NEWS RELEASE                                                                                                    DECEMBER 2014

Total FGD Market Much Bigger Than $3.4 Billion Forecast

Next year coal-fired power plants will spend $3.4 billion for traditional scrubbing systems to remove SO2. This is a big decrease from the 2010 - 2011 peak concludes the McIlvaine Company in FGD Market and Strategies.

The traditional market involves using limestone as a reagent in wet scrubbers.  Europe and The U.S. will be spending very little in this category because few new coal-fired power plants are being built. Many of the older ones already have scrubbers. However, there is another factor which is a regulatory environment which encourages high operating cost /low capital cost.

A number of older power plants in the U.S. are required to reduce HCl and must purchase equipment to do so in the next year or two. The traditional limestone scrubber has a high capital cost and low operating cost.  Due to greenhouse gas initiatives and lower natural gas prices the operators of these power plants are considering power plant retirement in the next decade. They are, therefore, looking to lower capital cost options.

Dry lime injection (DSI) is one of the low capital cost options.  Annual reagent costs (lime or sodium) will be quite high but if the power plant is retired in less than ten years, the life cycle cost of this option will be less.

A big market which is not reflected in the scrubber forecast is the upgrading and replacement of portions of existing FGD systems. Many FGD systems are more than 25 years old. Since there are regulatory barriers to building new power plants, the only option is to upgrade the old ones. The upgrade market has risen substantially over the decades. The potential in both Europe and the U.S. is significant. China is also forcing upgrades of nearly 100,000 MW of existing FGD systems which are not meeting current regulations.

The potential for FGD sales in India and some other parts of Asia is substantial.  At this point regulations do not require FGD but it is likely that there will be tougher regulations in the foreseeable future.

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