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Insight | Time:Nov 30 2016 2:52PM
Painful - coal-fueled recycled polyester fiber plants in Hebei to replace coal with gas boiler
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Government scheduling order in Hebei requiring all coal-fired plants to cut or stop production till end December this year shook recycled polyester fiber market there about two weeks ago. These plants in order to adjust themselves to the strengthened regulation and survive the policy of eliminating 11071 coal boilers by the end of 2017 have to work to replace the coal with gas boilers. 

Currently, coal boiler, coal water slurry boiler, biomass granule boiler and gas boiler are the four boilers used in plants which require a subsequent higher cost. 

Kind Fuels Advantage Disadvantage Cost
Coal boiler Coal Cheap, low cost unsustainable, highly polluted 100yuan/mt
coal water slurry boiler 70% coal powder and 30% water and some chemicals to be mixed together efficent, low cost and relatively envronment-friendly high-quality stuff is needed, difficult in maintenance ad high cost in replacement  170-180yuan/mt
biomass granule boiler Forestry?residues and wood?waste to be processed with press roll and holder die using cold dense shaping technology at room temperature Recycling convenient in trasportation, without desulfurizing unit, envronment-friendly Industrail chain of fuels to be developed, unstable supply and demand, standards to be improved higher than coal water slurry and lower than gas
gas boiler Natural gas Environment-friendly high cost in feedstock 300-400yuan/mt
Note Price differs from plants to plants in line with their cost

It thus can be argued that enterprises are mainly driven by government policy to carry out this coal-burning to gas-burning reform due to the high production cost caused by the energy structure of “rich in coal, poor in oil and gas”. Here is the primary calculation.

Solid re-PSF plants production cost would go up 200yuan/mt, an increase of 20% based on the current 900yuan/mt which weeds out the depreciation and financial cost given the respective 100yuan/mt and 300yuan/mt cost of gas boiler and coal boiler (coal is at 600yuan/mt).

It is heard that some plants in Hebei with 5 ton steam boiler or 10 ton one are on the way to do the replacement and is expected to finish the work in the first half of 2017.

What goes around comes around. For those who have already completed the replacement at the cost of increasing production cost, they are to operate as usual and release less pollutants under the policy. Yet, current coal-fired plants are to bear not only high cost of the reform, but the loss of profits due to halted or shortened supply and the possible squeezed market share or even customer losses. However, the idea of green production as the guiding principle of and development potential for future economic growth, shall be integrated into the practice of various businesses to take on their social responsibilities.
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