Large-scale conversion from coal to gas is not suitable for China’s national conditions

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This post was last edited by pyp222 on 2017-1-11 at 15:48, with \"burning coal\" changed to \"burning natural gas\", abbreviated as \"coal-to-gas conversion\". In China, the initiative to replace coal with gas was aimed at reducing air pollution caused by coal burning; furthermore, it helps to cut carbon dioxide emissions, which is beneficial for global climate protection. The intention behind this measure is good. 　　The conversion of large thermal power plants, cogeneration plants, or heating centers from coal to gas has been a topic of debate in China for several years. Recently, there has been a trend of large-scale expansion in the shift from coal to gas. 　　To determine whether a policy is reasonable and good, there should be quantitative indicators for assessment. In the field of energy, there are 4 globally recognized key quantitative indicators: 1) Economic efficiency ； 　　2) Energy security ； 　　3) Environmental protection ； 　　4) Climate protection. 　　The following analysis takes the relatively representative North China market as an example. 　　Looking at the first indicator – economic efficiency – the market price of natural gas is around 3 yuan per cubic meter (with subsidies for household use of natural gas). The calorific value of 1 cubic meter of natural gas is about 10 kilowatt-hours; based on this calorific value, the market price of natural gas is around 0.30 yuan per cubic meter. 　　The price of coal with a calorific value of 5500 kcal is around 480 yuan per ton. Calculated on a per-kilowatt-hour basis, this amounts to 480 yuan/ton ÷ (5500 kcal/kg * 1.162 kWh/1000 kcal) ÷ 1000 kg/ton = 0.075 yuan/kWh. In other words, calculated based on the unit calorific value of primary energy, the price of natural gas is about 4 times that of coal. 　　The maximum efficiency of gas-steam combined cycle power generation plus transmission and distribution is around 50%. The primary energy cost of gas-based power generation is 0.30 yuan/kWh ÷ 50% ≈ 0.6 yuan/kWh ； The maximum efficiency of coal-fired power generation plus transmission and distribution is around 40%, which is about 20% lower than that of gas-powered systems. The primary energy cost of coal-fired electricity is 0.075 yuan/kWh ÷ 40% ≈ 0.19 yuan/kWh. The primary energy cost of gas-powered power generation is about 0.40 yuan/kWh higher than that of coal-powered power generation. 　　If combined heat and power is used for heating, due to the high overall thermal efficiency of gas-based combined heat and power systems, even though a large proportion of the energy generated comes from electricity production, the heating capacity per unit of heat value remains roughly equivalent to that of coal-fired power plants. 　　Therefore, whether it is power generation or cogeneration has little impact on the cost difference between gas-fired and coal-fired power generation. 　　Based on the first criterion—economic efficiency—natural gas power generation is much more costly than coal-based power generation; the difference in the cost of primary energy per unit of electricity generated is as much as three times. 　　Now let’s look at the second indicator – energy security. 　　China has abundant coal resources, and it relies mainly on domestic production; imports account for only about 5% of total consumption. With excess coal production capacity in the country, there is no concern regarding energy security. 　　In terms of per capita figures, China’s natural gas reserves and production are both very limited; currently, about 30% of its total consumption is met through imports, and this trend is upward. A significant portion of these imports is brought in via liquefied natural gas carriers that travel over long distances. 　　In December 2015, a shortage of natural gas supply occurred in parts of the Beijing-Tianjin-Hebei region due to the delayed arrival of ships carrying imported liquefied natural gas. This forced Beijing to reduce heating for non-residential buildings, causing indoor temperatures in many buildings to drop to around 14°C. The lack of gas for industrial use led to the shutdown of numerous enterprises that relied on natural gas in this area. 　　To enhance the security of natural gas supply, many countries maintain reserves of natural gas; Germany, for example, has reserves that are sufficient to cover three months’ demand, while the Beijing-Tianjin-Hebei region has very limited such reserves, leading to gas shortages during winter. Building capacity for storing liquefied natural gas requires substantial investment. 　　Clearly, in terms of the second indicator—energy security—the energy security of natural gas is much lower than that of coal. 　　Regarding the third indicator—environmental protection—the main environmental issue associated with coal-fired power generation is air pollution caused by the combustion exhaust gases. 　　However, treating coal-fired flue gas in accordance with the emission standards for gas-fired flue gas is no longer a technical issue today, and the cost will not exceed 0.10 yuan/kWh. 　　Due to the high combustion temperatures in gas turbines, a large amount of nitrogen oxides are generated during fuel combustion. The costs associated with nitrogen oxide removal are high, and such removal processes can easily release ammonia into the atmosphere. 　　Of course, the construction cost per unit capacity for coal-fired power plants is higher than that for gas-fired ones. When the higher environmental costs associated with coal use compared to gas, along with the higher construction costs per unit of power generation capacity, are taken into account to achieve the same environmental impact as gas, the cost of power generation from gas is still at least 0.20 yuan/kWh higher than that of coal-based power generation. 　　When using gas to replace coal in power generation or combined heat and power production, approximately 60% less carbon dioxide is emitted per kilowatt-hour of electricity generated, which means an emission reduction of around 0.47 kilograms of carbon dioxide per kilowatt-hour. Assuming that the cost of gas-based power generation remains at least 0.20 yuan per kilowatt-hour higher than that of coal-based power generation, the cost of reducing carbon dioxide emissions by using gas instead of coal is equal to 0.2 yuan/kWh ÷ 0.47 kg/kWh × 1000 kg/ton = 425 yuan/ton. 　　China’s subsidy for wind power generation is around 0.2 yuan per kilowatt-hour. Since wind power generates almost no carbon dioxide, the cost of reducing carbon dioxide emissions through wind power is approximately 0.2 yuan/kWh ÷ 0.78 kg/kWh × 1000 kg/ton = 256 yuan/ton. In other words, the cost of reducing carbon dioxide emissions by switching from coal to gas is about 66% higher than that of using wind power. 　　Currently, the trading price of carbon dioxide on China’s carbon trading market is only 20 to 50 yuan per ton. If carbon trading is used to replace the shift from coal to gas in order to reduce carbon dioxide emissions, the cost of achieving such reductions will be only 1/20 to 1/8 of that associated with the shift from coal to gas. 　　Of course, this price is far too low and not conducive to promoting carbon dioxide emission reductions; it should be increased significantly in the future. 　　It is reported that **Jiang Zhaoli, deputy director of the Climate Department of the National Development and Reform Commission, believes that a reasonable trading price for carbon dioxide in China’s carbon trading market in the future should be between 200 and 300 yuan per ton. 　　Even at this price, which is generally considered difficult to achieve, the carbon dioxide emission reduction cost of switching from coal to gas remains 40% to 100% higher. 　　It should be noted that due to the rapid development of coal mining capacity in our country, coupled with a significant decline in coal demand in recent years, coal prices have dropped sharply. As a result, many coal companies have suffered heavy losses, which has led to a reduction in employment. 　　Under these circumstances, a large-scale shift from coal to gas will exacerbate the problems facing the coal mining industry. 　　Coal is an industry in decline; from now on, China’s coal production is likely to keep falling over the next few decades. However, if the decline is too rapid over a period of time, it will also result in significant economic losses for the coal industry, increase financial risks, and create considerable employment pressures. 　　China’s increase in natural gas imports boosts employment and income in natural gas-producing countries, while reducing employment in China’s coal industry and lowering its economic efficiency. 　　In summary, large-scale conversion from coal to gas: the economic benefits are very poor ； Energy security is very poor ； The improvement in environmental benefits can be achieved through the modification of flue gases from coal-fired power generation ； The cost of reducing carbon dioxide emissions is too high, far exceeding that of coal combustion and many other methods for cutting carbon dioxide emissions. 　　Therefore, using gas on a large scale to replace coal in thermal power plants or cogeneration plants is clearly not suitable for China’s national conditions. 　　China currently has around 250 million kilowatts of cogeneration units, most of which are coal-fired cogeneration units. 　　If 100 million kilowatt coal-fired cogeneration units were replaced with gas-fired cogeneration units in that system, and assuming that each kilowatt of generating capacity produces 4,000 kilowatt-hours of electricity per year, then 400 billion kilowatt-hours of electricity would be generated annually. With an additional cost of 0.20 yuan per kilowatt-hour for electricity generation, the total additional cost would amount to 80 billion yuan per year! 　　In summary, to achieve the same environmental and climate protection benefits as switching from coal to gas, it is much more economical than using gas-powered generators, and energy supply is also much safer, thanks to cleaner treatment of flue gases from coal-fired power plants/CCHP plants and the use of emission reduction measures with low costs for cutting carbon dioxide emissions. 　　Even in developed countries, coal-fired power plants and cogeneration plants still play a very important role. For example, in Germany’s Ruhr industrial region, which covers an area of less than 10,000 square kilometers, there are coal-fired power plants and cogeneration plants with a capacity of around 10 million kilowatts ； The largest coal-fired combined heat and power plant in Berlin, the German capital, with a capacity of one million kilowatts, is located only about 10 kilometers away from the city center. 　　By the way, in 2015, the average annual concentration of PM2.5 in the atmosphere was 12–16 micrograms per cubic meter in various cities in Germany’s Ruhr region; 17 micrograms per cubic meter in Berlin; 17 micrograms per cubic meter in Sanya; 34 micrograms per cubic meter in Zhangjiakou; 54 micrograms per cubic meter in Shanghai; and 80 micrograms per cubic meter in Beijing. 　　The differences in the aforementioned indicators between heating boilers and thermal power plants as well as cogeneration plants are similar, so they will not be discussed here. 　　However, in places that require heat such as hospitals, schools, and hotels, since the cost of treating the flue gases from small coal-fired boilers is too high, switching from coal to gas using small gas-fired boilers or distributed gas combined heat and power systems yields better overall benefits ； 　　Furthermore, replacing fuel with gas in large diesel vehicles not only significantly reduces fuel costs but also greatly decreases the pollutants in the combustion exhaust gases. 　　Of course, if one day China discovers large amounts of natural gas resources and gas prices drop significantly, then things will be different.