Feasibility Study on Energy Saving and the Reduction of CO2 Emission At
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NED0-IC-00ER24 FEASIBILITY STUDY ON ENERGY SAVING AND THE REDUCTION OF C02 EMISSION AT PETROCHEMICAL CORPORATION OF SINGAPORE March. 2001 New Energy and Industrial Technologies Development Organization (NEDO) Entrusted to JGC Corporation 020005071-4 BASIC SURVEY PROJECT FOR JOINT IMPLEMENTATION, ETC. 2000 FEASIBILITY STUDY ON ENERGY SAVING AND THE REDUCTION OF C02 EMISSION AT PETROCHEMICAL CORPORATION OF SINGAPORE (PRIVATE) LIMITED ENTRUSTED ORGANIZATION JGC CORPORATION MARCH 2001 Study Purpose: This report is for a project to execute revamping of units in order to save energy and reduce C02 based on data which were collected by the site surveys for the No, 1 Naphtha cracker and the related utility facilities in the plant of Petrochemical Corporation of Singapore (Private) Limited in Singapore. Preface This report summarizes the results of the study on energy conservation and C02 reduction in the naphtha cracker and the related utility facilities in Complex I of the Petrochemical Corporation of Singapore (hereafter referred to as “PCS”) that was commissioned to the JGC Corporation by the New Energy and Industrial Technology Development Organization (NEDO) as a basic study for promoting joint implementation in fiscal 2000. As a backdrop to this study, the third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP3) was held in Kyoto, Japan, in December 1997. At the session, the target of reducing greenhouse gas (e.g., CO?) emissions to prevent global warming was established in the Kyoto Protocol. The target for industrialized nations is to reduce their average emissions from 2008 through 2012 to levels at least 5% below their 1990 levels. Japan ’s target was set at 6%. The Kyoto Protocol also established various joint activities implemented by the industrialized nations, the Clean Development Mechanism, and emission trading with developing countries as mechanisms for attaining the targets. Japan intends to attain its target by maximizing the effect of these mechanisms. In the naphtha cracker and the related utility facilities in Complex I of PCS (the Singaporean partner of this study), energy can be saved and a significant reduction of CO? (a greenhouse gas% will be possible. These results can be achieved in several ways. (1) Through the reconfiguration of the energy-balance of the entire complex system using pinch technology. (2) Through the introduction of the Advanced Recovery System (ARS). The ARS was designed by Stone & Webster (hereafter referred to as “S&W”), who licensed the technology to PCS at the time of the initial complex construction. (3) By adopting cogeneration system using a gas turbine generator (GTG) for the boiler which supplies steam to the naphtha cracker. This study is intended to detect and ascertain projects to which the above Clean Development Mechanism can be applied, in order to confirm that the naphtha cracker and the related utility facilities can be functionally optimized and made more efficient by improving their heat-recovery/combustion systems, and to investigate their economic efficiencies. - 1 - The study would not have been possible without the assistance of PCS, the government of Singapore, and all other parties concerned. We would like to express our gratitude for their support. March 2001 Yoshihiro Shigehisa President & Representative Director JGC Corporation - 2 - A report on the study concerning energy conservation and C02 reduction efforts at PCS Contents Page Overview 1 1. BASICS OF PROJECT 1-1 1.1 Conditions of the Partner Country 1-1 1.1.1 Political, economic, and social conditions 1-1 1.1.2 Energy situations 1-13 1.1.3 The Need for Projects with Clean Development Mechanisms 1-24 1.2 The Need for Industries to Introduce Energy Conservation Technologies 1-25 1.3 Demand for, Significance of, and Impact of the Project, and Deployment of Output 1-26 in Similar Industries 2. IMPLEMENTATION OF THE PROJECT PLAN 2-1 2.1 Project Plan 2-1 2.1.1 Overview of project target area 2-1 2.1.2 Project details 2-4 (1) Merbau plant 2-4 (2) Project details 2-9 (3) Onsite study 2-9 2.1.3 Greenhouse gas under study and related issues 2-15 2.2 Overview of Implementation Sites (Companies) 2-15 2.2.1 On-site Interest 2-15 2.2.2 Facility conditions at Project site (company) 2-16 (General Outline, Specifications, Operating Conditions) 2.2.3 Project implementation capabilities of implementation sites (companies) 2-29 (1) Technical prowess 2-29 (2) Management 2-30 (3) Management infrastructure and management policy 2-30 (4) Financial support capability 2-30 (5) Personnel support capability 2-31 (6) Implementation system 2-31 2.2.4 Contents of Project for Project site (Company) and Specifications of 2-31 Facilities after Modifications 2.2.5 Split of Scope of Work and Supply between both parties for funds, facilities, 2-89 and services for project implementation 2.2.6 Preconditions and problems in project implementation 2-90 2.2.7 Project implementation schedule 2-90 2.3 Implementation of Financing Schedule 2-95 2.3.1Financial schedule for project implementation (required funds and 2-95 financing methods) 2.3.2Financing prospectus (plans of parties commissioned to 2-95 study financing plans and implementation sites (companies) 2.4 Conditions and Issues Related to the Clean Development Mechanism 2-95 2.4.1Coordination with the Recipient Country for Setting Conditions for Project 2-95 Execution and Assignment of Responsibility for Implementing Clean Development Mechanisms Based on the Project Site Conditions 2.4.2Coordination with the Recipient Country for Setting Conditions for Project 2-98 Execution and Assignment of Responsibility for Implementation of Clean Development Mechanisms Based on the Project Site Conditions 3. PROJECT EFFECTS 3-1 3.1 Energy savings 3-1 3.1.1 Technological basis for energy savings 3-1 3.1.2 Baseline used to estimate energy savings and assumptions made in 3-2 calculations of normal energy consumption (i.e., without modifications) 3.1.3 Estimate of actual energy savings, expected timeframe, and accumulation 3-3 3.1.4 Verification of energy savings (monitoring methods) 3-9 3.2 Reduced greenhouse gas emissions 3-10 3.2.1 Technological basis for reductions in greenhouse gas emissions 3-10 3.2.2 Baseline used to estimate reductions in greenhouse gas emissions 3-10 (i.e., without modifications) 3.2.3 Estimate of actual reduction in greenhouse gas emissions, anticipated timeframe, 3-11 and cumulative benefits 3.2.4 Verification of reductions in greenhouse gas emissions (monitoring methods) 3-17 3.3 Productivity improvements 3-18 4. EARNINGS POTENTIAL 4-1 4.1 Recovery of investment 4-1 4.1.1 Investment calculation method 4-1 4.1.2 Required level of investment 4-1 4.1.2 Breakdown of total investment 4-2 4.1.4 Recovery of investment 4-3 4.2 Cost-benefit analysis (Energy savings, and Cost versus greenhouse gas reductions) 4-14 4.2.1 Energy savings 4-14 4.2.2 Cost versus project benefit 4-15 4.2.3 Cost versus greenhouse gas reductions 4-16 5. LOCAL DIFFUSION OF THE TECHNOLOGIES 5-1 5.1 Possibility of local diffusion of technologies to be introduced in this project 5-1 5.2 Benefits including diffusion effects 5-2 5.2.1 Energy saving 5-2 5.2.2 Greenhouse gas reduction effects 5-2 6. OTHER BENEFITS 6-1 Other environmental, economic, and social effects related to the project; changes are also realized in energy conservation and greenhouse gas emission reduction 7. CONCLUSIONS References Attachment Overview Adopted at the third Conference of the Parties to the UN Framework Convention on Climate Change (COP3) in Kyoto in December 1997, the Kyoto Protocol seeks to combat global warming by encouraging industrialized nations to reduce emissions of greenhouse gases such as carbon dioxide. The basic target is an average reduction in greenhouse gas emissions of at least 5% below the 1990 levels for the period 2008 - 2012. The target for Japan was set at 6%. The Conference also agreed on various mechanisms that would introduce more flexibility in efforts to attain these goals, including Joint Implementation (JI) by two or more industrialized nations, whereby participants share the benefits of overall greenhouse gas reductions, and Clean Development Mechanisms (CDM), implemented by industrialized nations in partnership with developing nations. However, the issue of trading emission credits was not discussed in depth at COP6 in 2000, and details are not expected to be finalized until COP7. Japan is eager to utilize these mechanisms in order to achieve its designated target. This investigation involved a feasibility study on the Petrochemical Corporation of Singapore (PCS) plant on the island of Merbau. The feasibility study identified potential energy savings and reductions in greenhouse gases (primarily CO2) emissions that could be achieved using energy-saving technology developed by JGC Corporation. The investigation also examined prospects for linking the project to a Clean Development Mechanism (CDM). The comprehensive feasibility study examined potential energy savings and C02 reductions in the naphtha cracker I - a plant with which we are very familiar - and in utility facilities. The three best options identified in the study are described below. 1. Improvement of the heat recovery system using pinch technology One method for reducing carbon dioxide emissions from the plant is to decrease the boiler load. Doing so requires reducing the amount of steam consumed by the plant. Heat recovery improvement analysis focused on reducing the steam consumed to heat fluids and drive compressors. Within the constraints imposed by existing facilities, we have conducted , through pinch analysis, an overall analysis of utility sources such as steam, fuel, and electricity, by which determination of the optimum supply-demand balance in each process, development of a detailed strategy for -1 - reducing energy consumption (incorporating more effective uses for low-pressure steam and reduced consumption of fuel gas and electricity) and quantitative evaluation of the strategy will become possible.