Implementing carbon trading to promote the utilization of low concentration gas

Ren Shihua Chen Guifeng Ning Cheng Hao

(Clean Coal Engineering Technology Research Center of Coal Industry Beijing 1000 13)

About the author: Ren Shihua, male, Clean Coal Engineering Technology Research Center of coal industry, main research direction: energy economy.

This paper analyzes the reasons for the low utilization rate of low concentration gas in China at present, and introduces the technical situation of gas power generation. Based on gas power generation technology, this paper analyzes the incentive effect of common policies on the utilization of low-concentration gas, puts forward the implementation of carbon trading to improve the economy of utilization, and analyzes the economic effects under different transaction prices.

Keywords: low concentration gas-fired power generation carbon trading incentive policy

Implementing CO2 trading to promote gas utilization

Ren Shihua, Chen Guifeng, Ning

(Clean Coal Technology Research Center of Coal Industry, Beijing 1000 13)

Abstract: This paper expounds the causes of direct discharge of low concentration gas, and introduces the development of gas power generation technology. On this basis, this paper analyzes the stimulating effect of conventional economic policies on the utilization of low-concentration gas, puts forward the implementation of CO2 trading to promote the utilization of gas, and gives the economic effect analysis under different prices.

Keywords: low concentration gas; Gas power generation; CO2 trade; encourage

At present, more than 90× 108m3 of low-concentration gas is extracted during coal mining in China every year. Gas is a kind of greenhouse gas, and the gas discharged every year is equivalent to 1.35× 108t carbon dioxide equivalent; Natural gas itself is a kind of energy, and 1000m3 methane is equivalent to 1.26tce, which causes serious waste of resources. The utilization of low concentration gas is an important means to reduce gas pollution and rationally utilize resources, which has good environmental and social benefits and has been successfully applied internationally. However, in China, the utilization of low-concentration gas is still in the planning stage, mainly because the economy of low-concentration gas utilization is poor, and the commercial application needs strong policy support. From the development of international low-concentration gas utilization technology, power generation is the main direction of low-concentration gas utilization. Therefore, taking power generation as an example, this paper discusses the utilization strategy of low concentration gas that can run economically.

1 technical overview

At present, countercurrent reactor technology (also known as countercurrent reactor and flow direction conversion reactor) is mainly used for power generation with low concentration gas. Flow reactor technology can realize the self-oxidation and stable combustion of air waste gas at 1000℃ or lower under the action of catalyst. Heat is extracted by installing a heat exchanger in the central reaction zone (the heat medium is compressed air, low-grade steam or other processes). The heat medium can be heated to 700 ~ 800℃ by heat exchange to generate compressed air or superheated steam with high calorific value, which can be used as the heat source of steam turbine power generation. This technology can realize low concentration autothermal oxidation combustion; When the concentration and velocity of inlet airflow fluctuate sharply for a short time, it can still maintain stable operation; It has high conversion rate and heat recovery rate. CANMET demonstrated this technology in the Phalen mine in Nova Scotia, and plans to set up a demonstration site in China. This paper is based on this technology.

Generally speaking, this technology is basically feasible, but its commercial application depends on its economy. The investment of low concentration gas power plant based on flow reactor technology mainly includes equipment and workshop, and the operating expenses mainly include gas collection and transportation expenses, personnel salaries, maintenance expenses, etc. In this paper, the operation period is defined as 15, and 30% investment is raised by itself. Taking the financial internal rate of return of total investment as the index, this paper analyzes the economy of low concentration gas utilization under different conditions.

2 Economic analysis of natural gas utilization

2. 1 General scale and running time

Under normal circumstances, the unit investment of low-concentration gas power plant using flow reactor technology is about 12000 yuan /kW, the scale can reach 20 MW, and the annual operation is 5000 h. According to the gas emission situation in general mines and the current gas turbine technology, the gas concentration is 0.75%, the gas turbine efficiency is 30%, and the auxiliary power consumption rate is 12%. Other parameters are shown in Table 2.

Under the basic parameters, the annual gas consumption of the power plant is 40 14× 104m3, the annual power generation is 1× 108kWh, and the power supply is 0.88× 108kWh, which is equivalent to 3.75×/kloc-. Although it has good environmental and social benefits, the investment is large, the sales electricity price is low, the financial internal rate of return (I RR) of the total investment is negative, and the economy is poor, as shown in table 1.

Table 1 Economic indicators of gas-fired power generation (general scale, operation time)

Table 2 Basic parameters

Figure 1 Impact of running time

2.2 the impact of scale

Considering the huge difference of mine scale and gas emission concentration in China, the internal rate of return under different scales is calculated respectively. With the increase of scale, there is a certain scale benefit, but at present, the I RR of 20 MW is still less than-10%, and the economy is poor.

2.3 Impact of running time

Considering the change of annual operation time, the financial internal rate of return of total investment in 4000~7000 h is calculated respectively. With the increase of annual operation time, the economic benefit is obviously improved. The internal rate of return reaches 0.07% after 7000 h of annual operation, which still cannot meet the requirements of economic operation.

Through the analysis of scale and operation time, it can be seen that without strong policy support, the utilization economy of low concentration gas is poor. Therefore, promoting the commercial application of low concentration gas needs strong policy support.

3 Incentive economic policies

3. 1 policy content

Various economic policies and measures formulated or approved by the government can be divided into two categories: incentive and punitive. This paper discusses how to improve the economy of gas consumption, and mainly studies the incentive economic policy.

(1) subsidy policy. Common subsidies include investment subsidies, output subsidies and subsidies to consumers (that is, users). The problem of subsidy strategy, that is, who should be subsidized and what kind of operating mechanism should be used to subsidize, needs further study.

(2) tax policy. Tax policy is one of the most widely used economic policies at home and abroad, including tariff reduction, value-added tax reduction and income tax reduction. Theoretically speaking, tax relief does not require the government to provide a large amount of funds for subsidies, but only reduces part of the central or local income.

(3) Price policy. Price preference is a very effective incentive measure, which can promote technological progress and reduce costs as long as it is used properly. The key is the source of funds for price difference subsidies and the object and choice of price concessions.

(4) Preferential loan policy. Low-interest or discount loans can reduce the burden of enterprises to repay current interest and help reduce production costs. However, the government needs to raise some funds to support interest discount or interest subsidy reduction.

According to the above analysis, this study mainly considers the following policy factors:

(1) gas subsidy (refer to the situation at home and abroad, taking 0.02 yuan /m3 as an example)

(2) Discounted loans (taking 3-year discount as an example)

(3) rural power grid preferential repayment fund (taking preferential interest rate 100% as an example)

(4) Equipment VAT deduction (taking 50% deduction as an example)

(5) VAT relief (to avoid taking this as an example)

(6) Income tax relief (avoid taking this as an example)

(7) Electricity price subsidy (refer to the German government's subsidy of 7 cents per kWh for coal mine gas power plants, and the German electricity price, taking the subsidy of 0. 15 yuan per kWh as an example).

3.2 Policy impact

Incentive economic policy is helpful to improve the economy of low-concentration gas-fired power generation, but the range of improvement is limited, which can only be increased to 3.54% at the highest, and it is still on the verge of loss, so it is difficult to meet the requirements of enterprise investment and profit, and the project is economically infeasible, as shown in Figure 2. This is mainly due to the conditions of the project itself and the limitations of the incentive policy. The investment of the project itself is large (240 million yuan), the output during the project period is small (normal operation 15, annual sales income is 26.4 million yuan), the cost is high (total annual cost is 27.55 million yuan, excluding loan interest during the construction period), and the annual loss is 6.38 million yuan (excluding loan interest during the construction period). This determines that the role of various policies is limited:

(1) gas subsidy. Gas subsidy is equivalent to reducing part of the power generation cost, but the reduction ratio is limited, so it is difficult to make up for the loss and the effect is limited.

(2) Loan discount. Loan discount reduces part of the interest burden of enterprises, but the attached interest is difficult to make up for the losses, and the effect is not obvious.

(3) Preferential repayment fund for rural power grid. It is equivalent to indirectly increasing the sales electricity price, but the preferential margin is limited, and the maximum is not more than 0.02 yuan/kWh, so it is difficult to change the loss situation.

(4) Equipment VAT deduction. Equipment only accounts for about half of the investment in fixed assets, and equipment value-added tax accounts for about 14.5% of equipment. The effect of equipment value-added tax deduction is difficult to make up for the loss.

(5) VAT relief. Directly reduced the sales tax burden of the project. However, VAT is based on sales revenue. The output of the project is less, and the effect of VAT relief on improving the project economy is limited.

(6) Income tax relief. Pre-tax profit is negative, and income tax relief will not play any role.

(7) electricity price subsidies. Comparatively speaking, the electricity price subsidy plays the most obvious role in improving the economic benefits of low-concentration gas-fired power generation, mainly because the electricity price subsidy actually increases the sales electricity price in disguise.

From the above analysis, it can be seen that general incentive economic policies can improve the economy of low-concentration gas utilization technology, but the improvement range is very limited, which still cannot meet the profit requirements and needs more powerful policy support.

4 Implement carbon trading

4. 1 Carbon trading at home and abroad

With the formal implementation of the Kyoto Protocol in early 2005, a "carbon trading" mechanism for developed countries to invest in developing countries to purchase additional emission reductions of greenhouse gases such as carbon dioxide is gradually taking shape. According to the provisions of the Kyoto Protocol, developed countries contribute money or cooperate with developing countries to develop greenhouse gas emission reduction projects, and the final approved greenhouse gas emission reduction will offset the amount promised by developed countries. Under the derivation of this regulation, some "carbon trading" markets have formed in Europe and America. At present, the price of carbon dioxide emission reduction per ton in the international market is 5 ~ 10, and the price is still rising. China's "carbon trading" has also entered the primary stage. As of February 15, 2006, there were 2 1 CDM projects approved and being accepted by the National Development and Reform Commission, of which 18 were approved.

Figure 2 The economy of a single policy

4.2 Carbon trading price impact

Referring to the international carbon trading price, the internal rate of return of low-concentration gas-fired power generation technology with carbon trading price of 0 ~ 60 yuan is calculated, as shown in Figure 3. As can be seen from the figure. Taking the carbon transaction price as an example, with the increase of carbon transaction price, I RR is also increasing rapidly, and IRR is almost proportional to the carbon transaction price. When the carbon transaction price is raised to a certain extent (565,438+0.64 yuan /t), IRR reaches the benchmark rate of return (65,438+02%), which meets the economic requirements of the project. If it is further improved and exceeds 5 1.64 yuan /t, the I RR of the project exceeds the benchmark rate of return, which is economically feasible. It can be seen that the implementation of carbon trading price can effectively promote the commercial application of low concentration gas utilization technology.

Fig. 3 Impact of carbon trading price

5 conclusion

The economy of low concentration gas utilization technology is poor, and its commercial application needs strong policy support. General incentive economic policies can improve the economy of low-concentration gas utilization technology, but the increase is very limited and still cannot meet the requirements of economic operation. The implementation of carbon trading can effectively improve the economy of low concentration gas utilization and promote the commercial application of low concentration gas utilization technology.

refer to

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