APRIL 2024 2024/130 A KNOWLEDGE NOTE SERIES FOR THE ENERGY & EXTRACTIVES GLOBAL PRACTICE Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants: Feasibility and Challenges The bottom line. Finding fuel sources to replace coal in power plants is crucial in the march toward decarbonization. Biomass and ammonia are two options offering significant potential. Both can be used with coal or alone in newly constructed facilities or in modified power plants. Relatively new power plants are good candidates for modification. While work is underway demonstrating the feasibility of each material, there are logistical challenges to address, particularly in the case of ammonia. Why are biomass and ammonia important is well known, but substantial uncertainties remain in the for replacing coal in existing thermal power case of ammonia. plants? Is conversion of coal-fired power plants to Full conversions offer complete decarbonization while burn biomass a commercially viable option? utilizing all existing plant assets Yes. The world’s experience is extensive with both If biomass is produced in a sustainable manner and ammonia co-firing and full biomass conversion is green (i.e., produced from renewable sources), full decar- bonization of existing coal-fired power plants is technically Existing coal-fired power plants can be converted to burn feasible. Both fuels offer the opportunity for full utilization of biomass either partially (“co-firing” of coal and biomass) or coal-fired power plants. This is particularly important in the fully (100 percent biomass). Converted plants maintain the case of relatively new plants that are not fully depreciated role of the power plant in the grid by continuing to provide and may have outstanding loans, as it is the case in Asia, energy, firm capacity, and ancillary services in the same way where the average age of coal plants is 10–20 years. as coal plants. Biomass can achieve a high capacity factor and has the potential to be a reliable source of power. While some modifications to the plant will be necessary, all of its components are likely to be utilized, and the conversion If domestic biomass replaces imported coal the conversion cost is a small fraction of a new power plant of similar size. The enhances the energy security of the country and its balance nature of the modifications involved in biomass conversions of payments. It can benefit power plant staff and neighboring Stratos Tavoulareas is an energy advisor at Author the World Bank and an adjunct professor at Georgetown University. 2 Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants communities, too, as the biomass plant maintains jobs that In general, the co-firing option should be viewed as a step may have been lost upon retirement of the coal-fired plant. toward 100 percent biomass conversion and should be pur- If the biomass is produced locally, labor requirements may sued when full conversion is the goal. Under these circum- even increase. stances, co-firing can provide an opportunity to become familiar with biomass procurement, transport, storage, and Co-firing using up to 15 percent biomass (energy input) is utilization. done by blending the biomass with the coal and feeding it through the existing firing system. Experience has shown Full biomass conversion may be accomplished in the follow- that up to 15 percent biomass has no discernible impact on ing ways: plant performance. The 15 percent cut-off point is based on industry experience, but it may vary depending on plant 3 By converting the existing coal-fired boiler to burn bio- design and operating condition and the relative properties of mass without changing the type of firing system—also the coal and biomass. In some plants, more than 15 percent called direct firing biomass energy input may be possible without major modi- fication; however, each power plant is different and calls for 3 By cutting out the lower part of the boiler and replacing a site-specific assessment. About 230 plants, located mostly it with a stoker-firing system (with a travelling or vibrating in Europe and North America and ranging in size from 50 grate) or an “atmospheric bubbling fluidized bed” to 700 megawatts (MW), were co-firing biomass and coal in 2012 (IRENA 2012). By 2023, many more co-firing projects 3 By replacing the existing boiler with a new biomass boiler, had been implemented around the world. while using the existing steam turbine, generator, and the balance of plant equipment. If domestic biomass replaces imported coal, The scope of each option needs to be determined on a case- by-case basis, but some general observations can be made. the conversion enhances the energy security of the country and its balance of payments. Direct firing is the simplest option. In some cases, in addition to replacing the fuel feed system and the burners, substantial It can benefit power plant staff and modifications to the boiler heating surfaces and the systems neighboring communities, too, as the biomass for dust collection and ash removal may be needed; new mills may also be necessary. All are capital-intensive but less plant maintains jobs that may have been lost expensive than the other options. upon retirement of the coal-fired plant. Conversions to a stoker or a fluidized bed are feasible, but both these options have advantages and disadvantages Before evaluating biomass conversion options, two key requiring detailed assessment. aspects need to be considered. The first is the desired reduc- tion of greenhouse gas (GHG) emissions. If the GHG reduction In all cases, special attention should be paid to the reliability goal is short term and moderate or low, co-firing may be of the converted plant as it combines new and old com- a viable option. For more aggressive GHG reduction, co- ponents. If parts are in poor operating condition, they may firing may not be enough, and a full conversion from coal to adversely affect the reliability of the whole plant. biomass should be considered. The second consideration is whether adequate biomass is available and produced in a Experience with both co-firing and full conversions confirms sustainable manner. that such projects are feasible and can be implemented without major technical challenges. The central issues are Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants 3 the availability of biomass, its sustainability, and its cost-ef- biomass plants, making them a viable commercial option fectiveness in comparison to other power generation options. (box 1). New biomass power plants with a collective capacity of 65 gigawatts (GW) were built from 2010 to 2020 (Fitch The option of building a new plant should be considered, Solutions 2022). The majority of these plants produced less even if only for purposes of comparison. Worldwide, a than 40 MWe (most of them ranging from 10 to 20 MWe). great deal of experience has been accumulated with new Box 1. International experience with biomass conversions Randers, Denmark: Combined heat and power plant, Helsingborg, Sweden: Vasthamnsverket power station built in 1982 and consisting of two coal-fired boilers (2 (54 MW), converted to 50 percent co-firing and then to x 95 MWt) and one common steam turbine (52 MWe); 100 percent biomass (wood pellets). converted to 100 percent biomass in 2008–09. The United Kingdom has the largest capacity of Herning, Denmark: Combined heat and power station biomass burning power plants, including the following: (80 MW), built in 1982; converted to biomass co-firing • Drax: Coal plant (2.6 GW) has burned 100 percent in 2000 and switched to 100 percent biomass in 2009. imported biomass since 2016; typically consumes Ronne, Denmark: Ostkraft power plant generating 7.5 million tonnes of biomass a year. electricity (37 MWe) and district heat (35 MWt) for the • Lynmouth: Coal plant (420 MW) converted to 100 city of Ronne. Built in 1995, converted to 100 percent percent biomass in 2018. biomass in 2016. • Ironbridge: Coal plant (2 x 500 MW) burned 100 percent biomass from 2012 to 2016 before being Avedore, Denmark: Power station consisting of two retired. units (each 380 MWe plus 465 MWt). Unit 2 was • Tilbury B: Coal plant (1,428 MW) co-fired biomass converted to biomass (wood-pellet) co-firing in 2003 from 2011 to 2019, then was retired. with the goal of reaching 100 percent biomass by 2023. Unit 1 was converted to 100 percent biomass in Conversions from pulverized coal to fluidized bed 2016. Both units are derated (258 MW each). boilers are not as common, but the following projects Denmark (various): Studstrup 3 (380 MWe plus 455 from the United States suggest that this option is also MJ/s heat), converted to biomass in 2016; Asnaes, commercially viable: three units with a total installed capacity of 1,057 MW, • French Island station in Wisconsin (15 MW), con- converted in 2019; and Esbjerg 4 (378 MW), to be verted to atmospheric fluidized bed combustion in converted to biomass in 2024. 1981 to burn a blend of 25 percent refuse-derived Awirs, Belgium: Power plant (125 MW) owned and fuel and 75 percent waste wood. operated by Electrabel, converted in 2005 to burn 100 • Black Dog power plant, Minnesota (125 MW), owned percent wood pellets. Subsequently, plant was derated and operated by Northern States Power, converted to 80 MW capacity. in 1986 to atmospheric fluidized bed combustion burning coal or biomass. Belgium: Langerlo power plant (20 MW) and Roden- • Heskett station, North Dakota (70-MW), stok- huize power plant (60 MW), converted to biomass in er-fired unit owned and operated by Montana 2005. Dakota Utilities, converted to atmospheric fluidized bed combustion in 1987. Note: GW = gigawatt; MJ/s = megajoules per second; MW = megawatt; MWt = megawatts thermal; MWe = megawatts electric. 4 Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants What are the costs and benefits of biomass If the biomass price is $200/tonne, then most of the options conversion? being considered—conversion to 100 percent biomass, a new biomass boiler, or a new biomass power plant—have an elec- Substantial GHG emission reductions can be achieved tricity production cost of around 15 US cents/kWh. Biomass with no loss of employment or economic activity, but priced at $300/tonne raises that cost to 21.7 US cents/kWh. the price of biomass is a critical factor At high biomass prices, regulatory support in the form of On the benefit side, in addition to GHG emission reductions feed-in tariffs (for the electricity produced) or fuel subsidies and potential competitiveness, converted biomass plants may be needed. Table 1 presents benefits and capital cost will continue to offer firm capacity and ancillary services, ranges for the various biomass conversion options. which are expected to be very valuable as more renewables are integrated into the power system. If the biomass is pro- Fortunately, as carbon prices (and associated markets) duced domestically, conversion increases energy security advance around the world, sustainably produced biomass is and reduces foreign exchange requirements. Also, biomass expected to become increasingly competitive. conversion is the least disruptive option in terms of employ- ment, since staff requirements are similar to those of coal What are the remaining challenges facing plants. In fact, additional labor may be needed to collect, biomass conversions? process, and transport the biomass, which would benefit the Supply, quality, sustainability, logistics, and price are broader community. the biggest challenges In terms of costs, the most critical factor determining the Establishing an adequate biomass supply at a price secured competitiveness of biomass conversion is the price of the by a medium-term contract (or longer) is the biggest chal- material. If the price is below $100/tonne, the electricity price lenge facing biomass conversion. So far, biomass projects is less than 10 US cents/kWh. However, in the last couple of are relatively small (e.g., 10–20 MWe). However, existing years, biomass prices have been well above $100/tonne coal plants are typically 100–500 MW per unit (multi-unit (figure 1, following page). power plants are the norm) and require substantially more Table 1. Costs and benefits associated with biomass conversions Technology options Benefits Capital costs Notes Co-firing Easy to implement <15% biomass: $30–100/kW Not a zero-carbon option with boiler modified to GHG reductions proportional >15% biomass: $100–300/kW 15% cutoff may vary from plant to accommodate a percentage of to percentage of biomass plant biomass 100% biomass conversion 100% GHG reduction $200–700/kW (lower end Operating condition and of existing plant from coal to for direct firing; high end for reliability of remaining equipment biomass AFBC; stoker in the middle) require assessment New biomass boiler 100% GHG reduction $700–1,000/kW Operating condition and alongside use of remaining existing reliability of remaining equipment assets require assessment New biomass power plant 100% GHG reduction $2,000–3,000/kW Flexibility to choose any power Reliable plant with full plant size to fit market needs commercial guarantees (e.g., energy demand) Note: AFBC = atmospheric fluidized bed combustion; GHG = greenhouse gas. Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants 5 Figure 1. Biomass prices, December 2022 fob southwest Canada $268.06/t fob Baltic €318.75/t fob Vietnam to S. Korea $166.93/t cif northwest Europe $303.06/t fob southeast US $279.56/t cfr Gwangyang $189.30/t fob Portugal €308.34/t fob Vietnam to Japan FIT $198.50/t Source: Argus Media 2023. Note: fob = free on board; cif = cost, insurance, and freight; cfr = cost and freight. feedstock. The logistics of securing large amounts of bio- Is the case for ammonia as good? mass, while feasible in theory, may be logistically difficult. Ammonia may be an attractive option for the Biomass may need to be transported over long distances conversion of coal power plants, but it will require (transatlantic transport is common), which adds to the cost continued reevaluation as the technology improves and increases the carbon footprint. For transport by truck, the larger the power plant, the more logistical challenges If ammonia can be burned competitively in existing coal- can be expected (e.g., the need for many trucks and an fired power plants, its potential benefits are the same as increase in local traffic). Moreover, logistics must be ensured those to be gained from biomass. over the entire fuel chain—collection, drying, processing (e.g., pelletization), transport, storage, and handling at the power Depending on the way it is produced, ammonia (NH3) is plant. characterized as either “green,” “blue,” or “gray.” It is an inor- ganic compound that is commonly available as anhydrous Biomass quality and sustainability are also important. The ammonia (in its pure form) and aqueous ammonia (as a quality should be secured through a medium- or long-term water solution). It dissolves easily in water to form ammo- contract, without which the project developer will assume nium hydroxide solution. Ammonia gas is easily compressed substantial risk. In terms of sustainability, biomass produc- and forms a clear, colorless liquid under pressure. Ammonia tion should be certified. is produced through the Haber-Bosch process (FuseSchool 6 Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants 2013), which combines nitrogen from the air with hydrogen Figure 2. Projected prices and production from natural gas or water hydrolysis. costs of renewable and low-carbon ammonia through 2050 Ammonia is toxic when concentrated and corrosive to tis- sues upon contact; exposure in sufficient quantities can 1,500 Renewable ammonia 80.4 be fatal. Safety requirements are in place in most member Low carbon fossil ammonia Production cost ($/t) 1,250 67.0 countries of the Organisation for Economic Co-operation 1,000 53.6 and Development, and experience with other ammonia $/GJ applications has proven that safety issues can be addressed 750 Best in class 40.2 successfully. Produced in high volumes around the world, it is 500 26.8 used mainly in manufacturing, refrigeration, and agriculture (as a fertilizer). Because of its high concentration of hydrogen 250 13.4 (17.65 percent by weight), and because it can be transported 0 0 more easily than hydrogen, ammonia is viewed as an option 2020 2030 2040 2025 for transporting hydrogen over long distances. Source: IRENA, AEA, and World Bank 2023. Note: “Best in class” indicates the lowest-cost option envisioned for the near Is conversion to ammonia of coal-fired term (2023–25). power plants a commercial option at present? Figure 2 provides preliminary estimates for the price of Not yet. Its viability will depend on the results of ammonia through 2050, comparing green “renewable” ongoing trials ammonia to low-carbon ammonia (produced from natural While ammonia retrofitting of existing coal-fired boilers gas but deploying carbon capture as well). According to seems to be a technically feasible option with substan- these projections, green ammonia is unlikely to be compet- tial potential for GHG reduction, the technology is still in a itive with low-carbon ammonia before the 2040s. Figure 3 precommercial stage. shows the levelized cost of electricity in coal plants converted to ammonia, compared to new offshore wind, coal with CCS, In 2022, the China Energy Investment Corporation announced and natural gas with CCS in Japan. successful co-firing trials of 35 percent ammonia in a 40 MW coal-fired boiler (at the Huaneng Yantai power plant), but no specifics were provided (Power Magazine 2023). Substantial unknowns are associated with the In the same year, Bloomberg found that ammonia was not supply of ammonia globally and regionally. competitive against other GHG reduction options in Japan, If ammonia is used for power generation, as including offshore wind, coal with carbon capture and stor- age (CCS), and natural gas with CCS (BloombergNEF 2022). projected in Asia, the production of green Even without detailed evaluation, ammonia does not seem ammonia needs to be substantially increased competitive as a fuel because, on a heating value basis, it is 15 to 30 times more expensive than domestic coal and 5 over present production levels. to 15 times more expensive than internationally traded coal. While ammonia production costs are expected to decline, the substantial gap will take time to close.1 1. Other costs include a potential reduction in power plant efficiency, the cost of converting the existing power plant, and the costs associated with higher reduction of nitrogen oxides. Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants 7 Figure 3. Cost of electricity in coal plants converting to ammonia, by conversion option (Japan) $/MWh (2021 real) 600 500 100% ammonia firing 400 50% NH3 co-firing O shore wind 300 200 Coal CCS CCGT CCS 100 20% NH3 co-firing 0 2024 2030 2040 2025 Source: BloombergNEF 2022. Note: CCS = carbon capture and storage. CCS costs shown do not include the cost of CO2 transport and storage. Decreases in CCS cost over 2024–30 are contingent on a ramp-up of deployments to around 30 GW by 2030. If ongoing trials at JERA’S Hekinan power station in Japan Particular attention must be paid to the carbon footprint are successful, commercial availability is expected as follows: of ammonia, as the primary motivation for its use is GHG reduction. It is possible to control nitrogen oxide emissions by 3 20 percent ammonia co-firing after 2025 selective catalytic reduction. Plants that already have selec- tive catalytic reduction equipment may need to expand it; 3 50 percent ammonia co-firing after 2028 in developing countries that do not have it, it may have to be added at substantial cost. 3 100 percent ammonia in coal-fired boilers after 2035. Substantial unknowns are associated with the supply of After the successful completion of these trials, the corre- ammonia globally and regionally. If ammonia is used for sponding level of ammonia co-firing could be considered power generation, as projected in Asia, the production of commercially viable, and the technology-related risks lower. green ammonia needs to be substantially increased over present production levels. While this is feasible, competition Regarding performance, neither the impact on plant effi- from other uses (e.g., fertilizer production) and the need for ciency nor the generation of nitrogen oxide emissions are renewable facilities suggests that a production increase of clear. Key uncertainties include boiler reliability and per- green ammonia will take longer than projected, and prices formance (including efficiency and ability to achieve the are likely to be high for some time. Over the long term this required steam temperatures); emissions (NOx, PM2.5, and issue could be addressed, provided that there is market unreacted ammonia, known as ammonia slip); the scope of demand and ammonia becomes competitive against other boiler modifications and associated capital requirements; options. and the availability and price of ammonia, particularly green ammonia. 8 Using Biomass or Green Ammonia to Replace Coal in Existing Thermal Power Plants For the time being, the most serious challenge for ammonia A wait-and-see approach is recommended. conversion of coal plants is technology that has not been fully demonstrated or commercialized. As a result, invest- The peer reviewers for this note were Chiara Odetta Rogate and ment decisions are undermined by uncertain performance Bipul Singh, both senior energy specialists at the World Bank. and cost. 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