ASPA Diesel Combined Cycle Study

Transcription

1 Diesel CC Study Commercial-in-Confidence American Samoa Power Authority 17 December 2008, 5 February 2009 (update), 3 March 2009 (modification) Document No.:

2 APIN ASPA010 Prepared for American Samoa Power Authority Prepared by Maunsell Limited 47 George Street, Newmarket, Auckland 1023, New Zealand P O Box 4241, Shortland Street, Auckland 1140, New Zealand T F December February 2009 (update) 3 March 2009 (modification) Maunsell Limited 2009 The information contained in this document produced by Maunsell Limited is solely for the use of the Client identified on the cover sheet for the purpose for which it has been prepared and Maunsell Limited undertakes no duty to or accepts any responsibility to any third party who may rely upon this document. All rights reserved. No section or element of this document may be removed from this document, reproduced, electronically stored or transmitted in any form without the written permission of Maunsell Limited. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence

3 Quality Information Document Ref Date Prepared by 17 December 2008, 5 February 2009 (update), 3 March 2009 (modification) Richard Gapes/Generoso Paloso Reviewed by Barry Tyer Revision History Revision Revision Date Details Name/Position 17/12/2008 Feasibilty Report Barry Tyer Team Leader 5/2/2009 update Barry Tyer Team Leader 3/3/2009 Modification Barry Tyer Team Leader Authorised Signature Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence

4 Table of Contents Executive Summary i 1.0 Background History Location Existing Plant Descriptions Objectives Baseload Operating Regimes Usable Thermal Energy Description of ORC Technology Supplier and Configuration Options Technology Suppliers Working Fluids Initial Screening Performance Results Key Assumptions for 1 st Pass Financial Evaluation Returns on Investment NPV Discussion of NPV Calculations General Use of Jacket Water alone Effect of Cooling Water Temperature Use of Jacket Water and Exhaust Heat Configuration Optimisation Control and Technical Considerations Implementation Time Sensitivity Analysis Discussion of Sensitivity Analysis Conclusions Appendix Material Safety Sheet for R245fa Modification of Report 18 Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence

5 Executive Summary Maunsell were engaged to examine the economic viability of Organic Rankin Cycle (ORC) technologies and configurations to optimise the heat and power output of the generating plant at Tafuna and to update the relevant sections of their previous reports in 2001 and Three configurations were considered and three new suppliers were contacted, giving a total of nine combinations. The three configurations considered were: 1) use of exhaust gas only 2) use of exhaust gas and jacket water, and 3) use of jacket water only. No hot water sales are intended at Tafuna. No modifications are expected to the grid connection nor in the grid itself. During the intervening weeks after Christmas and since issue of a first draft report, ORC suppliers provided significantly improved technical information which has been used to update the report. This new information is based on experience with ORC units in production and for that reason was keenly sought. In particular the very strong influence of the cooling water temperature was integrated more directly into the study i.e. the temperature difference between the hot water input and the cooling water strongly effects output and yield the temperature difference should be at least 70ºC. As a result a new option for increasing both the output and NPV of the OCR units was suggested using sea water cooling, in spite of the apparent effort and investment this entails. The economic feasibility is positive for NPV and IRR calculations. This is based on fuel cost savings because current installed power generation capacity is adequate to supply demand. This NPV analysis performed favoured the use of the jacket water alone to generate electric power using an Organic Rankin Cycle (ORC) unit. The Sensitivity Analysis indicates that the positive NPV is robust across a wide range of fluctuations in Fuel Price, Maintenance Costs, and variations in Capital Cost for the project. The maximum economic benefit (IRR) would come from use of jacket water (without exhaust heat and without lower cooling water temperatures). This option would cost approx. $US2 mill and use aircooling and require approx. 1 year to realise. Alternatively, the maximum production i.e. maximum power output is achieved by using heat from both jacket water and exhaust heat combined with lower cooling water temperatures - but without optimising the IRR. Capital costs are above $US8 mill. excluding the investment required to supply the cooler water e.g. sea-water. These estimates include contingency and engineering costs. It is recommended that a more detailed study is performed based on installation of ORC unit(s) converting heat into power. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page i

6 1.0 Background 1.1 History Maunsell were engaged in 2001 and in 2004 to examine the economic viability of technologies and configurations to optimise the heat and power output of the two generating plants at Satala and Tafuna. Neither of those two studies provided a business case strong enough to introduce the technology and configurations considered. This current report summarises several further technologies and suppliers along with new configurations made possible by the new technologies. 1.2 Location As described in previous reports, America Samoa is made up of seven islands and is located in the tropics near the equator. The island group is some 2,300 miles southwest of Hawaii and approximately 1,600 miles north east of Auckland. The 1990 census showed a population of 46,773. In particular the main island of Tutila is mountainous. American Samoa is an island territory totally dependent upon imported fuel for its development, economic well-being, and the welfare of its people - "imported" meaning transported via tanker from the mainland United States. There are two power stations on the main island of Tutuila serving the majority of people in American Samoa. The Tafuna power station is surrounded by small industry and residential dwellings. 1.3 Existing Plant Descriptions The existing power infrastructure has not changed significantly since the last report. The main island of American Samoa has two generating plants, both of which feed power into the island's power grid. No other forms of generation exist on the island. Both plants operate modern Deutz diesel generators running on #2 fuel oil for base load generation. The two generating plants each have four identical engines i.e. eight identical engines in total. The engines convert approximately 42% of the energy from the fuel oil to electricity and the remainder is rejected to the environment, principally as heat. Parasitic loads in the form of two water circulation pumps and three sets of fin fan heat exchanges absorbing kw(e) resulting in a net power output of 40.7%. Waste heat is available from four sources on each engine: Waste heat is available from four sources on each engine. The first two, namely the LT (intercooler) and lube oil cooling circuits are of insufficient quality (high enough temperature) and quantity to recover economically useable amounts of heat. The other two, the HT(jacket water) circuit and exhaust gas stream, however have higher levels of quality and quantity. The HT circuit is the engine block cooling circuit and has up to 2220 kw of available energy at full throttle at a temperature around 86 degrees C. The exhaust gas stream contains up to 2900 kw at a temperature of around 320 degrees C At present waste heat from the intercooler/lt, lubrication oil, and jacket water/ht circuits are discharged the atmosphere via banks of forced draft horizontal radiators (fin fan heat exchangers). The engine exhaust discharges to atmosphere via exhaust silencers. (2004 report, p3) 1.4 Objectives The objectives of this study are to perform the following steps for the addition of binary cycle generation for the power station at Tafuna: Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 1

7 1) Contact equipment suppliers and obtain current pricing for main plant items 2) Review cost allowances for general plant and buildings due to the significant increase in prices 3) Review/consider likely implementation time 4) Update cost estimates 5) Revise the cost/benefit analysis 6) Perform a sensitivity analysis including high and low oil price 7) Review/consider likely implementation time 8) Determined the safe handling requirements of the working fluid if a binary cycle machine is used 9) Prepare a basic Process Flow Diagram and layout 10) Consider possible electrical distribution constraints for increased output 11) Prepare report summarising the results of the above work and a recommended option 1.5 Baseload Operating Regimes Some growth in demand due to increased population and growth in the island economy is likely to have occurred since the 2004 study. For the purposes of the current study, however, no growth was assumed. This assumption errs conservatively i.e. if positive growth has occurred then the economic feasibility e.g. NPV will improve. The assumed "Baseload Operating Regimes" are as follows: The total island electrical load carried by the generation assets of Satala and Tafuna varies between MW(e) depending on weather, time of day and day of the week. The minimum load normally is seen at around midnight with peaks of up to 24 MW(e) at around 11 am and about 22 MW(e) at 7 pm. Three Deutz generator sets provide the base load at the Satala and Tafuna sites. The base load at each location varies between about 7.5 MW(e) and 12 MW(e) including some allowance for spinning reserve. Three engines generally run at about 80% of their nameplate for up to 24 hours per day Monday through to Friday. The weekend loading is generally three engines running at each location at 70% loading for 10 hours per day and 80% for the remaining 14 hours. The two main electricity users are the canneries and they do not process fish on Sunday and therefore consumption reduces significantly on this day. The Satala and Tafuna plants can operate independently with the bus tie open however this is not the normal running mode. (2004 report, p3) The study is based on selecting equipment best matched to the following work cycle of the diesel engines at each power station. - Three engines working at 3800 kw output each (80% nameplate) for 24 hours per day Monday through to Friday. - Three engines working at 3325 kw output each (70% nameplate) for 10 hours per day on Saturday and Sunday. - Three engines working at 3800 kw output each (80% nameplate) for 14 hours per day on Saturday and Sunday. (2004 report, p5) Since there are four engines at each power station, then effectively there is always one engine on stand-by. The current study based the evaluation of ORC units on 3 engines running at 80% load throughout the year. 1.6 Usable Thermal Energy The current Preliminary Feasibility Report, considers use of heat from the jacket water and/or heat from the exhaust gases to generate electricity. A similar approach was adopted by the 2004 report. It was assumed for this study that no significant changes have been made to the system. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 2

8 The jacket water/ht circuit is currently cooled by forced draft horizontal radiators. A forced draft horizontal radiator currently cools the HT circuit. The circuit is fitted with a thermostatic valve, which is designed to begin opening at around 77 deg C, and is fully open at 82 deg C circulating all of the HT water through the fin fan set. On inspection at the site the HT engine circuits were checked and found to be operating at a temperature ranging between 82 and 86 deg C ex the engines although this depends on the engine load. According to operators there are times when the engine cannot run at 100% nameplate ie 4750 kw(e) due to insufficient cooling from the fin fans. This is assumed to be when the ambients are high. The ambient temperatures at site appear to be consistently above the original design temperatures for the plant. Typically during February daytime averages of 36 deg C and 90% humidity were being observed as opposed to the 32 deg C design temperature. (2004 report, p4). Figure 1: Existing Fin Fan Heat Exchangers 1.7 Description of ORC Technology The Organic Rankin Cycle (ORC) follows the conventional steam Rankin cycle in that it takes a working Fluid under pressure, boils it to a vapour, expands it through a turbine (or reciprocating engine) to generate shaft power, condenses the expanded gas to a liquid and repeats the cycle. In the ORC water is replaced by an organic fluid that boils at a low temperature but at high pressure. Temperatures as low as 80ºC can be used economically. The temperature difference between the hot water input and the cooling water is a major factor effecting the efficiency and net output from an ORC unit, and should be 70ºC or more. The temperature change in the hot water entering/exiting the ORC unit depends on the water flow rate but is often targeted at 10ºC to 20ºC, however, for low temperature sources a lower flow rate may be chosen to keep the entry temperature as high as possible. These relatively low input temperatures are generally provided by geothermal sources or waste heat from industrial processes such as jacket water and exhaust gases from large diesel or gas turbine engines. As the cycle is completely closed there are no releases to the environment other than waste Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 3

9 heat from the fin fan units, a very small leakage of Working Fluid from the turbine shaft seals, and noise from the fin fan fans. Figure 2 is a schematic diagram of the ORC cycle. Heat Transfer medium to Working Fluid Vaporiser Turbine and Generator Fin Fan Condenser Heating Circuit EHRU ORC Skid HT Fin Fans Working Fluid Circuit Exhaust gases Deutz Engines Figure 2: Schematic of Organic Rankin Cyle The suppliers tailor their units to fit into standard containers or skids. The cooling tower (or other cooling equipment) is mounted in another frame also of standard container format. The condensing unit container may be mounted remote from the generator unit or mounted on or above the generator container. There is only one pair of motive fluid pipelines and an electrical cable to power the fans running between the two containers. The generator unit is fitted with a pair of flanged connections to which the heating medium (i.e. the jacket water) is pumped in and out of the vaporiser and connections for the power cables. All controls are onboard the generator container. A 250kW unit from Infinity is housed in a standard 20 ft container and its platform dimensions are as follows: length (base overall) 16 8 (5081mm) width (base overall) 7 (2134mm) height 7 6 (2286mm) A 500kW unit from Infinity fits into in a standard 40 ft container. The 250kW ORC units from UTC/PHP have a standard container footprint but are higher. Stacking them is thought to be likely if necessary. UTC/PHP does not offer a 500kW unit. 2.0 Supplier and Configuration Options In total three configurations were considered and three new suppliers were contacted, giving a total of nine combinations. The three suppliers were Pure Power/UTC, Wow Energies, and Infinity. The three configurations considered were: 1) use of exhaust gas only 2) use of exhaust gas and jacket water, and 3) use of jacket water only. Figure 3 shows the Process Flow Diagram (PFD) illustrating the a configuration with four engines all feeding hot jacket water to a single ORC binary unit. Figure 4 is a PFD for an alternative configuration with dedicated ORC units for each generator offering greater flexibility and redundancy but higher capital outlay. Detailed design will refine the configuration options. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 4

10 Figure 3: Process Flow Diagram for a Single ORC Unit Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 5

11 Figure 4: Process Flow Diagram for Dedicated ORC Units Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 6

12 2.1 Technology Suppliers Four technology suppliers were found who are offering ORC equipment of suitable capacity and configuration: Ormat, Global Energy/Infinity Turbine, Wow Energies, and PHP/UTC. The suppliers were contacted, their technology briefly assessed, and budget financial data requested. Ormat s technology is familiar due to previous work e.g. the 2004 study. Infinity offered R245fa as a working fluid in a 500kWe unit along with some flexibility in configuration. Wow Energies offered propane as the working fluid with the highest conversion efficiency. PHP/UTC offered R245fa as a refrigerant with little/no flexibility in machine size or configuration. Although a preliminary appraisal suggests that the UTC package incurs higher costs, their proposal should be considered further until a more detailed comparison can be performed. Figure 5 shows a skid mounted Infinity ORC Turbine. Figure 5: Skid Mounted Infinity ORC 250/500 kw(e) Turbine The supplier discussed in the 2004 report, Ormat, was not included in this report due to experience during the 2004 report. The capacities of its units are too large and the required input temperatures too high. They use iso-pentane as Working Fluid which is highly flammable and at ambient conditions propane vapour is heavier than air. 2.2 Working Fluids Two very different working fluids were offered by the equipment suppliers. The working fluid 1,1,1,3,3- Pentafluoropropane (R245fa) was offered by two suppliers, which is stated as being "a nonflammable, non-ozone depleting refrigerant, and is considered to be "non-hazardous". Material Data Sheets can be found in the Appendix. Although a potent Green House Gas escape levels should be minimal and comparable with refrigeration and chiller facilities. Wow Energies offered propane at very high pressures as a working fluid. While their configurations may be able to deliver higher conversion efficiencies, propane also is highly flammable and at ambient conditions propane vapour is heavier than air. Use of this working fluid would require suitable equipment and upgrading of any nearby, existing equipment. Safety aspects and the cost of upgrading existing equipment were deciding factors against this technology. This technology was not considered further. 2.3 Initial Screening Initial screening quickly eliminated two suppliers and one configuration. The two suppliers offering Working Fluids which are highly flammable and highly explosive (i.e. Ormat and Wow Energies) were both eliminated. The other two technology suppliers provided a non-flammable, non-toxic working fluid. The configuration which was eliminated early was the option to use exhaust gas only because the capital costs incurred outweighed the benefits. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 7

13 2.4 Performance The ORC Units using R245fa accept input temperatures between ca. 70ºC and ca. 140ºC and convert between ca. 8% and ca. 11% of the heat to electric power, depending on the model, supplier, and in particular depending on the temperature difference between hot input water and the cooling water. This allows consideration of the sole use of jacket water from the engines. Depending on supplier and technical considerations small units of nom. 30 kw(e) may cost approx. US$60,000 (without condenser) and large units of nom. 500 kw(e) cost approx. US$600,000. The units are designed in a modular fashion to fit into standard container(s). Parasitic loads can consume approx. 5% of the power produced depending on configuration, temperatures, supplier, and other factors. 3.0 Results 3.1 Key Assumptions for 1 st Pass Financial Evaluation three engines running on average at 80% load 24/7 365 days per year first pass direct cost of installation estimated as % of purchase price (ca. 40%) maintenance estimated as a percentage annually of installed cost major overhaul estimated as 1/3 of Purchase Cost of binary Unit every 5 years NPV calculated using a rate of 8% and a project life of 20 years first pass direct cost for purchase of ORC binary unit were obtained from suppliers the Base Case fuel price was set at US$2.95/gal, which is the cheapest in the suggested range and corresponds to minimum price in the previous year (November 2007) 3.2 Returns on Investment The returns for the proposed investment were based on the fuel savings achieved assuming that production levels remain constant without additional electricity sales. The calculation is shown in Table 1. Table 1: Fuel and Power Cost Calculation Indirect benefits such as reduced administration, increase security of supply, etc were not considered but would act to improve the economic feasibility. 3.3 NPV Table 2 to Table 4 summarise key budget information for the calculation of capital expenditure. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 8

14 Table 2: Capital Investment Summary Table 3: Expenditure and Income Calculation Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 9

15 Table 4: Annual Income/Expenditure Summaries and NPV Calculation 3.4 Discussion of NPV Calculations General The equipment supplier Infinity provided an offer at a lower capital cost and with a wider range of equipment capacities, in particular a 500kW unit (a size which UTC/PHP does not offer). Recent information suggests that the performance of the Infinity units and the UTC/PHP will be very similar as they both use not only the same working fluid but also both are using standard Carrier equipment for key components. It is therefore assumed for this Go-NoGo assessment that maintenance & operating costs, efficiencies, and other performance characteristics are comparable. The difference in NPV is therefore a result of the lower purchase price which in turn results from different pricing strategies and different model capacities i.e. two 250kW units from UTC/PHP are required compared to the one 500kW unit from Infinity. Infinity are currently testing their very first units of capacity comparable to ASPA requirements and expect to have the units available for viewing shortly. UTC/PHP, however, have had reference facilities operating for a number of months and ca. 50 units are currently being installed at a single site in Utah. These will provide a wealth of experience during ensuing months. Even just 6 months from today much better data will have become available for O&M costs. UTC/PHP reference plants are: 2 units at Burgett in New Mexico (geothermal) (start August 2008) 1 unit in Guatemala running on diesel jacket water (start November 2008) Several of 50 units already on-site at Raser technologies in Utah (geothermal) - The first of 50 units at the Utah site began the first Power generation Tests on 19 November Annual maintenance costs are expected to be low for ORC binary plants because they are similar to chiller and air-conditioner systems with much common componentry. Further, the working fluid is fully enclosed and re-circulated with very little leakage and the working fluid is not corrosive to the materials used. Updated information suggests that Maintenance and Operating Costs for ORC units from both UTC/PHP and Infinity are comparable and currently estimated at approx. 2.5% of purchase price per annum. A major overhaul of the ORC unit is required every approx. 5 years. The NPV calculations have allowed for major reconditioning every 5 years costing 1/3 of the purchase price. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 10

16 These calculations are based on fuel cost savings at an average of 3 engines running at 80% load. Current installed power generation capacity is considered to be adequate to supply demand hence no increase in total generation is expected. Secondary economic benefits have not been included in the calculations but include: Lower operating and maintenance costs for the generators, which will run less because of the ORC units. Lower administration and handling costs due to reduced fuel demand. Deferral of investment further increased power generation if demand growth occurs. Reduced cooling load on the existing air-cooling system resulting in energy savings by switching the fans off. Maintenance for the fans will be reduced, whereby automated rotation of duty can be used to balance wear/tear among the fans. (It might also be possible to achieve lower motor/generator maintenance by improving control of the cooling water return temperature.) Use of Jacket Water alone The updated IRR calculations show no change of significance within the accuracy of the calculations i.e. 13% and 17% versus 10% and 18% in the first draft (refer Table 4). The net power output, annual benefit, NPV, and annual maintenance costs all approximately double as multiple, down-graded units better match the quantity of heat available, as explained in the previous paragraph Effect of Cooling Water Temperature Recent more detailed supplier information for ORC operation using cooling water at 25 ºC during winter and 33 ºC during summer indicate that down-rating the nom.250kw units is appropriate resulting in a net output of ca. 180kW (25 ºC cooling water) and 140kW (33 ºC cooling water). Interestingly, the down-rating permits a doubling of the number of ORC units which in turn matches the available heat more closely giving better utilisation of the heat available. The result is higher net power output but also increased capital costs. The effect on NPV of this down-rating was integrated into the updated calculations. At an average annual temperature of cooling water of 29ºC (i.e. ave. of 25 ºC and 33ºC) the average net output is ca. 160kW resulting in an NPV of $US0.79 mill. as shown in the tables above. The IRR was estimated at 13%. This down-rating by ca. 1/3 could be partially reversed by use of cooler water for cooling the ORC condenser. If the average cooling water temperature is reduced to 17ºC then net output increases ca. one third to 212kW. The result would be a jump in estimated NPV from $US0.79 mill to $US2.1 mill for UTC/PHP equipment and correspondingly from $US1.2 mill to $US2.5 mill for Infinity equipment in each case an approx. $US1.3 mill improvement in NPV. The estimated IRR would change from 13% (UTC/PHP) and 17% (Infinity) to 22% and 26%. (The cost of sea water cooling was not included in the above calculations and would reduce the NPV accordingly.) Installation of cooling based on sea water may well take more than a year to account for planning and approval procedures. The increase in NPV suggests that use of sea water for cooling should be investigated further Use of Jacket Water and Exhaust Heat Installation of heat recovery equipment to recover exhaust gas heat for supply to the ORC units is technically possible and would approximately double the amount of heat available. The capital cost of this equipment was estimated to be very approximately $US8 mill based on Maunsell s 2001 and 2004 reports. If cooling water at temperatures of 25ºC/33ºC in summer/winter is used as described above, then the NPV is close to zero for both suppliers within the accuracy of the calculations. If cooling water at ave. 17ºC can be sourced then the NPV for this option improves to $US 3 mill or better. The IRR is approx. 15%. The difference in NPV and IRR between the suppliers is insignificant in relation to the accuracy of the calculations. This configuration gives the greatest power output and requires approx. ca. six off 250kW units from UTC/PHP or half as many 500kW units from Infinity. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 11

17 3.4.5 Configuration Optimisation The possibility of having one ORC unit each per engine stack e.g. while recovering heat from the exhaust stacks was considered, whereby, the difficulty in matching the heat supply per engine stack to the ORC unit sizes available must be considered relative to the high unit costs of the ORC equipment. Fortunately after down-rating due to the high cooling water temperature this match appears possible if exhaust heat is recovered: if nom. 250kW are installed then up to 6 ORC units would be required to make maximum use of the heat available i.e. two ORC units per engine stack. if nom. 500kW are installed then up to 3 ORC units would be required to make maximum use of the heat available i.e. one ORC units per engine stack. Estimates for NPV, IRR, etc. can be found in the previous paragraph (refer 3.4.4). While this configuration currently appears favourable, the optimal configuration will only be determined during detailed design. 3.5 Control and Technical Considerations Overall system control matching generation and demand for power on the island will involve both the automatic switching of generators and automatic control of the ORC units. As the ORC units produce significantly less power than the diesel engines then the existing control regime may be able to accommodate the extra generating capacity with little adjustment. The control strategy should, however, be checked during detailed engineering design to ensure compatibility and suitability. The power connection to the grid is expected to have sufficient capacity without major modification for installation of ORC units as the loading on the connection is determined by demand for power by the consumers. Further, currently only three of four generators run at only approx. 80% of capacity although it is expected that the grid system is designed for power generation at full load for 4 engines, hence additional capacity should be present in the connection to the grid. The grid connection for new ORC units could either be through a new transformer or fed to the existing 480V auxiliary bus. The latter option could be the less expensive, however, the final choice must be based on the final capacity of the additional generation in relation to the maximum capacity that can be accommodated in the existing 480V bus. The protection requirements for both options should also be evaluated to address synchronizing as well as other technical issues. This merits further investigation to come out the most appropriate connection scheme for the ORC installation. Temperature control of the cooled jacket water returning to the engines is currently achieved by way of a thermostat valve beginning to open at ca. 77ºC and fully open ca. 82ºC. The returning water varies in temperature up to ca. 86ºC. Installation of ORC technology should include a revision of the cooled jacket water return temperature control to prevent excessive cooling with associated increased risk of engine damage. Control valves shall be installed to control the flow of hot water to the ORC evaporator and the residual water flow to the engine radiators. The mixing of hot water coming from the ORC evaporator and the residual water from the engine jacket must also be monitored and considered in the revised control scheme. Sufficient additional temperature control should be achieved by switching/controlling the fans of the heat exchangers with the added benefit of reducing parasitic power loads and increased net overall generation output. A preliminary Process Flow Diagram can be seen in Figure 3 on page 5. Jacket water from the diesel engines is collected and fed into the hot side generator of the ORC unit. It is important that the water is fed as hot as possible to the ORC units, which improves performance significantly as the temperature increases. It is therefore important to keep the hot water piping between the engines and the ORC unit as short as possible and insulate them well. A preliminary layout of the facility based on a single 500kW ORC unit from Infinity (i.e. maximising IRR) can be seen in Figure 6 below which attempts to keep the hot water piping as short as reasonably possible. Access for vehicles including cranes and for maintenance should be provided for, especially for the 5-year major overhauls. Provision for a full size container for the ORC Unit and a half size container for a Cooling Tower has been provided for based on data from suppliers. The equipment is designed for outdoor use. This preliminary layout will need to be changed if another configuration option is realised which requires multiple ORC units. (The containerised design of the ORC modules permits stacking of the containers.) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 12

18 3.6 Implementation Time Figure 6: Preliminary Layout Diagram (single ORC unit) Use of ORC units using a Working Fluid which is neither explosive nor toxic will simplify and accelerate the implantation time compared with the technology and configurations available for the 2004 study. The ORC Units have a delivery time of at least 3 to 6 months or even longer depending on supplier. It is considered likely that an implementation time of approx. 1 year from firm order is possible including a site visit early in the design phase, construction, commissioning, performance testing, and defects punch-listing. 3.7 Sensitivity Analysis A sensitivity analysis was performed to ensure that the results were robust with respect to the approximations made and with respect to possible changing circumstances during the life of the project, including the fuel price. The sensitivity results when using Infinity equipment and jacket water as the sole heat source can be seen in Figure 7 to Figure 9. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 13

19 Fuel cost was varied in the Sensitivity Analysis from below US$2.95/gal (Nov. 2007) to above US$4.76/gal (Aug. 2008), which represent the lowest and highest prices paid per gallon during the previous year (Figure 7). $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 Net Present Value NPV (8%, 20 years) (US$) 34% 36% Engine Efficiency (%) 38% 40% Case I2 $2.50 $3.00 $3.50 $0 $4.00 $5.00 Fuel Price (US$/gal) $1,000,000 Figure 7: NPV vs. Fuel Price and Engine Efficiency (values on p. 19) The sensitivity of the NPV to Capital Costs was simulated by multiplication with a Capital Multiplier e.g. an increase of 30% is simulated by a Multiplier of 1.3 (Figure 8 and Figure 9). Net Present Value (NPV)(US$) $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Maintenance as % of Capital (%) Case I % % 3.0% Capital Multiplier 4.0% 5.0% Figure 8: NPV vs. Capital Multiplier and Maintenance (values on p.20) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 14

20 50% 45% 40% 35% 30% 25% 20% Internal Rate of Return IRR (20 years) (%) 15% 10% 5% 0% $5.00 Fuel Price (US$/gal) $4.00 $3.50 $3.00 Case I Capital Multiplier Figure 9: IRR vs. Fuel Price and Capital Multiplier (values on p.21) 3.8 Discussion of Sensitivity Analysis Fuel cost was varied in the Sensitivity Analysis from below US$2.95/gal (Nov. 2007) to above US$4.76/gal (Aug. 2008), which represent the lowest and highest prices paid per gallon during the previous year. The NPV was robust throughout this range (Fig. 7 and 9). The higher the value of the electric power produced then the better the NPV. For the purposes of this report value has been set equal to the savings in fuel saved. This is because total sales (i.e. equal to total power production) from the facility is determined by customer demand, which is not influenced by the ORC units. There is already an existing excess of capacity. Fuel costs up to $5/gal were considered, which show a very high NPV and IRR. The NPV was robust throughout this range. Current estimates suggest NPV=0 at below ca. US$2 per gallon (Fig. 7 and 9). Maintenance costs as a percentage of Purchase Price were varied from the expected range of approx. 1% and up to 5% to cover the range of estimates from the equipment suppliers. The NPV was robust throughout this range too (Fig. 8). All suppliers of equipment considered closely were companies in the United States which largely insulates the project feasibility from exchange rate fluctuations. The efficiency of heat conversion to power by the ORC units also affects NPV but has not been included in this sensitivity analysis due to lack of sufficient data. The present process configuration has assumed, however, that heat is in excess which will reduce the influence of conversion efficiency. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 15

21 4.0 Conclusions During the intervening Christmas weeks since the issue of a first draft report, ORC suppliers provided significantly improved technical information which has been used to update the report. Further, a new option for increasing both the output and NPV of the OCR units has been indicated using sea water cooling (in spite of the apparent effort and investment this entails). The efficiency of heat conversion to power is significantly influenced by the cooling temperature supplied to the ORC units. The current investigation assumes use of air cooling. If seawater can be used for cooling, then more power could be generated and the parasitic power demand might be significantly reduced if pumping costs are low. The maximum economic benefit i.e. IRR, would come from use of jacket water without exhaust heat and perhaps combined with lower cooling water temperatures e.g. using sea water. The maximum power output is achieved by using heat from both jacket water and exhaust heat combined with lower cooling water temperatures. Although the Return on Investment (IRR) is highest for projects without recovery of the exhaust heat, the amount of power produced would greatly increase with exhaust heat recovery. Hence, if total power production is more important than optimising the rate of return, then exhaust gas heat recovery with sea water cooling is an interesting possibility. This "first pass" Feasibility Analysis strongly suggests that use of the jacket water to generate electric power using an Organic Rankin Cycle (ORC) unit would be economically viable. The Sensitivity Analysis indicates that the positive NPV is robust across a wide range of fluctuations in Fuel Price, Maintenance Costs, and variations in Capital Cost for the project. It is recommended that a more detailed study is performed based on these results. Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 16

22 5.0 Appendix Material Safety Sheet for R245fa (refer separate file, only the first page is reproduced here for reasons of file size) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 17

23 6.0 Modification of Report The calculations were initially based on the fuel savings achieved assuming that production levels remain constant without additional electricity sales. The Base Case fuel price was therefore set at US$2.95/gal, which is the cheapest in the suggested range and corresponds to minimum price in the previous year (November 2007). This fuel price corresponds to an energy price for power of US$180/MWh(e). The calculations were rerun using a power value of US$260/MWh(e). This caused changes to Tables 3 and 4 and to Fig. 8. The modified tables and figure are shown below along with the values for Fig 8 (refer Table 7 on p.20). Table 5: Expenditure and Income Calculation (recalc. for $260/MWh) Table 6: Annual Income/Expenditure Summaries and NPV Calculation (recalc. for $260/MWh) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 18

24 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 Net Present Value NPV (8%, 20 years) (US$) 34% 36% Engine Efficiency (%) 38% 40% Case I2 $2.50 $3.00 $3.50 $0 $4.00 $5.00 Fuel Price (US$/gal) $1,000,000 $2.50 $3.00 $3.50 $4.00 $5.00 Fuel 44% 293, ,433 1,561,639 2,195,845 3,464,257 Cost 42% 444,229 1,108,635 1,773,041 2,437,448 3,766,260 $US/gal 40% 610,330 1,307,957 2,005,584 2,703,210 4,098,463 38% 793,916 1,528,260 2,262,604 2,996,948 4,465,635 36% 997,901 1,773,041 2,548,182 3,323,323 4,873,604 34% 1,225,883 2,046,620 2,867,358 3,688,095 5,329,569 Engine Efficiency Figure 10: NPV vs. Fuel Price and Engine Efficiency (same as Fig. 7) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 19

25 Net Present Value (NPV)(US$) $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Maintenance as % of Capital (%) Case I % % 3.0% Capital Multiplier 4.0% 5.0% 0.0% 2.0% 3.0% 4.0% 5.0% Maint ,716,285 2,368,263 2,194,251 2,020,240 1,846,228 %/a ,910,827 2,589,575 2,428,949 2,268,323 2,107, ,105,368 2,810,887 2,663,647 2,516,407 2,369, ,299,910 3,032,200 2,898,345 2,764,490 2,630, ,494,451 3,253,512 3,133,043 3,012,574 2,892, ,688,993 3,474,825 3,367,741 3,260,657 3,153,573 Capital Multipler Figure 11: NPV vs. Capital Multiplier and Maintenance (recalc. for $260/MWh) 0.0% 2.0% 3.0% 4.0% 5.0% Maint , , , ,370 48,359 %/a ,112, , , , , ,307,499 1,013, , , , ,502,040 1,234,331 1,100, , , ,696,582 1,455,643 1,335,174 1,214,704 1,094, ,891,123 1,676,956 1,569,872 1,462,788 1,355,704 Capital Multipler Table 7: NPV vs. Capital Multiplier and Maintenance (calc. for $180/MWh) (refer Figure 8: NPV vs. Capital Multiplier and Maintenance) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 20

26 50% 45% 40% 35% 30% 25% 20% Internal Rate of Return IRR (20 years) (%) 15% 10% 5% 0% $5.00 Fuel Price (US$/gal) $4.00 $3.50 $3.00 Case I Capital Multiplier $2.50 $3.00 $3.50 $4.00 $5.00 Elec % 11% 15% 19% 26% Value % 13% 17% 21% 29% $US/MWh % 15% 20% 24% 32% % 17% 22% 27% 36% % 20% 25% 31% 41% % 24% 29% 35% 46% Capital Multipler Figure 12: IRR vs. Fuel Price and Capital Multiplier (same as Fig. 9) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 21

27 The IRR for a 10 year project life instead of 20 years is shown in Figure 13. (Note: a power value of US$260/MWh is equivalent to a fuel price of US$4.26/gal.) 50% 45% 40% 35% 30% 25% 20% Internal Rate of Return IRR (%) 15% 10% 5% 0% $5.00 Fuel Price (US$/gal) $4.00 $3.50 $3.00 Case I Capital Multiplier $2.50 $3.00 $3.50 $4.00 $5.00 Fuel % 6% 11% 15% 24% Price % 8% 13% 18% 27% $US/gal % 10% 16% 21% 30% % 13% 19% 24% 34% % 16% 22% 28% 39% % 20% 27% 33% 45% Capital Multipler Figure 13: IRR vs. Fuel Price and Capital Multiplier (10 year project life) Reports\3 Go-NoGo_Report_200903\_f-mod.doc Commercial-in-Confidence Page 22