NEWS RELEASE SEPTEMBER 2015
Chinese Air Pollution Tsunami Will Hit U.S. Shores in a Few Years
A huge but declining air pollution control (APC) market in China will create a tsunami which will exceed the Japanese and European APC tsunamis of previous decades. This is the prediction of McIlvaine Company in Air Pollution Management.
What is an APC tsunami and what is its cause? The tsunami is the sudden appearance of many new foreign players in a domestic market. The cause is that national regulations create temporary large markets. When these markets slow, the suppliers look elsewhere to sell their products.
The U.S. has experienced two such events. Flue gas desulfurization (FGD) was developed in the U.S. and applied to 10 percent of the 300,000 MW coal-fired base in the 1975 timeframe. Japan then decided to install FGD immediately on all its 30,000 MW of coal-fired capacity. So it was the world’s largest market for several years. Mitsubishi, Chiyoda and Hitachi all entered the market. When the Japanese market subsided, they started pursuing the U.S. market and over the years became major suppliers.
The world precipitator market was dominated by two U.S. companies: Research Cottrell (RC) and Western Precipitation (WP). As a result of European tsunami, they disappeared under the waves. Their demise was more than just the aggressive activity of European suppliers. Europe mandated continuous compliance for particulate control. No such requirements existed in the U.S. Flimsy wire rappers supplied by RC and WP would break and were no match for the rigid frame European design. Flӓkt (Sweden) very quickly became the top U.S. precipitator supplier.
The Japanese market for coal-fired boiler air pollution control is one tenth the size of the U.S. market. The European market is equal to the U.S. The Chinese market is four times the U.S. in the long term and twenty times the U.S. in the short term. So the Chinese tsunami potential is huge. The top ten air pollution control companies in China are all in the top twenty worldwide even though all their business is in China. The huge retrofit program has created an unsustainable bulge in the market. The economy is also slowing and there will be no more years with 100,000 MW of new coal-fired power plants.
Much of the Chinese technology was originally under license, but improvements to the technology have been made. One major supplier requires its engineering staff to spend 30 percent of its time on development of improved products. One example of an improved product is a hybrid precipitator-fabric filter licensed from U.S. DOE. The Chinese supplier has commercialized this with many successful installations. The U.S. Dry Fork power plant dry scrubbing system duplicates an installation in China.
The magnitude of the tsunami can be measured in SCR catalyst capacity. World demand in 2010 was 130,000 m3. Chinese SCR catalyst production was zero. Due to retrofits there was a Chinese need for as much as 200,000 m3 in just one year. China now is the world production leader. However, catalyst only needs to be replaced every six years, so China already has excess capacity. The situation relative to systems and components is even more calamitous. Systems last 25 years.
Coal-fired boilers are the largest application for air pollution control. Future new equipment markets are spread throughout the developing countries. However, there is a very large upgrade and maintenance market in the U.S. and Europe. The Chinese tsunami will necessarily be focused on the existing U.S. plants.
The worldwide APC new system capability already exceeds the needs over the next decade. On the other hand, the upgrade and maintenance demand is going to exceed supplier capability. Plant owners want to focus on their core business and would like to outsource as much of the air pollution control activities as possible. The result will be a Chinese Total Solutions tsunami which provides all upgrading, operations and maintenance needs.
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