Coal, Gas, Coal-Fired Power Plants
Coal is once again King. Gas is rapidly becoming the peaking fuel it traditionally was. Upgrades of existing coal-fired plants will be driven by the much lower electricity cost. In addition, ultrapure water suppliers will also find that there are other opportunities for sales of membranes and instrumentation. Coal plants will look more like chemical plants, as they are required to scrub out pollutants and use liquid chemicals for many different pollutant reactions. This will be one of the highest growth segments of the process equipment market.
Air pollution control project activity at U.S. coal-fired power plants has reached a high never before duplicated. In the McIlvaine Utility Environmental Upgrade Tracking System, 1135 projects will be contracted over the next ten years. There will be a number of new coal-fired plants which will require particulate, NOx, mercury, SO2, and SO3 control. Air pollution control expenditures for these new plants will be $12 billion and will involve 50 completed projects. Presently the tracking system lists 70 new coal-fired plants in some state of planning. However, some of these plants will not be built.
The bulk of the activity (1085 projects and $51 billion) will be to bring existing plants into compliance with air regulations. The projects fall into ten categories as follows:
U.S. Coal-Fired Project Tracking
Equipment Number Air Pollution Revenues
Type of Projects $ Billions
New coal-fired projects 50 12
Expanded capacity at existing plants 40 5
Retrofit FGD systems 150 22
Retrofit SCR systems 90 5
Mercury removal 100 3
Precipitator upgrades 125 4.5
Fabric filters 80 2.5
CEMs upgrades 200 0.4
SO3 additive injection 80 0.8
Combustion modification 220 3.3
Total 1135 58.5
The biggest single revenue generator will be the retrofit of FGD systems. 214 units have been identified as likely to be fitted with desulfurization equipment. This number is expected to rise to 300 units but only 150 projects. While 100 selective catalytic reduction systems (SCR) projects have already been completed, another 90 projects will be undertaken. The new projects will mostly be west of the Mississippi. EPA is required to regulate mercury from coal-fired plants no later than December 2003. This will add another 100 separate projects. In addition 200 projects will reduce mercury but only as incidental to other investments.
Capacity expansions will result in another 40 projects worth $5 million in air pollution control equipment. This also includes some switching of fuels. Several plants will switch to coal from gas. Others will switch to Orimulsion which, because of the sulfur and particulate content, will require big investments in air pollution control.
Most coal-fired power plants are operating old and inefficient particulate control equipment. Some will upgrade their existing precipitators. Others will either replace the precipitators with fabric filters or add fabric filters after the precipitators. SO3 has become an unexpected problem. So there are projects focused just on providing sorbent injection systems to capture SO3. The largest number of projects will deal with improving combustion through hardware and software to optimize the balance between emissions and cost.
The individual project size will be very large. The average FGD project will generate supplier revenues of $146 million. Major contracts will be received by the architect/engineer and the system supplier. They in turn will execute a number of sub contracts. Ultimately large contracts will be let to valve, pump, piping, vessel, control, damper, nozzle, mist eliminator, ball mill, filtration, and other equipment suppliers. Suppliers of chemicals such as lime will also be beneficiaries. The Utility Environmental Upgrade Tracking System also includes the identification of the many sub contracts on the larger projects.
The project life for air pollution control for a new coal plant is as much as eight years. Even the smallest projects are usually not completed in less than twelve months. The timing of many of the projects is known years in advance due to consent decrees. In each case, the power plant has agreed to install a specific piece of equipment at a certain plant in a specified year. This makes it possible to track individual projects over a long time span as the project evolves from planning through engineering contract to the award of the system. Finally, the award of the sub contracts by the system supplier may take place over a 4-year period. For example, catalyst may be ordered a year before the vessel in which the catalyst will be placed.
These air pollution control projects in power plants represent a very large potential. The opportunity is particularly attractive at this time when many other requirements for steel and mechanical contracting are low. Furthermore, the projects will be nicely spaced over the next decade. A substantial number are now moving from design to construction. There is no likelihood of a repeat of the gas turbine market where there was a very big market for several years and then disaster. For more information on Utility Environmental Upgrade Tracking System click on: http://www.mcilvainecompany.com/energy.html .
Bob McIlvaine
847-784-0012
www.mcilvainecompany.com