Economical benefits for industries that convert thermal equipments into natural gas

Transcription

1 Economical benefits for industries that convert thermal equipments into natural gas J. Huertas, A. Valencia Department of Mechanical Los Andes University, Colombia. Abstract In Bogoth, the capital city of Colombia, the use of natural gas began in 1996, Today, the use of natural gas has reached the domestic, industrial and vehicular areas. However, despite the effort of the government and the private sector, the use of natural gas is not massive yet. For the case of the industries, the issue that still remains is: What is the economical and environmental benefit for the industries that convert thermal equipments into natural gas under the local conditions of Bogoti? To address this issue, a representative sample of 24 industries and 36 thermal equipment were chosen to evaluate their operation cost and their pollutants emissions. The sample included boilers and furnaces working with natural gas, LPG, Fuel Oil No. 2, Fuel Oil No. 6 and coal. In this report the results related to the economic aspect appear. The environmental issue is presented in a separate report. 1 Introduction Bogota, the capital city of Colombia, is located at 8531 ft (2600 m) above sea level, It has a population of 11 million inhabitants, It is one of the most important industrial centers in Colombia. At present, the industries that operate in the city of Bogota mainly use Natural Gas, LPG, Fuel oil No, 2, Fuel oil No. 6 and Coal as fuels for their thermal equipments. In Bogota, the use of natural gas began in Today, the use of natural gas has reached the domestic, industrial and vehicular areas. However, despite the effort of the government and of the private sector, the use of the natural gas is not massive yet, It is not clear which is the economic and environmental benefit

2 182 Air pollution X that the operation of thermal equipments with natural gas brings for the industry of Bogoth. In response to the previous restlessness, the present work was developed, This report presents the results related to the economic aspect. The environmental issue is presented in a separate report [1]. 2 Methodology In order to determine the economic benefit that the companies obtain when they convert their thermal equipments into Natural Gas under the present conditions of the market of Bogota, two methodological alternatives exist, The first alternative consists in working with companies that on the beginning date of the study were going to convert their thermal equipments into Natural Gas, In these companies the operation costs of the equipments will be determined before and afler the conversion, However, this alternative was not applicable because: Once the conversions of the thermal equipments into Natural Gas are made, the industry enters into a phase of adjustment and completion, During this stage the fuel consumption cannot be compared objectively. Once the stage of adjustment and completion of the thermal equipments is finished, a long time is required (more than one (1) year) so that, for example, the changes in maintenance costs are reflected, This exceeds the limitations of time for the development of the present study, Some companies carry out their conversion process together with processes of modernization of their production line. This restricts the accomplishment of an objective comparison, since the new processes change the demanded loads of the thermal equipments. The second alternative consists in evaluating the operation costs of similar thermal equipments that work with different fuels in a group of companies in Bogota and then compare the operation costs. This was the methodology adopted for the development of the present study, The direct operation costs of 36 thermal equipments were evaluated, Such equipments are installed in 26 companies of Bogot& 26 fire tubes boilers of different powers, 9 water furnaces and 1 heater were evaluated. These thermal equipments work with Natural Gas, LPG, Fuel Oil No, 2, Fuel Oil No. 6 and Coal, Formats for taking data were developed in order to collect the information in an organized and reliable form during the visit to each one of the companies, The information comes from the data board of the different components of the boiler, from the engineer in charge of the maintenance of the machinery of the company and from the worker in charge of the operation of the equipment.

3 3 Analysis of results 3.1 Distribution of costs Air pollution X 183 For each thermal equipment, the information obtained during the process of evaluation of the costs of operation was consolidated in 3 items: fuel consumption, human labor and raw material and spare parts. The results are expressed in terms of $/month. The results obtained show that the cost associated to the fuel consumption constitutes the highest percentage (-90Yo) of the total operation costs of the fire tubes boilers that operate with different fuels in the city of Bogota, The boilers that work with coal where this percentage is of -50Y0 are excluded, The previous idea means that all the efforts to diminish the operation costs of the boilers must be fundamentally focused on diminishing the cost associated to fuel consumption, Natural Gas Fuel Oil No. 6 Hunm labor 5,5% -\ / R&S 7 5.1% Human labor 2.9% \ R&S,/ 4,6% 89.4% 92,50/c Fuel Oil No. 2 Hunm labor R&S 3. Coal R&S Fuel 15.9% 48,4% Fuel Human lab or 93.2 h 35,7% Figure 1: Distribution of operation costs of thermal equipments 3.2 Comparison in terms of thermal efficiency The average of thermal efficiency (~), the percentage of air (h) and the temperature of gases in the stacks of the boilers evaluated in the development of the present study are reported in table 1. This table shows that typically in the city of Bogota, the Coal boilers operate with very high levels of percentage of air, Also, it shows that the typical efficiencies of Natural Gas and Fuel Oil No. 6

4 184 Air pollution X boilers, which operate in Bogota, are similar to the typical efficiencies of the calibrated boilers that work at sea level [2]. Table 1: Average value of the operation parameters of the evaluated fire tubes boilers in the development of the present study R&4 (xl Fwet Oil NG the hoiier T&t.6?4/3.2 cd A Stack Temperature [ C] 188, q [v.] Table 1 shows that boilers that work with Fuel oil No. 2 have greater thermal efficiencies than those that work with Fuel Oil No. 6, Natural Gas and Coal in order, respectively. The difference in efficiencies is due to the different levels of formation of water during the combustion process that the fuels present and to the temperature differences of hot gases in the stacks, As a net result of the loss of hot gases in the stacks and the failure loss of the latent heat of vaporization of the water formed in the combustion products, the efficiencies of the Natural Gas boilers are lower than the efficiencies of Fuel Oil No, 6 boilers by -3.3%. Nevertheless, the thermal efficiency is not an indicator of which equipment is more economical to operate. 3.3 Comparison of operation costs The operation costs of the different thermal equipments are mainly influenced by the power of the boiler, the number of working hours and the load demand of the boiler. Therefore, it is not possible to compare directly the operation costs of the thermal equipments evaluated. In order to compare the typical operation costs of the thermal equipments that operate with different fuels, the following alternatives were used: Compare statistically the operation costs of thermal equipments that operate under similar conditions 9 Find an expression to predict the operation costs of the thermal equipments. Then, use these prediction models to compare on common basis the operation costs of the thermal equipments. Next the obtained conclusions following each one of the raised alternatives are described. 3.3,1 Comparison of operation costs from similar boilers With the purpose of making an objective comparison, the operation costs from boilers with similar power and number of working hours must be compared. From the statistical point of view, this means the analysis of the statistical distribution of the difference of operation costs between similar boilers. Figure 2 shows graphically the results obtained following this alternative of comparison.

5 Air pollution X ~ 2; o ~ Fuel 00 Fuel 00 Coal - NG No, 6- NG No, 2- NG (a) -1oo - f % -200, Fue I 00 Fuel Oil Coal - NG No, 6- NG No. 2- NG (b) 50-40~ ~ Fuel Oil Fuel Oil Coal - NG No. 6- NG No. 2- NG (c) ~ Fuel 00 Fuel Oil Coal - NG No. 6- NG No. 2- NG (d) Figure 2: Difference of operation costs from similar boilers operating with different fuels, The horizontal bar shows the average of the difference. The stuffed bar shows the rank, where with a confidence of 95%, the average of the difference of costs is found. The empty box shows the measured values of the differences of operation costs, Figure 2 shows the difference in the total operation costs and discriminated by fuel consumption, human labor and raw material and spare parts between the Natural Gas boilers and the specified fuel, expressed in $/BHP-hr, The difference of operation costs between Natural Gas boilers and the specified fuel oscillates between the ends of the bars shown. For example, the difference in total costs to operate a Fuel Oil No. 6 boiler and a Natural Gas one oscillates between +$360/BHP-hr and -$80/BHP-hr. This means that it is possible to find Fuel Oil No. 6 boilers that are more expensive to operate than

6 186 Air Pollution X those of Natural Gas and vice versa, Table 2 reports the existing statistical difference between the operation costs of the boilers that operate with different fuels with a confidence level of 95 %0. These differences are expressed in $/BHP-hr. The negative values in table 2 indicate that the Natural Gas is more expensive than the compared fuel, Where there is no significant difference between the operation costs of the boilers with a confidence level of 95%, table 2 reports the confidence level fi-om which there is a significant difference in the operation costs in favor of Natural Gas, Table 2: Difference between the oueration costs of Natural Gas boilers and the specified fuel. Where there is a non-significant difference between the operation costs of the boilers with a confidence level of 95 h, the confidence level is reported from which a significant difference in favor of Natural Gas is found, Total Fuel Oil No, 2 -N.G, Coal - N.G. -133, Fuel Oil No. 6- N.G Doesn t exist 86.9 Fuel Fuel Oil No. 2- N.G consumption Coal - N.G Fuel Oil No, 6- N.G. 3.3 Doesn texist 86.0 Human Fuel Oil No. 2- N.G. 3.0 Doesn texist labor 23,7 Coal - N.G. 3.5 Doesn t exist 41,7 Raw Fuel Oil No. 6- N.G material and Fuel Oil No, 2- N,G, 3.6 Doesn texist 74.3 spare parts Coal - N.G. 3.5 Doesn t exist 84.1 n I able 2 shows that the behavior of the cost caused by fuel consum~tion is similar to the behavior of the total cost of operation, This is due to the high percentage that the cost of fuel consumption represents within the total operation cost of a boiler. From table 2 it is possible to establish that there is not a significant difference in the cost of human labor when operating a Natural Gas boiler and a boiler with another type of fuel. This statement is reasonable if it is considered that the boilers always need at least one worker in charge of the overhaul of their operation parameters, 3,3,2 Comparison of operation costs using prediction models It can be hoped that the operation costs of the thermal equipments vary linearly with the power of the equipment and the number of working hours, Thus, the operation costs of the thermal equipments vary according to eqn 1. G=a*BHP+b*Hr+c. (1)

7 Where, Air Pollution X 187 G BHP Hr a, b, c Total operation cost of thermal equipments Nominal power of the boiler expressed in BHP Number of monthly working hours of the boiler Constants In addition, figure 3 shows that the total operation cost of a boiler is linearly related to the fuel consumption, expressed in millions of BTU per month (R2 higher than 0,95 for all fuels). This means that an expression can be found to evaluate the total operation costs as a fimction of the monthly consumption of the boiler and the cost of fuel, 60- ; 50! m { u / 40- FuelOilNo. 6.; g m ~& gg ~ z MBTU/month Figure 3: Relation between the fuel consumption of the boilers and the total operation cost With the purpose of evaluating the total consumption of the boilers, including the price variation of the fuel, the model of prediction shown in equation 2 is proposed as a variation of eqn 1, G=[z4*&b+B ]* CMBTU+C (2) Where, G Total monthly operation cost of the boiler in millions of Colombian pesos (MCOP$) Pcomb Price of the fuel in Colombian pesos (COP$) cmbtijmonthly consumption of the boiler in Millions of BTU A, B, C Constants that depend on the type of fuel Table 3 shows the values found for the constants, A, B and C of the eqn 2 and the units of the fuel price for each one of the fuels used

8 188 Air Pollution X Table 3: Values of the constants and units of the fuel price used in eqn 2 R&+ A R c L%itsfiw thepriix afft~et Natural Gas [COP$/m ] Fuel Oil No [COP$/Gallon] Fuel Oil No [COP$/Gallon] Coal [cop$/-kg] Using the average price of the fuels found during the development of the present study as a base for comparison and observing the variation of the total operation costs when the price of each fuel is increased 25 /0, it is concluded that the total operation cost of the coal boiler is less sensible to the cost of the fuel than the total operation cost of the Natural Gas, Fuel Oil No. 6 and Fuel Oil No. 2 boilers in order, respectively. This agrees with the fact that the cost associated with fuel consumption represents a smaller fraction of the total operation cost in the coal boilers than in the other boilers. Constant C of eqn 2 is the monthly average of the costs associated to human labor and raw material and spare parts used in the operation and maintenance of the boilers. Table 3 shows that the more expensive equipments to maintain and which involve greater human labor are the equipments that work with Fuel Oil No. 6, followed by equipments that work with Fuel oil No. 2, Coal and Natural Gas, in order. 3,4 Comparison in terms of indirect costs Within the indirect costs those that, by their nature, are not included by the companies within their general balance can be found, So it is the case, for example, of the costs associated to air pollution and operation of thermal equipments not working properly. These expenses are paid indirectly by the company or directly by society in general. They are reflected in the absences of workers because of disease or in the costs associated with the excesses in the fuel consumption of the equipments. The cost of air pollution as well as the noise and other environmental damages are not quantifiable in precise form, The quantification principles are not even universally accepted, Nevertheless, the estimates of air pollution costs serve to form the general guidelines of control policies. At least 3 alternatives exist to infer the costs of the air pollution: Direct estimates of damages: This is the best-developed alternative, It consists in tracking the bonds between the emission of polluting agents and the adverse consequences. Later, an economic value is assigned to those consequences, Most of the studies of this type conclude that the effects on human health constitute the dominant component of air pollution costs, o Estimate of the variation of price due to the quality of air: It consists in comelating the change in the price of the product with the air quality levels to

9 Air pollution x 189 which the product is exposed. For example, a building changes in price according to the existing levels of contamination in the zone where it is located. The cost of the medical insurance policies and professional risks vary according to the levels of contamination of the air to which the employee is exposed. Estimate of the costs of complying with environmental regulations: It consists in quantifying the costs associated with the implementation of the technologies available for controlling emissions that allow the indust~ to comply with the maximum permissible levels of emissions stipulated in the environmental regulations. Within the 3 alternatives mentioned, the last one is the most appropriate for the interest of the present study, A study financed by The World Bank presents an evaluation of the mitigation costs of air pollution in the industrial sector for the main polluting agents. This study presents the costs for the year 1993 of diminishing by one ton the emissions of particulate matter, sulfur oxides, nitrogen oxides, carbon dioxide and unburnt hydrocarbons in different industrial sectors. Such information can be used along with the averages of mass emissions of polluting agents in fire tubes boilers of different powers in the city of Bogoth, provided by Huertas and Valencia [1], to calculate the cost of reducing 1 XOthe levels of emission of different polluting agents, using eqn 3. ~, = Cc LHV 1 tiei Gei * (3) Where, Gj Estimate of the monthly cost of reducing 1% the emission of the polluting agent i (COP$/month) cc Monthly fuel consumption of thermal equipment (kg/month) LHV Low heating value of the fuel (kj/kg) Ge,i Cost of diminishing the polluting agent i by one ton (COP$/kg) t Monthly average working time of the thermal equipment (hr/month) Ie, i Emission index of the polluting agent i provided by Huertas and Valencia [1] (mg/kj) As an example, it can be calculated the costs of reducing by 1% the levels of emission of the different polluting agents (from the levels reported by Huertas and Valencia [1]) in Fuel Oil No. 6 boilers working in the textile sector, in such form that they comply with the maximum permissible levels for the year 2001 by the environmental authority (DAMA), For such effect, these boilers require a reduction of -37 % (from 960,7 to 600 mg/m3) in the emission levels of S02 and -5% (from 420 to 400 mg/m3) in the emissions of NOX, This means that, for example, for a Fuel Oil No. 6 steam boiler with a power of 300 BHP, in the textile sector, that typically works 24 hours a day, 6,5 days a week (equivalent to MBTU per month), the cost to adjust its emissions to the regulation is US$ 2875 per month for the emissions of S02 and US$ 579 per month for

10 1!)0 Air Pollution X emissions of NOX. This is equivalent to an additional cost of -21 VOin the operation costs for this type of boilers, The previous example shows that controlling emissions of polluting agents by means of the application of control technologies is exceedingly expensive. Considering the conclusions of section 3, it is possible to conclude that, economically, it is more profitable to decide on fuel substitution as an alternative to prevent contamination. It means that, for industries, it is more profitable to operate thermal equipments with environmentally friendlier fuels than to try to control polluting emissions. 4 Conclusions The concentration levels of polluting agents in the stacks of a representative sample of thermal equipments that operate with Natural Gas, LPG, Fuel Oil No. 2, Fuel Oil No. 6 and Coal in the city of BogotA were determined. For the same sample the direct costs of operation were determined. The costs associated with fuel consumption, human labor and raw materials and spare parts were included, A statistical analysis was made to the values found and it concluded that: The costs associated with fuel consumption constitute the highest percentage of the total operation cost of the thermal equipments (between A depending on the type of fuel). Therefore, the analysis of the operation costs is very sensible to the real price of each type of fuel. Under current prices for the accomplishment of the present study it is cheaper to operate thermal equipments with coal than with natural gas, Fuel Oil No, 6, and Fuel Oil No. 2 in order, respectively. For thermal equipments with low power demands (low MBTU/month), it is cheaper to operate equipments with Natural Gas than with Fuel Oil No, 6, For higher power demands (high MBTU/month) the opposite happens, The breaking point depends on the real price of each fuel, For the case of prices in force on the date of performance of the present study, the breaking point is approximately 2000 MBTU/month. Finally, the cost of reducing a given percentage to the level of pollutant emissions for each fuel was evaluated, It was concluded that the cost of reducing the levels of pollutant emissions up to the maximum level allowed by the local regulation is equivalent to an additional 25 A of the operation cost of the equipment for the case of Fuel oil N 6. References [1] Huertas, J, & Valencia, A., Beneticio econ6mico y ambiental para las empresas que se convierten a gas natural, Universidad de Los Andes: Bogota, [2] Payne, W, & Thompson, R., Efficient boiler operations sourcebook, Fairmont Press Inc.: Lilbum, 1996.