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| Wednesday, 7 December 2011, 22:00 HKT/SGT | |
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HONG KONG, Dec 7, 2011 - (ACN Newswire) - According to the national overall arrangement on energy conservation & emission reduction, the NOx emission shall be reduced by 10% in the period of 12th Five-year Plan. The technological improvement on denitration for coal-fired power companies has become the top priority in the NOx emission reduction. The NDRC announced on Nov. 30, that in order to encourage coal-fired power companies to adopt denitration, all coal-fired power plants with denitration equipment installed or in operational status shall be entitled to a subsidy of RMB 0.008 / Kwh to compensate the denitration costs.
On Sept. 21, 2011, the Ministry of Environmental Protection released the new version of Airborne Pollutant Emission Standards for Coal-fired Power Plant to significantly increase the requirement, which implemented the most stringent standard for NOx emission with 100 mg/cubic meter above the limit in Europe and US, representing the government's resolve to control the emission from coal-fired power plants. In this sense, the price subsidy on denitration released by the NDRC can be considered as another strong measure to implement the new emission standards.
The stringent emission standards and the new policy on subsidies will encourage coal-fired power companies to adopt the denitration technology and also conduct an inspection on the existing denitration technology and relevant enterprises to phase out backward denitration technologies and enterprises below the denitration standards. The denitration standardization will reshuffle the industry. In practice, such policy influence will converge to accelerate the development of the denitration industry.
In line with the new standards, the implementation on new coal-fired units will start on Jan. 1, 2012 and the improvement will cover all existing equipments. According to the estimate, after the implementation of the new standard for airborne pollutant emission, the denitration capacity for coal-fired exhausts will reach 0.72 Bn KW by 2015, which requires investment and operating expense in billion. In recent years when the thermal coal price has kept increasing and coal-fired power industry faces mounting pressure due to the operating loss, the coal-fired power companies are reluctant to adopt denitration technology. Through subsidies to coal-fired power companies with denitration improvement, they are encouraged to improve the denitration.
The benchmark denitration tariff policies and more stringent emission standards opened up hundreds of billions Renminbi market for the denitration sector. How to promote the healthy growth of this sector? And who will outperform against such backdrop?
Currently, thermal power plants mainly adopt three denitration technologies, i.e. low NOx combustion, SCR and SNCR. Low NOx combustion technologies focus on controlling the formation of NOx during the combustion process, also known as front-end denitration; while both SCR and SNCR technologies focus on handling the boiler flue, and thus also known as back-end denitration. 70% of domestic devices adopted SCR technologies, and the low NOx combustion technologies have been applied to all of the above 300MW new-builds. However, in order to increase the desulfurization efficiency, the low NOx combustion technologies should be combined with SCR system. It is expected that low NOx combustion and SCR technologies would take the lead in the domestic denitration market going forward.
As to SCR technologies, SCR denitration catalysts serve as the core component, whose quality directly determines the efficiency of operations. The mix, structure and life of such catalysts are critical to the utilization and efficiency of the denitration system.
SCR denitration catalysts account for around 40% of total construction cost. In the past, China has to rely on import from the US and Japan as it has no proprietary SCR catalyst technologies, making the cost of denitration high for long.
Therefore, the company that first develops the SCR catalyst technologies would be able to grasp the first mover advantage and significantly cut the SCR cost through economies of scale, and thus outperform peers.
Denitration providers' proven record in the sector of desulphurization service for coal fired power plants may become a "recommendation letter" for them to penetrate into the denitration market. The concession operation mechanism which has been tested in the desulphurization sector is also likely to be implemented in the denitration sector. Under concession operation, desulphurization providers can benefit from the electricity tariff subsidy. The subsidy is delivered from the grid company to the power generator which passes on the subsidy to the desulphurization provider. Therefore, the providers under major power groups such as Guodian Technology and Environment Co. Ltd (GDTE) will get more benefits. Since concession operation has been conducted successfully in the desulphurization sector, it is very likely to be implemented in denitration market. Denitration concession operation will create extensive market potential for companies under major power groups in China such as GDTE. It provides guarantee for sustaining rapid growth of earnings, and helps such detrination companies to increase their market share and take dominant role in the denitration market competition.
At present, the denitration industry has taken off and the catalyst market is infused with fierce competition. The profit model is not yet clear and strict execution of standards is the key to the sound and orderly development of denitration industry going forward. The catalyst market may enter a period of booming development with the growth of engineering projects, and fierce competition is on the verge of breaking out.
Under these circumstances, we need companies that focus on R&D, have independent key intellectual properties and core technologies and have rich experiences to lead the industrial upgrade through technologies and work process flow innovation, set up high technological entry barriers and avoid blind competition. As per the experiences and lessons from the desulphurization business, in the next 5 years, the government has to roll out firm policies to promote denitration industry, and relevant departments should improve the technologies and market entry standards to guide the sound and steady development of the industry at the very beginning.
Topic: Environment Issue
Sectors: Energy, Alternatives
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2026 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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