Impact of plasma arc reforming deployment on economic performance of a commercial coal to liquids process

Abstract

Coal remains integral to the supply of energy in many parts of the world despite the associated negative effects on the environment. Plasma arc reforming has the potential of making coal to liquids processes cleaner by reducing its greenhouse gas footprint. However, the chances of adoption without a clear understanding of how the process modification would affect economic performance are slim. In this study, financial models were built using an existing commercial coal to liquids process as a reference case. Economic analyses were done to evaluate the impact of deploying a plasma arc reformer on financial performance of a coal to liquids process. In building the financial models, the possibility of the introduction of a carbon tax was taken into consideration. The results show that deploying plasma arc reforming reduces the oil price required for break-even from $89/bbl. to $82/bbl., achieves a positive project NPV and exceeds the hurdle rate for similar projects. In the process, it reduces vulnerability to the introduction of a carbon tax. The requirement for extra low carbon electricity can be a hurdle to implementation, however the alternative carbon tax related charges are less desirable. Overall, it was concluded that the deployment of plasma arc reforming to coal to liquids processes is value adding. The project demonstrates that by implementing a cleaner production initiative it is possible to reduce greenhouse gas emissions of coal to liquids without significantly losing shareholder value