A Guide to. Cogeneration. Plant Solutions. Plant Solutions A Guide to Cogeneration

Transcription

1 A Guide to Cogeneration

2 The Guide to Cogeneration Copyright 2014 Published by Fosdick & Hilmer All rights reserved. Except as permitted under U.S. Copyright Act of 1976, no part of this publication may be reproduced, distributed, or transmitted in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. Visit our website at 2

3 Table of Contents Chapter 1: How Does a Cogeneration Plant Work? Chapter 2: Why CHP Lowers Costs for Facilities Chapter 3: How Cogeneration Enhances System Reliability and Resilience Chapter 4: CHP as a Sustainable Heating Solution Chapter 5: Weighing the Benefits of Combined Heat & Power About

4 Chapter 1 How Does a Cogeneration Plant Work? What is a cogeneration plant and how does it work? The short answer lies in another name for the system: Combined Heat and Power (or CHP). A cogeneration plant generates both power and heat for an institution. For a more detailed answer and an understanding of why cogeneration can be so effective for organizations with significant power and heating needs it s useful to consider the problem that CHP solves. Why cogeneration? Many institutions such as universities and medical campuses require systems to generate both heat and power. Traditionally, these systems have been independent of one another (and too often, out-of-date), creating some serious inefficiencies. Today, many organizations are looking to update their systems for greater cost-effectiveness, reliability, and sustainability. Some of these institutions face pending regulations from the federal government that may require them to identify new power solutions. 4

5 Chapter 1 For these institutions, cogeneration represents an opportunity to increase the efficiency of their systems and make a reliable long-term energy plan for years to come. How? The answer is right in the name: by coordinating heat and power generation. How it works A cogeneration plant burns and combusts fuel typically natural gas through a turbine or internal combustion engine. This turbine or engine then turns a generator to create electricity. So far, this is all pretty standard procedure for a power system. But here s where things get interesting. Any generator is going to produce a certain amount of waste heat. Usually, that waste heat is exactly what it sounds like: wasted energy, released and written off as part of the price of generating power. In a cogeneration plant, this waste heat isn t wasted at all. Instead, it is directed into a device called a heat recovery steam generator (or HRSG). The HRSG turns waste heat into hot water or steam depending upon the institution s heating needs. Reducing waste, increasing efficiency By generating power and heat in concert, institutions can reduce energy costs, improve the reliability of their systems, and take a more sustainable approach to power even create an infrastructure that allows for more sustained operation independent of the power grid, in emergencies. In the following chapters, we ll explore each of these advantages, and help you understand whether cogeneration is right for your organization. 5

6 Chapter 2 Why CHP Lowers Costs for Facilities How can Combined Heat and Power reduce costs for facilities like hospitals and universities? First, it s important to match the plant to the facilities specific needs. A plant that fits To achieve maximum efficiency, a cogeneration unit should be designed to meet a facility s base steam needs. For a university, you might establish this base by looking at your heating needs in the summer months, when it s warmest outside and fewer students are on campus. By scaling your operations relative to this baseline, you ensure that your plant is using every bit of available heat, all of the time, to produce your steam. No heat is ever wasted which means no fuel is wasted, either. And that brings us to one of cogeneration s greatest cost advantages: fuel. 6

7 Chapter 2 Forecasting fuel costs Rather than buying electricity from a utility and burning natural gas or oil to create steam, cogeneration plants burn one fuel to produce both. In a traditional natural gas plant, boilers might operate at about 80% efficiency so 80% of the energy in your natural gas would become heat. On top of your fuel costs for heat, you would also have to pay the utility for electricity, the costs for which are on an upward trend nationally. With a cogeneration plant, you need only one fuel: typically natural gas. This offers two advantages. First, natural gas prices have fallen a great deal recently and are projected to stay low for the foreseeable future. Turning to natural gas offers savings all on its own, particularly for organizations moving away from more expensive or less efficient fuels. Second, natural gas is a hedgeable utility. This means an institution can purchase natural gas at a locked-in rate for three, five, or even ten years. Of course, locked-in rates are going to come at a premium. But this predictability can allow you to weigh the economics of a major, long-term infrastructural change with much greater precision, while protecting against sudden and unexpected fluctuations in the energy market. Cost calculations Installing a new cogeneration unit isn t cheap, and there are important nuances one should examine when considering a CHP solution. 7

8 Chapter 2 For example, we recommend that owners purchase service contracts from their turbine generator manufacturer, in order to warranty and provide scheduled service for the engine. Engines that are run 24x7 require major overhauls on a three-year cycle. When our clients are considering cogeneration, we factor this cost into our economic analysis. For many owners, the economics of cogeneration are rooted in its ongoing, predictable, and long-term cost-effectiveness. The spark spread the substantial difference between the cost of energy from natural gas and from the utility and the hedgeability of natural gas mean that facilities can rely primarily on a single fuel for power and heat. This simplification and coordination of facilities energy needs means much more control over an institution s energy future for owners. But what about reliability? How resilient is a cogeneration system? In the next chapter, we ll explore just that. 8

9 Chapter 3 How Cogeneration Enhances System Reliability & Resiliency Cogeneration allows institutions to simplify their energy needs, burning natural gas to provide both heat and power. Some owners might wonder: what if there is a gas line disruption or a gas curtailment? Could this create a single point of failure for the entire system? In fact, the opposite is true: Combined Heat and Power can help institutions improve the resiliency of their systems and become more self-reliant in the case of catastrophes. The reliability and redundancy afforded by CHP can provide uninterrupted power and bumpless transfers between power sources in order to keep systems online, avoid data loss, and prevent damage to critical equipment. Contingency plans In most cases, a cogeneration plant has 100% redundant electrical power systems, meaning that if the CHP plant fails to produce power the facility can be fed by either the local utility grid or on-site standby generators. 9

10 Chapter 3 In practical terms, this allows your facilities to stay powered up, even if they experience total failures of either the utility grid or your on-site generation. You can also maintain power in the case of partial failures of either system. This functionality draws in part on the plant s utility interconnection it is connected to the utility in such a way that if the CHP system fails, the utility will immediately pick up the lost power generation. Your backup measures aren t limited to the utility, either: depending on the design of your onsite generation and fuel storage, you can store a backup fuel source such as oil for use in the event of a gas line failure. Adapting to disruptions Of course, it s not enough for your system to be able to draw on alternative power sources. It must also be designed to start back up after a failure, and to function correctly if a long term utility grid disruption occurs. This is where two essential CHP capabilities come in: Black start If the grid goes down and your CHP goes down as well, black start capability allows you to start the CHP plant independently without relying on the utility. Island mode In the event of a major grid failure or other power disruption, island mode enables the CHP to provide electrical power to your facility while it is completely disconnected from the electric grid. 10

11 Chapter 3 If your institution is located in an area that is at risk of natural disasters such as hurricanes, tornados, floods, or earthquakes, engineering these capabilities into your CHP installation can confer heightened resiliency to your system and keep the power on even during serious crises. During Hurricane Sandy, one CHP-powered facility maintained power for the duration of the lengthy utility outage, enabling the organization to serve its community in the aftermath of the storm. For universities, hospitals, or factories, this opportunity to shore up energy security can make a powerful difference, keeping the system running even when utility power plants are damaged or power lines fall. Controlling the assets For reliability, one of the key advantages of Combined Heat and Power is its scale specifically, the scale on which you distribute your power. Because your distribution area is limited to your own institution, you have much less distribution infrastructure to manage and maintain. For facilities owners, this represents a major edge when it comes to keeping your system up and running. Since you control all of the relevant assets, you can make and implement your own contingency plans, without banking on (or waiting for) action from a utility. In addition to system reliability and resiliency, CHP enhances your capacity for self-reliance. Increased control of your system allows for something else, too: heightened sustainability. In the next chapter, we ll explore what lies behind this feature. 11

12 Chapter 4 CHP as a Sustainable Heating Solution Today, many industries and organizations like universities are burning coal to produce steam for their campuses and other organizations. Increasingly, institutions with older heating systems are seeking to replace those systems with cleaner and more cost-effective alternatives. Searching for new solutions Take Ohio. Many of the state s public universities have signed on to an initiative that will eliminate their use of coal by One alternative is to replace these facilities coal boilers with gas boilers. But this takes a sizeable investment; if an organization is going to make such a significant investment, it may be better served by leveraging the efficiency and cost effectiveness of Combined Heat and Power. Indeed, this kind of major infrastructural change offers an important opportunity: the return on investment for CHP will be favorable not only due to the energy savings provided by cogeneration but because only the incremental investment in CHP over and above the amount that would be spent anyway on new boilers needs to be considered in the ROI calculation. 12

13 Chapter 4 Furthermore, a CHP burns fuel with exceptional efficiency. A utility typically burns coal at about 30% efficiency to produce electricity meaning that they re utilizing well under half of the coal s available energy. But when producing electricity by burning natural gas, an inherently cleaner burning fuel, a CHP installation can operate with an overall efficiency of around 80 to 85% a truly dramatic difference. This creates a fortuitous circumstance wherein sustainability and cost-efficiency are in agreement. As a result, an institution s net CO2 and other pollutants may be significantly reduced. Staying in charge Just as CHP helps improve reliability by consolidating your control over your own energy assets, it helps put the sustainability of your energy solution in your hands. You may not be able to control the fuels used by a utility, or how efficiently it is burned. But by controlling and coordinating your heat and power, you can ensure that you are using your fuel as efficiently as possible and reduce or eliminate your dependence on the utility. And while regulations may fluctuate, by taking your heat and power into your own hands, your organization will be better prepared to ensure regulatory compliance and deal with marketplace disruptions in the future. Taken together, the sustainability, efficiency, and reliability afforded by CHP represent a spectrum of powerful advantages for an institution. But how can an organization decide if cogeneration makes economic sense for their needs? In the next chapter, we ll discuss the best way to weigh the benefits. 13

14 Chapter 5 Weighing the Benefits of Combined Heat and Power Is cogeneration the right match for your organization s energy requirements? In order to determine the answer, you ll need to consider your institution s energy use and profile, utility company tariffs and regulations, and future energy needs. The right time Typically, organizations that utilize Combined Heat and Power (CHP) have significant, continuous, specialized, or mission-critical heating and power needs: institutions such as universities, hospitals and industrial facilities with 24x7 production schedules. Installing a cogeneration unit is a significant investment. For many institutions, the suitability of CHP is a question of timing. The utility infrastructure of many universities, hospitals, and industrial facilities were built over fifty years ago. The equipment is aging, inefficient, and ready to be replaced with a more contemporary system. The need for a system-wide overhaul makes these institutions strong candidates for CHP. They will have to make a significant investment one way or another; by investing in a system that allows for more efficient and reliable operation, they may ensure that they receive the anticipated return on investment. 14

15 Chapter 5 For the same reason, cogeneration could be a strong value proposition for new chemical and petrochemical plants that expect to operate for decades. For organizations that are planning for the long-term, an investment in CHP at the outset can be highly effective. Funding strategies There are a number of ways to approach funding a cogeneration plant: Some organizations fund the unit entirely on their own There are many third-parties who are willing to fund a plant, recouping their investment through a utility rate agreement Many organizations may be eligible for federal, state, and local incentives If your institution is interested in cogeneration, you will want to explore these strategies thoroughly. Furthermore, it will be essential to calculate your prospective energy and cost savings at the outset. CHP is a powerful tool, and one of its greatest assets is its ability to help institutions plan for the future. Make certain that its requirements and capabilities align with your long-term organizational goals and needs. A more efficient way Combined Heat and Power delivers a valuable balance of benefits: efficiency, reliability, and sustainability. 15

16 Chapter 5 Combined Heat and Power delivers a valuable balance of benefits: efficiency, reliability, and sustainability. While both markets and regulations fluctuate over time, CHP allows organizations to take a confident step forward with a new sense of resilience and certainty. For institutions looking to implement a more contemporary heating and power system or to develop cutting-edge facilities that will stand the test of time cogeneration may be the right solution for the challenge. Combined Heat and Power delivers a valuable balance of benefits: efficiency, reliability, and sustainability. 16

17 About Fosdick & Hilmer Since 1905, Fosdick & Hilmer has been raising the bar for innovation and sustainability in engineering. From central utilities and electric power to healthcare and other mission-critical infrastructure, our hands-on approach takes facilities from concept to close-out. Need to modernize an older facility? Our engineers also specialize in the adaptive re-use and repurposing of older systems, extending their useful life and bringing them up to modern standards. We also provide engineering services in areas including: Electrical Power Mechanical Facilities Central Utilities System Commissioning Controls Automation Software Development Sustainability Engineering for Architecture For questions about Combined Heat and Power or our other services, contact us at: Could you be saving on energy with cogeneration? Whether you re building a new facility or updating an existing system, cogeneration can reduce costs over the long run and improve resilience. To learn more about how cogeneration can work for your organization, contact us at: feedback@fheng.com 17