status of korea igcc projects with emphasis on the … · parsons 1 status of korea igcc projects...
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Status of Korea IGCC Projectswith Emphasis on the YOSU Refinery
IGCC Projectby
Yongkee AhnParsons Energy & Chemicals Group
Reading, Pennsylvaniaand
Hoil Ryu and I. S. KwakLG-Caltex Oil Corporation
Seoul, KoreaPresented at
2001 Gasification Technologies ConferenceSan Francisco, California
October 10, 2001
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Introduction
ObjectivesKorea’s power and demand supply to year 2015Recent KEPCO restructuring/privatizationEstablishment of Korea Power ExchangeKorea’s Alternate Energy LawActive Korea IGCC projects– KEPCO CCT program– LG-Caltex YOSU refinery IGCC project– IAE gasifier development program– KIER gasifier development program– SK Ulsan refinery IGCC project
Path forward for Korea IGCC program
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Objectives
This paper reviews the active Korea IGCC program inlight of the recent KEPCO restructuring, establishment ofKorea Power Exchange, and passage of AlternativeEnergy Law to determine the program’s future potentials
Emphasis will be placed on the recently completedLG-Caltex Yosu Refinery IGCC project
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Korea’s Power Demand and Supplyto Year 2015*
16.217.616.921.419.1ReserveMargin, %
79,06074,61061,61049,05046,980InstalledCapacity, MW
67,51060,72051,66039,51037,290MaximumDemand, MW
20152010200520001999
*The 5th Long-term power Construction Plan, Korea Monistry of Commerce, Industry & Energy, January 2001
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Korea’s Power Demand and Supplyto Year 2015 (cont’d)
Nuclear13,716 MW
28.3%
LNG12,689 MW
26.2% Coal14,031 MW
29%Oil4,866 MW
10%
Hydro 3,149 MW
6.5%
Installed Generation Capacityby Fuel (2000)
Electricity Consumptionby Sector (2000)
Industrial56%
Residential15%
Public and Service29%
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Recent KEPCO Restructuring
Spun-off all KEPCO generation plants into five regionalfossil and one nuclear/hydro companies
The five regional companies are to be sold toKorea/foreign investors, one at a time, starting next year
The nuclear/hydro company will not be privatized
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Recent KEPCO Restructuring (cont’d)
Each of the five regional fossil generation companies willhave approximately 8,200 to 9,500 MW total capacity by2015 with coal, oil, and LNG as fuels
These regional companies will now have to compete witheach other and with other potential IPP developers
All powers provided from these companies/developerswill have to sell through Korea Power Exchangecompetitively
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Korea Alternate Energy Law
Alternate feedstocks to include coal, petroleum coke andother petroleum residues
Gasification and liquefaction technologies
Government must establish selling price for electricityproduced from alternate feedstocks
If the proposed plants produce electricity that meets thegovernment established selling price, government mustgive first priority to purchase electricity from these plants
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KEPCO CCT Program
Plan to install 3 units of 300 MW CCT plant each forcommercial operation in 2007, 2013, and 2014
KEPCO has just completed detail feasibility studies forIGCC vs. PFBC and selected IGCC for the first CCTplant
Plant reliability and capability to meet stringentenvironmental resolutions were two important selectioncriteria
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KEPCO CCT Program (cont’d)
A detailed site-specific construction feasibility study is tobe initiated shortly
The construction FS will include a detailedimplementation schedule
The IGCC plant will be installed by Korea WesternPower Company (KOWEPO)
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LG-Caltex Yosu Refinery IGCC ProgramStudy Background and Objectives
Study performed under partial funding of USTDA grantwith the following project teams:– LG-Caltex Oil Corporation – Project owner– Parsons Energy & Chemicals Group – Prime contractor– LG Engineering and consortium – Local engineering
subcontractor– Bank of America – Financial advisor– Kim & Chang – Local legal consultant
Assessment of feasibility of 500 – 700 MW vacuumresidue based IGCC plant at an existing 650,000 BPDLG-Caltex Yosu Refinery
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LG-Caltex Yosu Refinery IGCC ProgramStudy Background and Objectives (cont’d)
Financial Analysis by Bank of America
Four cases were evaluated, including conceptual designand cost estimates– Case 1 – Heavy oil-fired conventional steam power plant
(Benchmark Case)– Case 2 – IGCC for power sales and steam sensitivity, but
without hydrogen– Case 3 – IGCC for power sales, steam sensitivity with hydrogen– Case 4 – IGCC for internal refinery power use, steam sensitivity
with hydrogen
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LG-Caltex Yosu Refinery IGCC Program
150150NoneNoneHydrogen, MMSCFD
None500500500Power to KEPCO, MW
89895252Power to Refinery, MW
200-500200-500200-500NoneSteam Export, tph
50,00050,00050,000N/AVacuum Residue Available, bpd4321Case
Feasibility Study Cases
10
70 (4)
70 (4)
20 (4)2005
101015ppmHydrogenSulfide
70 (4)250 (13)500 (13)ppmNO2
50 (4)120 (4)120 (4)ppmSO2
20 (4)40 (4)40 (4)Mg/Nm3Dust (TSP)Design Basis20001999UnitPollutant
( ) : % Oxygen
Yosu Refinery Emission Limits
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
GE 6FAOxygen-blown, entrained type, andquench mode
4
GE 7FAOxygen-blown, entrained type, andquench mode
3
GE 7FAOxygen-blown, entrained type,both syangas cooler and quenchmode
2
Gas TurbineGasifierCase
Technology Selection
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Summary of Performances for all Four Cases
140249142633Sulfur, tpd65.751.142.438.8Thermal Efficiency, % HHV
95584571542Net Power, MW661329129Auxiliary Power, MW
161716662571Gross Power, MW313N/AN/AExpander Power, MW
150150N/AN/AHydrogen, MMSCFD200N/AN/AN/ASteam to Refinery, tph92394394N/AGas Turbine Power, MW
309
3
30,082
Case 3
268
2
17,141
Case 2
66571Steam Turbine Power, MW
2N/AGasifier No. of Trains16,91218,942Feed, BPD
Case 4Case 1
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Basis of Cost Estimate
Pricing year – 2002 dollars
Major equipment – vendor quotations
BOP – Parsons’ in-house database
Capital costs were initially developed on the basis ofU.S. gulf coast conditions and each estimate line itemsadjusted to Korean conditions
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Ocean freight, on-site shipping and start-up sparesincluded
Engineering, CM, start-up services, and contingencesincluded
O&M costs incorporated Korea productivity index
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Results of Capital, O&M Costs and Cost of Power(Relative to Base Cost)
+75,800
3+52,400
2-70,500Base$1,000 (2002 $)
41Case
-842
+11,714
3
-854
+4,943
2
-793BaseVariable Operating Costs, $/hr+2,154BaseFixed Operating Costs, 1,000$/year41Case
-20.91
3-8.08
2BaseROE of 11 % (Tariff at Won/kWh)1Case
Relative Capitol Cost Comparison
Relative Cost of Power Comparison
Relative Operating CostComparison
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Financial Analysis
Detailed financial modeling to determine the economicfeasibility of each case
Based on the two key financial indicators, DSCR and IRR,rank of competitiveness was in the order of 3, 4, 2, 1
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Financial Analysis
Analysis of commercial, economic and financialstrengths, risk, and mitigants
Four key risks aware analyzed, ranked in order ofimportance– Market risk– Offtake risk– Currency mismatch– Construction risk
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LG-Caltex Yosu Refinery IGCC Program (cont’d)
Financial Analysis
Potential sources of funds investigated included:– International commercial bank debt– Export credit agency– Multilateral debt– U.S. capital markets– Korean local bank debt– Korean local bond debt
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Path Forward for Korea IGCC Program
Korea Western Power Company (KOWEPO) 300 MWIGCC program– First of the three 300 MW CCT plant will be an IGCC plant for
2007 start-up– A detailed site-specific construction feasibility study to start
shortly– Passage of the Korea Alternative Energy Law may provide high
incentives for commercial plant implementation
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Path Forward for Korea IGCC Program (cont’d)
LG-Caltex Yosu refinery IGCC program– Variable KEPCO’s privatization plan and power market
liberalization plan– Currently analyzing various in-depth implementation scenarios– Alternate Energy Law may give an incentive to proceed with the
program