PROJECT BACKGROUND HONGSA MINE

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HONGSA MINE MOUTH POWER PROJECT
PROJECT BACKGROUND
1. Project Location

The Hongsa Mine Mouth Power Project is located in Hongsa District, Xayabouri Province, Lao PDR in the northwest region, approximately 90 Km from Xayabouri urban province to Nguen International Immigration Checkpoint and 34 Km northwest from Lao-Thai border Checkpoint (Huay Kon Checkpoint at Nane province). Ideal location, geology, natural resources for power generation. The project is mainly consisted of two components as a Power Plant and Mining, a capacity of Thermal Power Plant is 3 Unit x600 MW, totally is 1800 MW. There are two dams will be constructed to reserve water for cooling system and any using purposes, expected that water value required for Power Plant is approximately 40-50 M.Cu.m annually, Lignite Fired to power generation is approx. 13,60 M.ton a year.

A 1,800 MW MINE MOUTH POWER PROJECT

MAP1: location of the project
The 500 kV transmission line approx. 67 Km from Power Plant to Lao-Thai border will be constructed and 115 kV transmission line will be constructed to connection Electricity du Laos (EDL) domestic network. A part from these, there is road upgrading 31 Km long to Lao-Thai border and a By-pass road will be constructed for avoiding road traffic to Nguen District not allowed pass through the Power Plant area. For the first phase of power generation, limestone from Nguen quarry will be used for dust collection system (Electrostatic Precipitator – ESP).

2. Project Rationale

The Lao PDR is land-locked country, 70% of land area is mountainous, it is one of the word’s poorest countries with almost half of population living under the poverty line with the average GDP per capita per annum below USD 500. Studies by institutions such as the World Bank have identified two main options for economic growth – the export of tropical timber products and export of hydropower. However, as the large-scale exploitation of tropical timber products is viewed as non-sustainable and environmentally degrading, this option is not acceptable to the Government of Lao PDR (“GOL”). One of the few ready available and sustainable to the GOL to achieve its stated objective of economic and social development is hydropower as neighboring Thailand represents a long-term viable customer for power generation from Lao PDR.

3.Project History

The development of hydroelectric power projects in the Lao PDR for export of electricity to both Thailand and Vietnam has long been addressed in inter-governmental agreements between the respective countries. In addition to benefits derived from the export of electricity, the development of hydroelectric power capacity is also needed to satisfy both current and domestic electrical energy demand for industrial, residential and domestic purposes.
For Thermal Power Development Project is the first project in Lao PDR to be chosen by GOL to meet its strategy of economic and social development plan, with potential natural resources available. Therefore in the year 1994, Thai-Lao Lignite Company (TLL) has entered into the Project Development Agreement (PDA) with GOL to develop 700 MW Thermal Power Plant Project in Hongsa district, Xayabouri province, Lao PDR.
In Dec 2006, the supersession of Banpu Power Limited (“BPP”), a wholly-owned subsidiary of Banpu Plc. (“Banpu”), signed a Heads of Agreement (“HOA”) with the GOL with Exclusive Rights to develop a lignite mine and a lignite-fired power project. Since then, Banpu has been developing both projects industriously. In 27 December 2007, the tariff MOU was signed with EGAT. Since then the process to establish project company has been proceed continuously, while pre-construction work at Hongsa site has been started. In 24 July 2008, the GOL basically has approved Concession Agreement (CA), until 5 February 2009, Shareholders Agreement was signed among Lao Holding State Enterprise (LHSE), RATCH and Banpu.
LHSE, a state owned enterprise of Lao PDR, to jointly establish Hongsa Power Company Limited (HPC) and Phu Fai Mining Company Limited (PFMC), both of which have principle offices located at Vientiane in Lao PDR. The objectives of HPC and PFMC are to implement and operate Hongsa Project, a 1,800 MW mine-mouth power plant in Hongsa district, Xayabouri province of Lao PDR.

PROJECT TECHNICAL DESCRIPTION HONG SA MINE
TECHNICAL DESCRIPTION
1. Power Plant

The Power Plant is designed to have a nominal gross rating of 1,878 MW, consisting of 3 x 626 MW Units with a net available-for-sale power output slightly in excess of 1,653 MW. The actual gross power generated by each Unit at maximum output is 626 MW. The auxiliary power consumption during normal operation is 75 MW per Unit, resulting in a net power output of 551 MW per Unit. Of the net available-for-sale power output, 1,473 MW is contracted to EGAT, measured at the Thai-Lao border (the delivery point), and 175 MW to EDL, measured at the Hongsa Town Substation (the delivery point), while the remaining is lost in the transmission. The Power Plant operation will be controlled from a fully-equipped central control room. Each Unit will be highly automated to ensure strict compliance with operating limits, achievement of optimum performance, and to guarantee reliability and safety of the Power Plant. Additionally, the Power Plant will operate in compliance with the World Bank Environmental Guidelines 1998 (“WBEG98”). Each lignite-fired Unit produces electricity by burning lignite in a boiler to heat water to produce steam. The steam, at tremendous pressure, flows into a turbine, which spins a generator to produce electricity. The steam is then cooled and condensed back into water to be returned and reused again in the boiler.

2. Power Plant Design

The functional specification of the Power Plant has been prepared by the Employer’s Engineer, Pöyry Energy Limited. The specification of the design of the Power Plant reflects the performance required by the Employer with respect to the EGAT PPA as well as the limitations imposed by the EIA. Particular attention has been paid to delivering the Contracted Operating Characteristics specified by EGAT. The Power Plant has also been designed such that the environmental requirements of the Employer and the obligations stated within the EIA can be met in accordance with good industry practice for a facility of the Power Plant’s nature.

2.1 Boilers and Fuel Burners Designs

Each Unit consists of one boiler supplying steam to a turbine generator. Sub-critical boilers of a proven design were chosen to ensure good result when burning lignite as the main fuel. Each boiler has a single furnace in which all of the low NOx lignite burners are aligned to fire tangentially to a common circle within the furnace to produce a single fire-ball to ensure overall stability in the combustion. The design of the low NOx burners, together with staged introduction of the air for combustion, ensures that the production of NOx is minimised under all operating conditions. To start up the boilers and to ignite the lignite burners, diesel oil burners are used for their ease of ignition and for their instantaneous heat generation capacity. Diesel oil burners will also be employed during adverse conditions to ensure combustion stability.
For normal operation, the lignite will be supplied to the burners after it has been pulverised by beater wheel mills so that the moisture content of the fuel will be dehydrated by the re-circulated flue gases from the top of the furnace. A Beater wheel mill is a particular type of mill designed to pulverise lignite having high moisture content. The drying capacity of these mills is much greater than that of mills designed to pulverise other types of coal and low moisture content lignite. Beater wheel mills pulverise the lignite by attrition and use high temperature flue gas drawn from the furnace exit of the boiler to dry the fuel and then transport the pulverised lignite to the burners. Some hot air from the air heater is mixed with the flue gas to act as primary air to support ignition of the mixture at the burner. This also provides a mean to control the mill temperature. An important safety feature is that the oxygen content of the drying and transport flue gas is low, ensuring that the mills operate under inert conditions.
The air required for combustion of the fuel is provided to the burners by large electric motor driven fans (2 x 50% fans) that first pass the air through regenerative pre-heaters to recover heat from the flue gases leaving the boiler. Steam air pre-heater are also provided to assist during start up and low load operation.
The boiler furnace will operate at slightly below atmospheric pressure. The flue gases will be drawn from the furnace to the FGD by 2 x 50% electric motor driven induced draft fans located downstream from the electrostatic fly ash collectors.