NEWS RELEASE March 2019
Dry Scrubbing: Most Profitable Markets
The largest market for dry scrubbing is to capture SO2 from coal fired power plants. Wet scrubbing is used by 95 percent of the coal plant operators. The reason is the much lower reagent cost and the opportunity to generate a byproduct (gypsum). Dry scrubbing offers much lower capital cost as well as reduction in water consumption and pollution. In many cases the dry scrubbing option is eliminated by default. Limestone for wet scrubbing is widely available at a predictable cost. Reasonably priced lime for dry scrubbing may only be available if a lime supplier agrees to build a dedicated kiln just for a plant or several plants in a region.
The catalytic filter with dry sorbent injection (DSI) is now proven in many smaller applications. The recent introduction of 6 meter long candles makes it a candidate for power plants as well as the smaller applications. One vessel instead of three is used to reduce NOx, SO2, other acid gases, and particulate. Furthermore clean hot gas at 600F is available for energy recovery.
System and reagent suppliers are challenged to determine which industries and countries to pursue. The goal is always maximizing profit not revenue. So opportunities should be quantified based on predicted return. Should a lime company ship product from one continent to another and be content with a low gross profit or should it build a plant close by and generate high gross margins? Should a system supplier and lime producer team to provide a total solution based on a yearly semi fixed contract ($ per ton of pollutant removed during the year)?
McIlvaine is offering a service to help suppliers quantify the market in terms of the obtainable gross profit at various price levels resulting in the revenue and gross margin combination to provide the Most Profitable Market (MPM).
Total Available Market (TAM) for dry scrubber systems, O&M, and reagent is $30 billion/yr. This includes the market lost to wet scrubbing. The Serviceable Obtainable Market (SOM) is the market which can be addressed with the lowest priced product at even small unit margins. This market is $5 billion per year and eliminates the wet scrubber portion. The Most Profitable Market (MPM) is the one for which the supplier can most profitably supply its products and services given its capital and knowledge resources.
The main types of dry scrubbing systems are dry sorbent injection (DSI) and systems which use a dedicated vessel for the reaction. Vessels can be segmented into those which fluidize and those which recirculate the reagent.
Dry scrubbing is a market which is being pursued worldwide by air pollution system designers, reagent suppliers, and suppliers of components such as filters, valves, fans, conveyors, and instrumentation. There has been recent success with third party remote monitoring and guidance. The success at NAES plants has been well documented at Dry Scrubber User Association (DSUA) meetings.
Dry scrubbing is being used to capture acid gases in a variety of industries around the world. The largest installations have been in coal fired power generation. For decades the U.S. was the main market. Now power plants around the world are adopting this technology. Dry scrubbing is now widely used in waste to energy plants, glass plants, and in many other industries. So the market has evolved from one country and one industry to many countries in many industries.
The MPM for system suppliers is limited to those regions where a lime producer offers a reasonably priced product. The fact that reagent consumption is a very large percentage of total cost of ownership dictates a close working relationship between system and lime suppliers.
The McIlvaine MPM forecast is being customized for any lime, system or component supplier. The MPM is derived from the SOM which is provided in N027 FGD Market and Strategies. McIlvaine will assist in determining what portion of SOM at what pricing and packaging strategy constitutes the MPM. Part of the analysis will be to determine the cost of ownership of all the options. This in turn will be based on decades of evidence gathered in 44I Coal Fired Power Plant Decisions. For suppliers of fibers, media and bags the additional insights in N021 World Fabric Filter and Element Market will be utilized. In addition McIlvaine is working with others such as International Filtration News to provide ongoing total cost of ownership analyses. The Dry Scrubber Users Association is a continuing source of TCO evidence.
The MPM forecast of purchases by each owner is also available. A small number of power plants operate most of the dry systems. Forecasts for each owner and for each plant within a system are available based on data extracted from 42EI Utility Tracking Systemfor coal fired power plants around the world and N032 Industrial Plants and Projects for industrial plants