Steam is supplied from adjacent power generation plant
In the coming detailed F/S, adequateness on the way of setting up the scenarios are to be
investigated, including followings:
46
(a) Application of the Tri-hybrid technology for newly-built plants
Reference scenario for applying the Tri-hybrid technology is (1) RO membrane method or
(2) Evapolation method. In some sites (especially along the Persian Gulf), there are barriers
against applying only RO membrane. In KSA, (1) : (2) is supposed to be approximately 3:7,
therefore, now we can result that those weighted average is regarded as the reference
scenario.
So as to establish the reference scenario as above, some facts are to be demonstrated:
Relationship between raw seawater quality and applicability of RO membrane;
Business policy of the project owner (in this case, SWCC); and
Influence on the boiler type in the adjacent power generation plant
(b) Modification of existing plants
In principle, BaU is not preferable as the reference scenario. In this case, BaU may mean the
continuous operation of existing plant without any rehabilitation and modification. One of
the alternatives is to regard energy consumption close to the nominal value (after
rehabilitation) as the reference scenario.
So as to establish the reference scenario as above, some facts are to be demonstrated:
Possibility or plans of plant owner's implementation of rehabilitation; and
Possibility or plans of implementing rehabilitation before modification
4.3 Eligibility criteria
On those two project types, the eligibility criteria of JCM methodology (draft) is as follows:
Table 27 Eligibility criteria (draft)
Project type Criteria What are to be investigated
(a) Application of
the Tri-hybrid
technology for
newly-built
plants
To apply Tri-hybrid
technology. Definition of the technology
Seawater is polluted
which makes barrier
to apply only RO
membrane; or
Relationship between raw seawater
quality and applicability of RO membrane
Business policy of the project owner (e.g.
Requirements for tender, RFP)
47
Project type Criteria What are to be investigated
Business policy of the
project owner is clear.
Steam is supplied by
steam boilers.
Influence on the boiler type in the
adjacent power generation plant
Electricity is supplied
by adjacent power
generation plant.
Case of purchasing electricity from the
power grid
(b) Modification of
existing plants
Modification includes
increasing steps in the
Evaporation method.
Definition of the technology
Steam is supplied by
steam boilers.
Influence on the boiler type in the
adjacent power generation plant
Electricity is supplied
by adjacent power
generation plant.
Case of purchasing electricity from the
power grid
4.4 Calculation method of emission reductions
Both on those two project types, the difference (reductions) of the followings are to be estimated
to calculate the CO2 emission reductions:
(1) Energy consumption (steam, fossil fuels to generate steam, electricity, fossil fuels to
generateelectricity); and
(2) Production of saline water in the same plant
Reference emissions
= ∑ , +
Where:
: Reference emissions during the year y (t-CO2/y)
i : Number of steam boilers within the project boundary , : Reference emissions from steam boiler “i” (on the consumption in the project
48
boundary) during the year y (t-CO2/y)
: Reference emissions from electricity (on the consumption in the project boundary)
during the year y (t-CO2/y)
, = , × , × ,
Where: , : Reference emissions from steam boiler “i” (on the consumption in the project
boundary) during the year y (t-CO2/y) , : Allocated annual consumption of fossil fuel “k” in steam boiler “i" (on the steam
consumption in the project boundary) (mass or volume units) , : Net calorific value of fossil fuel “k” used to generate steam in steam boiler “i" (TJ/mass
or volume units) , : Carbon emission factor of fossil fuel “k” used in the steam boiler “i" (t-CO2/TJ)
= , × , × ,
Where:
: Reference emissions from power generator (on the consumption in the project
boundary) during the year y (t-CO2/y)
: Allocated annual consumption of fossil fuel “k” in power generator (on the electricity
consumption in the project boundary) (mass or volume units)
: Net calorific value of fossil fuel “k” used to generate electricity in power generator
(TJ/mass or volume units)
: Carbon emission factor of fossil fuel “k” used in the power generator (t-CO2/TJ)
Project emissions
= ∑ , +
Where:
: Project emissions during the year y (t-CO2/y)
i : Number of steam boilers within the project boundary , : Project emissions from steam boiler “i” (on the consumption in the project boundary)
during the year y (t-CO2/y)
: Project emissions from electricity (on the consumption in the project boundary) during
49
the year y (t-CO2/y)
, = , × , × ,
Where: , : Project emissions from steam boiler “i” (on the consumption in the project boundary)
during the year y (t-CO2/y) , : Allocated annual consumption of fossil fuel “k” in steam boiler “i" (on the steam
consumption in the project boundary) (mass or volume units) , : Net calorific value of fossil fuel “k” used to generate steam in steam boiler “i" (TJ/mass
or volume units) , : Carbon emission factor of fossil fuel “k” used in the steam boiler “i" (t-CO2/TJ)
= , × , × ,
Where:
: Project emissions from power generator (on the consumption in the project boundary)
during the year y (t-CO2/y)
: Allocated annual consumption of fossil fuel “k” in power generator (on the electricity
consumption in the project boundary) (mass or volume units)
: Net calorific value of fossil fuel “k” used to generate electricity in power generator
(TJ/mass or volume units)
: Carbon emission factor of fossil fuel “k” used in the power generator (t-CO2/TJ)
Emission reductions
= × −
Where:
: Emission reductions during the year y (t-CO2/y)
: Reference emissions during the year y (t-CO2/y)
: Project emissions during the year y (t-CO2/y)
: Reference water production amount during the year y (amount/y)
: Project water production amount during the year y (amount/y)
50
4.5 Calculation of emission reductions
Now for the trial calculation, we assume a desalination plant that has production capacity of 20
kt/d. And for the sake of simplicity, only the steam consumption is taken into consideration (that is,
electricity consumption is assumed to be almost the same between two scenarios).
Table 28 Assumptions
Reference Project Source
Saline water production (1,000
m3/d) 20 Parameter
Steam consumption (t/h) 58.4 25.0 Table 16
Steam consumption (kt/y) 511.4 219.0 24h*365d
Net calorific value of fuel oil
used to generate steam in steam
boilers (TJ/t)
0.0030
65 L/t-steam(1) * 39.1 MJ/L(2) = 2.54 GJ/t-steam = 0.00254 TJ/t-steam (1) Assumption of Japanese boiler (2) Calorific value of fuel oil (A heavy oil) (Ministry of the Environment)
Carbon emission factor of fuel
oil used in the steam boilers
(t-CO2/TJ)
74.1 IPCC (2006) Gas/Diesel Oil
Reference emissions = ∑ , = , × , × , = 511.4 × 0.0030 × 74.1 = 113.7
Project emissions = ∑ , = , × , × , = 219.0 × 0.0030 × 74.1 = 48.7
Emission reductions = − = 113.7 − 48.7 = 65.0
51
5. Business opportunity and project candidate
The steps towards the commercial project to apply Tri-hybrid technology in the newly-built
seawater desalination plant are as follows:
(1) First step: Technical demonstration test
In response to SWCC’s request for research cooperation, the technical demonstration project
“Hybrid desalination research association for oil producing countries (The Kingdom of Saudi
Arabia)” was conducted by utilizing the budget of METI (2006-2009). Furthermore, after finishing
that project, the technical demonstration test has continued as the voluntary project with the
participation of the following three entities (-October 2012):
Table 29 Hybrid desalination research association for oil producing countries (The
Kingdom of Saudi Arabia)40
Role Entity
Installation and operation SWCC R&D Center (Al-Jubail)
Project management Water Reuse Promotion Center
Production of facility and technical evaluation Sasakura
The main objective of that project is technical demonstration, and for that, very small-scale pilot
plant (24 t/d) was manufactured, installed and tested, which has been already stopped operation.
The result of the project includes followings41:
1. Operation Results of the Pilot Plant
(1) Operation less than 125 degrees (nearing the maximum limit to scale deposition) was proven
possible by fully utilizing the NF membrane treatment that was found to significantly eliminate
sulfate ion and other scale components dissolved in seawater.
(2) This is known to be the first in the world, with the use of MED Seawater Desalination System.
(3) The charts of the temperatures in correspondence to the categories and the scale predictions
corresponding to the concentration levels were proven feasible though the analysis of the
saturation solubility product of scale components.
(4) The stability of operation was proven though a long term operation with temperature, salinity ,
40 Water Reuse Promotion Center 41 Water Reuse Promotion Center and Sasakura
52
and the concentration of calcium sulfate at practical levels.
(5) With the above results, the Tri-hybrid seawater desalination system was announced completed in
terms of basic demonstrations.
2. Economic Efficiency and Financial Savings
Based on the research operation of the pilot plant, the following results were revealed from
implementing the conceptual design of the device with the capacity of water production of
100,000 m3 /day (RO: 50,000 m3 /day, MED: 50,000 m3/day).
(1) Steam consumption with the traditional MED method, the water production was at 8-10 due to
the TBT being limited to 65 degrees. However with this new method, the production of 20 or
an increase by 2.2 times is possible when under identical circumstances. In financial lenses, the
cost per unit of water produced of the traditional MED method was US $0.94/m3, while this
new method shows US $0.42/m3. It is clearly a cost efficient method in addition to
performance efficiency.
(2) The desalination cost including the construction costs, electricity bills, steam volume and
chemical costs of this method was 0.75US $/m3, which is about 50% of of the MED method
requiring 1.33US$/m3.
3. Conclusion
The cost, as well as energy efficiency of the Tri-hybrid NF/RO/MED seawater desalination
system was proven by the successful erection of an actual performance replicating facility in
2008, with the support and positive relations with our counterpart, the SWCC. The collection of
engineering data, as well as further research is essential for the expansion and trust of this
technology in the Middle Eastern countries.
Figure 23 Pilot plant42
42 Water Reuse Promotion Center
53
(2) Second step: Demonstration project by the commercial plant
Sasakura has been talking with SWCC on the application of the Tri-hybrid system in the
commercial plant, and constructing strong relationship with Minister of Water and Electricity and
Governor/Deputy Governor of SWCC.
In this F/S, so as to investigate the feasibility of the project as JCM demonstration project, and to
cultivate a better understanding on the technology and JCM, we have invited 4 staffs of SWCC to
Japan.
Based on those preparations, we intend to have further talks with SWCC and progress to the
detailed JCM F/S, towards implementation of JCM demonstration project after 2016.
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Figure 24 Steps toward the demonstration project43
43 Mizuho Bank
Technical Demonstration
(METI, SWCC, Water Reuse Promotion Center and Sasakura)
(Small-scale pilot plant)
Technical Demonstration (continue) (SWCC, Water Reuse Promotion Center and
Sasakura) (Small-scale pilot plant)
Preparation for the commercial project
(Sasakura)
JCM F/S (This project)
Voluntary preparation for JCM in the KSA
(Mizuho)
Detailed JCM F/S
JCM Demonstration Project
(Commercial plant)