A Plan to Retrofit a Twin 500 MW Coal Power Plant in China with Air Pollution Control Equipment






BCDP Consulting

New York, NY USA



GlobeTech-IV Simulation

EID 372: Global Perspectives in Technology Management

Prof. Jacoby

The Cooper Union for the Advancement of Science and Art

The Albert Nerken School of Engineering








November 16, 1998


Power Plant Information

Owner: Greater Shanghai Power Authority, GSPA

Contractor: BCDP Consulting

Location: Shanghai, China

Project Goals:

The primary aim of this project is to retrofit this twin 500 MW coal power plant with air pollution control equipment. This technology is needed to reduce environmentally problematic particulate, NOx, and SOx emissions. Air pollution is not a localized problem; emissions from China affect the United States and other parts of the world, and vice versa.

Fortunately, the solution to this problem benefits all parties. The Chinese people will benefit the most, by having a cleaner atmosphere. The Chinese industry will benefit from having its own workers employed and trained on the project to the maximum possible extent. BCDP sees the Chinese work force as a vital part of this project. Hopefully, this work will help to spur future economic growth in China, and encourage future air pollution control projects at other Chinese Power Plants.

It is an important aim of this joint venture project to provide this particular Shanghai power plant with a viable, cost-effective solution, so that other Chinese power plants will ask for similar improvements.

Company Information


After graduating from the Albert Nerken School of Engineering at the Cooper Union for the Advancement of Science and Art, the four founders of BCDP Consulting went in different directions. In 1986 Jung, Pierce, Sean, and Eric decided that to start a worldwide consulting firm. With the constant barrage from the media about the Greenhouse Effect and other air pollution related issues, the four founders decided that the company should focus on pollution control technologies. Since then, BCDP has found a niche in the world market, creating a lucrative, environmentally meaningful firm.

Company Structure:

Eric Bjurstrom: Air Pollution Technology Expert

Pierce Cleary: Cost Manager

Sean DeNigris: Computer Specialist

Jung Ho Park: Supervisor of Foreign Relations

Economic and Social Considerations

  1. BCDP will comply with the European environmental standards to attract funding from world banks and foreign investors.
  2. Advertisement campaign will be launched in Shanghai to promote public’s awareness of air pollution problems in China and proposed solutions in companies such as GSPA. This will help alleviate the public anger aroused by higher cost of electricity after the implementation of the new pollution control system.

  1. We propose the formation of a joint venture with the GSPA to provide the legal means of providing air pollution control technology and equipment, and the basis for foreign investors to invest in the joint venture and provide technical assistance. We propose to name this joint venture: SAPC Co. (Shanghai Air Pollution Control Corporation).
  2. Within SAPC, current and new employees will be trained in the understanding, control, and management of new emission technology, so that GSPA can take full managerial responsibilities of the air pollution control plant within 10 years. Since the wages for workers in China are substantially lower than those of American specialists, the training cost will be returned in the near future.
  3. SAPC Co. will need about 200 employees. 80% of the work force shall consist of Chinese workers and their salary would average about $20,000. The remaining work force will consist of engineers from U.S.A. whose average salary will be about $55,000.
  4. We propose that 60% of the equity investment (24% of the total project cost) required for this project to be provided by BCDP. We understand that the remaining 40% (16% of the total project cost) of the equity will be provided by GSPA. The other 60% of the total project cost will be obtained through bonds issued by SAPC Co., for assets obtained form various international banks or investment firms. Please see the schematic below for further clarification:

SAPC (total project cost)


40% Equity (Issue Shares) 60% Bonds (borrowed $$)

| (From Banks and Investment Firms)


60% $$ BCDP 40% GSPA

(55% Shares) (45% Shares)




Pollution Control Systems

For large power plants there are a limited number of pollution control systems that can be implemented to remove SO2 and NOx particles. The standard systems are electrostatic precipitators, natural gas reburners, and dry flue gas desulfurization. These systems will be the initial step. Other technology, such as coal reburners, advanced turbine systems and integrated gasification combined cycle will be considered for future steps although they are still under development or still being adapted to larger scale plants.

1. Dry Flue Gas Desulfurization (Dry FGD)

Dry FGD are used to remove SO2 particles by converting the SO2 into CaS03 and CaSO4, also called fly ash which is removed by Electrostatic Precipitators or bagfilters. Atomized calcium hydroxide slurry (quicklime mixed with water) is mixed with the flue gas in a spray dryer tower. The droplets of calcium hydroxide slurry and the SO2 particles react to form CaSO3 and CaSO4 which can be collected from the bottom of the spray dryer and also in electrostatic precipitators or bagfilters. Most of the solid waste is disposed of and the rest is recycled into the spray dryer tower to improve its performance in removing the SO2. The efficiency of the spray dryer can be improved by chlorine injection or using high chloride coals. The lower capital cost, ease of disposal and ease of maintenance make the spray dryers a better choice than wet scrubbers.

SO2 reduction of 90 % is expected

2. Electrostatic Precipitators (ESP)

Electrostatic Precipitators are both well-known and well-established. The technology is relatively simple compared to many other systems. The particles in the air are charged and then enter near the bottom of the precipitator and travel upwards in-between many electrically charged plates. The charged particles are attracted to the plates and collect on the surface. The particles are removed from the plates by rappers which cause the plate to vibrate. The particle cakes fall into the particulate collection hoppers on the bottom of the precipitator. This solid waste can be sold to cement manufacturers instead of being landfilled. In order for the ESP’s to work efficiently, the voltage and current must be kept constant and the electic field uniform. The technology is suitable for developing countries, the main reason it has not been utilized so far is the leniency or lack of emission control laws.

Particulate reduction of 99.9% is expected


3. Natural Gas Reburners

Gas reburner technology is used to control NOx emissions. Natural gas is burned above the main coal burning zone. The conditions are set such that they catalyze the break down of NOx into environmentally benign gases. The natural gas not only has low emissions, but reduces the NOx emissions from the coal.

NOx reduction of 34.4% is expected


Future Technology

The coal reburners are similar to the gas reburners. Coal dust is burned above the main coal burning area in the boiler instead of natural gas. The combustion of the coal dust reduces the amount of oxygen available to form NOx. It is expected to reduce NOx emissions by at least 50% without any serious decreases in efficiency.

Advanced Turbine Systems (ATS) are extremely efficient and fuel flexible. These systems are expected to demonstrate at least a 15% improvement over today’s best turbines, and break the 60% barrier in net thermal efficiency for large power plants. This Increase in efficiency will also mean a decrease in emissions. These turbines would be idea for use with IGCC.

Integrated Gasification Combined Cycle Technology (IGCC) replaces a coal combustor with a gasifier and gas turbine. The gasifier turns the coal into a gas and then removes the pollutants. Using this system, over 99% of the sulfur contained in the coal can be removed before it is burned. The gas is fed to a gas turbine and the exhaust heat is used to create steam for a steam turbine. The IGCC system in modular form can be integrated into existing plants. The result will be high efficiency, low capital cost, lower emissions, and marketable byproducts.


Air Pollution Monitoring System

The industry for monitoring air pollution systems is enormous. Companies offer many different products. There are comprehensive systems for monitoring a wide range of pollutants, and there are single pollutant monitoring systems. For this project, three pollutants must be monitored. It would be cost effective to incorporate two systems for the Shanghai power plant, one for particulates and a dual system to monitor NOX and SOX.

One system would involve only the particulates. This system is the cheaper component of the two. There are many companies offering different styles, but the main design is the same. The instrumentation consists of what is called a "dust jar". This jar is usually a glass, metal, or plastic container a half of foot in diameter and 8 inches tall. The jar is placed in a position as not to be disturbed by normal traffic. Care is taken so that birds and other animals do not disturb the measurements. In addition, a fungicide is placed in the dust jar so that a growth of cultures does not result, which would effect the readings. The settled particulates are measured by weight. This information is then fed into the monitoring computer system, where a trained technician can analyze the real time data.

The dual system brings the main expense to the project. The high temperature nature of the power plant coupled with the high sulfur content in the coal creates a potentially difficult corrosion situation. However, companies such as Tisch Environmental claim that they can offer reliable equipment at reasonable prices that address this issue.

BCDP is currently awaiting bids for the most reliable and cost effective systems to be used on this project.



Financial Issues

This project is a joint venture between BCDP Consulting and the GSPA. In the Request for Proposal by the GSPA, certain issues are of question. The financing situation outlined in the RFP does not seem fair to an outside investor. BCDP Consulting wonders how the GSPA, who has the lower investment costs into the project (16%), maintains that they should own 70% of the equity. BCDP suggests the equity split be something along the lines of 55% for BCDP and 45% for the GSPA. Of course, we are open to further negotiation with you of the exact financial and managerial terms of the proposed joint venture.

Another managerial area which we would like to discuss prior to contract award is the composition of the Board of Directors (B.O.D.) of the joint venture (SAPC). We propose the B.O.D. have nine (9) members, out of which five (5) should be BCDP officers, the rest GSPA officers. We would also have the chairmanship of the B.O.D. for the first four years of the joint venture existence, to ensure the on-time completion of the project and plant start-up.

BCDP has a good working relationship with China International & Materials Corp, so they offer us lower-priced equipment. With the exception of the Electrostatic Precipitator, all other equipment will be obtained for 50% of the U.S. market price.

Due to the nature of the joint venture, both the GSPA and BCDP are very interested in how they are going to get their money out of the investment. BCDP believes that the pollution control system justifies higher electric rates. These rates can be adjusted for day or night consumption, to provide incentives for consumers to use more energy at off-peak times. We could also advice GSPA of the most favorable rate policies, to encourage efficient energy consumption, as currently applied in the United States.


Cost Analysis

Capital Cost For All The Equipment & Indirect And Startup Costs

Capital Cost For All The Equipment

Low NOx Combustion

$ 4.15 Million

Electrostatic Precipitator (ESP)

$32.61 Million

Flue Gas Desulfurization (FGD)

$32.63 Million


$ 2.78 Million


$72.17 Million

Indirect And Startup Costs

General Facilities

$ 5.58 Million


$ 5.58 Million

Project Contingency

$19.38 Million

Process Contingency

$ 0.87 Million

Preproduction Costs

$ 2.53 Million


$33.94 Million

Total Capital Requirement = Capital cost for all the equipment + Indirect and startup cost

= $72.17 Million + $33.94 Million

= $106.11 Million

Annual Operating Cost

Operating and Supervisory Labor


$0.81 Million


$0.09 Million

Maintenance Labor

$1.29 Million

Maintenance Material

$1.93 Million

Admin. & Support Labor

$0.66 Million


$4.78 Million


Solids Disposal, Wet

$3.35 Million

Solids, Disposal, Dry

$1.15 Million


$0.19 Million


$2.71 Million


$1.73 Million


$9.13 Million

Total Annual Operating Cost = $13.91 Million