Fossil Fuel Generation

Fossil Fuel Generation Introduction Fossil fuels are carbon-based fuels found in the earth’s crust that have been formed over millions of years by decomposing remains of plants and animals under intense heat and pressure. They include energy-rich fuels such as coal, petroleum (oil), and natural gas, which have provided the majority of the world’s energy supply since the industrial revolution. It is commonly predicted that world energy consumption will grow by 50 percent during the 2007 to 2030 time period and that the majority of this energy will be supplied by fossil fuels.1 The objective of this paper is to provide an overview of the major fossil fuels and their uses, a brief description of major fossil fuel electricity generation technologies, and the major advantages and disadvantages of using fossil fuels as an energy source. Overview Fossil fuels consist largely of hydrocarbons, which are complex chains of hydrogen and carbon atoms. They are extracted from the earth’s crust and, if necessary, can be refined into fuel products such as gasoline, heating oil and kerosene. They are non-renewable resources due to the time required for their formation; currently they are being depleted at a much faster rate than additional resources are being formed. In 2007, approximately 86 percent of world energy production came from burning fossil fuels.2 The majority of fossil fuels are used in the electric-power generation, transportation, manufacturing and residential heating industries. The following sections provide a brief overview of each of the three primary fossil fuels predicted to continue to account for the majority of the world’s energy production in the foreseeable future. Coal Coal is a readily combustible rock consisting of more than 50 percent by weight and more than 70 percent by volume of carbonaceous materials. It occurs naturally underground and must be extracted via mining. In addition to carbon, coal often contains hydrogen, oxygen, ash, nitrogen, sulfur, chlorine, sodium, and mercury, some of which can result in the emission of pollutants when coal is combusted. Coal is categorized as lignite, sub-bituminous, bituminous and anthracite based on the amount of carbon, oxygen, and hydrogen present. Lignite has the lowest carbon content and the lowest combustion temperature and heat content. It is used primarily to produce electricity, syngas, and fertilizer. Bituminous coal, the most plentiful coal type, has a higher combustion temperature but also contains high levels of sulfur. It has a higher carbon and lower moisture content than subbituminous coal. More than 80 percent of extracted bituminous coal is burned to generate electricity; the remainder is used in industrial processes such as the production of plastics and 1

The US Energy Information Administration (EIA), International Energy Outlook 2008 page 1. This reference case reflects a scenario where current laws and policies remain unchanged throughout the prospective period. 2 US EIA, International Energy Outlook 2008

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textiles. Byproducts of bituminous coal can be converted into nylon and paint. Anthracite contains the most carbon and has the highest heating value. In the western hemisphere, it is primarily used to heat homes; in China and other parts of Asia, it is used to generate electricity. Reserves The world’s total proved coal reserves are estimated to be approximately 847.5 billion tonnes at current usage rates.3 Proved reserves are defined as those quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known deposits under existing economic and operating conditions. Figure 1 shows the world’s proven reserves of coal by geographic area. Other than the Middle East, most areas of the world have significant coal reserves. They are fairly evenly distributed between coals with low energy content, such as subbituminous and lignite coals, and high energy coals such as bituminous coal and anthracite. Consumption In 2007, coal was the fastest growing fuel in the world for the fifth consecutive year.4 Global consumption rose by 4.5 percent from 2006, and consumption increased in every region except the Middle East. China and India increased coal consumption by 7.9 percent and 6.6 percent, respectively. It is predicted that global coal consumption will increase by approximately 62 percent by 2030.5 The world’s total known deposits recoverable by current technologies are estimated to be sufficient for 164 years at current consumption levels.

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British Petroleum Statistical Review of World Energy, June 2008, p. 32. A tonne is a metric ton and is a unit of mass equal to 2,204.6 pounds. 4 BP Statistical Review of World Energy, June 2008 5 Paris-based International Energy Agency (IEA)

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Oil Oil is a liquid fossil fuel composed of decayed organic matter that occurs naturally in underground reservoirs. It is extracted from subsurface reservoirs as crude oil and is sent to a refinery for separation into its various component fuels such as kerosene, diesel fuel, and aviation fuel. The United States is the world’s largest oil consumer; it relies on petroleum more than any other fuel source. It accounts for 97 percent of the fuel used by the United States’ transportation sector. Reserves Figure 2 shows the world’s proved oil reserves by geographic area. At the end of 2007, proven world crude oil reserves were approximately 1,238 billion barrels. The member nations of the Organization of Petroleum Exporting Countries (OPEC) account for more than 60 percent of the world’s total crude oil reserves.6 Consumption Compared with 2006, global oil consumption in 2007 grew by 1.1 percent, by approximately 1 million barrels per day.7 Consumption by the Middle East, South and Central America and Africa accounted for two-thirds of this growth. During this same period, global oil production fell by 0.2 percent due to production cuts by OPEC, the first decline since 2002. As world economic growth continues, crude oil demand is predicted to rise from approximately 85 million barrels per day in 2006 to 113,300 million barrels per day in 2030.8 At the rate of production in 2007, OPEC’s proven reserves are estimated to last for more than 80 years; non-OPEC reserves may last less than 20 years.

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Organization of Petroleum Exporting Countries (OPEC) BP Statistical Review of World Energy, June 2008 8 OPEC World Oil Outlook 2008 7

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Natural Gas Natural gas is a mixture of hydrocarbons, primarily methane. Other gases present typically include ethane, propane, nitrogen, water vapor, and carbon dioxide. Natural gas is extracted from reservoirs or gas streams, or can be separated from other petroleum products such as crude oil during the refining process. Natural gas as methane from landfills or water treatment facilities is generally referred to as landfill gas or swamp gas. After being separated from its component liquids, the gas is refined to remove hydrogen sulfide and other sulfur compounds and sent through other quality control procedures. Natural gas is used as fuel in the form of a gas, but it can be compressed into liquefied natural gas (LNG) or compressed natural gas (CNG) for transportation over long distances. Natural gas is commonly transmitted through pipelines to be used in the transportation, industrial, commercial, and residential sectors. Reserves Figure 3 shows the world’s proved gas reserves by geographic area. The total proven natural gas reserves stood at approximately 177.4 trillion cubic meters at the end of 2007.9 The Middle East and Europe/Eurasia have the highest percentage of known reserves. Consumption In 2007, worldwide natural gas consumption grew by 3.1 percent. The United States accounted for nearly half of this growth due to cold winter temperatures and increased demand for gas for power generation. Gas production rose by 2.4 percent. Much of this increase was supplied by the United States, the former Soviet Union, China, and Qatar. At the current usage rates, the world’s proven reserves are estimated to last between 60 and 70 years.10

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BP Statistical Review of World Energy, June 2008 UN Conference on Trade and Development

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Fossil Fuel Energy Conversion Technologies Coal, oil, and natural gas are used primarily to produce electricity and heat through combustion. Coal used for electricity generation is usually pulverized and then burned in a furnace with a boiler. The furnace heat converts boiler water to steam, which is then used to spin turbines that turn generators and create electricity. Most coal fired electricity is currently generated at less than 35 percent efficiency; approximately 65 percent of the coal energy is released to the environment as waste heat. Supercritical cycles run at efficiencies of 35 percent to 40 percent in large-scale applications in the United States. Gas turbine generators were introduced to the power generation industry in the late 1940s and now provide the solution to many power generation needs. Gas turbines, also referred to as combustion turbines, transform the thermal energy from hot combustion gas into rotating mechanical energy. They are called “gas turbines” because the work to produce the mechanical energy is done by combustion gases rather than by steam. Gas turbine technology is used in a variety of configurations for electric power generation, including simple cycle, combined cycle, or cogeneration. A modern simple cycle gas turbine can exceed 40 percent thermal efficiency. To achieve greater than 40 percent efficiency, hot exhaust gases from the gas turbine can be directed into a heat recovery boiler and used to generate steam that can then be used in a steam turbine to generate additional electricity. This combination of technologies is termed “combined cycle” generation. The thermodynamic efficiency for combined cycle gas turbines can be as high as 55 percent. If all or part of the steam is used as thermal energy for an industrial process instead of being used in a steam turbine, the application is termed “cogeneration.” Integrated Gasification Combined Cycle (IGCC) is an advanced technology that is currently the cleanest available coal technology. It can reduce emissions of SO2 and NOx and can also result in improved efficiency compared to conventional coal-based power generation systems. IGCC is a combination of two technologies: coal gasification and combined cycle. In the gasification portion of IGCC, coal is combined with oxygen to produce a gaseous fuel, primarily hydrogen and carbon monoxide. Impurities are removed from the gas, which is then used in the combustion turbine to produce electricity. With potential efficiencies exceeding 40 percent, IGCC power plants could use less coal and produce lower emissions of CO2 than conventional power plants. The CO2 can be captured prior to combustion in a concentrated stream, making it easier to convert into other products or to sequester underground. Key disadvantages of this technology include its high capital cost and lower reliability compared to conventional coal fired generation technologies.

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Table 1 identifies the most common conversion technologies that have been developed to harness these energy sources.

Emissions from the Combustion of Fossil Fuels During the combustion of fossil fuels, a variety of air pollutants are released to the atmosphere. These emissions can combine with water vapor in the air to form acidic compounds that create acid rain. Burning fossil fuels also releases carbon dioxide, a greenhouse gas that many scientists believe contributes to global climate change. Different generation technologies emit pollutants of different types and at different rates. Coal fired generating facilities emit regulated pollutants such as oxides of nitrogen (NOx), sulfur dioxide (SO2), volatile organic compounds (VOC), particulates (PM), carbon monoxide (CO), and mercury (Hg). In addition to these regulated pollutants, coal fired facilities emit CO2. Gas turbines in simple cycle or combined cycle modes typically emit significantly fewer air pollutants than similarly sized coal fueled power plants due to fuel quality and combustion technology. Most gas turbines burn natural gas or No. 2 fuel oil. Because sulfur is not usually a constituent of natural gas and is usually a minor constituent in fuel oil, neither of these fuel sources requires processing of exhaust gases (scrubbing) to remove sulfur dioxide. Primary emission concerns for gas turbines are

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NOx and CO. Both can be controlled through combustion techniques or with postcombustion systems in the waste heat boiler. Little or no particulate emissions are produced. Combustion turbines also emit approximately 40 percent of the CO2 emissions of coal plants on a thermal input basis. Figure 4 illustrates the emissions of NOx, SO2, and CO2 from both gas and coal fired facilities with and without current state-of-the-art control technologies. All units are stated in pounds per megawatt hour (lbs/MWH). It is also assumed that a 90 percent reduction of CO2 emissions is achieved.

Air Pollution Control Technologies for Coal Plants Technologies to minimize pollutants from the combustion of fossil fuels include both precombustion, during combustion, and post-combustion options. Coal beneficiation involves removal of pollutants prior to combustion. The coal is crushed and screened to remove impurities, then placed in a liquid medium to remove pyretic sulfur, which accounts for up to 30 percent of sulfur content of coal. Flue gas desulfurization (FGD), fabric filters, electrostatic precipitators (ESP), and selective catalytic reduction (SCR) are

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post-combustion technologies designed to remove SO2, particulate, and NOx, respectively. In an FGD system, flue gas is sprayed with a slurry of water and an alkaline agent such as lime or limestone. Sulfur dioxide mixes with the slurry to form a pH-neutral compound such as calcium sulfate/sulfite, which is then eliminated in the form of a waste sludge. ESPs remove fly ash, which is the solid particulate ash emitted during coal combustion. As fly ash passes through the ESP, it is given an electric charge that causes it to be attracted to a collector plate; it is thus removed from flue gas before it can enter the air. Coal plants often have a series of ESPs or fabric filters through which gas passes before leaving the stack to remove as much of the particulate as possible. SCRs change oxides of nitrogen (NOx) into elemental nitrogen and water by reacting the NOx with ammonia in the presence of a catalyst.

Comparative Economics The cost of electricity provided by fossil fuel generation depends primarily on three factors: the initial capital cost of the facility; how often the facility operates (the capacity factor); and the cost of fuel. Figure 5 shows comparative values for capital cost, fuel and operation and maintenance costs for the major types of fossil fuel electricity generating facilities in the United States. The costs for renewable energy sources are included for comparison purposes. Although the capital costs may be lower in some parts of the world

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and in certain parts of the United States, they are representative of those associated with fossil fuel generation facility development. The figure also shows the calculated “levelized” cost of energy, which is based on the capacity factor, the cost of fuel and capital cost, in addition to numerous other assumptions including operations and maintenance and financing cost.

Advantages and Disadvantages of Major Fossil Fuel Sources The advantages and disadvantages of coal, oil, and natural gas as sources of energy are summarized in Table 3. These nonrenewable fuels are currently readily available in many parts of the world, and they are predicted to provide the majority of the world’s energy supply for the next 80 to 100 years. However, there are increasing concerns about dependence on fossil fuels due to the finite quantities available, the impact of their emissions on climate change, and the regulation of emissions resulting from their use.

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For example, many renewables such as wind and solar can, at best, provide intermittent power, so they require some backup. Typically this backup is provided by a fossil fuel source that can generate electricity and assume the load when the renewable energy source is not available. The ability to have fossil fuel backup makes these renewable energy sources practical as a dependable source of energy. 12 For example, existing coal facilities can be adapted to burn biomass at moderate cost. The use of biomass offsets the use of coal and the equivalent GHG emissions. In addition, because many renewables are zero fuel generators, system thermal efficiency will increase with increased use of renewables. The same amount of generation is achieved with less fossil fuel.

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Carbon Emissions All fossil fuels contain significant amounts of carbon and form CO2 when burned. Combustion of different fuels generates varying amounts of CO2. Coal, for example, has a particularly high carbon content and therefore produces more CO2 than natural gasbased generation. CO2 is widely believed to contribute to global warming and climate change. The greatest risk to continued generation of electricity by fossil fuels includes efforts to mitigate the impacts of climate change, such as the enactment of legislation or international agreements to reduce greenhouse gas emissions. Leaders in both the United States and the United Kingdom have made a commitment to reduce CO2 levels. In the United States, numerous bills requiring carbon reduction have been proposed, and programs to limit CO2 emissions have already been legislated in the European Union and some Canadian provinces. If a cost, either implicit or explicit, is applied to electricity generating emitters of CO2, several alternative, zero, or low-emission technologies that currently are commercially unproven but are under development, could become more economical and could be expected to replace some conventional coal fired generation. In addition, methods for capturing and/or sequestering carbon are currently under development and offer potential for significantly reducing the carbon emissions to the atmosphere associated with fossil fuel generation. Implementing these carbon capture and carbon sequestration technologies would not require extensive large-scale changes in the power distribution infrastructure or in new technology. However, the cost of electricity to the consumer would increase should such modifications be required. It could be more difficult to achieve similar results in sectors such as the transportation sector that are dependent on oil. Large-scale reduction of CO2 emissions probably would require extensive changes in the motor vehicle fleet fueling stations and fuel distribution systems at great expense to the consumer. Conclusion The world fossil fuel resource base remains sufficient to support growing levels of electricity production for decades to come, but the weakness in the political and economic stability of the oil supply chain presents challenges to maintaining secure energy supplies. Increasing concerns relating to GHG emissions and efforts to reduce those emissions, the maturing oil supply basis, limited access to oil in parts of the world other than the Middle East, higher fuel costs, and rising resource nationalism by countries with adequate fuel supplies will pose a challenge to both consumers and producers of fossil fuel generation.

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Glossary of Terms Anaerobic digestion: Breakdown of organic material by bacteria in an oxygen-free environment. Biomass: Any material of relatively recent biological origin. Capacity: The load for which a generating unit, generating station, or other electrical apparatus is rated either by the user or by the manufacturer. Capacity Factor: The ratio of the electrical energy produced by a generating unit for the period of time considered to the electrical energy that could have been produced at continuous full-power operation during the same period. Capital Cost: As related to power plants, the cost of equipment, construction and other related fixed costs that may be capitalized and are associated with power plant development. Dispatchable Resources: A generation resource that is controlled by a system operator or dispatcher who can increase or decrease the amount of power from that resource as the system requirements change. Fermentation: Anaerobic conversion of sugar to alcohol and carbon dioxide by yeast. Fossil Fuel: Oil, coal, natural gas or their by-products. Fuel that was formed in the earth in prehistoric times from remains of living-cell organisms. Fuel Cells: One or more cells capable of generating an electrical current by converting the chemical energy of a fuel directly into electrical energy. Fuel cells differ from conventional electrical cells in that the active materials such as fuel and oxygen are not contained within the cell but are supplied from outside. Gasification: Incomplete combustion of a fuel to produce a syngas with a low to medium heating value. Generation: The total amount of electric energy produced by the generating units in a generating station or stations measured at the generator terminals, usually expressed in terms of kilowatt-hours. Geothermal: As used at electric utilities, hot water or steam extracted from geothermal reservoirs in the earth’s crust that is supplied to steam turbines at electric utilities that drive generators to produce electricity. Grid: The layout of an electrical distribution system. Internal Combustion Engine: An engine in which fuel is burned inside the engine. A car’s gasoline engine or rotary engine is an example of an internal combustion engine. It differs from engines having an external furnace, such as a steam engine. Kilowatt (kW): One thousand watts of electricity (See watt).

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Glossary sources: (A) EIA, “Energy Consumption and Renewable Energy Development Potential on Indian Lands,” April 2000. (B) California Energy Commission, www.energy.ca.gov/glossary. (C) Black & Veatch, “Power Plant Engineering,” Fifth Printing, 2001. (D) Edison Electric Institute, “Glossary of Electric Utility Terms,” December 1997.

Kilowatt-hour (kWh): One thousand watt-hours (see watt-hour). Landfill Gas: Gas generated by the natural degrading and decomposition of municipal solid waste by anaerobic microorganisms in sanitary landfills. The gases produced, carbon dioxide and methane, can be collected by a series of low-level pressure wells and can be processed into a medium Btu gas that can be burned to generate steam or electricity. Levelized cost: The cost of building and operating a power plant over its economic life stated in terms of a single, cost per year, or cost per MWh (or kWh). The present worth of the yearly levelized costs are equal to the present worth of the variable cost streams and therefore economically correct decisions can be made by comparing the single levelized cost figures. Megawatt (MW): One million watts of electricity (See watt). Megawatt-hour (MWh): One million watt-hours of electricity (See watt-hour). Municipal Solid Waste: Locally collected garbage, which can be processed and burned to produce energy. Net Plant Capacity: The instantaneous peak dependable output of an electricity generating plant minus any internal electricity consumption (e.g., electricity used to power pumps, fans, etc. needed to run the facility). Typically measured in kilowatts or megawatts. Nitrogen oxides (NOx): Gases formed in great part from atmospheric nitrogen and oxygen when combustion takes place under conditions of high temperature and high pressure; considered a major air pollutant. Parabolic Dish: A high-temperature (above 180 degrees Fahrenheit) solar thermal concentrator, generally bowl-shaped, with two-axis tracking. Parabolic Trough: A high-temperature (above 180 degrees Fahrenheit) solar thermal concentrator with the capacity for tracking the sun using one axis of rotation. Peak demand: The highest demand level occurring during a specified period of time. Pyrolysis: Thermal decomposition of a material in the absence of oxygen. Reliability: A measure of system or plant performance in terms of the continued operation of a plant or the supply of electricity at the proper voltage and frequency. Solar Energy: The radiant energy of the sun, which can be converted into other forms of energy, such as heat or electricity. Transmission System (Electric): An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery over the distribution

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system lines to consumers, or is delivered to other electric systems. Turbine: A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction, or a mixture of the two. Watt: The electrical unit of real power or rate of doing work. The rate of energy transfer equivalent to one ampere flowing due to an electrical pressure of one volt at unity power factor. One watt is equivalent to approximately 1/746 horsepower, or one joule per second. Watt-hour: The total amount of energy used in one hour by a device that requires one watt of power for continuous operation. Electric energy is commonly sold by the kilowatt-hour.

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