Coal power: a surprisingly large number of projects in the pipeline

17 October 2018

Somewhat unexpectedly for a region replete with gas and sunshine, a number of countries in the Middle East and nearby are building or thinking of building coal fired power plants. Among the key drivers are: fuel diversification, energy security, and cost and reliability considerations.

A recent update from the US Energy Information Administration (principal contributor: Bonnie West) estimates that planned coal-fired capacity additions within countries in and around the Middle East will add about 41 GWe of new electric generating capacity over the next decade, based on announced projects and projects currently in the permitting process. Another 3 GW of coal fired capacity is currently under construction in these countries. About 12 GW of the existing coal fired generating capacity — or about half of the region’s coal fired generating fleet — has come online since 2006, the EIA update notes.

Coal capacity in the region is typically less than that of other fuels, particularly compared with liquefied natural gas or petroleum based fuels, with coal accounting for less than 1% of primary energy production in the region, the EIA update points out.

As the EIA’s graph (below) shows, Turkey is the heaviest user of coal fired power among these countries, with an installed capacity of about 18.5 GW, followed by Israel (4.9 GW) and Pakistan (2.5 GW). Turkey and Pakistan both plan to add more coal capacity over the next decade.

Egypt, Oman, Iran, Jordan, and the United Arab Emirates (UAE) have no current coal-fired electricity generation, but they all plant to bring coal capacity on line over the coming years. New coal capacity is currently under construction in the UAE, Iran, and Jordan. In addition, Egypt and Oman have announced plans for new coal-fired plants.

Iran’s Tabas power station, sponsored in partnership with MAPNA Group and China’s Shanghai Electric, will have an installed capacity of 650 MWe upon completion of its two units. The plant, which began construction in 2012, will be powered from locally mined coal. Iran’s domestic coal production is expected to increase by more than 2 million tons per year when improved coal mining and processing facilities begin operation in 2020.

Jordan’s 30 MW coal fired plant, a joint project of the Energy Ministry and the Al Manaseer Group, will provide power for industrial cement production using coal from the United States, Russia, and Africa. Construction of this plant was expected to begin in July 2018.

Meanwhile, Oman has announced plans for a 1200 MW coal fired power plant and in April began accepting proposals for qualification from developers. Source: EIA

Chinese consortium wins in Egypt

A Chinese consortium has been awarded the engineering, procurement and construction (EPC) contract for Egypt’s first coal fired power plant, a 6.6 GWe facility.

Dongfang Electric Corp and Shanghai Electric Group signed the EPC contract with the Egyptian Ministry of Electricity and Renewable Energy in Beijing on 2 September.

The plant, to be built close to the Red Sea port of Hamrawein, over 800 km from Cairo, will consist of six ultrasupercritical coal-fired units. The consortium, working in partnership with Egyptian civils contractor Hassan Allam, came in with the lowest bid for the EPC contract, US $4.4 billion, when bids were opened in June. The consortium also bid a higher environmental spec option, at $4.58 billion.

The second lowest EPC bid was submitted by a GE-Harbin consortium, US $5.2 billion (US $5.3 billion, for the alternative), while a third offer came from Mitsubishi-Toyota-Orascom-Elsewedy, US $6.19 billion (and US $6.61 billion). The bids were reviewed by Belgian consulting engineers Tractebel.

Hassyan construction well advanced

Construction is well advanced on the 2.4 GWe first phase of Dubai’s Hassyan ultrasupercritical coal fired plant, with full operation scheduled for 2023. This US $ 3.4 billion first phase consists of four 600 MWe net (660 MWe gross) units (a well established unit size in the power generation industry worldwide, and also compatible with Dubai’s relatively limited grid), with steam conditions of 280 bar/600°C/610°C.

The developer of phase 1 is Hassyan Energy Company, a joint venture of DEWA (Dubai Electricity and Water Authority), which holds 51%, with the remaining 49% held by a consortium of ACWA Power (26.95%), Harbin Electric (14.7%) and Silk Road Fund (7.35%). The Chinese see the project as an infrastructure component of their One Belt, One Road (aka Maritime Silk Road) concept. The EPC provider for phase 1, under contract to Hassyan Energy Company, is a consortium of Harbin and GE, with GE subcontracted to supply the subbituminous-coal-fuelled boilers, steam turbines and emissions control systems. The boilers do not employ T23/T24, alloys which have proved problematic in ultrasupercritical projects elsewhere.

The process of selecting qualified developers for the 1.2 GWe second phase, comprising a further two 600 MWe (660 MWe gross) units, is underway.

The Hassyan project is being implemented on an IPP (independent power producer) ‘build, own, operate’ model, the developer signing a 25 year power purchase agreement (at a price of less than 5 US c/ kWh) with DEWA and being required to put in place arrangements for secure delivery of coal over the 25 year period (and thereby shouldering risks associated with fuel price movements). Coal (principally from South Africa and Indonesia) for phase 1 is being provided by EDF Trading, while coal handling and transhipment facilities are being managed by Louis Dreyfus Ports and Logistics.

The project includes an offshore floating coal handling facility plus barges for transhipment of coal, an onshore jetty for both coal and ash, an onshore coal bulk handling facility together with a 45 day coal storage facility, covered to control dust.

DEWA requires the plant to meet emissions limits that are more stringent than requirements of the EU IED and those set out in International Finance Corporation guidelines. Emissions control technologies include advanced ESP, seawater FGD, low NOx burners and SCR, with NOx emissions from the plant to be compatible with those from a natural gas fired facility. The plant will be able to achieve over 40% efficiency even at ambient temperatures of 50°C and seawater temperatures of 39°C. It is also required to be carbon capture ready, with the possibility that carbon dioxide produced in the future could be used in enhanced oil recovery applications.

The plant is seawater cooled with intake and outflow reaching, respectively, 4.5 km and 2.5 km out to sea to minimise impacts on the local environment.

The plant will be operated and maintained by NOMAC, a wholly owned subsidiary of ACWA Power.

The project can be seen as part of Dubai’s efforts to reduce dependence on entirely imported gas.

Looking beyond Hassyan, a second coal fired plant project is planned in the north of the UAE, by FEWA (Federal Electricity and Water Authority) sole utility provider for the UAE’s northern emirates.

UAE’s national energy strategy targets for 2050 include about 11.5 GW of ultrasupercritical coal capacity, all required to be compatible with carbon capture and sequestration technologies. 

Visualisation of Hassyan, phase 1
Status of coal fired power generation in and around the Middle East region. Source: US Energy Information Administration

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