Question

1) A power plant with an efficiency of 65% combusts 500,000 metric tons (MT) of anthracite coal per year to generate electricity. It has been established that this type of coal has the capacity to generate electrical energy at 19 GJ/MT.

a) How much energy in GJ (giga joules) does this plant generate in one year?

b) Estimate the annual emissions of criteria pollutants including SO2, NOx, PM and greenhouse gases including CO2 and CO using the appropriate emission factors given in the below table.

2) The Power Company has recommended a plant conversation to switch to using natural gas as fuel to generate the same amount of energy. Your firm has been asked to review the economics and perform and sensitivity analysis for the proposed switch and make a recommendation to the regional Utility Board of Directions. If the natural gas to be used has an energy capacity of 43 MJ/m³ (mega joules per cubic meter of gas)

a) Estimate the volume of natural gas needed in m³/yr.

b) Calculate the annual emissions of criteria pollutants including SO2, NOx, PM and greenhouse gases including CO2 and CO using the appropriate emissions factors given in the below table.

Pollutant	Anthracite coal	Bituminous coal	Fuel oil	Natural Gas
CO2 (g/GJ)	94,600	101,000	77,400	56,100
SO2 (g/GJ)	765	1361	1350	0.68
NOx (g/GJ)	292	183	195	93.3
CO (g/GJ)	89.1	89.1	15.7	14.5
Particulate matter (g/GJ)	1,203	3254	16	0.1

3) The NG plant conversion is estimated to cost $25 million. Given that the cost of Anthracite coal is $750/MT and natural gas is $15/m³ calculate the plant operating costs per year and the annual fuel cost difference for switching to natural gas. Additionally, it has been determined that the cap and trade program for SO2 reduction will provide a credit benefit for $150/MT-SO2 reduced. Also, the plant is looking ahead and planning for the implementation of a similar cap and trade program similar to the European model for CO2 emissions. The expected credit benefit for CO2 emission reduction will be market based and can range from $100 to $300/MT-CO2 reduced. Determine the NPV, payout and rate of return for the plant conversion project incorporating the capital an operating costs and emissions program credit for SO2 with a 4% interest rate. If the carbon cap and trade system is implemented, how does that change the economic outcomes?

Based on the emission estimates and costs and benefits, what is your recommendation to the utility board?

Answer 1

Solution:

1. a) 14653800 GJ per year

b) The annual emission of CO₂ is 329100 g/GJ/yr.

The annual emission of SO₂ is 3476.68 g/GJ/yr.

The annual emission of NO_x is 763.3 g/ GJ/yr.

The annual emission of CO is 208.4 g/GJ/yr.

The annual emission of Particulate matter is 4473.1 g/GJ/yr.

2. a) The volume of natural gas needed is 56208580 MJ/m³/yr

b) The annual emissions of criteria pollutants including SO₂, NOx, PM and greenhouse gases including CO₂ and CO is 338.02148 kg/GJ/yr.

3. The NG plant conversion cost is $25 million.

cost of Anthracite coal is $750/MT and natural gas is $15/MT

Difference = $750 - $15 = $735/MT.

Therefore the percentage reduction in cost is 1.125%. Substitute the difference percentage in NG plant conversion cost. we get,

1.125% of $25 million is $281250.

Therefore the plant operating costs per year and the annual fuel cost difference for switching to natural gas is $ 281250.

$150/MT-SO2 reduced and $100 to $300/MT-CO2 reduced,

SO2 with a 4% interest rate is applied in SO2 reduced $150 x 4% = $6

The interest rate of credit to SO2 is $6.

Based on the emission estimates and costs and benefits, my recommendation to the utility board is to use natural gas since it gives more income with less pollution.