The coal option

27 July 2008
In a part of the world as rich in oil and gas as the Gulf, opting to use coal to generate electricity may seem like a retrograde step. Yet it could be as little as five years before the Gulf develops its first coal-fired power plant.

Several countries in the region are considering adding coal-fired generation to their energy mix. It is one way to reduce their dependence on gas for electricity production and at the same time make more gas available to sell at higher international prices on the export market.

Oman is reviewing plans to build its first coal-fired plant at Duqm. Dubai is also considering the coal option, while at the same time pursuing a 2,000MW integrated gasification combined cycle plant (IGCC) project in partnership with the Chinese government.

The technology allows coal to be gasified and the resultant synthetic gas to be converted into hydrogen.

It has also recently emerged that Egypt is considering a proposal to build a 5,000MW coal plant on its Red Sea coast.

It would be set within a wider energy park, which would include a coal-handling terminal and storage facilities. The estimated cost of the plant and associated infrastructure is $6-7bn.

Morocco, which has experience with coal-fired plants, recently announced plans to develop a 1,320MW independent power project (IPP) at Safi on the west coast of the kingdom between Casablanca and Agadir.

The project will cost a total of MD20bn ($2.7bn), including MD3bn worth of clean-coal technology.

The Safi IPP demonstrates the complications associated with building coal-fired power plants.

Previous plans to build the facility at Cap Ghir close to Agadir were abandoned over environmental concerns and fears about the impact the plant might have on the local tourism industry.

Adhering to environmental regulations and selecting an appropriate site will be critical to the success of similar projects in the Gulf.
The cost of coal-fired power is not limited to the cost of sourcing coal and building the plant itself.

Countries that have always used gas or oil to fire their power plants will incur additional and significant costs to put coal-handling and storage infrastructure in place.

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