Hidden costs make coal expensive

Activists with the message: “Coal is just for barbecues”. Photo: Anja Vatterodet/flickr.com/cc by-sa

Unexpected costs and technical disappointments have been recurrent while building the Moorburg power station – a project that is part of a 6 GW coal power expansion in Germany.

Coal combustion accounts for over 20 per cent of European electricity production. In contrast to natural gas and renewable energies, the dependability of coal power is unaffected by geopolitical instabilities or meteorological conditions. According to a Reuters analysis of April 2014, increased coal usage supplemented by renewable energies could eliminate a quarter of EU gas imports from Russia by 2020.

Germany will be adding nearly 6 gigawatts (GW) of new hard coal generation before the end of next year, including the 1.64 GW Moorburg dual-turbine power station in Hamburg. Construction by the Swedish state-owned Vattenfall GmbH, however, has been plagued by costly delays due to faulty design assumptions. Scheduled operation in 2012 was postponed for two years to replace more than 10 per cent of the T24 boiler steel after riveting seams became brittle at high firing temperatures.

Flow-through plant cooling from the Elbe River would also have heated 64 cubic metres of discharge water per second above the legal maximum limit of 28°C during the summer months. Full-year operation has now been achieved by installing two recirculation cooling towers for €200 million to reduce water intake to 1 cubic metre per second.

In 2009, Greenpeace estimated that all required technical revisions had added €600 million to the original Moorburg construction price of €2 billion. Further costs of €200 million have since been incurred by boiler modifications. Recent unspecified problems will nevertheless prevent half of the power station from entering scheduled service in autumn 2014.

Output generation at Moorburg can be adjusted from 35 per cent to 103 per cent depending on the amount of renewable electricity on the power grid. Despite this adaptable performance, however, the long-term reliance on coal remains incompatible with European climate policy.

Up until 2010, a carbon capture and storage (CCS) retrofit design was foreseen as a means of fulfilling EU decarbonisation objectives. However, the electrical power demanded by CO2 capture and compression processes could have reduced the grid output capacity by nearly a third. Since internal plant thermal losses increase as a result, additional cooling water would have been required, which could not have been provided by the Elbe River.

Furthermore, no nearby site had been made available for installing the necessary CO2 separation and compression equipment. Public opposition to supercritical overland pipelines and geological storage sites has finally caused all CCS projects in Germany to be abandoned. For Vattenfall, this development has providentially alleviated the need for additional equipment expenditures. Those costs might never have been recovered from grid power sales, which would have been reduced to almost two thirds by CCS parasitic energy losses.

Hamburg’s CO2 emissions, which are currently on a trajectory declining below 15 million tonnes annually, will soon rise by over 50 per cent when 12,000 tonnes of coal are burned per day at Moorburg. The smooth transition to 4 Mt carbon dioxide once envisioned for 2050 may also not be realized for an additional reason.

Vattenfall has cancelled original plans to deliver municipal heat from the power station, which would have raised coal usage efficiency from 46.5 to 55 per cent. A separate gas-powered plant in the nearby city of Wedel will instead provide district heating services, further increasing total greenhouse gas emissions.

This separate arrangement, however, is actually better suited to the growing market penetration of renewable energies. During blustery cold weather, greater amounts of wind energy are fed into the grid. Heating demand increases under the same conditions, while the need for conventional power generation declines.

As a result, combined heat and power production at the new Trianel €1.4 billion coal plant in the German city of Lünen will result in operational losses of €100 million this year alone. Electricity generated in synchronization with heat cannot compete with surplus wind energy fed into the grid at the same time.

As licensed, the Moorburg power station may emit up to 400 tonnes of particulates annually. However, effluent dispersal at high altitudes will not be detected by municipal air quality monitoring. Vattenfall also maintains that legal requirements for sulphur dioxide and nitrogen oxides will be “significantly undercut” during all phases of operation.

Prevailing regulations nevertheless do not guarantee state-of-the-art pollution control. Although Germany is smaller than the US state of Montana, just nine lignite generation sites produce 11 per cent of the mercury effluents measured in the entire United States at over 1,300 coal and oil fired installations. The Vattenfall Lippendorf power station near Leipzig is the largest German toxic metal point source with 482 kilograms of Hg per year, about 1.8 per cent of total large-plant US mercury emissions.

Expensive filter upgrades would nevertheless be difficult to fund from coal power revenues increasingly in competition with renewable energies. CCS ventures already constitute premeditated stranded investments. Relatively clean-burning natural gas is an expensive alternative, but it can be sparingly deployed in inverse proportion to expanding renewable power usage.

Jeffrey H. Michel


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