March 2014 Coal and Gas Assumptions DECC Job number: 286861A Final Coal and Gas Assumptions 286861A Report Title : Coal and Gas Assumptions Report Status : Final Job No : 286861A Date : March 2014 DOCUMENT HISTORY AND STATUS Document control George Atkinson Kirsten Foy Kirsten Foy Ignacio Garcia Checked by Prepared by Bill Hatfield David Lunn (technical) David Roberts David Roberts Paul Willson Pauline Evans David Horner Checked by Approved by Marie Roberts Paul Willson (quality assurance) Anne Nethercott Revision details Pages Version Date Comments affected 0.1 11/10/13 All IED Compliant Technologies section added 0.2 16/10/13 28-End Plant Life section added 0.3 22/10/13 Section 2, 3 Feasible Build Rates and Supply Curves sections added Final values, addressed comments, added draft SCR cost 0.4 22/11/13 All section 0.5 13/12/13 Various Added Executive Summary, addressed comments. 1.0 10/2/14 Various Addressed final comments, final draft for publication. 2.0 14/3/14 Various Addressed additional comments. 3.0 24/3/14 Various Corrected minor typos and formatting errors. CONTENTS Page List of Abbreviations 3 Executive Summary 5 1 INTRODUCTION 7 1.1 Structure of report 7 1.2 Scope of work 7 1.3 Acknowledgements 7 2 FEASIBLE BUILD RATES FOR CCGT AND OCGT 8 2.1 Introduction 8 2.2 Approach 8 2.3 Site Availability 9 2.4 Maximum rate for design and contracting 10 2.5 Maximum rate at which financial markets can fund CCGT or OCGT 11 2.6 Maximum build rates for CCGT and OCGT 11 2.7 Maximum rate for construction and commissioning 14 2.8 Discussion of overall maximum feasible build rate 15 2.9 Combined build rates for CCGT and OCGT 16 2.10 Conclusion 17 3 SUPPLY CURVES FOR CCGT AND OCGT 19 3.1 Factors affecting assumptions 22 3.2 Impact of factors on levelised cost of power 25 3.3 Impact of factors on CCGT assumptions 27 3.4 Impact of factors on OCGT assumptions 29 3.5 Interactions between factors 33 3.6 Realistic high and low cases 33 4 INDUSTRIAL EMISSIONS DIRECTIVE COMPLIANT TECHNOLOGIES 37 4.1 Background 37 4.2 Industrial Emissions Directive 37 4.3 Best Available Technology (BAT) 38 4.4 NOx control technologies 38 4.5 Primary control - combustion techniques 39 4.6 Secondary controls - post combustion techniques 40 4.7 Key parameters for operators’ decisions 42 4.8 Conclusions 45 5 COSTS TO RETROFIT SCR AND HYBRID SCR/SNCR 46 5.1 Decision to update cost and technical parameters for SCR retrofit 46 5.2 Sources of updated assumptions 49 5.3 Operating costs 54 5.4 Other assumptions 57 5.5 Peer review 57 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 1 - 5.6 Updated values 58 6 PLANT LIFE EXTENSION 61 6.1 Life limiting mechanisms 61 6.2 Outage frequencies 65 6.3 Coal fired life extension costs 66 6.4 CCGT life extension costs 68 6.5 OCGT life extension costs 70 6.6 Summary 71 BIBLIOGRAPHY 73 APPENDIX A: SITE AVAILABILITY 74 APPENDIX B: SITES AVAILABLE FOR CONSTRUCTION AS CCGT/OCGT 82 APPENDIX C: PROPOSAL METHODOLOGY 86 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 2 - LIST OF ABBREVIATIONS BAT Best Available Technology BREF BAT Reference °C Degree Celsius CCGT Combined Cycle Gas Turbine CEGB Central Electricity Generating Board DCO Development Consent Order DCS Digital Control Systems DECC Department of Energy and Climate Change EA Environment Agency ELV Emission Limit Values EOH Equivalent Operating Hours EPC Engineer, Procure, Construct EU European Union FD Forced Draught FGR Flue Gas Recirculation GE General Electric GT Gas Turbine HRSG Heat Recovery Steam Generator HP High Pressure HT High Temperature ID Induced Draught IP Intermediate Pressure IPP Independent Power Producers IED Industrial Emissions Directive LCPD Large Combustion Plant Directive LHV Lower Heating Value mg/Nm3 Milligram per normal metre cubed MWh Megawatt hour NOx Nitrous Oxides OCGT Open Cycle Gas Turbine (also called Simple Cycle Gas Turbine, SCGT) O&M Operation and Maintenance PA Primary Air pH Measure of acidity PSSR Pressure System Safety Regulations 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 3 - ROFA Rotating Opposed Fire Air SCR Selective Catalytic Reduction SNCR Selective Non-Catalytic Reduction TNUOS Transmission Network Use of System UK United Kingdom UoS Use of System £M Million Pound Sterling 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 4 - Coal and Gas Assumptions EXECUTIVE SUMMARY Parsons Brinckerhoff was asked by the Department of Energy and Climate Change (DECC) to undertake work in relation to the future use of gas and coal power plant technology in the UK and the associated modelling assumptions. The areas considered were: a Maximum feasible build rates for Combined Cycle Gas Turbine (CCGT) and Open Cycle Gas Turbine (OCGT) power stations The maximum feasible build rate for CCGT has been found to be 6 GW per year and the maximum feasible build rate for OCGT has been found to be 4 GW per year. Before 2017 these values are lower as a plant would need to have begun construction to be commissioned in these years. In 2014 and 2015 the maximum build rate is zero and in 2016 it is 0.9 GW. Table 2 shows how the build rates may be combined if both CCGT and OCGT are built in the same year. b The factors that could affect the variation in costs for CCGT and OCGT power stations A wide range of factors was considered including location, type of plant, international market, commercial, technical and design factors, regulation and cost of equipment. Interactions between these factors were also considered. Tables 8 and 9 show the maximum and minimum values for individual inputs affected by these factors. Table 10 shows realistic low and high cost cases for 900 MW CCGT plant; Tables 11 and 12 show realistic low and high cost cases for Large Frame Standby Plant and Aeroderivative Peaking Plant. c The technologies which could be applied to existing coal fired power plants in order to attain compliance with the forthcoming Industrial Emissions Directive (IED) A number of technologies have been described that reduce NOx emissions for coal fired plant. Only two technologies can be retrofitted that will meet the criteria for the IED. These are Selective Catalytic Reduction (SCR) and Hybrid SCR/Selective Non- Catalytic Reduction (SNCR). Hybrid SCR/SNCR is technically feasible but to the authors’ knowledge has not been implemented on any plant. SNCR has not yet been applied at full scale in coal plant. There are a number of uncertainties associated with the hybrid approach due to its first of a kind nature, however as both technologies are applied at different points in the cycle they are essentially independent, which reduces the likelihood of any problems with applying both in sequence. There may be technical issues to be dealt with however as both technologies have been successfully retrofitted to coal plant separately it is unlikely that any such problems would be serious enough to render the hybrid unworkable. d The costs of retrofitting SCR, and Hybrid SCR/SNCR A number of sources were used to produce estimates of SCR and Hybrid SCR/SNCR retrofit costs. Table 18 shows the range of each input assumption, covering both SCR and Hybrid SCR/SNCR (with Hybrid values highlighted to differentiate them), and Table 19 shows the central cost estimates for SCR and Hybrid. 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 5 - Coal and Gas Assumptions e The Work required for Plant Life Extension of existing power stations Work required to extend the life of existing coal, CCGT and OCGT plants has been described and cost estimates have been produced. Most costs would fall under the standard Operation and Maintenance (O&M) cost that is already included in the model, and only additional costs that would not typically occur during the lifetime of the plant have been considered. All of the life extension works could be undertaken during planned outages. Table 24 shows the costs for a 10-year life extension of coal plant, Table 26 shows the costs for a 10-year life extension of CCGT plant, For OCGT plant life extension should be covered by the O&M cost. For CCGT a cost is presented for upgrade of plant to meet emissions limits; this applies to some operating plant in the UK but not to others. Apart from this value no costs have been included for upgrade work. The decision to extend the life of a plant would take into account not just the costs of life extension, but also the cost of continuing O&M and the cost of upgrades required e.g. to meet new legislative limits. The value of keeping the plant operating would be heavily dependent on the number of operating hours expected per year. As plant ages it becomes more obsolete and will be lower on the merit order, so it will operate less. If plant life is extended long term eventually it will become impossible to find spares and the cost of O&M would increase as bespoke spares need to be manufactured. No cost estimates have been produced for such long term life extension. 286861A Report v 3.0 Prepared by Parsons Brinckerhoff March 2014 for DECC - 6 - Coal and Gas Assumptions 1 INTRODUCTION Parsons Brinckerhoff was asked by the Department of Energy and Climate Change (DECC) to undertake work in relation to the future use of gas and coal power plant technology in the UK and the associated modelling assumptions.