Wednesday, November 18, 2015

Under Pressure – Botswana’s Coal Energy Resources

Dumelang*. As I have been reading the local press, internet articles and other literature, I was surprised at the number of coal-based projects that have been proposed for Botswana over the years. I was having trouble keeping them all straight so I decided to collect, summarize, and tabulate these coal projects. At the same time, I wanted to take a hard look at coal as an energy resource.

It is generally believed that Botswana has significant coal resources and it is clear, based on the existing, planned, and proposed projects listed in the table in the Coal Projects in Botswana tab on this blog, that coal will continue to be an important resource for Botswana well into the future. These projects range from the new coal-fired generators at Morupule, the refurbishment of the Morupule A operation, new coal-fired operations, coal-bed methane, coal-to-liquid projects, and new mining operations.

A number of years ago there was a flurry of project proposals to start up new coal mines and to build new power plants on-site or close to these collieries to feed electricity into the Southern African Power Pool. However, since the construction and partial commissioning of the large Kusile (4800 MW) and Medupi (4800 MW) coal-fired projects in South Africa, in combination with load shedding, efficiency drives, and renewable energy projects, there appears to be less call for smaller independent coal-fired power plants. Few, if any, of these smaller projects have gained traction.

The list of coal projects proposed for Botswana is long. (See the Coal Projects in Botswana tab on this blog.) Most of the projects are at varying stages of preliminary assessment—some are still under review, some have completed detailed feasibility studies, and some are just proposals—but most are currently on hold because of the large capital investments required and low coal prices. Moreover, many of the projects have been suspended because they are export-market driven and require the establishment of railroad infrastructure to Namibia or Mozambique to deliver coal to the international markets.

Coal is a troublesome energy resource. It is cheap and readily available. One tonne of coal, which costs about $50 on the world market, contains 24 000 MJ of energy—or approximately four times that of a $50 barrel of oil. Despite its high energy content, coal needs to be converted into another energy form to be useful: this could be as electricity or, in the case of the Sasol operations in South Africa, into liquid hydrocarbon fuels.

The ready availability and high energy content of coal is offset by the high levels of pollution associated with its use. Coal consists largely of carbon, as well as varying amounts of hydrogen, oxygen, nitrogen, and sulfur. Coal used for electricity generation normally has a carbon content greater than 75% and also contains compounds of aluminum, calcium, and silicon that form ash when the coal is combusted. Coal is also contaminated with deleterious metals, such as cadmium, mercury, selenium, lead, and others. The key problem associated with coal is that, on burning, it releases these nasty elements, as well as fine particulate matter, sulfur dioxide, nitrogen oxides, and carbon dioxide: these all end up in the off-gases and are released into the environment. Some coal plants incorporate expensive particulate-capture and gas-scrubbing units to reduce the emissions, but considerable quantities of these pollutants are still released into the atmosphere. In terms of greenhouse gases and increasing levels of carbon dioxide in the atmosphere, coal is particularly bad and coal-fired electricity is the largest contributor to man-made carbon dioxide emissions.

Coal or fly ash is another problematic byproduct of coal combustion. This consists largely of a fine, non-combustible silica and calcium oxide residue and can contain appreciable amounts of deleterious elements like cadmium, chromium, and others. The ash is stored on-site at power plants or is disposed of in landfills. In some cases, it can be used as a component of Portland cement.

It is all these nasty byproducts (deleterious metals, coal ash, carbon dioxide, fine particulates, and sulfur dioxide) that are behind the widely accepted assertion that coal is a dirty fuel…And this does not even begin to consider the issues associated with coal mining—which is a dangerous, difficult, and complex operation that has significant environmental impacts. Mined coal cannot just be used as is: it needs to be treated through various mineral-processing operations to upgrade its quality and reduce the portion of non-coal components. This beneficiation requires water and also produces a significant quantity of byproducts – known as middlings and discards. These byproducts can represent up to 50% of the mined ore and are typically accumulated on site at the colliery and stored indefinitely. Moreover, the sulfur in this mining waste reacts with air and water to form sulfuric acid which leads to acidic runoff, known as acid mine drainage, which, if not controlled, can contaminate local water supplies.

In a future post, I will take a look at “clean coal” and the many options available to mitigate the harmful effects of coal combustion. Each of these approaches has pros and cons, but in every case there is a significant economic penalty to be paid. As a result, promoting coal projects with state-of-the-art clean coal and pollution control installations requires enormous political will, stringent regulations, and the willingness to take on increased capital and operating costs—which will ultimately result in higher electricity costs. This is a price that many less developed countries are simply not in a position to pay.

When I cover coal as an energy source with my MBA students in the Energy and Sustainability track at Franklin Pierce University, I have them consider the entire value and utilization chain associated with coal, along with its inputs and outputs, so that they can appreciate the complexity and implications of the coal-fired electricity business. A summary of this value chain is reproduced below. As can be seen, the coal-fired electricity business is complicated, with several energy, water, and labor inputs and numerous outputs that have significant impacts on the environment. All of these energy and water inputs and the polluting and harmful outputs need to weighed against the benefits of useful electricity generation—without which our modern lives would not be possible.
Coal Value Chain

Despite these drawbacks, coal will continue to be a very important fuel for a very long time all around the world. Some countries are moving away from coal and closing down aging coal plants, but these countries possess alternative sources of energy, such as those of natural gas and nuclear reactors, and, in some cases, renewable energy from solar and wind. These alternatives are not options for less developed countries like India, China, and much of Africa at present: coal will continue to be a very important part of the energy supply in these countries, regardless of the long-term environmental impacts. Ideally, one would like all coal-related projects to carefully evaluate the long-term environmental impacts of coal mining and coal burning against the immediate benefits of electricity production, but, unfortunately, this is (for various reasons) not always done.

Exploiting the coal resources in Botswana is a challenging endeavor. Mining is straightforward, but, once mined, the coal becomes a stranded resource. It is difficult to export due to the lack of direct rail links to the port of Walvis Bay in Namibia or to Mozambique via Zimbabwe, and there is limited rail traffic to Richards Bay in South Africa. Moreover, exporters of Botswana coal have to compete against large established coal mines in South Africa that have better access to transportation and export networks. There have been several proposals to build rail links to Namibia or Mozambique, but, owing to the cost of these rail links and low prices for coal, there has been little progress of these beyond the discussion stage.

The world is presently awash in coal: demand in countries such as the US and China is down; there is an excess of supply from coal-exporting countries like the United States, Australia, and Indonesia; so coal prices are depressed. The figure below shows spikes in coal prices in 2008 and 2011, which drove a lot of the interest in coal mining and coal-based projects. Since then, however, prices have fallen off considerably and are currently the lowest they have been in the last 10 years.
Source: InfoMine**
The exploitation of coal resources in Botswana is further complicated by the present water crisis in the country. As shown in the value chain above, coal mining and electricity generation require a great deal of water: any coal-related projects need to ensure a steady supply of water in the face of challenging shortages in the country.

Overall, coal exploitation in Botswana can be viewed as being under pressure from five directions, as shown in the figure below: 1) capital investment, 2) coal prices, 3) water resources, 4) environmental impact and increasingly stringent legislation, and 5) lack of transport infrastructure. Pressure can be relieved, to a degree, by exploiting these resources internally, such as by building more in-country power plants and perhaps even coal-to-liquid operations. Even so, such projects need large capital investments, large water requirements, and will still have significant environmental impacts. The successful exploitation of coal in Botswana will require dealing with all of these factors.
Coal Pressure

In my next blog, I will take a closer look at coal projects that do not involve the generation of electricity, particularly those involving coal-bed methane and coal-to-liquid production. Until next time, remember to turn the lights out when you leave the room so that less coal has to be burnt.

Tsamayang Sentle***
Mike Mooiman

(*Greetings in Setswana)

(**Coal pricing is complicated: it depends on source and destination locations, quality, ransportation, and a host of other factors, so I have just used the North American Central Appalachian price (CAPP) as a proxy for international coal prices.)

(***Go well or Goodbye in Setswana)

Wednesday, November 4, 2015

History of Electrical Energy Generation in Botswana

Dumelang*. In this post, I take a look at historical trends to see how electricity generation in Botswana has changed over time. I noted in an earlier post about Sankey diagrams that Botswana generated only 7% of its electricity needs in 2012. This seemed an extraordinarily low number, so, in my research for this post, I also took a close look at the source data and uncovered some interesting discrepancies.

Utility-scale electricity generation in Botswana began in 1970 with the commissioning of a small oil-fired station in Gaborone. This provided for the needs of the capital and surrounding areas until its decommissioning in 1989. In 1974 a 65 MW coal-fired operation was built in Selebi-Pikwe to service the mining industry. 1985 saw the start-up of a large coal-fired plant at Morupule near Palapye and the shutdown of the Selebi-Pikwe plant a few years later in 1989.  The Morupule operation consisted of four 33 MW air-cooled units, providing a total generation capacity of 132 MW. This operation, known as the Morupule A plant, served Botswana’s needs well for a time. However, with increasing population, electrification of the country, and industrialization, demand rose and increasing quantities of electricity had to be imported from neighboring countries. The construction of the Morupule B coal-fired plant, consisting of four 150 MW air-cooled units, commenced in 2009. The deadline for completion was 2012, but many startup and operational problems have been encountered and today—three years past the scheduled completion date—the new plant has not lived up to its promise. There have been frequent breakdowns and, as a result, a great deal of Botswana’s electricity is still sourced from the Southern African Power Pool (SAPP).

Location of Morupule power plant near Palapye

In the figure below, I have plotted two sets of data for the past 18 years. The orange line shows the percent of electricity generated in-country by the Botswana Power Corporation (BPC), largely from their Morupule operations. The blue bars show the total annual amount of electricity (generated locally and imported) supplied in gigawatt hours (GWh). Data for 2015 are for the first three quarters only.

Data Source: 1997 to 2004; Adjusted BPC annual report results. 2004-2015; Statistics Botswana

An examination of the data shows that, from 1997 to 2008, the amount of electricity supplied steadily increased, with a compounded annual growth rate of 5.7%. During this same period, the proportion of local generation, which was as high as 60% in the late 1990s, decreased. This is to be expected from a fixed source of local generation in the face of increasing demand. However, the decline in local generation accelerated because of operational problems at the aging Morupule A power station. In 2011, an extreme situation was reached, when only 9% of the electricity supply was locally generated.

The difference in supply was made up of imports from the SAPP. However, since late 2008, supply shortages in the entire SAPP region have become acute and electricity imports to Botswana were reduced. As a result, rolling blackouts, also known locally as load shedding, were introduced across the country to curtail demand. Since then, the annual electricity supply has been up and down and there have been some years (specifically 2009, 2011, and 2013) in which energy supply was actually lower than the previous year. Load shedding, combined with the introduction of demand reduction initiatives, prepaid electricity, smart metering, and hot water load control, has slowed the rate of electricity supply growth since 2008 to a compounded rate of ~3% per year.

Since 2012, with the startup of the Morupule B operation, the local supply situation has improved and there have been year-on-year increases in electricity output from this operation. In 2014, Botswana again generated 60% of its electricity demand, significantly reducing the amount of electricity that it needed to import. However, the first quarter numbers for 2015 are disappointing because they indicate a similar level to that of 2014. It was anticipated that this value would be higher, but the performance of the Morupule B plant has been problematic, with only 300 MW of the specified 600 MW generation capacity currently available. We are hopeful for an improvement by the end of the year.

(In my post, The Big Picture, I noted that Botswana only generated 7% of its electricity needs in 2012. However, the historical data in the figure above indicate that this low actually occurred in 2011. My earlier statement was based on data from the International Energy Agency, IEA. A careful analysis of the IEA data led me to conclude that they were using information from the BPC annual reports. Because the BPC financial year ends in March, use of their data requires adjustments to take into account that their annual numbers actually incorporate the last three quarters of the previous year’s data. As a result, IEA reports of low levels of energy generation in 2012 actually correspond largely to the previous year, 2011.)

In my last post, I noted that energy students sometimes confuse capacity factor with conversion efficiency. The concepts are quite different: capacity factor is a measure of how much of the theoretical capacity of an energy-generating device was utilized over a time period (typically one year), whereas conversion efficiency is a measure of the effectiveness of the conversion of one form of energy to another, such as the conversion of energy in coal to electricity. To get a sense of conversion efficiencies, let’s take a closer look at the Morupule coal-fired plant.

According to the data provided by the IEA, the Morupule operation burnt 169 kilotons (kt) of coal and generated 250 GWh of electricity in 2012. To calculate conversion efficiency, we need to compare the input energy in coal and output energy as electricity in the same energy units by converting the energy in coal to GWh equivalents. If we assume that the Morupule plant burns coal with a heat content of 24 MJ/kg (a typical value for Botswana coal), we can calculate that 169 kt of coal contains 7.1 billion MJ of energy. Considering that there are 3.6 MJ in a kWh, we can calculate that the energy input was equivalent to 1126 GWh, which generated 250 GWh of electricity.

With this common set of units, we can now calculate that the conversion efficiency is Input/Output x100 = 250/1126 x 100 = 22%.

In fossil fuel plants, a different measure of conversion efficiency is often applied. This is heat rate, which is the amount of input energy (usually measured in kilojoules (kJ)) that is needed to produce one kilowatt hour (kWh) of electricity. One kWh of energy is equivalent to 3600 kJ, so if a fossil fuel plant is 100% efficient, it would have a heat rate of 3600 kJ/kWh, i.e., the plant would take 3600 KJ or 1 kWh of coal-based energy and convert it into 1 kWh of electricity. A plant operating with 50% efficiency would have double this heat rate or 7200 kJ/kWh (= 3200/0.5). At 22% conversion efficiency, the heat rate would be 16,363 kJ/kWh (= 3200/0.22).

Compared with other coal-fired plants around the world, which have conversion efficiencies of 30 to 40%, this value of 22% seemed extraordinarily low. To understand this discrepancy, I undertook a careful review of the IEA data and determined that they used a standard conversion efficiency of 22% every year to back calculate the amount of coal burnt in producing electricity in Botswana, i.e., their coal consumption numbers are not based on actual coal consumption data! The correct way to do this calculation would be to use the actual coal consumption numbers for the Morupule coal-fired operations. Unfortunately, I have not yet been able to source this data.

Further research led to some old 2006 data from SAPP which indicates that conversion efficiencies for the old Morupule A plant were actually more of the order of 30%. Additional evidence for higher conversion efficiencies was provided by data from the World Bank, which indicate that the heat rates at the Morupule plant were 11,621 kJ/kWh. This is equivalent to an efficiency of 31% (= 3600/11,621 x 100). As a result of this analysis, I am forced to conclude the IEA numbers for coal consumption in Botswana have a high bias.

A conversion efficiency of 30% (although significantly better than a value of 22%) still means that only 30% of the energy in coal ends up as useful electricity. The remaining 70% is lost due to process inefficiencies and heat losses.

To understand why this occurs, we need a better understanding of how the Moropule coal plant works. Coal is burned and the heat produced is used to boil water to generate steam. The steam is used to drive a turbine which then drives an electrical generator. In the process, we have the conversion of the chemical energy in coal, to thermal energy in the steam, to the kinetic energy of the turbine, to the electrical energy leaving the generator. In this process, there are heat losses in the hot off-gases that leave the combustion chamber and then exit those tall stacks at the Morupule operation. Another problem with a steam plant is that steam can only be used once to turn the turbine: it then needs to be condensed into water so that the water can be again be boiled to generate steam. The Morupule plants are air-cooled so the energy that was in the hot steam is lost to the atmosphere during the cooling process. The challenge with air cooling is that this is an energy-intensive operation itself, because large air fans need to be powered to drive air past heat exchangers. A significant portion of the energy generated by an air-cooled plant, typically 10%, is used to run the cooling units, which reduces the amount available for distribution. 

There are certainly coal-fired steam plants that have higher conversion efficiencies. Many modern coal-fired power plants have conversion efficiencies greater than 35% and water-cooled plants, such as those located near rivers or oceans, have even higher efficiencies. The world’s most efficient coal plants have conversion efficiencies as high as 47%. One hopes that, as the operational problems are solved at the Morupule plant, attention will be focused on improving its conversion efficiency to above 30%.

Until next time, remember to turn off those lights when you leave the room

Tsamayang Sentle**

Mike Mooiman

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(*Greetings in Setswana)
(**Go well or Goodbye in Setswana)