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Sunday, 11 February 2007

This commentary is from USAK’s Energy Review Newsletter
http://www.turkishweekly.net/energyreview/TurkishWeekly-EnergyReview6.pdf
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There is an old saying, attributed variously to the Chinese, which goes, "Fool me once, shame on you. Fool me twice, shame on me."
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 proven reserves. Turkish Electricity Generation Public Company has already built two groups of four units, each group with 4X340 (1360) MWe electricity generating output capacity. These are tendered internationally. German/ USA/ Japan companies have received the contracts based on their past similar experiences in their home countries or elsewhere.

The first group A-plant has been designed to generate 1400 MWe and never reached that figure. According to World Bank feasibilities, its average generation is around 500 MWe at nominal continuous rate.

Because its pulverized coal firing/ burning system is not suitable/ appropriate for Afsin Elbistan lignite. It is incorrect

This lignite is not appropriate to fire with pulverized coal firing technique. It has high moisture content. You may fire other lignites in your home country but our lignite is not that lignite.

In order to fire our lignite, we need to make enrichment of the calorific value, we must clean, screen, make necessary enrichments- we must reduce its moisture content in its overall analysis.

Next to the first group we tendered the second group named B-group with the same lignite firing technology. Construction of B-group is completed. It passed the temporary acceptance tests, but the contractors cannot complete the final tests since coal feeding system is not completed. So we have a new thermal power plant without coal feeding system.

Foreign contractors are more than pleased. They completed their work. They received most of their money. Plant is there to stay. But there is no coal to operate the power plant in full load. There will be a new tender to finalize the new coal feeding system. That new tender will take at least 3-4 years to complete.

It is the same as you build your Olympic Stadium in Istanbul, but you do not construct the roads to reach there. It is almost the same.

Even you complete the coal feeding system, it is still doubtful if they can operate at full load. Why???

Because we get our lignite as received from the coal mine without screening/ without cleaning from non- combustible materials. We get them as received without any purification treatment, and send them into the steam boilers as is there is no pre screening, nor any enhancement.

It is necessary to make cleaning, screening, purification, enhancement. In our technical literature, we call this process "Selective mining". Go to "Google" and make the search you will find many serious technical documentation how to make it.

Since our local companies have not enough past references, nor finance capabilities, nor any courage to design, construct the power plants, so foreign companies rushed to join in competition with job hunger. The biggest natural gas exporting country Russia, decided to penetrate the domestic energy projects.

The budget figures are around 5 billion USD equivalent for these two different group each with 1400 MWe electricity generating output capacity. Projects also cover coal mine rehabilitation and their operation.

Not only Russian companies but also German, Japan, UK companies are in competition. There are almost 30 different international groups to compete for Group-C & as well as D.

Turkish Electricity Generation Public Company (EUAS) announced that the tender would have been finalized on 23rd January 2007. They organized prebid conference on 22nd Nov 2006 in their own premises and they asked the interested parties to make site-seeing at Afsin Elbistan coal premises.

Last week, tender (royalty transfer of C&D) postponement to 27th March 2007 is announced. It is our sincere feeling that the tender could be postponed multiple times to reach a date after the local general elections which are scheduled in November 2007.

Each of Thermal Power Plant units is required not less than 1200 MWe. All four generation power plant groups each with approximately 1400 MWe capacity will generate overall 30 billion kWh. Within economic life time of 30 years, they will consume approximately 400 million tons of local coal. For construction of last two new groups, it is presumed that 15,000 construction workers will be employed during construction period of 5-7 years, and after completion 8,500 operating personnel will be needed for running the plants.

World Bank has allocated 280 million Euros fund to make the necessary rehabilitation of the existing group-A. Turkey will add 100 million Euros to the project from her own resources. The group-A is operated with 2-units out of total 4. After rehabilitation, all 4 units will be operated at full load. Could it be possible with pulverized coal firing system? Nobody knows. For the rehab tender, Japanese Hitachi and Itochu, Russian JSP with local Mineks, German Alstom Power and Babcock Borsig, Italian Ansaldo, local Aksa Enerji A.’z. and many others purchased the tender documents to participate.

In the end we understand that local Teknotes with a German group (Babcock & Borsig) and Gama with (Hitachi) parties are shortlisted. Technical evaluations are continued. Final financial proposals are not disclosed yet.

As of last week (Feb 2007), EUAS’ announced that for Afsin-Elbistan A Thermal Power Plant Rehabilitation Project, the Executive Board has taken a critical decision that may bring along important developments. In the official correspondence with the World Bank, the financial prequalification criteria are tried to be lowered. If the World Bank agrees, EUAS may request bids again, according to the new conditions, from the companies that have bought the specifications but could not meet the initial tender criteria.

The interested parties for Group-C are

Limak, E-ON (Germany), Güri’¾, Çal’½k-NTF, Alsim Alarko, Park Teknik, Marubeni Europower (UK), Özdo’°u, Gama, Enka, International Power (UK), Unit International (Belgium), Mitsubishi Corporation (Japan), Demir Export (Koç Holding), Energie Baden (Germany), Mitsui Co. (Japan), Zorlu, Enerjisa (SABANCI), Haba’¾, Teknotes, Karkey, Özta’¾, IC ’�çta’¾, Akenerji, Nurol, JSC Coal Company (Russian), Tekfen, Özalt’½n ’�n’¾aat.

Those companies who purchased the tender documentation to participate to group-D plant are

Limak, E-ON, Güri’¾, Çal’½k-NTF, Alsim Alarko, Park Teknik, Özdo’°u ’�n’¾aat, Gama, Unit International, Mitsubishi, Demir Export(KoçHolding), Energie Baden, Mitsui, Zorlu, Enerjisa(SABANCI), Teknotes, Karkey, Özta’¾ ’�n’¾aat, Akenerji, JSC Coal Company, Tekfen, Suez-Tractebel (Belgium), Özalt’½n ’�n’¾aat.

It is not sufficient to open an international tender to construct the power plants

Turkey needs the scientific research to find which firing technology is appropriate for our specific lignite. It has low calorific value (1150 kcal/kg LHV) high moisture content at about 55% of overall elementary analysis. There are multiple research documentations created by Turkish scientists. These are to be further developed and put into practice.

We need to know how to make enrichment of the available lignite, which firing technology is appropriate for Afsin Elbistan lignite?

The existing power plants are based on pulverized coal firing technology which needs relatively higher calorific value plus less moisture. First group (A) is unsatisfactory. Second is doubtful, not delivered yet.

Pulverized coal firing technique can be successful only if you lower the moisture content and hence higher the calorific value.

The 3rd (Group-C) and the 4th (D) groups (each with 340 MWe) maybe designed to CFB (Circulating Fluid bed) although there are very few similar capacity references in the world, and therefore we have the risk of first try for that capacity plus for that lignite composition.

IGCC (Integrated Gasification combined cycle) firing technology may be employed. Here in this technology you build a sort of refinery to generate "Synthetic gas" from poor lignite then you fire this synthetic gas in the combined cycle power plants similar to natural firing. Seems to be logical but we doubt if it is applicable for our lignite.

It was successful in North Dakota as built by general Electric and funded by USA department of Energy. Here in Turkey who will decide to move on and who will finance? These researches are prepared and presented to decision-makers of Ministries. These are to be shared by the public in order to reach "Common Wisdom" and to be directed accordingly for the best interest of our country.

Those foreign companies who guaranteed the best performance were unsuccessful in group-A power plant. In group-B power plant, it is the same unsuccessful firing technology and therefore we have doubts for success.

Existing Afsin- Elbistan coal mines are to be enriched at coal site prior to feeding into the steam boilers, it has to be cleaned, screed to free from unburned combustibles, its moisture level has to be reduced at least 25% by prior drying. These are easy to make,

In using domestic lignites for electricity generation, by merely relying on foreign technology Turkey can reach to nowhere. Each country designs and develops her own indigenous coal firing technology by herself, and they have to design their own plants accordingly. This activity is too important not to be left only to foreign companies

If Turkey fails to show her local engineering expertise, her market will soon be dominated by these East world- China- India- Korea and local companies will be doing only the simple hard work.

All Turkey needs is courage, at least within our own environment. Turkey has the potential to start constructing her own thermal power plants by relying on her technical expertise. Foreign companies cannot design, construct efficient power plants to fire our special lignite. Only Turkish engineers can do it, since we live all our life with these local fuel.

Our local private companies are to decide if they will continue to have simple works all the time, and vanish, or make drastic change and start doing new investments on engineering talent by supplying the engineering staff with appropriate software and hardware, plus necessary technical licensing, to enable their companies work as turnkey EPC contractor as leading company.

That is the most important decision to take at this time.

We should also appreciate that power generation technology is a very dear, very precious, very expensive issue. It is NOT free of charge, and sometimes it is not even possible to get only with bare money as in the case of your own independent effective/ sound / efficient power generation. You can only get it through your own hardwork by employing your young talents with their latest scientific and intellectual capability.

In base monetary terms for a lignite fired CFB power plant within range of 150 to 350 MWe, you should pay at least 1000 to 1500 USD per unit kW power generation if you purchase the plant direct from abroad plus together with unfavorable concessions on your foreign policies. So if Turkey aims to reduce the concessions in her foreign policy and lower the energy costs, she should depend more on her own talent.

So we would strongly advise Turkish decision makers in the respective ministries to put more incentive for the research activities in the local Universities, more funds for MSc and PhD works, more software and hardware for our scientists, more money for them to spend at site for more research. Turkish Scientific Research Institute TUBITAK must open a permanent research center at Afsin Elbistan coal site to support scientific works.

Those initiatives/ and further incentives will put more value added high tech into Turkish indigenous lignite development in a sound, cost-effective and logical way. In the long run Turkey can also export our local technology in order to construct more thermal power plants in other countries through Turkish contractors.

Turkey can get it through her own hard work by employing her young talents with their latest scientific and intellectual capability on a long tedious journey with blood, sweet and tears.

It is also a matter of survival of the fittest.

Fool me once shame on you, fool me twice shame on me, fool me thrice.....

Haluk Direskeneli, Energy Analyst
HalukDireskeneli@gmail.com