MUSCAT, SEPT 29 - Oman’s second stab at coal-based power generation — nearly a decade after it jettisoned its first bid in 2009 — has compelling reasons to succeed, not least because of the nation’s quest to diversify its fuel resource base, according to a well-placed market expert. Dr Sacha Parneix, Commercial General Manager for GE Steam Power Systems (Middle East, North Africa & Turkey), says the grounds for the Sultanate’s foray into clean-coal based power generation are undeniable and forceful.
“I don’t know of any country in the world today that doesn’t consider a certain amount of a fuel mix in its energy picture,” the Dubai-based executive points out. “From that standpoint, I’m not surprised that a country like Oman is investigating a diversification away from gas for power generation. No doubt, gas will continue to play a role in Oman’s energy mix — which is good because it has access to gas — but it’s not a surprise for me to see Oman looking at wind, solar and also coal.”
The Sultanate’s sole offtaker of power output, the Oman Power and Water Procurement Company (OPWP) — a member of Nama Group — is expected to shortly issue a Request for Proposals (RfP) for a 1,300 MW coal-based Independent Power Project (IPP) planned at the Special Economic Zone (SEZ) in Duqm on the Sultanate’s southeast coast. A number of international developers have already submitted their prequalification credentials in an expression of their interest in bidding for the ambitious scheme.
In exclusive comments to the Observer, Dr Parneix said the Sultanate was ideally positioned to develop coal-based power capacity to meet its burgeoning energy requirements. “Oman has, geographically speaking, easy access to the sea with its lengthy coast, which makes coal power viable. From the technology standpoint as well, today’s technologies have evolved quite a bit over the past 10 years. What was not possible 10 years ago is possible today.”
Notwithstanding coal’s reputation as ‘not-so-friendly’ from the environmental point of view, it is “affordable and quite safe” from the energy security perspective, the expert points out. “Moreover, you will find very large reserves of coal on every continent on this planet.”
Superior standards
According to the expert, coal burning can be harmful to the environment — locally and globally — which explains why coal projects often struggle to develop, the expert notes. “However, today’s technologies allow much cleaner power generation using coal — from an efficiency point of view, as well as flue gas cleaning. Equipment and technologies exist that are well proven today to actually eliminate, if not all, very close to all pollutants away from the flue gas before it is released to the atmosphere to a certain level, which is very similar to gas power plants that are typically considered by the public as clean enough.”
Dr Parneix cites the example of the Gulf’s first clean-coal based power plant — a 2,400 MW capacity scheme currently under construction in Dubai — where emission standards are expected to surpass international benchmarks.
“This is what Dubai is enforcing in terms of emission levels, which are expected to be way beyond any guidelines on coal power emissions set by the World Bank, and even the more stringent EU guidelines for coal power plants. The Dubai project’s target is to make the environment impact as low as the one for gas power plants.”
So what about critics of coal as a fuel resource who may question the wisdom of countries embracing this resource at a time when the world seems to be moving away from coal? According to Dr Parneix, while the West is transitioning away from coal, and China making tentative moves as well, not every other coal-based producer is ditching coal. On the contrary, many countries are still implementing new coal power plants, he argues.
“I believe there is no ‘one-size-fit-all’ solution for every country’s problem with regard to its energy mix. Each country has its own geo-politics, its own growth demands, and so, which will require it to select a different path. Today, Western countries have in some sense the luxury of moving away from coal, because they actually enjoy a very large coal fleet, which offers them a huge amount of dependable capacity. This allows investment in renewable energy, which is intermittent in nature, to be implemented affordably. But developing countries which want to grow their economies, and therefore need affordable and secure power generation, need to expand their dependable capacity. Naturally, they will have a different solution to their energy mix.”
Environmental issues
Whether Oman eventually develops coal based capacity or not will make hardly any impact on the amount of carbon-dioxide — a key greenhouse gas linked to global warming — in the atmosphere, says Dr Parneix.
“Today, the main producers of CO2 by a large margin are sitting in North America, Europe, China and India to some extent. Frankly speaking, whether Oman builds a coal plant today or not will amount to a drop in the CO2 ocean. Some countries question why the West has been allowed to produce so much CO2 in the past and continue still today at efficiency levels in the region of, say 33 per cent on average. And why should a developing country not be allowed to develop a new coal project, which is at a much higher efficiency and much lower CO2 level. If those countries are concerned for the planet, why don’t they consider shutting down more coal plants and let the establishment of more efficient coal plants in the developing world?”
The issue of global warming linked to carbon emissions is a more complex problem that will require a coordinate global effort to address, according to the expert. Additionally, the switch to coal, among other fuel resources, is also linked to the opportunity cost of natural gas — currently the dominant fuel resource in Oman — if used as feedstock, for example, in industries.
“If you use gas to produce power, you don’t use that gas to maybe support an industry that provides much more value for the country than electricity,” Dr Parneix explains. “Some countries look at natural gas rather holistically at the overall economy level. They might decide to keep some gas for oil and gas refineries for example, which adds a lot of value and wealth to the country, and may prefer to power their grid system with another fuel. There is no one size fits all solution here. This issue is also so much country-dependent, but also time-dependent as well. For a country, it may make sense to invest in gas today, and some coal or wind, and later change the configuration again,” he added.
Oman’s fuel diversification policy envisions up to 3,000 MW coal based capacity to be developed by 2030.
(Next: Clean coal technologies competing for Oman’s maiden coal-based IPP – Part III]
Conrad Prabhu
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