16.3 RESEARCH

16.3 RESEARCH

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RESEARCH


New BCIA funded studies on
Coal to Chemicals, Coal to Hydrogen
By Dr Phil Gurney, CEO and Director, BCIA


BCIA undertakes a variety of studies looking to understand what is required to deliver the optimum environmental and economic benefits from continued use of Victorian brown coals. In recent years, BCIA has participated in or commissioned studies in areas as diverse as solar gasification of coal, novel carbon dioxide storage options, and how to reduce the commercialisation risks of developing coal-water fuels for use in stationary diesel engines.

With a continuing local and international focus on novel uses of coal, BCIA has recently commissioned a report on the opportunities and prospects for Coal to Products (CTX) projects in Victoria. This report, which has been delivered by Strategic Energy Consulting and Gamma Energy Technologies, provides a “techno-economic” analysis of various Coal to Chemicals options, focussing on a route to products through gasification. It shows that both hydrogen and urea production could be economic at today’s prices.

The report provides an overview of the global trends for CTX, and a high-level analysis of selected CTX options that may be applicable to Victoria. The economic study, with construction cost data derived from the 2015 “Australian Power Generation Technology Report”, enabled the estimation of the range of production costs for the various product options, and high-level estimates of the regional economic benefits of CTX projects.

Together with a breakdown of the capital and operating cost, this data was used to estimate which CTX options could be viable at today’s commodity prices. The report also analysed what else would need to happen to make projects feasible, and provided a review of how effective government support could be in securing the regional benefits, and supporting the long-term sustainability of such projects. Given that new projects would likely have limits set on CO₂ emissions, the authors also considered how the cost of capture and storage of CO₂ would affect project economics.

In undertaking the report, the authors considered only Coal to Chemicals options based on mature technologies. However, it was noted that there were technology risks associated with building these projects as “First-of-a-Kind” in Australia. The report therefore relied on the assumption that a local R&D workforce was available to support adaption of technologies to local conditions. This local R&D workforce would have a thorough knowledge of Australian coal chemistry, the physical properties of coal, Australia’s environmental requirements, what has been done here in the past, what works, and what is known not to work.

The study analysed a “generic” technology solution, and further work would be needed to adapt the results to any particular project. Using this generic approach the authors have been able to show the following.


1.
The local and regional benefits of a large Coal to Chemicals facility would be substantial during both the construction and operation stages. Peak construction labour would be approximately 6,000 jobs – with long-term operational roles approximately 400–500.

2.
The economic feasibility of a Coal to Chemicals facility is very dependent on the product produced.
  • The cost of hydrogen production is within the upper bound of current market prices, however the price is sensitive to carbon dioxide price.

As production costs are dominated by operating costs, capital subsidies are not likely to be a useful incentive for hydrogen production.
  • Urea may also be feasible, however the mid-point price for the cost of urea is above current market prices.

Capital subsidies or other financial instruments (e.g. loan guarantees) would both lower the cost of product – reducing the project risk – and make the process more economic.

Urea production is relatively insensitive to the price of carbon dioxide.
  • Synthetic petroleum products (from a Fischer–Tropsch facility) are not likely to be feasible unless the crude oil price is over A$130 billion for the life of the facility.
  • Both methanol and ammonia would require significant subsidies or assistance to become competitive with current market prices for those products.

Noting that the cost of hydrogen production from Victorian brown coal is dominated by operating costs, BCIA also recently participated in a study undertaken by the Energy and Environmental Research Center in North Dakota. This study tested at pilot scale the use of a novel membrane technology aimed at reducing the cost of hydrogen separation in gasification reactions.

The final report of this activity is titled “Demonstration of pilot-scale hydrogen and CO₂ separation membrane technology on North Dakota coal-derived syngas”. The report provides data from the pilot on testing with North American coals, as well as a desktop modelling study using data from previous gasification studies on Victorian coals undertaken in 2003. The study showed that the use of membranes in this way could make a significant improvement in process efficiency, with the implication that this could translate into reduced operating costs, and increased project viability, for a hydrogen production facility.




Figure 1: Front cover of ‘Victorian based Coal to Chemicals economics and technology status’ report by Strategic Energy Consulting and Gamma Energy Technology, January 2016.

Figure 2: Front cover of ‘Demonstration of pilot-scale hydrogen and CO₂ separation membrane technology on North Dakota coal-derived syngas’ report by Energy & Environmental Research Center, University of North Dakota, January 2016.




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