Monday, November 19, 2007

Afsin-Elbistan Thermal Power Plants tender

Istanbul- AA- Electricity Generation Company (EUAS) Director-General Mr. Sefer Bütün announced yesterday in an interview with Anatolia news agency that a tender for the tender to build and operate the Afsin-Elbistan thermal power plants C and D has been rescheduled; the previous tender was called off due to a legal ambiguity.

EUAS has announced that the tender process for Afşin-Elbistan plants C and D will be renewed and provisional clauses have been inserted into the Law on Establishment and Management of Nuclear Power Plants and Sale of Energy to eliminate the ambiguity in electricity purchase that previously derailed the privatization process. A long-delayed bill vetoed by former President Ahmet Necdet Sezer was passed by Parliament on Nov. 9 to help avert an energy shortfall. The amendment made in the law foresees that expropriation of power plants be carried out, not by the company that becomes preferred bidder in the tender, but by EÜAŞ itself.

Mr. Bütün said: “We have eliminated any ambiguity stemming from the Law on Establishment and Management of Nuclear Power Plants through two provisional clauses. The law will be published in the Official Gazette as soon as it is approved by President Abdullah Gül. We have completed all preparations to announce the tender process in 10 days, following the law’s publication in the Official Gazette. We expect the power plant to arouse significant interest among many investors across the country.”

Mr. Bütün said that the expropriation of the power plants, which is expected to cost around $400-500 million, will be carried out by EÜAŞ. The Turkish Electricity Trading and Contracting Co. (TETAŞ) pledges to purchase the electricity produced by the winning company for 15 years. A contract will be signed between the bidding company and TETAŞ to this end.

The land surrounding the Afşin-Elbistan thermal power plants C and D, contains coal reserves of 680 million tons at each site and will be given to the winning company in return for a redevance, in which the company will hand in an agreed amount of coal to the state as license fee for a certain period of time.

With this system, the investor will also have a guaranteed coal supply at a suitable cost to run the power plants for 30 years. Bütün also noted that the company that offers the highest amount of electricity, or highest amount of money in exchange for electricity, and which pledges to complete the construction of the power plant in the shortest time possible will be the preferred bidder in the tender. AA

Sunday, November 18, 2007

Dhahran Saudi Aramco, May 1996

Dear Energy Professional, Dear Colleagues,

In May 1996, a leading US boiler manufacturing company decided to send a marketing team to Dhahran Saudi Aramco facilities to make presentations of their new product “heat recovery steam generators” to upgrade the existing simple cycle gas turbine based power stations in Saudi Arabia.

Mr. Prahlad Kaushik was responsible to make the presentations in Saudi Aramco Dhahran premises, Sales Manager from Babcock & Wilcox International Inc of Barberton, Ohio USA. Since we were the B&W’s closest JV Company to the Saudi Aramco site, I was also asked to join the mission to support at site and get ready for necessary proposal preparation if/when needed in future.

Saudi Aramco, the state-owned national oil company of Saudi Arabia, was/still is the largest oil corporation in the world and the world's largest in terms of proven crude oil reserves and production. Headquartered in Dhahran, Saudi Arabia, Saudi Aramco also operates the world's largest single hydrocarbon network, the Master Gas System. It was formerly known as just Aramco, an acronym for Arabian American Oil Company.

In 1973 the Saudi Arabian government acquired a 25% share of Aramco, increased this to 60% by 1974 and finally acquired full control of Aramco by 1980. In November 1988 the company changed its name from Arabian American Oil Company to Saudi Arabian Oil Company (or Saudi Aramco).

Saudi Aramco produces and exports more crude oil than any other company. Recent production has averaged some 8 million barrels (1,300,000 m³) per day.
I took the non-stop overnight flight by Singapore Airlines from Istanbul to Dhahran. Flight was very comfortable. I recall zero-size beautiful Singaporean hostesses serving the meal.

We landed to Dhahran International airport after 4 hours of flight in their morning time. At the Dhahran customs clearance, the customs officer asked me to open my luggage and he inspected every written item, especially the written documents/ books/ magazines. Since I brought only company documentations, all business, harmless, it was relatively easy for me to pass the inspections. I remember the other passengers to leave all their magazines, books and newspapers at the gate to pass the customs.

At the arrival gate, our local rep was waiting for me. He took me to the special compound where we would be staying that week. The compound was operated by a Muslim Indian family. It was a family run enterprise. We had delicious Indian food open buffet service. It was a popular lodge for expatriates staying in Dhahran for short term.

Each one of us had a big private house with full accessories, air-conditioned, refrigerator, satellite TV etc. We had an open-air swimming pool nearby but we had no appetite to swim due to high heat during day time.

My business associate arrived on the same day from USA. We took a taxi that evening and went to a nearby rent-a-car company. It was also operated by another Muslim Indian brothers. We had a brand new car with air condition. Since my business associate had broad business experience in this environment, he immediately drove the car to a service station, and asked them to check the car/its engine/ tires etc. Although car was clean, it had low oil in engine and brakes, and tires were seriously worn-out. So the Indian mechanic completed the oil and advised us to be careful in driving especially in braking.

The next day we arrived to the head quarters of Saudi Aramco on outskirts of Dhahran. It was a huge establishment.

I recall a digital sign “110” at the main gate. In our air-conditioned car interior, it was quite hot inside. But when I realized that “110” number means Fahrenheit, that was an incredible heat outside (43 degrees Celsius). It was even unbearable to walk from car parking lot to the head office interior, almost 100 meters walk.
To my surprise, it was similar to a small Texas City, expatriate office ladies were in light summer dresses, managers were with business suits. Indoors were all air-conditioned.

From its headquarters in Dhahran on the eastern shores of the Arabian Peninsula, Saudi Aramco manages virtually all of Saudi Arabia's enormous hydrocarbon enterprise.

We were invited into a large conference room. Almost 30 or more all male Aramco engineers were invited to join our presentation. They were all fluent in English; most of them were graduates of leading US universities, very competent in their professions.

We were also very experienced in our supply, steam generators world wide applications.

In our presentation my colleague explained the virtues of combined cycle power plants. The power house in Dhahran was equipped with undisclosed number of GE frame gas turbines all operated in simple cycle mode.

We were explaining them that if they would put heat recovery steam generators at gas turbine exit, generate steam and steam turbines to couple with the existing gas turbines, they would be generating almost 50% more of existing power generation free of charge.

All they should be doing was to invest some more money to buy and install the new heat recovery steam generators and steam turbines. We call that system “combined cycle power plant.”

We were selling heat recovery steam generators. That was a new concept at that time, and a few special companies were manufacturing. We were expecting to receive a big order from our hosts.

In order to prove our marketing product we explained every detail of our equipment, showed our references. Our audience listened to our presentation and they asked many intelligent questions. In order to prove our point, we also prepared a feasibility study earlier. On the projector we showed them a Lotus 1-2-3 spreadsheet and asked our audience to give us their natural gas price in consumption.

In our market gas price is specified as USD per 1000 Nm3 or 1000 Normal ft3. That is also given as maybe 4-6 US Dollar per 1 million BTU. Due to ever increasing oil prices in the world, these prices are now almost tripled or more now.
Anyhow we were expecting that we could show them a payback period less than 3 years. In our own environment, conversion from simple cycle to combined cycle pays back within 6 months. That was so feasible.

Our audience had an internal conversation for declaring their natural gas price. Their response was very surprising for us at that time. They had no price for their gas, maybe a number but so negligible in their accounting books. Gas was almost free of charge. They were paying almost nothing, or a negligible figure for their gas production/ and its consumption. Their gas production facilities were next to giant oil fields and natural gas was a byproduct of their major oil production.
So there was no need for a combined cycle power plant. All they need to do was to run the existing gas turbines in simple cycle mode.

Later in the day, we had lunch together in their company restaurant and evaluated the current world business affairs. So in the end, our marketing was a failure.
The next day we returned to our countries with no market expectation of our heat recovery steam generation products in near future from gas producer countries. You have no chance to sell a design where you do not create a demand. Gas was free of charge and there was neither gain in money invested nor any payback in Dhahran.

Today we have more reasoning for introducing combined cycle power plants. We now know that simple cycle gas firing power plants add more heat into global warming compared to combined cycle systems since their exit gas temperature is between 400-500 Celsius or more, whereby the exist gas temperature is expected to be less than 150 degrees Celsius in combined cycle power plants. The annual CO2 emission is quite high in the oil producing countries, compared to world average.

Measures to lower global warming and more ratifications of Kyoto protocol may create new opportunities to introduce new technology products into new markets.
However HRSGs alone are not a solution to CO2 emission. It generates more power free-of-charge, with some initial cost. It is only feasible if you pay a high cost for your gas, as in the case of our local market, and if you pay a high penalty for each ton of your CO2 emissions.

Your comments are always welcome.

Sunday, November 04, 2007

Afsin Elbistan Site Visit Followup

Dear Energy Professional, Dear Colleagues

On 31st October, 1-2 November, we were in Afsin Elbistan coal mine and thermal power plant premises to participate "Clean Coal Technologies" workshop, which was organized by Chambers of Mining, Mechanical, Chemical and Electrical Engineers of Turkey.

Our workshop agenda covered the following key subjects

- Coal, its importance in Turkish Energy politics
- Turkish Local energy resources, renewable potentials
- Coal mine regional site planning
- Economics of Elbistan Coal Reserves,
- Coal preparation, Enhancing, Selective Mining,
- Recultivation of coal fields, Plant Recovery
- Coal gasification at site, underground in the mine field
- Coal gasification and liquefaction, above ground
- Applicable Coal firing technologies,
- Assessment of existing indirect pulverized coal firing
- New Coal firing technologies, Circulating Fluidized Bed,
- Integrated gasification combined cycle, applications
- Flue gas desulphurization, e/p dust collectors,
- New High Voltage Power transmission applications/ new solutions

We all know that the most important electric power generation projects are in "Afsin Elbistan" region where the largest lignite mines are located in Turkey; including almost half of the entire local proven reserves.

The existing power plants (Groups A and B) are based on pulverized coal firing technology which need relatively higher calorific value plus less moisture. Indirect type Pulverized coal firing technique can be successful only if you lower the moisture content and hence with higher the calorific value.

Available coal has a challenging content with very poor Low calorific value at about average 1150 kcal per kg, and 55% moisture, 20% ash, 1.5-4% sulphur.

We had the opportunity to listen/ visualize important presentations of Turkish academicians as well as market experts from public and private enterprises.

On Friday morning, we had the site visit to Elbistan lignite mine field in Kislakoy. We were very proud to observe that Kislakoy Lignite mine fields were extraordinary. It was a huge man-made valley, with huge bucket wheelers, reclaimers, and stackers - coal band conveyors in operation. It is my feeling that there are so few similar examples on the world.

We then passed near recultivated coal fields with new trees planted on. It was an extraordinary application of recultivation on already depleted coal fields.

Finally we arrived to the thermal power plants, named A and B each with 1400 MWe installed electric generating capacity at full load.

Thermal Power plant (A) has no fluegas desulphurization. It was built in early 1980s, and its firing technique was based on indirect firing of pulverized coal. Power plant (A) electrostatic precipitators were designed at low capacity dust collecting. One other set of E/Ps were loaded with 30% of incoming pulverized coal for drying prior to final firing in the boiler combustion chamber. Hence they cannot carry the extended load and they are out of service most of the time.

In the indirect coal firing technique, you dry the incoming coal/ lignite first in the coal mills with hot flue gas and then you send 30% of that pulverized wet coal into a second set of electrostatic precipitators (vapor/brueden filters at +62m boiler elevation ) for further drying with outgoing hot flue gas.

This “indirect firing” was borrowed from cement process; it might be called technology plagiarism, and that can not be proven after 20 years of interrupted operation. Operation was almost in mess, non-stop operation was not possible for 4 units altogether. When they call that “indirect coal firing” as the great western technology, I cannot conceal my smile.

E/Ps are out of service most of the time, and the 2 of total 4 stacks in operation pour huge flyash into atmosphere. If E/Ps are not working properly in a thermal power plant, and furthermore if they have no flue gas desulphurization on the stacks, then it is our sincere feeling that those power plants have to be stopped for operation since their harm to nearby environment is greater that the expected gain in electricity generation to the national grid.

We then visited the thermal power plant named B. That was brand new thermal power plant in final acceptance until year 2008.

We have been informed that the major foreign contractor company in charge of boilers had bankruptcy in year 2002 and the plant was completed by jointly and severally liable partner companies. Practically there is limited or even almost no engineering capability nor responsibility in case of any boiler malfunction. Local contractor companies have limited major boiler engineering capability and/or contractual responsibility; hence they just wait in their prefabricated site facilities to pass the final acceptance period.

Another point is that B Thermal power plant has no individual coal feeding system in operation. That is tendered but the new facility is expected to be in operation in the next 3-5 year time. There is one temporary coal feeding system 5-km long from nearby Thermal Power plant A, but that extension line seems not sufficient to operate the B unit in full capacity. So you have a thermal power plant with no major incoming fuel facility to fire.

Thermal Power plant Unit-B is brand new, clean, and better, fully equipped with sufficient capacity flue gas desulphurization systems, with high capacity flue gas dust collecting electrostatic precipitators. We visualized almost no apparent dust on the existing stacks. It has 4 units of water based cooling towers and 2 common stack for all 4 units. We could see only harmless vapor outgoing from cooling towers.

You can collect the outgoing dust- fly ash, but thermal power plant has no ash dam/ no ash collecting area. Ash is collected in nearby open area and left there at the mercy of nature’s hard wind. When the hard wind blows, everywhere comes under ash rain.

Another important point to note is that the thermal power plant- Unit-B is constructed at the center of new coal field, so you have no ability to get coal underneath of the power plant. That is another poor planning.

B plant was in operation with 2 units when we were in the plant. One boiler had boiler tube failure. The other was out of operation due to water shortage.

Both thermal power plants were equipped with water cooling. That water cooling process needs huge amount of water. Available water is not sufficient for both plants to be in full operation. If they do, then the nearby municipalities can not supply water to their citizens for their household consumption. We were told that new water dams were in tendering and they would be in operation within 3-5 year time. If you need that much water, why don't you make the power plant design for air cooled operation? It would certainly cost some more money but you could have all boiler units in operation when needed.

This site report is a sort of black humor. Clean Coal Technologies Workshop in Elbistan will create a great opportunity for all interested local parties to enable them to learn from past mistakes, to investigate the possible/ applicable technologies, to investigate and assess the available intellectual capability of the local human resources.

We were very pleased to join/ support/ contribute to the event, hope to organize similar events in international platforms.

Your comments are always welcome.
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