Mcilvaine Insights

No. 67   June 27, 2018

WELCOME

Weekly selected highlights in flow control, treatment and combustion from the many McIlvaine publications.

·       Large Market to Maintain and Upgrade U.S. Coal Fired Power

·       Indonesia is a Growing and Robust Market for Coal Fired Power

·       Growth in Semiconductor Industry has Impact on Special Combust, Flow and Treat (CFT) Markets

Large Market to Maintain and Upgrade U.S. Coal Fired Power

The U.S. is retiring all its 50-70 year old plants but will keep running its 6-40 year old plants for another 30 years. With or without the clean power plan and regardless of gas prices the U.S. will have between 150 to 210 GW of coal fired power in 2050.

                                                                                                                    Reference: EIA

The average startup date for the remaining plants was 1980.  A new plant today is more efficient and economical to operate than the average older plant.  However, the older plants can be modernized and upgraded in unique ways to outperform some of the newest plants.  For example the Great River Spiritwood plant has a thermal efficiency of over 60 percent due to its combined heat and power initiatives.  There are unique byproducts needed by the U.S. which can be supplied by coal fired power. 

One of the largest pro-active opportunities is IIoT with remote O&M.  Coal plants can be efficiently operated remotely with the benefit of the highest skill levels. Wireless communications and data analytics will assure cost effective operation. However, a big investment in sensors, valves and improved process equipment will improve efficiency further.

There are process changes which will allow suppliers to provide innovative solutions.

 They include:

·       Switch to upstream catalytic filtration and DSI

·       Switch to biomass burning with catalytic filtration and DSI

·       Switch to biomass burning with catalytic filtration, DSI and CO₂ capture

·       Switch to produce hydrochloric acid, rare earth feed stock and ultrapure gypsum or sulfuric acid

·       Co-locate steam users around the power plant and use MVR to upgrade waste steam for parasitical use by industrial plants using steam

Details on these opportunities are provided in the following McIlvaine services

IIoT & Remote O&M

Utility Tracking System

World NOx Control Market

FGD Markets and Strategies

Indonesia is a Growing and Robust Market for Coal Fired Power

Indonesia has the domestic coal, the need for much more electrical capacity and a relatively high GDP growth which combine to make it an ideal location for coal fired power.  The plan is to add 80 GW of coal fired power by 2050. Other generating technologies will grow faster. In 2050 coal is projected to deliver 24 percent of the total power generation.

Thermal coal forms the single largest share of the fuel mix today. In 2017, coal accounted for 55.6 percent of the energy share, but is expected to reduce to a slightly lower share of 50.4 percent in 2026. Economic and logistical considerations (as well as significant available reserves) have led to coal's ongoing dominance, as it is a low-cost fuel that is easy to extract and transport using existing infrastructure.

Indeed, few economical alternatives exist for the development of low-rank coal, other than mine-mouth coal power generation. Indonesia sits in ninth place in terms of proven coal reserves in the world with 2.3 percent of global coal reserves and is a major coal exporter.

Natural Gas: Natural gas power generation is expected to double by 2026 (in TWh terms) from 25.8 percent of the overall mix in 2017 to 26.7 percent in 2026. Given the risks of not reaching the renewable energy target and the fact that gas has been determined to be the best substitute in the event of a shortfall, it is possible that the share of gas in the energy mix could be even higher. Being relatively low-carbon compared to coal, as well as being medium-cost, gas is likely to remain a favored fuel for at least the next decade, especially given Indonesia's extensive gas reserves.

A continuing glut of global and Asian (including Indonesian) Liquefied Natural Gas ("LNG") is likely to stimulate further consumption, although the fact that Indonesia is moving closer to being a net energy importer despite its abundant reserves may check this trend. Certainty regarding the upstream oil and gas investment climate and improved physical infrastructure, including pipelines and Floating Storage Regasification Units ("FSRUs"), as well as certainty on the price of gas-for-power, are crucial to enabling a strong long-term role for gas in the Indonesian power generation market.

Coal use will expand from 148 TWH in 2027 to 283 TWH in 2026.

By 2050 coal fired capacity will exceed 100 GW. This will require more than 80 GW of new coal fired plants. Consider that this compares to U.S. capacity which is presently 225 GW but could be below 180 GW by 2050.

There is a complete profile on the Indonesian power market as well as PLN, the government utility in the McIlvaine Utility Tracking System.  Details on this service are found at Utility Tracking System

Growth in Semiconductor Industry has Impact on Special Combust, Flow and Treat (CFT) Markets

The semiconductor industry growth is higher than that of other industries purchasing combust flow and treat products and services. However, for most CFT products this industry is a small percentage of the total. However, the needs are unique and high performance products with high margins are sold to a relative small number of large producers.

There is a cleanroom consumables market which is included in CFT because these are products which reduce contaminants in the semiconductor plant air. The semiconductor industry is the major purchaser of these products followed by the pharmaceutical industry and a variety of other "clean" manufacturing industries.

The Semiconductor Industry Association says worldwide sales of semiconductors reached $37.6 billion for the month of April 2018, an increase of 20.2 percent from the April 2017 total of $31.3 billion and 1.4 percent more than last month's total of $37.1 billion. The World Semiconductor Trade Statistics (WSTS) organization projects annual global market growth of 12.4 percent in 2018 and 4.4 percent in 2019.

"The global semiconductor industry has posted consistently strong sales so far in 2018, and the global market has now experienced year-to-year growth of greater than 20 percent for 13 consecutive months," said John Neuffer, president and CEO, Semiconductor Industry Association. "Although boosted in part by impressive growth in the memory market, sales of non-memory products also grew by double digits in April on a year-to-year basis and all major regional markets posted double-digit year-to-year gains. The global market is projected to experience significant annual growth this year, with more modest growth expected next year."

The impact of semiconductor growth varies widely depending on the CFT product.

Market reports on all these products take into account the robust semiconductor growth. 

More information on each is found at  http://home.mcilvainecompany.com/index.php/markets