1 / 27

Petroleum Coke in the U.S. Power Generation Sector

Petroleum Coke in the U.S. Power Generation Sector. Stan Kaplan Electric Power Division, Energy Information Administration 202-287-1803 stan.kaplan@eia.doe.gov McCloskey Group 2 nd Annual Petroleum Coke Conference July 19 & 20, 2004 Houston, TX.

tovah
Download Presentation

Petroleum Coke in the U.S. Power Generation Sector

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Petroleum Coke in the U.S. Power Generation Sector Stan Kaplan Electric Power Division, Energy Information Administration 202-287-1803 stan.kaplan@eia.doe.gov McCloskey Group 2nd Annual Petroleum Coke Conference July 19 & 20, 2004 Houston, TX

  2. Petcoke is a small but growing power generation fuel. Positives: High heat content, low ash, low price Negatives High sulfur content, price volatility Power industry trends working in favor of petcoke: Increased use of flue gas desulfurization (scrubbers). Cost minimization, especially at new solid fuel plants. Quality trends for some US coal types Key Points

  3. Market Position and Recent Trends

  4. Petcoke’s Role in the Power Market • Because of its combustion properties and (often) its grind characteristics, petcoke is typically burned in a blend with coal in conventional pulverized coal boilers. The blending percentage may be about 10% to 20%. • The larger and more geographically diverse the coal market, the larger the opportunities for petcoke. • Special-design pulverized fuel boilers, fluidized bed boilers, or gasifiers can be designed to use a much higher percentage of petcoke, or 100% petcoke.

  5. Fuel Mix for Generation – Petcoke Benefits from Coal’s 50%+ Share

  6. Consumption of Petcoke for Power Generation Has Been Growing

  7. Independent Power Producers (IPPs): Largest Power Sector Users of Petcoke

  8. Largest Power Sector Users of Petcoke, 2003

  9. Petcoke Consumption by Power Generators, 2003 Preliminary Thousands of Short Tons

  10. Factors Impacting Market Outlook Coal Market Growth Cost Minimization Coal Quality Trends Price Volatility Scrubbed Generating Capacity

  11. Coal Plants are Running Harder

  12. Near Term: Coal Consumption is Growing (Unsteadily) Source: EIA, Short-Term Energy Outlook, June 2004; Electric Power Monthly, March 2004

  13. Long-Term: Coal Consumption Grows Assuming Current Laws and Regulation

  14. Cost Minimization • Recent and planned solid fuel plants tend to have “special characteristics” that reduce capital and/or operating costs: • Low cost fuels, including petcoke. • Fuel flexibility of circulated fluidized bed boilers. • Brownfield sites or refurbished equipment. • Minemouth locations. • Government-contributed funding. • Appears that developers pursuing solid fuel projects want a cost edge. Petcoke is a low cost fuel.

  15. Cost-Cutting Factors for Recent and Planned Solid Fuel Units

  16. Coal Quality • Utility receipts data shows a possible decline in coal heat content from northern and central Appalachia, and increase or no improvement in ash content. • Possible explanations include reserve/production factors, or quality choices by buyers. • Increase in heat content from Powder River Basin reflects generator preference for highest-btu coal. • Lower btu coal in the east, and preference for higher btu coal from the west, may enhance the market for petcoke as a coal blend “btu booster.”

  17. Coal Quality: Northern Appalachia

  18. Coal Quality: Central Appalachia

  19. Coal Quality: Powder River Basin

  20. Petcoke Quality

  21. Price Volatility • Over the medium term, petcoke delivered price movements mirror coal. • However, short-term variations in petcoke prices can be extreme. • Longer-term agreements with price stability would probably work to the advantage of petcoke.

  22. Medium-Term Price Trends for Coal and Petcoke

  23. Recent Coal Price Trends CAPP NAPP PRB Source: Platts Coal Outlook

  24. Petcoke Price Volatility Source: Platts International Coal Report

  25. Scrubbed Generating Capacity • Scrubbed generating capacity (almost all coal-fired) has increased by 42 percent since 1991. • EIA estimates another increase of about 20 percent is in the pipeline. • Scrubbed (or fluidized bed) units are, other factors being equal, especially suitable for high-sulfur petcoke.

  26. Trends in Scrubbed Capacity EIA estimates that generators have firm plans to install scrubbers on another 23,000 MW of generating capacity.

  27. Conclusion • Several market factors appear to be working to the benefit of petcoke growth in the power market: • Growing use of coal. • Generator efforts to cut costs. • Increased use of SO2 scrubbers. • Possible quality issues with some coal types. • Price volatility is likely to be a concern to some potential users.

More Related