CHP and Cogeneration. Npower Energy Services. Nick Gardner 10/05/11 PAGE 1

Transcription

1 CHP and Cogeneration Npower Energy Services Nick Gardner 10/05/11 PAGE 1

2 Agenda Introduction and headline benefits Site Requirements Technical Solutions Some Commercial options - Energy Supply Contract - Tolling Service CHP benefits - cost savings CHP and CRC Reform of CCL and creation of CPS Questions & Answers PAGE 2

3 Introduction and headline benefits Why CHP? - headline Benefits provides a reduction in cost of utilities e.g. CCL avoidance, reduced DUoS, TNUoS and RO; primary energy savings of >10%; carbon savings of c tonnes/mw/yr; and - improved CRC position - emissions credit on exported electricity and no emissions attributed to heat from CHP ; or - Carbon Allocation under EU-ETS Phase II (separate CHP sector),...phase III allocation to heat other e.g. enhanced capital allowances PAGE 3

4 Site Requirements 8-8.5MW average electricity 62, 424 MWh imported electricity base load steam demand 17 tph 10 barg Annual steam requirement circa. 130,000 tonnes Security of supply (provide standby boiler) Production hours 7800 (to be advised) Good quality CHP to mitigate against CCL 15 year contract PAGE 4

5 Technical Solution CHP plant based around a single Alstom Tornado/Taurus 70 GT Matching HRSG with supplementary and auxiliary firing to 30 tph. One standby boilers up to 30 tph Electrical and gas reinforcement (allowance up to 50k) Location (install in place of existing boiler) The plant shall be designed to achieve Good Quality status as defined under the CHPQA programme PAGE 5

6 CHP Plant Sizing impacts.. PAGE 6

7 Commercial Basis ESCo options ESCo install all the required plant and equipment for the CHP plant (& heat/chiller plant) at it s own expense. All CHP plant performance and construction risk to be the responsibility of ESCo. ESCo proposals - host may contract for the CHP output either via: Energy Supply Contract (ESC); or a Tolling Agreement PAGE 7

8 Energy Supply Contract Finance + Insurance Construction operation and maintenance CHP Plant Heat Chilled Water Electricity Operations and Maintenance Performance Guarantees ESCo Payment for Heat, Chilled Water and Electricity Host Shipper/ Supplier PAGE 8

9 Tolling Service CHP plant Finance + Insurance Construction and maintenance Heat Chilled Water Electricity Operations and Maintenance ESCo Payment for plant availability Host Performance Guarantees Supply of Gas Shipper/ Supplier PAGE 9

10 Energy Supply Contract ESCo would install all the required plant and equipment at its own expense and pay for all the on going operation & maintenance costs, fuel and imported electricity. ESCo would supply all of hosts s electricity, host would take and pay for the heat and chilled water output of the CHP plant. Standby and top up heating and chilling requirements (above CHP output) would be provided from host s existing boiler and chiller plant. Installation and commissioning timescales to be agreed (allow for contract timescales). PAGE 10

11 ESC (tariffs & indexation) Example structure - for a 10 year supply: Electricity per MWh Chilled Water per MWh Hot water per MWh Monthly Standing Charge 47,160 Indexation (annual review) Electricity price indexed to a combination of market electricity and fuel prices Hot water and chilled water indexed to fuel prices Standing charge indexed to rpi PAGE 11

12 ESC Illustrative Savings Existing CHP Electricity Unit Cost (excludes Capacity charge) per MWh per MWh Consumption (upto 7.85MW) 68,748 MWh 68,748 MWh Transmission Network Use of System Demand Charge ( 8.49/kW 66,630 - Electricity Cost 4,250,662 per annum 3,299,718 per annum Unit Hot Water Cost [2] per MWh per MWh Hot Water Consumption [1,4] 24,766 MWh 24,766 MWh Hot Water Production in Boilers 24,766 MWh 0 MWh Hot Water Production in CHP - MWh 24,766 Mwh Total Hot Water Cost 643,013 per annum 643,013 per annum Unit Chilled Water Cost (assumes COP of 4) [3] per MWh per MWh Chilled Water Consumption [1,4] 26,587 MWh 26,587 MWh Chilled Water Production existing Chillers 26,587 MWh 0 MWh Chilled Water Production in CHP - MWh 26,587 Mwh Total Chilled Water Cost 404,524 per annum 404,524 per annum Standing Charge(includes maintenance & manning charges) 0 per annum 565,944 per annum Availability Electricity Charge exc per annum exc per annum Total Hot Water, Chilling & Power Cost 5,298,199 per annum 4,913,198 per annum Savings 385,001 per annum PAGE 12

13 Low Carbon Impact Estimated impact of energy and climate change policies on average nondomestic retail electricity prices /MWh (real 2009 prices) Estimated avaerage price without policies Price Impact CCL Existing RO Extended RO EU-ETS CCS FiT's Average price with policies % impact (on baseline) 20% 29% 42% Source DECC 2010 PAGE 13

14 Tolling Contract ESCo install all the required plant and equipment at its own expense and pay for all the on going O&M costs except Host would pay for fuel and imported electricity. All electricity, chilled water and LTHW supplied from the CHP plant would be provided to Host on a free of charge basis. ESCo would guarantee a net electrical output of 7.85MW ; fuel efficiency & heat output in accordance with the OEM data sheets and CHP plant availability of 92% (of 8760 hours pa). The following terms are available for a 10 year Tolling Contract: Variable Operating Charge 6.20 per MWh Monthly Standing Charge 62,430 per month PAGE 14

15 Tolling Option Illustrative Savings Existing CHP (Tolling) Electricity Unit Cost (excludes Capacity charge) per MWh 6.20 per MWh CHP Consumption (upto 7.85MW) 68,748 MWh 68,748 MWh Electricity Production in CHP - MWh 45,518 MWh Cost of CHP Electricity - 287,680 Import Electricity 68,748 MWh 23,230 MWh Cost of Import Electricity (@ 50/MWh) - 1,161,504 Transmission Network Use of System Demand Charge ( 8.49/kW 66,630 - Total Electricity Cost 4,250,662 per annum 1,449,184 per annum Unit Hot Water Cost [2] per MWh 0.00 per MWh Hot Water Consumption [1,4] 24,766 MWh 24,766 MWh Hot Water Production in Boilers 24,766 MWh 0 MWh Hot Water Production in CHP - MWh 24,766 Mwh Total Hot Water Cost 643,013 per annum 0 per annum Unit Chilled Water Cost (assumes COP of 4) [3] per MWh 0.00 per MWh Chilled Water Consumption [1,4] 26,587 MWh 26,587 MWh Chilled Water Production existing Chillers 26,587 MWh 0 MWh Chilled Water Production in CHP - MWh 26,587 Mwh Total Chilled Water Cost 404,524 per annum 0 per annum CHP Gas Consumption 132,567 MWh Unit Gas Cost 60 p/therm Gas Cost 2,714,037 Standing Charge(includes maintenance & manning charges) 0 per annum 749,160 per annum Availability Electricity Charge exc per annum exc per annum Total Hot Water, Chilling & Power Cost 5,298,199 per annum 4,912,381 per annum Savings 385,819 per annum PAGE 15

16 Recap - headline CHP Benefits reduction in annual cost of utilities e.g. CCL avoidance, reduced DUoS, TNUoS and RO; primary energy savings of >10%; carbon savings of c tonnes pa/mw; and improved CRC position. PAGE 16

17 CRC - introduction Why CRC? the UK is committed to a reduction of at least 80% from 1990 levels by 2050 the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) has been designed to focus UK business on this goal; and ensures UK compliance with the EU Energy Services Directive CRC is effectively CO 2 emissions trading scheme for installations outside CCA s and EUETS starting April 2010 Threshold: half hourly meters, electricity consumption more than 6,000MWh per year e.g: Large firms in the service sector: super-markets, retailers, banks, hotels, local authorities Around 20,000 organisations will be affected by CRC and c.5,000 will be full participants PAGE 17

18 CRC and CHP benefits CRC sites will have to buy carbon for all imported electricity and fuel (if not in EU-ETS). CHP will reduce the CRC liability... key considerations: - All electricity will have the same carbon emission factor as that from power stations; - exported electricity from GQCHP will receive carbon credits (using the same carbon factor); and - exported heat from GQCHP is zero carbon rated.. opportunities for heat export PAGE 18

19 CHP Carbon Savings Estimate Emissions Factors Natural Gas kg/kwh Grid Electricity kg/kweh Existing Carbon Emission (tonnes) Electricity (if displaced by CHP) MWh 8, Heat production MWh 8, sub-total 6570 CHP plant Operation 2011/12 Carbon Emission (tonnes) Gas consumption (CHP) therms Electricity exported MWh sub-total 5556 Annual Carbon Savings (tonnes) 1014 PAGE 19

20 Reform of CCL and creation of CPS through its Electricity Market Reforms the Government is committed to introducing support for carbon price support (CPS) through reform of CCL (starting from 2013) key proposals: CHP no longer exempt from CCL on fuel inputs, but will be exposed to new rate of CCL derived from CPS heat portion of the fuel input will not be exempted from CPS tax; and an existing exemption in the climate change levy for electricity for CHP plants supplying indirectly to an energy consumer is to be removed in order that CHP remains at least neutral to CPS HMT reviewing various options (incl. reducing the CPS tax paid by CHP) update awaited. PAGE 20

21 CHP opportunities and the future CHP represents one of the lowest cost of carbon abatement and is a well established technology and will therefore be a highly effective measure for example reducing CRC liabilities; in its Carbon Reduction Strategy, the NHS Sustainable Development Unit (SDU) states that CHP offers the health service the biggest carbon dioxide saving potential; opportunity to match fund community district heating projects through CERT and CESP (and going forward ECO); CHPA lobbying for possible feed-in-tariff for small scale CHP PAGE 21

22 Micro/CHP potential growth Total electricity demand (MWe) for varying size ranges of individual site capacities From DEFRA report The impacts of distributed generation on the wider UK energy system (2007) PAGE 22

23 Questions & Answers PAGE 23