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Economic Evaluation of IGCC Plants with Hot Gas Cleaning

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  • Melchior, Tobias

    () (RWTH Aachen University)

  • Madlener, Reinhard

    () (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

This paper investigates whether coal- or biomass-fired Integrated Gasification Combined-Cycle (IGCC) power plants can serve as an economically viable future technology for providing clean electricity and heat in Germany. In the context of CO2 emission reduction in power generation, energy conversion technologies that enable the implementation of Carbon Capture and Storage (CCS) need to be considered. IGCC is one such technology, as it utilizes coal or biomass but does not necessarily emit CO2. We therefore investigate whether IGCC plants can, from an economic perspective, be an alternative to nuclear and/or conventional coal-fired power plants. Our research is undertaken with the help of scenario analysis. The possible shut-down of nuclear power stations as well as of outdated coal-fired power plants, together with the evolution of CO2 prices, provides the starting point of our study. The option of hot gas cleaning in IGCC plants is of particular interest, as it is expected to significantly enhance the efficiency of IGCC technology and allows for combined heat and power production (CHP). Corresponding supplementary earnings (incl. subsidies) are compared with an increase in specific investment costs. Besides the hot gas cleaning advancement, we also investigate the injection of pure CO2 (separated from the IGCC process) into oilfields, as it reduces the costs of CO2 transport and storage through Enhanced Oil Recovery (EOR). Based on the results, a judgement on the ability of IGCC technology to replace nuclear power stations and/or conventional coal-fired power plants in Germany is made. Net present values calculated provide decision-support for energy suppliers about the if and when to invest in IGCC plants. We find that only a partial substitution of current power plants by IGCC facilities is reasonable, e.g. for locational reasons, whereas a complete abandonment of IGCC technology seems to be unlikely from the current point of view.

Suggested Citation

  • Melchior, Tobias & Madlener, Reinhard, 2010. "Economic Evaluation of IGCC Plants with Hot Gas Cleaning," FCN Working Papers 22/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2010_022
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    Cited by:

    1. Bernstein, Ronald & Madlener, Reinhard, 2011. "Responsiveness of Residential Electricity Demand in OECD Countries: A Panel Cointegation and Causality Analysis," FCN Working Papers 8/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Rohlfs, Wilko & Madlener, Reinhard, 2013. "Challenges in the Evaluation of Ultra-Long-Lived Projects: Risk Premia for Projects with Eternal Returns or Costs," FCN Working Papers 13/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Siefert, Nicholas S. & Litster, Shawn, 2013. "Exergy and economic analyses of advanced IGCC–CCS and IGFC–CCS power plants," Applied Energy, Elsevier, vol. 107(C), pages 315-328.
    4. Rohlfs, Wilko & Madlener, Reinhard, 2011. "Multi-Commodity Real Options Analysis of Power Plant Investments: Discounting Endogenous Risk Structures," FCN Working Papers 22/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    5. Moon, Dong-Kyu & Lee, Dong-Geun & Lee, Chang-Ha, 2016. "H2 pressure swing adsorption for high pressure syngas from an integrated gasification combined cycle with a carbon capture process," Applied Energy, Elsevier, vol. 183(C), pages 760-774.
    6. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "An Evaluation of Attribute Anchoring Bias in a Choice Experimental Setting," FCN Working Papers 6/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    7. Dergiades, Theologos & Madlener, Reinhard & Christofidou, Georgia, 2012. "The Nexus between Natural Gas Spot and Futures Prices at NYMEX: Do Weather Shocks and Non-Linear Causality in Low Frequencies Matter?," FCN Working Papers 17/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Sep 2013.
    8. Michelsen, Carl Christian & Madlener, Reinhard, 2011. "Homeowners' Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany," FCN Working Papers 9/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    9. Cocco, Daniele & Serra, Fabio & Tola, Vittorio, 2013. "Assessment of energy and economic benefits arising from syngas storage in IGCC power plants," Energy, Elsevier, vol. 58(C), pages 635-643.
    10. Kraas, Birk & Schroedter-Homscheidt, Marion & Pulvermüller, Benedikt & Madlener, Reinhard, 2011. "Economic Assessment of a Concentrating Solar Power Forecasting System for Participation in the Spanish Electricity Market," FCN Working Papers 12/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    11. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2015. "Assessing the global sustainability of different electricity generation systems," Energy, Elsevier, vol. 89(C), pages 473-489.
    12. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "The Impact of Green Framing on Consumers’ Valuations of Energy-Saving Measures," FCN Working Papers 7/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    13. Mansouri Majoumerd, Mohammad & Raas, Han & De, Sudipta & Assadi, Mohsen, 2014. "Estimation of performance variation of future generation IGCC with coal quality and gasification process – Simulation results of EU H2-IGCC project," Applied Energy, Elsevier, vol. 113(C), pages 452-462.
    14. Yan, Pei & Zheng, Chenghang & Zhu, Weizhuo & Xu, Xi & Gao, Xiang & Luo, Zhongyang & Ni, Mingjiang & Cen, Kefa, 2016. "An experimental study on the effects of temperature and pressure on negative corona discharge in high-temperature ESPs," Applied Energy, Elsevier, vol. 164(C), pages 28-35.

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    Keywords

    IGCC; Economic evaluation; Hot gas cleaning;

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