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CARBON CREDIT

- A New Measure to Shed off GHG Emission

Subhasish Mitra
M.Tech
Department of Chemical Engg, IIT Kanpur
Combined power cycle: Brief Recap

Rankine cycle

Brayton cycle

Fuel used : Natural Gas


Plant capacity : 400 MW
Power Plant Process Flow Diagram-
Base case – CCS facility excluded:

HP Steam turbine LP Steam turbine

Steam condenser

Steam boiler
Flue gas disposed to
Gas Turbine Block stack – GHGs emission.
CO2 Emission – A Known Nuisance

1. CO2 is the ubiquitous Green House Gas and liable for global
warming.

2. Fossil fuel powered power plants are the epicenters for CO2
emission due to voluminous flue gas disposal beside other
industries, automobiles and residential release.

3. Major concern is observed in the recent past to reduce CO2


emission through various measures and policy formulation (e.g
Kyoto protocol).
Brief Case Study:
• Govt decided to put mandate on implementing CO2
capture facility at the power plant site.

• Normal emission limit from power plant : 1.65 to 1.95


million ton CO2/yr.

• Emission limit posed by EPA is 7% reduction on 1990


emission figure of 0.479 tons of CO2/MWh generated
which translates to 1.425 million ton CO2/yr for our plant.

Plant capacity : 400 X8000 Mwh/yr


Where does our plant stand?

• CO2 Emission : 4079 kmol/hr which translates to 1.44


million ton CO2/yr.

• The plant exceeds EPA recommended limit by 0.012


million ton CO2 p.a.

• Since CO2 emission by the plant is more than EPA


recommendation, so plant decides to invest upon CCS to
earn CARBON CREDIT.
What is Carbon Credit?
Some definitions:

•Key component of national and international attempts to mitigate th


growth in concentrations of (GHGs). One Carbon Credit is equal to
one ton of Carbon.

• An instrument created to represent one metric ton of CO2 avoided


or removed by a carbon reducing project.

• A "credit" to emit a ton of carbon dioxide (CO2) issued as part of an


emissions trading scheme such as the European Emissions
Trading Scheme.
How does Carbon Credit work?

Heavy CO2 producer pays


penalty through buying credits
from those firms (normally those in
GREEN energy business) who
release CO2 below EPA tolerance
level.
Company adopts this CCS scheme

Void oil/gas
well for
storage

NG to
Power Plant

Amine To Oil/Gas
absorption reservoir for EOR
plant

Oil out
Amine absorption plant – simplified PFD:
CCS Project Feasibility Analysis:
• A Hysys simulation is made to study the feasibility of
integrating proposed CCS process with the existing plant.

• Major challenge is to provide huge thermal energy to the


stripper reboiler. Even auxiliary boiler is also reported.
But simulation shows reboiler demand can be internally
met.

• Around 85% CO2 scrubbing efficiency is obtained from


simulation.

• With all economic analysis, it turns out that project is


feasible.
Power Plant Process Flow Diagram-
Modified case – CCS facility included:

CCS unit: Flue


gas compression,
absorption &
transportation

Stripper reboiler
steam is supplied
from the partially
derated LP steam
turbine.
CO2 absorption unit:

Steam to stripper
reboiler supplied
from LP steam
turbine O/L.
CO2 Transportation Unit:

Transport
compressor Transport pump
Energy Efficiency Before Implementing CCS:

Energy efficiency before CCS

GT output 400 MW
ST-1 output 65.31 MW
ST-2 output 16.63 MW
Compressor 136.2 MW
Boiler heat input 283 MW
Condensate pump 1.585 MW
Heat input by NG@LHV 1072.65 MW
Overall efficiency 0.45
Gas turbine cycle efficiency 0.37
Rankine cycle efficiency 0.284
Combined cycle efficiency 0.55
Energy Efficiency After Implementing CCS:

Energy efficiency after CCS

GT output 400 MW
ST-1 output 65.31 MW
ST-2 output 9.869 MW
Compressor 136.2 MW
Condensate pump 1.585 MW
Boiler heat input 283 MW
Flue gas blower 47.94 MW
Rich amine pump 0.067 MW
Lean amine pump 0.102 MW
Transport compressor 18.42 MW
Transport pump 1.432 MW
Heat input by NG@LHV 1072.65 MW
efficiency 0.38
Efficiency reduction 15.56 %
Assumptions Behind the Economic Analysis:
• The existing Power Plant is paid-off.

• The company adheres to Carbon Tax (for natural gas


fuelled plant it is 0.0022 $/kwh).

• The Management Body is not willing to invest lump sum


for CCS project so they decide to go for a bank loan.

• Project cost is compensated through “Carbon Credit”


earned and a systematic hike in electricity price.

• Price hike in electricity is rational since it forces users to


reduce consumptions and drives towards a new supply
demand equilibrium.
Important Facts Behind Economic Analysis:

• Price hike in electricity follows yearly compounding,


i.e. P1 = P(1+i)n and stops at break even point. n = no of years.

• Straight line depreciation model is followed.

• Payback period is calculated as


Capital Investment/(Carbon Credit Earned + Depreciation/yr)

• ROI = (Net Profit/Capital Investment) x 100

• Credit from injecting CO2 for EOR not considered.


• Decline in Carbon credit due to escape from sequestration not
considered.
Important Figures Behind Economic Analysis:

• 1 Carbon Credit = 11.4 Euro ($15.39)

• Cost of electricity : $0.09/kwh

• Investment cost for NG power plant: $730/kw

• Investment cost for NG power plant with CCS: $1089/kw

• Carbon reduction cost : $ 37 – 74/ton of CO2

• Energy penalty for installation of CCS : 14 – 16%


Cooling Utility Cost for CCS:

Equipment
Total cooling
cooling duty Cost $/ton of CW flow
cost ($/yr)
Cooling cost (MW) CW rate (t/hr)
Flue gas blower
aftercooler 164.6 0.021 17169.68 2884506.259
Stripper column
condenser 17.96 0.021 1873.44 314737.135
Precooler 18.87 0.021 1968.36 330684.284
Compressor stage-1
cooler 6.578 0.021 686.18 115275.104
Compressor stage-2
cooler 5.834 0.021 608.55 102236.996
Compressor stage-3
cooler 5.83 0.021 608.14 102166.898
Compressor stage-4
cooler 10 0.021 1043.12 175243.394

Total 4.02 million $

Cooling water Delta T = 80C, Sp. Heat capacity = 4.314 KJ/Kg/K


Electricity consumption cost for CCS:

Electricity cost
Total cost ($)/yr
Equipment Capacity (MW) ($) / kwh

Flue gas blower 59.17 0.09 42604444.44

Rich amine pump 0.08 0.09 59511.11

Lean amine pump 0.13 0.09 90666.67

Transport compressor ST-1 5.88

Transport compressor ST-2 5.83

Transport compressor ST-3 3.97

Transport compressor ST-4 2.68

Total compressor power 22.67 0.09 16323555.56

Transport pump 1.76 0.09 1266666.667

Total 60.34 million $


Raw Material Cost:
Raw material cost
Unit cost Total cost Absorption
Qty (kg/hr) ($/kg) (million $/yr) loop inventory

10 min
(assumed)

MEA make up 688350 2.42 1.7 529.5 ton

Basis: Reported CO2 reduction


Make up is replacement of degraded MEA cost in literature:

MEA degradation rate : 2.5 wt% / week $37-74/ton of CO2

Absorption loop inventory : 10 min

*Total Carbon Reduction Cost :


$ 56.8 million/Ton of CO2
*5% contingency cost is included.
Expenditure Summary for CCS:

Investment cost
143.6 million $
Loan repayment duration (Year) 10
Bank loan interest rate 15 %
Annual loan installment 14.36 million $
Annual Carbon reduction cost 69.54 million $
Plant life 30 years
Salvage value 0 million $
Depreciation/yr 4.79 million $
Electricity generation reduced 6.76 Mwhr
Revenue lost/yr 4.87 million $
Hike in electricity price 5 % pa
Revenue/yr through electricty 14.4 million $
Taxable revenue 9.61 million $
Tax deduction 10 %
Revenue after Tax deduction 13.44 million $
Carbon credit earned/yr 18.62 million $
Payback period 6.14 yrs
Project cash flow for first 10 yrs:

Revenue Taxable
Revised Loan
after tax Revised revenue
Productio electricit Revenue interest Princip Net ROI Cost
Year including revenue from after
n cost y charge after tax repaymen al amt profit (%) Delta
carbon electricity depreciati
($/kwh) t
credit on

1 110.31 32.06 0.095 14.40 9.61 13.44 35.9 14.36 -78.25 -54.49 78.25

2 108.16 45.66 0.099 29.52 24.73 27.05 33.746 28.72 -62.49 -43.52 62.49

3 106.00 59.95 0.104 45.40 40.61 41.34 31.592 43.08 -46.05 -32.07 46.05

4 103.85 74.96 0.109 62.07 57.28 56.34 29.438 57.44 -28.89 -20.12 28.89

5 101.70 90.71 0.115 79.57 74.78 72.09 27.284 71.80 -10.99 -7.65 10.99

6 99.54 107.25 0.121 97.95 93.16 88.63 25.13 86.16 7.71 5.37 -7.71

7 97.39 108.38 0.121 99.20 94.41 89.76 22.976 100.52 10.99 7.65 -10.99

8 95.23 108.38 0.121 99.20 94.41 89.76 20.822 114.88 13.14 9.15 -13.14

9 93.08 108.38 0.121 99.20 94.41 89.76 18.668 129.24 15.30 10.65 -15.30

10 90.93 108.38 0.121 99.20 94.41 89.76 16.514 143.60 17.45 12.15 -17.45

* All cost figures are in million $.


CCS Project break even analysis

120 Hike in electricity


price stopped.
100
Cost figures in million $ / % ROI

80
60
40 Production cost
20 Revenue after tax
0 ROI
-20
-40
-60 Break even
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 point at ~ 6 yrs
In Nutshell:
• A case study involving techno economic analysis is carried out
reflect impact of CCS incorporation in an existing power plant
unit.

• Installation of CCS is both capital & energy intensive and it puts


penalty on plant capacity. Research is going on to reduce carbo
capture cost.

• Carbon credit is an incentive to the attempt to save environmen


and seems to be a good motivator to boost up morale of
industries for curbing GHG emission.
Thanks for
Your Attention!