Thermal power and denitrification market competition has begun

The “Emission Standard of Air Pollutants for Thermal Power Plants” (the final draft) formulated by the Ministry of Environmental Protection has been “landed”. This is called “the most severe” thermal power environmental protection standard because its regulations include nitrogen oxides and mercury content. The limits of smoke emission concentration in thermal power plants exceeded that of Europe and the United States. On the one hand, it triggered the fragile nerves of the already-debt-operated thermal power plants, and on the other hand, it also triggered an outbreak of more than 300 billion yuan in thermal power and denitrification.

The curtain has been started. Has the thermal power plant and denitrification company entered the "war" status? How can the thermal power and denitration market draw lessons from the accumulated experience of the past five years? The denitration industry has already started, the competition in the catalyst market is filled with smoke, and the relevant profit model is also being actively explored. The strict implementation of the standards will be the key to the healthy and orderly development of the denitrification industry in the future.

Mature profit model is still in search

The site of the largest domestic original gas purification experimental base built by China Power Investment Yuanda Environmental Protection Co., Ltd. under the Chongqing Jiulong Electric Power Group. The 600,000 kilowatts of thermal power plant boilers are connected to various pipes. According to the technical staff, the flue gas emitted by the coal-fired units will enter the denitrification, dust removal, desorption, and mercury removal processes through these pipelines. Pollutant emission limit control.

“It is on the basis of this experimental base that Yuanda Environmental Protection has started to improve the efficiency of off*and denitrification, optimize process design, and explore the business model of the project.” Liu Yi, General Manager of Jiulong Electric Power Co., Ltd. stated that after 11 years of unremitting efforts, Today, Yuanda Environmental Protection has become one of the leading companies in the field of thermal power off * denitrification in China.

Creating a mature profit model is the core proposition of the de-NOx industry in thermal power generation. In the past five years, many professional denitrification companies including Yuanda Environmental Protection have adopted the EPC model (general contracting). Dr. Yu Jian, from the Institute of Process Engineering of the Chinese Academy of Sciences, said that thermal power off* is mainly used for engineering tendering, and that the company adopts the EPC mode only after the installation of the facility is in place. It does not participate in later operations, and objectively causes the power plant to try its best to reduce prices. * The company's vicious competition and the pursuit of profit under low prices. A series of quality problems have emerged in low-cost projects, such as the quality of some off-gassing devices and the low rate of off-site facilities.

Since then, the policy has begun to implement off-licensing tenders, through the introduction of off the company to participate in the operation of the power plant in order to increase corporate earnings. According to Liu Yi, Jiulong Electric has actively participated in the concession bidding in the past two years. The company recently acquired 9 franchise projects of the company’s controlling shareholder CLP, through a private placement fundraising. The total installed capacity of the company’s current franchising operations has been Up to 12 million kilowatts. “According to the current annual average of the annual utilization hours of the thermal power units for the 4000-5000 hours of the Internet and 1.5 cents/kWh, all new revenues will exceed RMB 500 million each year,” said Liu Yi.

An expert from the China Environmental Protection Association Boiler Furnace Kiln Dumping and Dust Removal Committee stated that under the franchise model, the company can enjoy the government's electricity price subsidy, but the price of electricity is generally paid off from the grid to the power generation company and then paid by the power generation company. Instead of directly replenishing the company, it is obviously beneficial to companies such as Jiulong Electric Power and Guoyuan Longyuan Environmental Protection that rely on the advantages of large power groups.

For the majority of SMEs, even if they get the franchise, it may be delayed to pay the price of electricity subsidies, so we need to find a more reliable profit model. It is understood that Hunan Yongqing Environmental Protection Co., Ltd. has begun to try the EPC+C model beyond the EPC model, that is, the introduction of a follow-up custody operation (C). The project gross margin is much higher than that of the EPC.

Liu Yi said that the market exploration model will be able to use the denitrification market, and the BOT and EMC (contract energy management) models that are currently maturing in other engineering fields can be implemented in the future to further increase project comprehensive income.

Catalyst market competition has been booming

With the gradual start of the engineering market, the field of denitrification catalysts that account for more than 40% of the total project cost is seen as another blue ocean. It is understood that at present, there is no domestic catalyst production process that is completely independent of R&D. The technology is mostly imported from Japan and the United States. The technical threshold for enterprises to enter the industry is relatively low. Combined with the production of catalysts such as titanium dioxide, vanadium trioxide and other raw material carrier is relatively easy to obtain, leading to the emergence of market homogenization competition gradually emerged. At present, there are more than 10 companies engaged in the production of denitrification catalysts in China.

In the production plant of Chongqing Yuanda Catalysis Co., Ltd., under the jurisdiction of Jiulong Power, after the raw materials have been subjected to a series of processes such as stirring, extrusion, calcining, drying and cutting, a piece of catalyst similar to honeycomb coal has been produced. According to Cheng Zhenheng, head of the company's general department, the company's investment in the first phase of the production line, which invested 300 million yuan and was put into production in 2009, currently has an annual production capacity of 10,000 cubic meters of catalyst. This production capacity currently ranks at the forefront in China.

The catalyst is replaced on average every three years. Analytical calculations suggest that the demand for catalysts for the denitrification market during the “Twelfth Five-Year Plan” will reach 10-12 million cubic meters per year and the market scale will be as high as 50 billion yuan. At present, domestic denitrification project projects started to implement, the owner unit also adopted a separate bidding system in the choice of catalyst technology, which may further exacerbate the disorderly competition in the catalyst market.

For the upcoming market competition challenge, Liu Yi is full of confidence. As one of the few domestic leading suppliers of large-scale denitrification catalysts, the company has accumulated tens of thousands of cubic meters of orders. In the past two years, as far as the catalyst has accumulated in the industry, brand value and technological leadership strength have been the main advantages of the company. In addition, the company has begun to develop catalysts and engineering design processes that integrate dust removal, desorption, denitrification, and mercury removal in the catalyst production process. This aspect can improve the comprehensive treatment efficiency of the flue gas pollutant discharge and save the project at the same time. Cost of construction, economic efficiency is more significant. “For example, the integrated technology of denitrification and mercury removal catalysts that we are developing, through reducing the investment in the separate mercury removal process, has enabled the reduction of the engineering unit cost by more than 15%, while also facilitating the intensive management of denitrification and mercury removal.” He said.

Yu Jian said that from the perspective of the current industry development trend, the market demand for catalysts may be the first to enter the development stage of blowout development. The fierce market competition is already coming. What is more noteworthy is that at present, many domestic titanium dioxide catalyst production enterprises are planning to expand production plans, in order to share the "cooked glass" of the thermal power denitrification market. Under this circumstance, it is necessary to emerge more leading enterprises such as Yuanda Environmental Protection, to promote industrial upgrading through technological and technological innovation, and to avoid blind and low-level competition.

Denitrification or replay off* bad record

Compared to Party B (Denitrification Engineering and Product Company)'s "Mounting", the emotions of Party A's power plants are relatively complex. On the one hand, in the face of stringent emission standards, they hope that the final draft will be able to lower the upper limit value indicator; on the other hand, power plants are more expected to be introduced in time for the denitrification price subsidy policy.

In the emission limit indicators, the Ministry of Environmental Protection has clearly stated that "will not relax." In the electricity price subsidy, relevant sources of the CEPD revealed that it would be possible to implement a standard of 1.2 points per kilowatt-hour.

For the subsidy standard of 1.2 points, a power plant source from Southwest China stated that the current cost of the flue gas denitrification project is about 200 yuan/kW, the installed capacity of the power plant in operation and planned to be added is 3 million kilowatts, and the cost of denitrification is 600 million yuan. yuan. However, according to the power plant's annual average emission of 6 billion kilowatt-hours, the standard subsidy of 1.2 cents per kilowatt-hour within five years will amount to 360 million yuan, which is far less than the cost of 600 million yuan. However, another person from the Northeast Power Plant stated that the 1.2 points/degree subsidy standard can make up for the cost.

Why are there two different voices? A senior industry source revealed what actually happened. It turned out that according to the history of the past five years, some power plants met the policy requirements of the implementation of the unit off the transformation, but in fact they tried their best to escape environmental responsibility. The most common of these is the fume bypass that has been added to avoid shutdown due to plugging of the flue gas. According to the requirements, the bypass must be closed under the risk of no downtime, but the power plant often starts these bypasses and even artificially adds more bypasses to discharge the flue gas. In this case, the bypassed flue gas reduces the amount of flue gas emitted from the pipeline, and it can easily fool regular environmental inspections. "The final result is that the power plant has received a subsidy for the price of electricity and the cost of the gas has been reduced so that it does not lose out."

In order to prevent all kinds of unfavorable phenomena in the past in the field of flue gas detoxification from repeating itself in the future denitrification field, the Ministry of Environmental Protection clearly stated in the “Twelfth Five-Year Plan” atmospheric pollutant prevention and control plan announced recently that there should be an additional non-essential flue gas for power plant boilers. The road must be cleared in the future. At the same time, it will increase efforts to remove and review future denitrification and professionalism.

Liu Yi said that the strict requirements of the "Standard" reflect the policy's full attention to energy-saving and emission reduction of thermal power. This is a necessary move to implement the national energy-saving emission reduction policy. Summarize the experience and lessons of the past thermal power industry, the next five years of denitrification industry, on the one hand the need for "iron hand" policy is timely and strongly promoted, on the other hand related departments should also improve a series of technical and market access standards in the industry sector in a timely manner Focusing on guiding the healthy and orderly development of the industry at the initial stage.