exceed 50 units. The deployment of supercritical and ul-tra-supercritical power units will become the main trendfor coal-fired power generation.5.2. Demonstrations of clean coal technologies (CCT)Clean coal technologies include circulating fluidized bedcombustion (CFBC), pressurized fluidized bed combustion(PFBC), integrated coal gasification combined cycle (IGCC)and fuel cell (FC). CFBC is a technology very suitable forChina and is widely used. A 300 MW CFB unit is nowunder construction at the Baima Power Plant. A further de-velopment will be the demonstration of a 600 MW CFBboiler with supercritical steam parameters. IGCC is of stra-tegic importance to China. The demonstration of IGCC willmainly focus on lowering investment and operation costs byincreasing the use of domestic equipment.5.3. Rapid development of environment industryMore than 1.3 billion tonnes of coal will be used for powergeneration by 2020. Its use will create urgent demand andgood opportunities for, and will stimulate the developmentof, an environmental services industry. Capture of dust, SOxand NOx will be the main tasks for this industry.5.4. Increase in natural gas (NG) combined cyclepower generation One of the significant measures for restructuring the fos-

sil-fuel power sector is to increase the proportion of natu-ral gas power generation. According to current predic-tions, the total gas-fired power capacity will reach 72,000MW in 2020, i.e., 7.5 % of total installed power capacity.Gas consumption will be about 58 billion m3 per year,approximately 40 % of the projected total annual gas con-sumption of the country.

6. Conclusions

The 21st century is a new era of continuous and rapiddevelopment of the Chinese power industry. By 2020, theindustry’s total installed capacity will exceed 900 GW, ofwhich 600 GW will be newly-installed capacity. In thefuture, China will have the largest annual growth in newcapacity, and it will have the largest installed electricitygenerating capacity in the world.

Since coal will continue to be the main primary energysource in China, the proportion of coal-fired power plantswill continue to be high for 30 to 50 years. Therefore,the development of clean and efficient coal-fired powergeneration technology is a long-term task of strategic im-portance for China. It is believed that China can certainlycontribute to the sustainable development of the powerindustry of the world.

Barriers to theimplementation of coalsyngas/polygeneration (CSP)in ChinaBrian Anderson

Anderson Energy Limited, 1505-6 Albion Plaza, 2-6Granville Rd, Tsimshatsui, Kowloon, Hong KongE-mail: brian@andersonenergy.com

1. Introduction

This paper provides an extended outline to a presentationwith the same title made by the author at the August 2003meeting of the CCICED TFEST Workshop on Coal Gasi-fication/Polygeneration held at Tsinghua University inBeijing. The presentation for discussion covered the sub-ject of barriers to the implementation of coal syngas/poly-generation (CSP) in China.

This paper starts with a general overview of the systemdrivers, leading to a discussion on the barriers to imple-mentation, and provides some conclusions and recommen-dations for implementation at the enterprise level inChina. (Other speakers at the workshop covered country-level implications.)

2. The system barriers and drivers for coalsyngas/polygeneration

The main system drivers for the implementation of CSPin China are represented in Figures 1 and 2.

Key drivers leading to government action are depend-ence on foreign energy supplies and (particularly atmos-pheric) pollution, and TFEST work has therefore usedthese two elements as constraints on its development ofthe future energy-mix options in its advice to the govern-ment. From this work, CSP has emerged as a vital tech-nology that can assist China greatly in solving these twokey problems associated with the rapid increase in energydemand triggered by the growth of GDP (which is pro-jected by government to quadruple by 2020).

The main system barriers to implementation of CSP inChina are seen to be:l current low knowledge and capacity at all levels of:

- technical issues involved;- commercial factors, and lifecycle costs/benefits;- the potential benefits of integration (central syngas

production for multiple uses, i.e., polygeneration);and

- other benefits of CSP -- environmental, energy se-curity, national interest, flexibility, and efficiency;

l regulatory constraints:- e.g., difficulty of selling clean electricity at competi-

tive prices;l funding constraints;l strong, but fragmented, bureaucracy and decision-making:

- problems of central and provincial government; and- organisational ‘‘chimneys’’ not coherent to CSP (in-

tegrated technologies) business model; andl weak current planning, technical capability, and integra-

tion across traditional industry/government boundaries:- coal-mining, fuels, chemicals (which have most cur-

rent knowledge of syngas production from coal),

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petroleum refining, electric power, rail and pipelinetransport, road transport, domestic heating, indus-trial heating;

- a lack of understanding particularly in the electricpower industry of the benefits of coal syngas-de-rived fuelling and its integration potential on thesame site with, for example, the co-production oftransport liquids (methanol, F-T, or DME); and

- weak understanding of the linkages between CSP prod-ucts.

3. ‘‘Man on the moon’’ approach

It is suggested that because the political and commercialrisks to China from the two key drivers (local and globalatmospheric pollution and an over-dependence on foreignenergy supplies) are so great, and because it has an abun-dance of low-cost indigenous energy in the form of coal,and also because there is technology now available thatcan use this coal in a manner which will be environmen-tally friendly, China should urgently embark on a course

towards implementation of CSP.In order that sufficient impetus is given to this, concerted

and focused action is recommended to the government,much as was once used to secure a ‘‘man on the moon’’ bythe USA in the 1960s. For this reason, TFEST has recom-mended that the findings of its studies should be presentedto senior Chinese leaders, and that they be advised to setup the relevant government and industrial structures, andsystems of fiscal and regulatory incentives and penalties, tointegrate and focus efforts on, and stimulate investment in,the implementation of the proposed strategy.

4. Capacity-building

Currently, and understandably, knowledge and capacity isweak in many areas relating to CSP development, andtherefore the following are recommended actions in thisregard:l capacity-building at central government senior and

ministerial levels, for the personnel in these positionswill need to understand the main issues and technical

Figure 1. Barriers to and drivers for the implementation of coal syngas polygeneration in China

Figure 2. Main system drivers for implementation of CSP in China

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matters involved in order to steer planning and imple-mentation and integration efforts;

l the streamlining, and/or the removal, of government in-terfaces, and the building of specially focused organi-sations that can define the prime issues andrequirements quickly and effectively without too muchinterference;

l the building of public awareness of non-commercialbenefits and of impacts the new ideas will have on peo-ple and the environment: a ‘‘sustainable development’’approach which specifically links social, economic andenvironmental matters and turning these social benefitsinto incentives are recommended; and

l at project level, the defining of policies for access togrids, pricing, etc.

5. Linkage to grand energy strategy for China

Because the CSP initiative cannot be developed inde-pendently from the other energy supply and use elementsthat comprise what might be termed a ‘‘grand energy plan’’for China, there is a need to make sure that in developingand implementing the CSP strategy it is properly inte-grated with those other elements.

There is a need to develop the linkages and integrationpoints between the various elements of that plan, such as:l transport;l power generation;l coal-mining, syngas/polygeneration parks;l rural development, transport and heating;l inclusion of life-cycle costing as a standard for project

alternative evaluation;l importation of technologies and collaboration with ex-

ternal skill pools; andl development of local manufacture, eventually for ex-

port.

6. Incentives and barrier removal

Development of incentives that will enhance the growthof coal syngas/polygeneration and help to remove barrierswill fall into the following main categories:l financial innovation (Chinese and foreign);l linkages to power generation and committed access to

grids;l fuel-use policies in transport and heating;l consumer-based incentives for fuel use;l import tariff reductions for key components of the CSP

processes;l tax holidays;l provision of incentives for public and private compa-

nies to integrate and merge across traditional lines thatare necessary to develop the integrated added valuechains that coal syngas/polygeneration requires for ef-fective commercial and cost-effective development;

l incentives for energy companies to develop new or ad-justed infrastructures to accommodate the changing fu-els and transport systems;

l development of skilled people; andl incentives to demonstrate commercial and social bene-

fits of CSP in China.

7. Coal-mining issuesThere is one very important, and still less well-recog-nised, set of issues that needs action, and that is relatedto coal-mining, for if the proposed CSP strategy is to befollowed through it will have a significant impact on thelevel of coal production in China. It is therefore recom-mended that the government and industry should do thefollowing:l Link coal gasification and polygeneration plans with

mine development.l Improve mining methods to avoid negative environ-

mental and social impacts.l Link current planning for coal distribution to new re-

quirements for centralised added value CSP-relatedproduct distribution.

l Quantify the reduction in total rail transport of coal andthe benefits to other sectors of the economy derivedfrom this, and add this to the benefits of CSP.

l Determine best locations for major CSP centres, andlink this to flexible infrastructure development to servethe markets for its products (for instance pipelines formultiple use).

8. Enterprise-level conclusions

The following are the main enterprise-level conclusionsand recommendations that have been developed from theforegoing.l Accelerate the formation of JVs with foreign skills to

enhance rapid technology transfer.l Bring in specific management skills for integration and

optimisation of production and commercial aspects ata given site and in a particular market area.

l Provide incentives for crucial CSP-related foreignequipment manufacturers to bring technology intoChina, and to develop a capability to build this equip-ment for local and export markets.

l Upgrade mining techniques to best international health,safety, and environmental practices.

l Entice enterprises in the chemical and electricity indus-tries to form cooperative structures such that polygen-eration is stimulated.

l Set up government and private financial institutions toprovide the funds for investment.

l Encourage the development of an industry associationfor CSP.

l Although at this stage they are inexperienced, stimulateand encourage contributions from local design institutesand engineering companies to both the technologyproviders as well as the technology buyers.

l Ensure that intellectual property rights are protected toencourage technology providers to commercialise theirtechnology and to invest more in R&D.

l Align international and local engineering and construc-tion codes and standards.

l Institute the practice of using life-cycle costing (i.e.,including capital and operating costs, plus the costs ofpollution) when making comparisons between new andconventional energy supply and use options for invest-ment decisions.

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