China, People's Republic of: Tianjin Integrated Gasification Combined Cycle Power Plant Project

Sovereign Project | 42117-013

Summary

The Tianjin Integrated Gasification Combined Cycle Power Plant Project involves constructing and operating a coal-fired integrated gasification combined cycle (IGCC) power plant with 250 megawatt capacity in Tianjin Harbor Industrial Park in the Binhai New Area of Tianjin city. This will be the first IGCC clean coal project in the PRC, using the most efficient and least-polluting technology currently available commercially. It will also be the first IGCC power plant in the developing Asia. On completion, the plant will generate 1,470 gigawatt-hours of electricity annually, which will be sold to the Northern China Grid Company Ltd. using a 220 kilovolt interconnecting transmission line to an existing substation in the industrial park.

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Project Name Tianjin Integrated Gasification Combined Cycle Power Plant Project
Project Number 42117-013
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0196-PRC: Tianjin Integrated Gasification Combined Cycle Power Plant Project
Climate Change Fund US$ 5.00 million
Loan 2616-PRC: Tianjin Integrated Gasification Combined Cycle Power Plant Project
Ordinary capital resources US$ 111.84 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Conventional energy generation - Energy efficiency and conservation
Gender Equity and Mainstreaming No gender elements
Description

The Tianjin Integrated Gasification Combined Cycle Power Plant Project involves constructing and operating a coal-fired integrated gasification combined cycle (IGCC) power plant with 250 megawatt capacity in Tianjin Harbor Industrial Park in the Binhai New Area of Tianjin city. This will be the first IGCC clean coal project in the PRC, using the most efficient and least-polluting technology currently available commercially. It will also be the first IGCC power plant in the developing Asia. On completion, the plant will generate 1,470 gigawatt-hours of electricity annually, which will be sold to the Northern China Grid Company Ltd. using a 220 kilovolt interconnecting transmission line to an existing substation in the industrial park.

The Project is consistent with the priority of the Government of the PRC to implement a coal-fired power plant with near-zero emissions by 2015 under its flagship clean coal program GreenGen announced in 2005. The Project is a cornerstone of the critical first phase of the GreenGen program. In the second phase, a scaled-up IGCC plant fitted with pilot-scale carbon capture and storage (CCS) is expected by 2013, and the third phase is expected to provide a coal-fired power plant with near-zero emissions by 2015. CCS is included in all climate change-mitigation strategies proposed by the United Nation's Intergovernmental Panel on Climate Change and the International Energy Agency. Various international studies have found IGCC power plants with CCS to be the least-cost option to cut carbon dioxide (CO2) emissions from coal-fired power plants by up to 90%. By successfully demonstrating the advantages of IGCC technology, the Project will reinforce confidence in the viability of this technology and enable the timely implementation of the ensuing phases of the GreenGen program.

Relevant approvals for the construction are in place. Project completion is expected by 30 June 2012.

Project Rationale and Linkage to Country/Regional Strategy

The PRC is the world's largest coal producer and consumer. Coal production has increased from 0.98 billion tons (t) in 2000 to 2.74 billion t in 2008, or more than 48% of global production. In the PRC, electricity is produced predominantly from coal, which generated 81% of the total electricity in 2008. Electricity generation is the largest single consumer of coal. It consumed 1.34 billion t (49%) of the coal produced in 2008, with serious environmental problems and poor air quality caused by related emissions 50% of the nation's sulfur dioxide (SO2) emissions, 36% of its nitrogen oxide (NOX) emissions, and 39% of its CO2 emissions. Acid rain caused primarily by SO2 and NOx falls on one-third of the country and 45% of its farmland. The rapid increase in coal consumption has triggered a surge in emissions of CO2 a major greenhouse gas (GHG) and cause of global climate change.

The Government is actively improving energy efficiency and shifting to non-carbon and other cleaner energy sources to improve the country's environment and help mitigate global climate change. The Renewable Energy Law, enacted in 2006, brought unprecedented growth in wind, solar, and biomass power generation. Carbon-free nuclear power is expected to grow many folds. The PRC already has the largest hydropower capacity in the world, which is expected to grow substantially. Despite efforts to change the energy mix, coal is expected to remain dominant in electricity production in the near future.

To improve the efficiency of and reduce emissions from coal-fired power plants, the PRC is (i) rapidly closing small, inefficient plants, as indicated by the closing of 54 gigawatts of such capacity in the past 3 years alone; (ii) constructing new supercritical and ultra-supercritical (USC) plants with advanced technology that offer efficiency comparable to international standards; and (iii) accelerating the application of flue gas de-sulfurization. The development of coal-fired IGCC power plants has been slow, though they can offer 4% 5% higher efficiency than USC plants. So far, no industrial-scale IGCC plant is operating in the PRC. Higher capital and, operation and maintenance (O&M) costs (affecting electricity tariffs), and technology risks are cited as key barriers. IGCC technology is, however, gaining momentum in part because of the opportunity of combining it with CCS to cut emissions drastically.

The Project will demonstrate a key enabling technology with potential for large GHG emission reductions from coal usage in the largest coal-consuming country in the world. ADB project support will provide additional technical due diligence and help mitigate associated risks, strengthen compliance with safeguard policies, and thereby establish appropriate benchmarks and standards for future IGCC projects. The successful implementation of the Project will lead to scaled-up IGCC power

plants and trigger the next phases of the GreeGen program, with the potential for very large reductions in GHG emissions from coal-fired power plants in PRC.

Impact Reduced GHG emissions from coal-based power plants.
Project Outcome
Description of Outcome Multiple IGCC plants deployed
Progress Toward Outcome

The Project is being implemented according to schedule. The Tianjin IGCC power plant has successfully passed the critical continuous operation test at full load. In 2014, the IGCC has generated 1200 gigawatt hours and has operated continuously and realiably as a power plant.

Based on the positive experiences, the China Huaneng Group is conducting feasibility studies for three additional power plants.

Total utilization under the loan is $105.732 million. Contract award for Grant 0196 is $4.5 million representing the contract with the coal gasifier and gas turbines supplier for the long-term maintenance.

Implementation Progress
Description of Project Outputs

250 MW IGCC demonstration plant constructed at Tianjin;

Adequate plant O&M capacity created

Capacity developed for obtaining carbon offset revenues from IGCC plants

Status of Implementation Progress (Outputs, Activities, and Issues)

Through 2013, the plant had to go through some major repairs, including the replacement of (i) compressor at the air separation unit, and (ii) the nozzle at the combustion unit. In addition, further trial operations had to be completed. The plant has operated reliably since the beginning of 2014.

The Project is being implemented according to schedule.

The draft PDD was prepared in cooperation with Greengen staff. Due to the uncertainty of post 2012 CDM, Greengen decided not to further pursue CDM possibility.

Geographical Location Tianjin City, People's Republic of China
Safeguard Categories
Environment A
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

Category A. A summary of environmental impact assessment was circulated to the Board and posted on the Asian Development Bank (ADB) website on 14 April 2008.

The first Envrionment Safeguards Monitoring Report has been published and posted to the web in May 2012; the second one was posted in November 2012.

Involuntary Resettlement The Project has acquired 20 hectares of newly reclaimed land in an existing industrial park and therefore does not entail any resettlement.
Indigenous Peoples No indigenous people were affected by the project.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation The stakeholder participation and consultation will be mainstreamed in the Project's implementation and will be paid particular attention during the loan review missions. A knowledge product will be prepared identifying issues in the IGCC financing, implementation and operation for wider dissemination in PRC and other relevant developing member countries.
Business Opportunities
Consulting Services Consultants will be recruited in line with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). Advance contracting and retroactive financing will be considered for consulting services.
Procurement The Project's procurement willb e carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time).
Responsible ADB Officer Annika Seiler
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
China Huaneng GroupWang Xiaoyanxy_wang@chng.com.cnTel: 86-10-63228726 / Fax No. 86-10-63228745
Timetable
Concept Clearance 22 Aug 2008
Fact Finding 06 May 2009 to 16 May 2009
MRM 23 Sep 2009
Approval 08 Feb 2010
Last Review Mission -
PDS Creation Date 17 Sep 2008
Last PDS Update 30 Mar 2015

Grant 0196-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Feb 2010 28 May 2010 16 Aug 2010 31 Dec 2015 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 284.59 Cumulative Contract Awards
ADB 5.00 08 Feb 2010 4.78 0.00 96%
Counterpart 279.59 Cumulative Disbursements
Cofinancing 0.00 08 Feb 2010 4.97 0.00 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory - - -

Loan 2616-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Feb 2010 28 May 2010 25 Aug 2010 31 Dec 2012 31 Oct 2014 27 Feb 2015
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 111.84 Cumulative Contract Awards
ADB 111.84 08 Feb 2010 105.73 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 08 Feb 2010 105.73 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory - - -
Title Document Type Document Date
Tianjin Integrated Gasification Combined Cycle Power Plant Project Procurement Plans Apr 2014
天津整体煤气化联合循环电厂项目 : 项目数据表 Translated PDS Jul 2013
Amendment to Loan Agreement for Tianjin Integrated Gasification Combined Cycle Power Plant Project between People's Republic of China and Asian Development Bank dated 25 August 2010 Loan Agreement (Ordinary Resources) Aug 2010
Tianjin Integrated Gasification Combined Cycle Power Plant Project Project/Program Administration Manual May 2010
Loan Agreement for Tianjin Integrated Gasification Combined Cycle Power Plant Project between People's Republic of China and Asian Development Bank dated 28 May 2010 Loan Agreement (Ordinary Resources) May 2010
Project Agreement for Tianjin Integrated Gasification Combined Cycle Power Plant Project among Asian Development Bank Project/Program Agreement May 2010
Project Agreement (Climate Change Fund) for Tianjin Integrated Gasification Combined Cycle Power Plant Project among Asian Development Bank Project/Program Agreement May 2010
Grant Agreement (Climate Change Fund) for Tianjin Integrated Gasification Combined Cycle Power Plant Project between People's Republic of China and Asian Development Bank dated 28 May 2010 Grant Agreement May 2010
Tianjin Integrated Gasification Combined Cycle Power Plant Project Reports and Recommendations of the President Dec 2009
Tianjin Integrated Gasification Combined Cycle Power Plant Project Design and Monitoring Frameworks Jan 2009

Evaluation Documents

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