Background

Clean Coal Technologies, Inc. (CCTI) owns a proprietary technology that reduces the contaminants and pollutants created by the combustion of coal. Clean Coal Technologies, Inc. (CCTI), which began operations on September 1, 2007, was formed through the acquisition of Clean Coal Systems, Inc. CCTI stock trades under the symbol CCTC.

CCTI has developed a patented process that transforms low-rank, high moisture coals into a clean burning fuel with a high heating value per unit mass of coal (U.S. Patent #6,447,559). CCTI has identified the optimal process configurations and conditions to quickly extract and capture moisture and other pollutants while maintaining the structural integrity of the coal. The resulting coal, termed "Pristine® coal" is slightly more fragile than its parent coal, thereby requiring a smaller power draw on the coal pulverizers prior to combustion. At the same time, it is sufficiently rigid to allow safe transportation and storage with existing coal handling and storage infrastructure. It also possesses a significantly increased heat content that increases the value of the Pristine® coal.

For coal-burning power plants, there are significant potential financial benefits to implementing CCTI technology. CCTI's product offers a faster return on investment as it may eliminate the need for a flue gas scrubber (at a capital cost of $200-300 million) and significantly reduces maintenance costs for existing facilities. CCTI's technology deployment is based on standard modules that are configured in accordance with the client's production capacity requirements.

CCTI's technology is being marketed through a variety of contractual relationships, including joint ventures, licensing agreements, and build/operate/transfer (BOT) relationships. The Company has already signed its first major Chinese contract and a Technology Licensing Agreement with INK Global Consulting to build clean coal plants utilizing CCTI's patented technology in India More contracts and joint ventures are expected to follow around the world, including the USA.

The Challenge
Today's growing awareness of global warming has birthed a plethora of new technologies that claim to reduce carbon dioxide and other emissions from coal-fired power plants. Unfortunately, the development cycle of these technologies, from concept to commercialization, is rife with challenges. These include the collection of statistically valid data, its evaluation and analysis, and process refinement. Even after these steps are completed, there remains the major challenge of demonstrating the new technology at commercial scale. The first challenge is the design, construction, and testing of a commercial or proof-of-concept (POC) plant of the new technology. The next is the commercial validation of the stated benefits of the new technology with its end-user, i.e., a coal-fired power plant. Most power plants are hesitant to be the first to install a new technology. Reasons include the disruption of plant operations, possible damage to existing equipment, and the risk that the new technology may not work as expected. In addition, there exists the over-arching challenge of securing financing for the first commercial demonstration – a paradoxical set of circumstances with investors hesitant to finance the technology until it is proven and technology developer needing financing to prove the technology. Needless to say, once the first (or first few) commercial demonstrations have been proven, the hesitation to install the new technology quickly disappears.

A Potential Solution
A similar situation existed in the 1980s when the U.S Environmental Protection Agency enacted the Clean Air Act and its various Amendments. The Act severely curtailed the emissions of air pollutants from coal-fired power plants responsible for the formation of acid rain. These pollutants, consisting primarily of the oxides of sulfur, are derived from the sulfur in coal when coal is combusted. Several novel technologies were developed to reduce these emissions. These ranged from pre-combustion technologies that removed sulfur and other pollutants from coal prior to the boiler to those that removed such pollutants after combustion. Today, pre-combustion technologies, such as coal preparation or coal washing, and post-combustion technologies such as flue gas scrubbers are mature technologies. However, their POC plant demonstrations were largely facilitated by a sophisticated mathematical coal-fired power plant simulator developed by the U.S. Department of Energy and Carnegie-Mellon University. This simulator, termed the Integrated Environmental Control Model (IECM) was conceived in the early 1980s as a tool to quantify the potential benefits of using a new technology in a commercial coal-fired power plant prior to actual construction and validation. The simulator, based on actual data gleaned from hundreds of power plants, uses sophisticated algorithms to predict emission and performance changes in the power plant when coupled with different technologies. The anticipated benefits of a new technology now cease from being speculatory and qualitative to quantitative parameters that enable potential investors to be more comfortable when investing in the technology's first commercial validation.

IECM History
The IECM began in the early 1980's as a tool to assess the impact of fossil-fuel power plants on acid rain with respect to emissions and pollution control options. The first version only correlated boiler characteristics with these emissions. In the late 1980s, additions to the IECM focused on post-combustion technologies to control emissions of multi-pollutants (SOx, NOx, and particulate matter). Both performance and cost models were developed for each multi-pollutant control technology (flue gas scrubbers, low NOx burners, electrostatic precipitators) and integrated into the system model. Refinements continued into the 1990s that included a graphical user interface and a stochastic engine to perform uncertainty analysis. Baseline multi-pollutant control models were updated with actual data from commercial applications. The late 1990s added a mercury capture technology using activated carbon duct injection. The early 2000s incorporated natural gas combined cycle and integrated gasification combined cycle model frameworks into the IECM. Models for carbon capture and sequestration (CCS) were added in the mid-2000s using an amine-based system for post-combustion carbon dioxide capture and Selexol for pre-combustion capture systems. A GE entrained-flow gasifier and associated subsystems was added, based on a GE 7FA gas turbine. This gasifier supports a suite of coals. Also added was an oxyfuel model framework as an additional CCS option. Current work is focusing on additional gasifiers, water treatment technologies, and coal to liquid options for producing alternative fuels as part of a co-generation plant framework.

IECM Use and Limitations
The IECM provides a handy tool that allows different technologies to be systematically evaluated at the level of an individual plant. It calculates the performance, emissions, and cost of using different environmental control technologies in a given power plant. The model consists of a base plant and various control technology modules that may be implemented together in any desired combination. The graphical user interface (GUI) facilitates the configuration of the technologies, entry of data, and retrieval of results.

The IECM currently includes four types of power plants: a pulverized coal (PC) plant, a natural gas-fired combined cycle (NGCC) plant, a coal-based integrated gasification combined cycle (IGCC) plant, and an oxyfuel combustion plant. Each power plant may be configured in terms of its capacity and operating parameters with user inputs or default values. For each power plant, a process performance sub-model calculates all energy and mass flows, including air pollutants, reagent requirements, and solid wastes associated with that process. The process performance sub-models also determine key process design parameters, such as the specific collection area of an electrostatic precipitator, or the reagent stoichiometry of a flue gas desulfurization system for SOx capture. Coupled to each performance model is an economic sub-model that estimates the capital cost, annual operating and maintenance (O&M) costs, and total levelized cost of each technology based on plant and performance model parameters, including all emission constraints. These costs are based on the most recent EPRI cost estimates. (TAG, Technical Assessment Guide, Volume 1: Electricity Supply. Palo Alto, CA, Electric Power Research Institute (EPRI), TR-102276-V1R7).

A unique capability of the IECM model is that it allows performance and costs to be characterized probabilistically, using Monte Carlo simulations to quantify performance and cost uncertainties and risks.

While the IECM is not as reliable as a fully constructed pilot plant, it nevertheless provides a degree of confidence for investors and first-time users of a new technology to proceed toward a commercial or POC scale plant demonstration. Once at this stage, the IECM helps identify those critical process parameters and their associated values that have the largest effect on carbon dioxide capture and multi-pollutant reductions. This practice avoids the alternate (and time-consuming) approach of identifying each of these parameters through a statistical experimental design and determining their optimal values through repeated experimentation. Once the critical process parameters are identified via the IECM, they can be set and tested at the POC plant to validate further the predicted values from the IECM with the experimentally measured values from the POC plant.

Use of the IECM to Simulate Emissions from Pristine® Coal

So far, the only indicator of potential benefits derived from the combustion of Pristine® are its inherent properties, i.e., increased heating value, lowered moisture, sulfur, and pollutant levels. Actual combustion tests have not been performed due to the constraints mentioned above. Fortunately, the IECM may be used to simulate the change in emissions that could result when a power plant switches from combusting coal to Pristine® coal.

The first step of the simulation is the selection of a suitable power plant. The IECM allows the user to pick a desired power plant and specify certain parameters while allowing the IECM to fill in the remainder from its default or calculated values. The characteristics of the selected power plant are shown on Table 1. Note that the power plant uses no post-combustion multi-pollutant control technologies except for a bag house or fabric filter.

Table 2 shows the properties of a sample of coal from the Jacob's Ranch mine in Wyoming's Powder River Basin (PRB). The last column shows the properties of the Pristine® coal that was produced when this coal was processed through the CCTI process. Coal property improvements are observed in the increased heating values and reduced sulfur and moisture levels between the two coals. The increase in ash, as a percentage of the weight of coal, is due to the removal of nearly a third of the weight of coal due to moisture removal.

Until the simulation was run, it was expected that the use of Pristine® coal would provide significant advantages over the PRB coal. However, these advantages could not be quantified in any manner without an actual test. The IECM simulation allows the predictions of the advantages in a quantitative manner.

Table 3: Comparative emissions and the corresponding improvements in efficiency when the two coals are fed to the selected power plant.

Conclusions
Several advantages are noticeable with the use of Pristine® coal over PRB coal. These advantages are in quantified metrics that can now be used to develop cost-benefit analyses to facilitate a more confident go-forward approach with the use of the CCTI technology. While other tests may be run with different coals, the following benefits may be expected when a PRB coal from the Jacob's Ranch mine is converted into a Pristine® coal can combusted in a 200 MW coal-fired power plant.

1. 1. An increase in boiler efficiency from 85.67% to 94.36%.
2. 2. A decrease in the power draw for the coal pulverizers in the power plant from 0.8116% per MW to 0.5402 per MW.
3. 3. A reduction in the amount of coal fed to the boiler per hour from 109.1 tons per hour to 65.94 tons per hour.
4. 4. Reductions in stack gas emissions ranging from 12 to 69% for each component. In particular, NOx reductions of 12.1%, SO2 reductions of 47.6% and carbon dioxide reductions of 72.4%.

Summary
The significance of these findings computes to numerous cost savings and reduced negative impacts on the environment associated with the combustion of coal. CCTI's technology, a pre-combustion process, treats the coal before it is burnt by power plants and heavy industry. It is superior to other pre-combustion coal cleaning technologies because it removes pollutants and contaminants – up to 70% in this test case – that scrubbing does not address, yet costs substantially less. For coal burning power plants, CCTI's technology offers a faster return on investment as it may eliminate the capital investment of a scrubber (filter) for new facilities and significantly reduces maintenance costs for existing facilities. CCTI's technology deployment is based on standard modules, using a continuous process as opposed to conventional "batch" processes traditionally deployed by some of its competitors. The process provides for low-grade coal to be transformed via a multistage, patented process into high grade, clean burning coal on an industrial scale at a very cost-effective price.