Carbon Emissions Efficiency and Economics of Combined Heat and Power in New Zealand

Transcription

1 733 A publiction of CHEMICAL ENGINEERING TRANSACTIONS VOL. 61, 2017 Guest Editors: Petr S Vrbnov, Rongxin Su, Hon Loong Lm, Xi Liu, Jiří J Klemeš Copyright 2017, AIDIC Servizi S.r.l. ISBN ; ISSN The Itlin Assocition of Chemicl Engineering Online t DOI: /CET Crbon Emissions Efficiency nd Economics of Combined Het nd Power in New Zelnd Mrtin J. Atkins,*, Timothy G. Wlmsley b, Mtthis Philipp c, Michel R. W. Wlmsley, Jmes R. Nele Energy Reserch Centre, School of Engineering, University of Wikto, Privte Bg 3105, Hmilton, New Zelnd b Sustinble Process Integrtion Lbortory SPIL, NETME Centre, Fculty of Mechnicl Engineering, Brno University of Technology - VUT Brno, Technická 2896/2, Brno, Czech Republic c Technische Hochschule Ingolstdt, Insitute of new Energy Systems, Esplnde Ingolstdt, Germny mrtin.tkins@wikto.c.nz Combined Het nd Power (CHP) or cogenertion, is common nd often cost effective method to mximise the efficiency nd utilistion of fossil fuels. Greenhouse Gs (GHG) emissions from the electricity generted using CHP is lso n importnt fctor to consider, especilly within the frmework of emissions reduction nd uptke of renewble genertion. This pper will present detiled nlysis of the economics of industril CHP within New Zelnd nd exmine the potentil of CHP to contribute to GHG emissions reduction. An emissions fctor from electricity genertion using CHP is defined bsed on the mrginl efficiency of electricity genertion. The economics of CHP in New Zelnd cn be fvourble under certin conditions lthough the emissions of genertion using fossil fuels in ll cses ws higher thn grid purchsed electricity, due to high levels of renewble genertion. A reduction in emissions cn occur in countries tht hve medium to high Grid Emissions Fctors (GEF) such s the US, UK, Austrli, Indi, nd Chin. Countries with GEF less thn round 0.2 tco2-eq/mwel would need to utilise biomss to chieve lrge emissions reductions using CHP. 1. Introduction Decrbonising industril energy nd electricity genertion systems nd is n importnt but difficult tsk of climte chnge mitigtion. Combined Het nd Power (CHP) or cogenertion is n importnt industril prctice to mximise the efficiency nd utilistion of fossil fuels. As the nme suggests both process het nd power re generted together resulting in higher efficiency compred to generting het nd power seprtely using the sme fuel. Another benefit often cited is reduction in Greenhouse Gs (GHG) emissions from the use of CHP (Schumm et l., 2016). Although it is well estblished tht fuel efficiency is improved, the chnge in GHG emissions is more difficult to determine nd is dependent on the loction, type of CHP plnt nd the source of lternte electricity supply (Philipp et l., 2016). Severl countries nd regions, such s the USA (Brown et l., 2013) nd the Europen Union (Directive, 2004), hve trgeted policies imed t the promotion of CHP in industril pplictions for both efficiency improvements, primry energy nd emissions reduction; however effectiveness of these policies hs been questioned (Moy, 2013). In countries tht hve low Grid Emissions Fctor (GEF) the expnded use of CHP using fossil fuel cn potentilly increse the overll emissions from electricity by displcing renewble or low crbon genertion sources (Keen nd Apt, 2016). The net benefit for emissions reductions from using CHP is dependent on severl fctors including fuel type, overll grid emissions fctor, grid bsed genertion displced by CHP (if ny), nd efficiency of CHP genertion. The economics of industril CHP is lrgely dependent on two min fctors, the site fuel to power cost rtio nd the cpitl cost of the CHP system (Comodi nd Rossi, 2016). In countries tht hve high degree of therml power genertion, fossil fuel nd electricity costs tend to be coupled (if subsidies re disregrded), wheres in countries tht hve high degree of renewble electricity genertion, electricity costs cn be decoupled from fuel prices further effecting the economics of CHP. Subsidies or rebtes my be vilble due to ggressive Plese cite this rticle s: Atkins M.J., Wlmsley T.G., Philipp M., Wlmsley M.R.W., Nele J.R., 2017, Crbon emissions efficiency nd economics of combined het nd power in new zelnd, Chemicl Engineering Trnsctions, 61, DOI: /CET

2 734 policy instruments, which my ssist the economics, lthough these my be dependent on the type nd performnce of the system (Directive, 2004). The im of this pper is to determine the emissions reduction potentil for New Zelnd compred to Germny, United Kingdom, Frnce, Finlnd nd Austrli, s well s the economics for industril CHP in New Zelnd. CHP technology will be limited to the use of bck pressure nd condensing stem turbines nd gs turbines with het recovery stem genertors (HRSG). Net emissions from CHP electricity genertion will be compred to grid bsed genertion in other developed nd developing ntions to demonstrte under wht conditions CHP using fossil fuels increses or decreses crbon emissions. An exmple cse study is presented. 1.1 Electricity Genertion nd CHP in New Zelnd Electricity in New Zelnd is mostly generted using renewble sources (Wlmsley et l., 2014), nd the ntionl trget is to chieve 90 % or more renewbles by In 2016, 84 % of genertion cme from renewble sources (hydro 60 %, geotherml 18 %, wind 5 %) nd 16 % from fossil fuels (gs 13 %, col 3 %). These levels re predicted to increse over the coming yers to over 90 % s the remining col genertion is retired nd dditionl geotherml nd wind re constructed. New Zelnd hs n extremely liberl electricity mrket with no subsidies or incentives for using renewbles. The lowest Long Run Mrginl Cost (LRMC) of new genertion is for geotherml nd wind being between NZ$80 nd NZ$100/MWhel (MBIE, 2016). In 2015 the verge industril power price for lrge users ws pproximtely NZ$80/MWhel. Indictive fuel cost in New Zelnd re given in Tble 1. There is pproximtely 562 MWel of instlled CHP plnt. The pplictions include (from lrgest instlled cpcity) from steel, diry processing, pulp & pper, wood processing, hospitls, nd other sectors. A wide rnge of energy sources re used including gs, col, wood, geotherml, wste het nd biogs. There hs been very little growth in CHP plnts over the pst 20 y, neither hve there been dedicted policies to promote or incentivise CHP in New Zelnd. GHG emissions re priced under the Emissions Trding Scheme (ETS), mrket bsed mechnism. Under the scheme, emitters re required to surrender units purchsed on the mrket to cover their emissions libility resulting from fuel combustion nd the like. As of Mrch 2017 the current trding price ws round NZ$18/t of CO2 equivlent. 2. CHP Efficiency, Emissions Reduction, nd Mrginl Efficiency of Genertion CHP efficiency (ηchp) is defined s the sum of work or power (WCHP) nd het produced (QCHP) using CHP over the totl fuel consumption (Qf,CHP) s in Eq(1). It is common to define n electricl efficiency (ηel) nd therml efficiency (ηth) of CHP s in Eq(1b) nd Eq(1c). η CHP = W CHP + Q CHP Q f,chp = η el + η th (1) η el = W CHP Q f,chp (1b) η th = Q CHP Q f,chp (1c) A mrginl efficiency of electricity genertion (ηel,mrginl) cn be defined s the mount of power generted over the dditionl fuel required for electricity genertion (ΔQf) s in Eq(2). ΔQf is defined in Eq(3) s the difference between the totl fuel used in CHP mode compred to the fuel used in the reference cse (Qf,ref). The fuel use for the bse cse here is defined s the fuel to provide only the therml requirement only using boiler operting t the typicl efficiency for tht boiler nd fuel type. η el,mrginl = W CHP ΔQ f ΔQ f = Q f,chp Q f,ref (2) (3) The emissions from the electricity genertion from CHP (εel,chp) cn then be clculted using the fuel emissions fctor (εf) by the mrginl efficiency of electricity genertion s in Eq(4). Fuel emissions fctors for severl typicl fuels re given in Tble 1. ε f ε el,chp = [ ] η el,mrginl (4)

3 735 Tble 1: GHG emissions fctors indictive fuel costs for New Zelnd. Fuel Fuel Emissions Fctor (εf) [tco2-eq/gjf] Fuel Cost Rnge [NZ$/GJf] Biomss Forest Residues (BM) (NG) Col Lignite (CL) Col Sub-bituminous (CSB) includes ny trnsport nd distribution costs The Grid Emissions Fctor (GEF) (εgef) is defined s the verge GHG emissions from the trnsmission grid bsed on fixed geogrphic region (usully country or region) nd dependnt on the genertion mix. There will be net reduction in GHG emissions if εel,chp is less thn the GEF nd vice vers. The GEF for severl countries is shown in Tble 2. Tble 2: Grid Emissions Fctors for rnge of countries for Country Grid Emissions Fctor (εgef) [tco2-eq/mwhel] Country Grid Emissions Fctor (εgef) [tco2-eq/mwhel] New Zelnd (NZ) Chin (CN) Austrli (AU) Indi (IN) Frnce (FR) Jpn (JP) Germny (GE) Mlysi (MY) United Kingdom (UK) Cnd (CA) Finlnd (FI) United Sttes (US) A common mesure used to express the effectiveness of CHP is the Primry Energy Svings (PES), s in Eq(5) where ηel,ref nd ηth,ref is the electricl nd therml efficiency of seprte stnd-lone plnts. PES quntifies the reduction in primry energy for producing het nd power using CHP compred to seprte plnts (Bdmi et l., 2014). The core ssumption of the PES is tht CHP genertion displces existing or new therml genertion. In countries with high levels of renewble or nucler genertion this my not be the cse, nd CHP my displce low emission sources. In countries such s New Zelnd, CHP would displce new renewbles genertion nd so the PES is not good mesure of effectiveness. To mesure the GHG emissions reduction percentge reduction per unit of power generted (β) using CHP cn lso be clculted using Eq(6). 1 PES = 1 η el + η el,ref η th η th,ref (5) β = [ ε GEF ε el,chp ε GEF ] (6) The εel,chp for rnge of fuels s function of ηel,mrginl is shown in Figure 1. For fossil fuels εel,chp is highly dependent on ηel,mrginl, however biomss ws less effected due to the very low emissions fctor. The percentge reduction in emissions s function of GEF is shown in Figure 1b for two different mrginl efficiencies. For some countries, such s New Zelnd, Cnd, nd Frnce, fossil fuels lwys increse emissions nd biomss bsed CHP is the only vible option for emissions reductions vi CHP. For countries with medium GEF, such s Germny, UK, US, Finlnd, nd Jpn reductions cn be chieved if high ηel,mrginl re chieved using nturl gs. This would exclude the use of gs turbines with HRSG due to the reltively low ηel,mrginl (<35 %). In countries with high GEF, such s Chin, Austrli, nd Indi, both col nd nturl gs CHP yield significnt reductions. 3. Economics of CHP A mesure tht is often used s n indictor of the economic performnce of CHP systems is the Cost Sving Rtio (CSR) (Comodi nd Rossi, 2016), s defined in Eq(7), where Cbse is the energy cost of the bse cse with no CHP nd CCHP is the energy cost of CHP. One of the deficiencies of the mesure is it fils to include cpitl nd opertionl cost of the dditionl equipment over the bse cse (e.g. turbine, genertor etc.). A better mesure is to clculte discounted levelised cost in rel terms (Heck et l., 2016) of power genertion nd compre tht to the cost of power purchsed from the ntionl grid. As first order comprison the verge power price cn be used, lthough for mrkets with dynmic pricing more detiled nlysis would be needed.

4 % b NZ FI DE AU Emissions Fctor, el,chp [t CO2-eq /MWh el ] Col (Lignite) Col (Sub-Bitu.) Biomss Percentge Emissions Reduction, 80% 60% 40% 20% 0% -20% -40% -60% -80% Biomss Col (Lignite) el,mrginl 70% 80% % 40% 50% 60% 70% 80% 90% 100% Mrginl Efficiency of Electricity Genertion ( el,mrginl ) -100% Grid Emissions Fctor, GEF [t CO2-eq /MWh el ] Figure 1: Emissions fctor for CHP power genertion () nd percentge emissions reduction per unit of power generted using CHP (b). CSR = [ C bse C CHP C bse ] (7) The cpitl cost function of bck pressure stem turbine (CCST) nd gs turbine (CCGT), including genertor, instlltion nd blnce of plnt, is given in Eq(8) nd Eq(9). CC ST = 1077W CHP CC GT = 2500W CHP (8) (9) Bsed on locl experience, non-fuel opertion nd mintennce (O&M) costs were ssumed to be NZ$7.50/MWhel nd NZ$10/MWhel for the stem turbine nd gs turbine. A levelised cost of genertion ws clculted, including deprecition of cpitl equipment under NZ s tx regime. The stright-line deprecition rte used is 7 %/y nd the corporte tx rte 28 %. A discount rte of 5 % is used nd 5 % per yer cost escltion for both fuel, crbon nd O&M re ssumed. The levelised cost of CHP genertion is shown in Figure 2. For stem turbines (Figure 2) the levelised cost is lower thn the verge industril price for rnge of fuel prices nd mrginl efficiencies. It should be noted tht the difference in cost between the different fuels is exclusively due to the difference crbon costs. The use of gs turbine for CHP in NZ (Figure 2b) is uneconomic due to the high cpitl cost (compred to stem turbine), O&M costs nd inherent low ηel,mrginl. 4. Exmple CHP System An exmple of typicl CHP system is shown in Figure 3, illustrting two-stge bck pressure stem turbine reducing process stem from the High-Pressure heder (40 brg) to Low Pressure (10 brg) heder. The system hs been modelled in PetroSim 6.1. Condenste return nd the deertor is lso shown. The option for pressure reduction vlues insted of the stem turbine is lso shown, using feedwter s the desuperheter wter. The performnce prmeters of the system is shown in Tble 3. The totl fuel used incresed in CHP mode but the totl cost of fuel, power nd crbon is considered decresed by NZ$1.3M (8.6 %) due to the lower electricity cost. The totl emissions for electricity incresed when using nturl gs (β=-59 %) nd lignite (β=-197 %), but reduced for biomss (β=94 %).

5 737 $220 $350 Levelised Cost of CHP Genertion, C el,chp [NZ$/MWh el ] $200 $180 $160 $140 $120 $100 $80 $60 $40 Col (Lignite) Biomss el, mrginl 40% 50% 60% 70% 80% NZ Industril Ave. Levelised Cost of CHP Genertion, C el,chp [NZ$/MWh el ] $300 $250 $200 $150 $100 $50 b el, mrginl 20% 30% 35% NZ Industril Ave. $20 $6 $8 $10 $12 $14 $16 $18 $20 Fuel Cost, C f [NZ$/GJ f ] $6 $8 $10 $12 $14 $16 $18 $20 Fuel Cost, C f [NZ$/GJ f ] Figure 2: Levelised cost of power genertion using bck pressure stem turbines () nd gs turbine (b) t different efficiency of electricity genertion. A crbon price of NZ$18/tCO2-eq is included. Boiler P-100 BFW-1 Fuel Het Flow MW Hdr-100 Fuel Stm-1 BlDwn-1 Hdr-100 Pressure Temperture br_g C Use-100 Vnt-1 Loss-1 Cnd-1 Desup DSP-100 STG PowerCHP Loss-3 STG-100 Totl Power Gen kw Cnd-3 R 8 RCY-1 Hdr-101 Hdr-101 Pressure br_g Temperture C Vnt-3 7 Use-101 Loss-4 Vnt-2 Loss-2 Stm-2 Deer Mke_up MIX-100 Cnd-4 Cnd-2 BFW-2 Figure 3: A typicl exmple of multi stge bck pressure stem in use for CHP.

6 738 Tble 3: Performnce Prmeters of Cse Study. Prmeter Bse Cse CHP Qf,CHP [MW] WCHP [MWel] QCHP [MWth] ηel, ηth -, 84 % 6.2 %, 77.3 % ηchp % ηel,mrginl % εel,chp [tco2-eq/mwhel] (NG), (CL), (BM) Electricity Cost [NZ$/MWhel] Annul Fuel + Power + Crbon Cost [NZ$/y] b 15.79M M Electricity Emissions [tco2-eq/y] 4872 (Grid) 7,764 (NG), 14,460 (CL), 283 (BM) levelised cost per MWhel, NG t $7/GJ, crbon emissions price t $18/tCO2-eq b bsed on 6,000 h/y, NG t $7/GJ, crbon emissions price t $18/tCO2-eq, excludes cpitl cost 5. Conclusions Although in mny cses there is sensible economic rtionle to utilise CHP in NZ (bsed on levelised cost of genertion), the emissions fctor for fossil fuels is greter thn the grid emissions fctor. Any use of CHP involving fossil fuels will ctully increse emissions. Bsed on NZ s future demnd nd genertion scenrios further fossil fuel CHP would not displce therml/fossil fuel genertion nd only displce low-emissions renewble genertion. For other countries with higher grid emissions fctors the fuel type nd mrginl efficiency of genertion need to be known to determine the emissions reduction potentil of CHP. Acknowledgements This reserch hs been supported by the project Ctlyzing Investment in New Zelnd Wood-Energy Industril Symbiosis Opportunities funded by the New Zelnd Ministry of Business, Innovtion, nd Employment, nd the EU project Sustinble Process Integrtion Lbortory SPIL, project No. CZ /0.0/0.0/15_003/ funded by EU CZ Opertionl Progrmme Reserch, Development nd Eduction, Priority 1: Strengthening cpcity for qulity reserch. References Bdmi M., Cmillieri F., Portorro A., Viglini E., 2014, Energetic nd economic ssessment of cogenertion plnts: A comprtive design nd experimentl condition study, Energy, 71, Brown M.A., Cox M., Ber P., 2013, Reviving mnufcturing with federl cogenertion policy, Energy Policy, 52, Comodi G., Rossi M., 2016, Energy versus economic effectiveness in CHP (combined het nd power) pplictions: Investigtion on the criticl role of commodities price, txtion nd power grid mix efficiency, Energy, 109, Directive E.C., 2004, Directive 2004/8/EC of the Europen Prliment nd the Council on the promotion of cogenertion, Officil Journl of the Europen Union, Heck N., Smith C., Hittinger E., 2016, A Monte Crlo pproch to integrting uncertinty into the levelized cost of electricity, The Electricity Journl, 29, Keen J.K., Apt J., 2016, Are high penetrtions of commercil cogenertion good for society? Environmentl Reserch Letters, 22, MBIE, 2016, Electricity demnd nd genertion scenrios scenrio nd results summry. Ministry of Business, Innovtion & Employment, NZ, Report, Wellington, NZ, 26 ps. Moy J.A., 2013, Impct of support schemes nd brriers in Europe on the evolution of cogenertion, Energy Policy, 60, Philipp M., Schumm G., Peesel R.-H., Wlmsley T.G., Atkins M.J., Hesselbch J., 2016, Optiml energy supply structures for industril sites in different countries considering energy trnsitions: A cheese fctory cse study, Chemicl Engineering Trnsctions, 52, Schumm G., Philipp M., Schlosser F., Hesselbch J., Wlmsley T.G., Atkins M.J., 2016, Hybrid-heting-systems for optimized integrtion of low-temperture-het nd renewble energy, Chemicl Engineering Trnsctions, 52, Wlmsley M.R.W., Wlmsley T.G., Atkins M.J., Kmp P.J.J., Nele J.R., 2014, Minimising crbon emissions nd energy expended for electricity genertion in New Zelnd through to 2050, Applied Energy, 135,