As for the market size for FGD, you're aware that several plants are already being tendered, and many are purchasing FGD systems, making the market quite vibrant. Now, as you know, pollution control markets around the world are very soft at this point because coal is no longer a preferred fuel, and many of the more mature markets already have FGDs, SCRs, and other equipment in place. India is fortunate in this regard, as many vendors are focusing on the Indian market, leading to a significant number of vendors bidding on projects, which is driving prices down.
So you're observing a fairly buyer's market, where, in fact, places like NTPC and others have embarked on reverse auctions to award FGD projects. Returning to the market size, we estimate that roughly about 180,000 megawatts of units actually require some kind of SO2 control. It could be an FGD, a DSI, or something similar requiring an FGD control.
Our estimate is that about 141 gigawatts of units would need to install an FGD by 2022. Will it get extended again, going by India's track record? Perhaps yes, because things have always been subject to change, but since enforcement has become tougher, India has repeatedly shown support for COP 21 and other global environmental standards. So roughly about 141 gigawatts are likely to have FGDs by 2022, of which we estimate about 40 gigawatts or so have already been awarded, and another 100 gigawatts are yet to be awarded or are in the assessment stage through various AE firms like TCE, Fichtner, and other specialized companies in this area.
Now, the typical emission numbers for Indian units are roughly about 1000 to 1400 milligrams per cubic meter. About 80 percent of the impacted units burn high-ash Indian fuels, with less than one percent sulfur content in the fuel. Almost 100 percent of all the units have ESPs.
There are very few baghouses in Indian units, and it's primarily an ESP market. The average construction period for an FGD is roughly about 20 to 24 months, closer to 24 months. Now, of the 141 gigawatts that we estimate need an FGD and of the remaining 100 gigawatts that are yet to be awarded and are in various early stages of planning, our calculations show that around 70 percent of those are less than 600 megawatts. The reason I bring this up is regarding dry scrubbers. The largest dry scrubber installed anywhere in the world using a single-strain scrubber design is 520 megawatts, which is the Dry Fork project by Sumitomo Foster Wheeler (SFW). Historically and conventionally, it has been seen that dry scrubbers or semi-dry systems are most effective and cost-effective under 600 megawatts. They are designed for capacities under 600 megawatts, and there are roughly about 70 gigawatts of capacity that are essentially unawarded projects, all of which are less than 600 megawatts. Now, if you exclude the coastal units – I mention coastal units because they are more likely to opt for seawater scrubbers, and many of them also use very high sulfur fuels.
If you exclude them, then you're talking about another 15 gigawatts that are out. So you're talking about anywhere between 55 and 60 gigawatts of opportunity that could be ripe for dry scrubbers. In addition to that, you also have a number of captive power plants that are very hard to track. These are basically plants that have industrial processes on-site for steam and power generation. These units constitute almost another 300 to 400 captive power plants that are subject to another set of regulations and are being investigated on a case-by-case basis depending on the size of the unit to install additional controls. So, in a nutshell, this is what the market opportunity is. I mean the usual suspects like a number of state board companies, not so much the NTPCs of the world who have larger units, but a lot of the state board companies who have a number of units that are between 200 and 600 megawatts.
Many industrial plants with units on their sites, if they're in the right size range and operating with the right load factors and capacity factors, are likely to install an FGD. Like any other market anywhere in the world, the cost impact of these installations is very significant, and in many cases, there is no clear capital recovery process established. The plants are actually appealing to various regulators to see if they can get any relief, either through a pass-through clause or through slight modifications to the regulatory standards themselves, perhaps by increasing the limit or even pushing out the compliance dates.
Krishnan & Associates provides specialized market intelligence, regulatory research and market forecasts on global clean energy technologies and power & energy markets. For more information email us at info@krishnaninc.com