Commercial / Institutional / Light Industrial CHP --- Natural Gas

Transcription

1 Commercial / Institutional / Light Industrial CHP --- Natural Gas 36

2 Natural Gas Is the Preferred Fuel Existing CHP Capacity (2005): 82,411 MW Wood/ Biomass 3% Waste 9% Oil 2% Other 2% Coal 14% Natural Gas 70% Source: EEA 37

3 Natural Gas Fueled CHP In Iowa Present Electric & Natural Gas Rates in Iowa Make It Difficult to Justify CHP On Energy Cost Savings Only. Avg. Commercial Spark Spread: ~ $9.60 / MMBtu Avg. Industrial Spark Spread: ~ $5.25 / MMBtu Electric Deregulation & Interconnect Stds. on Hold Prices based on Jan. thru Aug data 38

4 Source 39

5 Source 40

6 Natural Gas Fueled CHP in Iowa Must be justified on Other Benefits: Increased Electric Reliability Homeland Security / Emergency Planning Municipal Utility Partnerships 41

7 Increased Electric Reliability Needs Rising Concerns Over Blackouts/Brownouts Grid Constraints Electricity Prices Selected Power Outage Costs Industry Avg. Cost of Downtime Cellular Communications Telephone Ticket Sales Airline Reservations Credit Card Operations Brokerage Operations $41,000 per hour $72,000 per hour $90,000 per hour $2,580,000 per hour $6,480,000 per hour 42

8 Emergency / Energy Assurance Plans Historically dealt more with energy shortages & response planning to those shortages Today, more emphasis placed on Critical Infrastructure Protection losing energy services for prolonged periods of time due to: Deliberate Attacks (man made) Natural Disasters (weather related) Accidental Disasters (technology failures) Systemic Threats (physical inability of the delivery system to meet demands) 43

9 Loss of Electricity Critical air handling & space conditioning equipment shuts down Gas stations can not pump fuel for vehicles (evacuation routes) Water supply, purification, & sewage systems fail Operation of hospitals, nursing homes, and other critical facilities are compromised once diesel stored on-site for emergency generator sets is consumed (normally hours) Businesses shut down (commercial & industrial) 44

10 Emergency Generators vs. CHP Systems Emergency Gen Sets Not capable of continuous operation Sized to meet critical loads Must be routinely tested to ensure reliable starts Normally diesel fueled High emissions Restricted fuel storage Used only in emergencies CHP Systems Designed to operate 24/7 with or without an operative grid Sized based on thermal and/or electric loads Base loaded with high Avail. Normally natural gas fueled Low emissions Used to reduce utility costs in non emergencies; provides reliable power during emergencies 45

11 CHP Systems Configuration (Energy Emergencies) Configured with synchronous generator Be grid connected with stand-alone capability Be sized to handle all or a major portion of the electric load Recycle the heat from the prime movers for space heating, space cooling, and possibly dehumidification Have Black Start capability Have a continuous source of fuel (usually natural gas or dual fueled natural gas and/or fuel oil) 46

12 Recent Examples Mississippi Baptist Medical Center, Jackson Ms: 624 bed full service hospital remained fully operational during the 54 hour blackout caused by Hurricane Katrina Montefiore Medical Center, New York City: Continued to admit patients, perform surgeries, and asses patients using specialized diagnostic equipment during the August 2003 Northeast and parts of the Midwest blackout Norwalk Hospital, Norwalk Connecticut: Operated as designed sensed the August, 2003 blackout, disconnected the CHP system from the grid, switched to emergency gen sets for life critical loads, CHP system restarted black start reconnecting 100% of load to CHP system 47

13 Potential Critical Market Sectors Hospital & Nursing Homes Emergency Command Centers Schools and Convention Centers (emergency shelters) Evacuation Route Facilities (gas stations, road side oasis) Water and Waste Water Treatment Facilities Police & Fire Stations Data Centers 48

14 CHP Can Help Public Power Organizations: Source of Self Generation (generation flexibility) Potential for Economic Development Partnership with Customers (business retention and/or expansion) Potential for Added Revenues Sale of Thermal Energy (Heating and Cooling) Increased Security During Natural or Terrorist Disasters (emergency centers) 49

15 Example Muni Partnerships Ethanol Plants City of Macon, Missouri & Northeast Missouri Grain 10 MW Gas Turbine, Purchased / Operated / Maintained by the City of Macon CHP System Located on the Ethanol Plant Facility Ethanol Facility Utilizes the Steam, Municipal Receives Credits for Adding Capacity to the Local Power Pool Utility and Ethanol Plant Split Fuel Costs 50

16 Example Muni Partnerships Ethanol Plants: City of Russell, Kansas & US Energy Partners 15 MW Gas Turbines Located on Ethanol Facility 3 MW for the Plant 12 MW for Serves City Residents Economic Development Attracted Ethanol Plant to City US Energy Paid for Heat Recovery Equipment 51

17 Example Muni Partnerships Waste Water Treatment Facility Partnership Albert Lea, Minnesota Utility State Energy Office 120 kw Micro-turbines, Fueled from Anaerobic Digester Gas Waste Heat Utilized for Digester Temp. Control and Space Conditioning 52

18 Summary Natural Gas Fueled CHP Difficult sell in Iowa today on the basis of reduced utility bills only (Spark spread not large enough) Quantifying other benefits can justify the investment: Need for increased electric reliability (voltage sags as well as extended outages) Emergency planning (should the electric infrastructure be compromised) Generation flexibility and/or economic development Municipal Utilities Solution to grid congestion Investor or Public Utilities 53

19 CHP & Anaerobic Digester Gas Applications 54

20 CHP and Digester Gas Applications Animal Waste / Manure Management Food Processing Waste Water Treatment Many of the following slides came from: R.T. Burns, PhD, PE Agriculture & Bio-systems Engineering Dep t Iowa State University 55

21 Anaerobic Digesters Natural Biological (bacterial) Process That Converts Organic Carbon From Large Molecules to Simple Molecules When Properly Applied, Digester Technology Can Effectively Assist in: Sustainable Economical Environmentally Balanced & Neighbor Friendly Agricultural Practices 56

22 Anaerobic Digestion Process Overview Manure pathogens macronutrients unstable organics Energy Methane (CH 4 ) Anaerobic Digester Carbon Dioxide (CO 2 ) H 2 S Biological Process Treated Effluent pathogen free nutrient rich stable (low odor) 57

23 The anaerobic digestion process is sensitive to changes in: Temperature Alkalinity Waste Strength (loading rate) Flow (hydraulic retention time) 58

24 Animal Waste Management System Collection Storage Digester Application / Utilization 59

25 Many Types of Anaerobic Digesters Classification Methods Loading Schedule Flow Pattern Microbial Growth Temperature Regime 60

26 Anaerobic Digester Configurations Covered lagoons (ambient and heated) Complete mix digesters (CSTR) Plug flow digesters Anaerobic sequencing batch reactors (ASBR) Fixed film digesters (anaerobic filters) 61

27 Flare It Energy Recovery Biogas (60% to 65% Methane) Use It for Heating Displace Natural Gas / Propane Use It for CHP Displace Purchased Electricity Displace Natural Gas / Propane 62

28 Anaerobic Digester / CHP System 63

29 Electric & Thermal Coincidence Steady Use of Recovered Thermal Energy Heat the Digester Heat the Livestock Operation Heat Potable Water Steady Use for the Electricity Displace Electricity Utilized on the Farm Possibly Sell Excess Electricity to Utility 64

30 CHP Technologies Prime Movers: Reciprocating Engines Micro-turbines Gas Clean up possible Gas Compression (micro-turbines) Generator / Heat Recovery Grid Interconnect Hardware 65

31 Advantages & Disadvantages CHP and Anaerobic Digesters Advantages Odor & Insect Mitigation Nutrient Management Pathogen Reduction Energy Savings Heating Fuel Savings Reduced Electric Bills Qualified for Net Metering Potential Farm Bill Funding Disadvantages Adding Complexity to Farming Commitment to Digester System Management (labor & maintenance) Capital Costs Electric Utility Interconnect can be Tedious 66

32 Iowa Net Metering Rule Biomass, MSW, PV, Wind, Hydro System Size: 500kW Total System Capacity: No Limit Credited at Retail Rate Industrial Owned Utilities Mandated All Other Utilities Voluntary 67

33 Expanded Applications Adding Food Processing Waste to a Manure System Can Increase Biogas Production with Higher Methane Content Community Digesters Provide Economic Development Tipping Fees Normal for Handling Food Wastes Bedding Material / Compost (potential revenues) 68

34 Potential U.S. Market Anaerobic Digester Gas Over 3 GW of Potential Capacity 7,000 Dairy Farms 11,000 Hog Farms 6,800 WWTPs Source: Resource Dynamics Corp. Opportunity Fuels for CHP 69

35 1000 Finish, or From Biogas to Btu 5000 Sow Farrow to Wean Both types of farms produce around 45,000 cubic feet of biogas per day With a Methane content of between 55% and 80% Farm produces between 25 and 36 MMBtu per day or between 9,000 and 13,000 MMBtu per year 70

36 From Btu to kw Assume a Heat Rate of 14,000 Btu/kWh (24% efficient prime mover) such as a microturbine or recip. engine 25 MMBtu/day to 36 MMBtu/day can fuel prime movers of between 74 and 107 kw installed capacity A 74 to 107 kw generator produces: between 1,700 and 2,500 kwh per day between 53,000 and 77,000 kwh per month Between 650,000 and 940,000 kwh per year 71

37 Electricity Savings Annual Electricity Savings at Various Rates Annual Savings $90,000 $75,000 $60,000 $45,000 $30, Electricity Rate ($/kwh) 74 kw Generator 107 kw Generator 72

38 Heat Recovery Installed Capacity Approximate Heat Recovery per Year Required Fuel Equivalent (at 80% Boiler Efficiency) per Year Savings from Heat $5/MMBtu Gas Cost per Year Savings from Heat $7/MMBtu Gas Cost per Year 74 kw 2,700 MMBtu 3,400 MMBtu $17,000 $23, kw 3,900 MMBtu 4,900 MMBtu $24,500 $34,300 73

39 Total Savings Potential Approximate Savings Assuming Low Case: 5 cent/kwh avoided electricity charges and $5/MMBtu natural gas prices High Case: 9 cents/kwh avoided electricity charges and $7/MMBtu natural gas prices Installed Capacity 74 kw Low Savings Case $/Year 49,400 High Savings Case $/Year 82, kw 71, ,700 74

40 Installed Cost - Rules of Thumb Reciprocating Engines <500kW Recoverable Useful Heat: O&M Costs: Installed Costs: (with heat recovery) Micro-turbines 30 to 400 kw Recoverable Useful Heat: 4,000 to 5,000 Btu/h per kw $0.012 to $0.015 per kwh $1,400 to $1,800 per kw O&M Cost (per kwh) $0.01 to $0.015 Installed Cost: $1,000 to $2,000 (with heat recovery) 6,000 7,000 Btu/h per kw 75

41 System Paybacks On Incremental CHP Facility Only Capacity Installed Cost Yearly O&M Cost Low Savings Case High Savings Case Years Years 74 kw $120,000 $8, (8.7) (5.2) 107 kw $160,000 $12, (6.6) (4.0) ( ) includes cost of digester system at $300k 76

42 Summary CHP / Digester Applications Appropriate when digester being installed for odor mitigation or other reasons Good match for thermal energy (digester) Significant market (manure, food processing, waste water treatment, community digesters) Farm Bill and Net Metering add incentives Reasonable paybacks 77

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44 Landfill Gas Industrial 2004 The Trustees of the University of Illinois 1

45 What is landfill gas? LFG is a gas created when waste in a landfill decomposes LFG contains ~ 50% methane and 50% CO2, with small amounts of O2, N2, and H2, and trace amounts of hazardous air pollutants LFG causes odors at a landfill Landfills are the largest anthropogenic (humanrelated) source of methane in the United States. Source: 2

46 Why should uncontrolled landfill gas emissions concern the public? Uncontrolled landfill gas emissions are harmful to the environment. Landfill gas emissions contribute to local smog and air quality problems. Uncontrolled emissions of landfill gas are odorous and potentially explosive. The methane in landfill gas is a potent greenhouse gas. Source: 3

47 How can methane emissions from landfills be controlled? Landfill gas can be captured and the methane used as a source of energy. The methane can be used to generate electricity or provide boiler fuel for local facilities with a large and constant demand for energy. Other applications of methane are: to heat greenhouses, as a vehicle fuel, and to treat leachate. It can also be upgraded and injected into natural gas pipelines. Source: 4

48 What has been done with landfill gas? Landfills with over 2.5 million metric tons of waste in place are required by federal law to collect and either flare or utilize their gas Regional laws may have similar requirements for smaller landfills YESTERDAY LFG was simply collected and flared - WASTED! TODAY many landfills are taking advantage of the waste gas to produce heat and power Cuts down on methane emissions Can potentially generate revenue for the landfill Source: 5

49 What are the Benefits of LFGTE Projects? Environmental Benefits leads to cleaner air, including reductions in smog, odor, and greenhouse gas emissions. Economic Benefits - create jobs associated with the design, construction, and operation of energy recovery systems. Community Benefits - win/win situation for all project partners, especially the community. LFGTE projects help ensure that local landfills are well managed and make the area around the site a better place to live. Energy Benefits - reliable, renewable, local fuel source that reduces our reliance on fossil fuels. LFGTE projects available to generate electricity over 90% of the time, 24/7. Source: 6

50 What comprises a typical LFGTE Project? 7

51 What are the identifying candidate criterion for potential projects? Desired Landfill Characteristics Landfill contains municipal solid waste (MSW) Landfill has at least 1 million tons of MSW in place Landfill is at least 30 feet deep Site receives greater than 25 inches of annual rainfall A number of energy projects however, have been developed at smaller and arid landfills. Source: 8

52 How much electricity does one site produce? 1 million tons of municipal solid waste Produces 300 cubic foot per minute of landfill gas (~ 432,000 cubic feet per day ) Could generate 7,000,000 kwh of electricity per year (~ 0.8 MW) of electricity Enough to power 700 homes Most of the LMOP identified candidates for LFG projects have more than 1 million tons of waste in place Source: 9

53 What is the environmental impact of generating electricity with landfill gas? Every 1 MW of electric generation from LFG equates to Planting ~11,300 acres of trees per year Removing the emissions of ~8,400 cars per year or Preventing the use of ~89,000 barrels of oil per year 10

54 What tools are available to assist you in evaluating LFGTE projects? EPA s Landfill Gas Emissions Model: LandGEM Can be downloaded from EPA s website at: ps/landfill.html Most widely used and accepted model First order exponential model Metric units Source: 11

55 Who can use the landfill gas? Identify End Users / Sales On-site use (gas and electricity) Nearby direct gas use (sale to industrial end users, such as boilers, kilns) Electricity use High-Btu upgrade (sales to nearby customers or gas utility) Specialty use (greenhouse, vehicle fuel) 12

56 How is heat recovery incorporated into a landfill project for CHP? A landfill s on-site heat uses are generally minor and largely limited to space heating Can send hot water or steam off-site by pipe Locate generation at end user 13

57 Who is using landfill gas? Nationally 396 LFGTE Operating Projects CHP Applications: 89 MW, 24 sites DG-Only Applications: 9,000 MW, 252 sites 600 Candidate LFGTE Projects Iowa 3 LFGTE Operating Projects 2 Electricity Generating 1 Direct Use 11 Candidate LFGTE Projects 14

58 Who are the Candidate Iowa Landfills Identified by LMOP? Black Hawk County SLF (Area E) Waterloo, IA Clinton County SLF (East) Clinton, IA Des Moines County SLF - West Burlington, IA Dubuque Metropolitan SLF Dubuque, IA Fayette County Landfill Fayette, IA Ft. Dodge LF - Ft. Dodge, IA Lee County SLF - Fort Madison, IA Marion County SLF Tracy, IA Northwest Iowa SLF Shelden, IA Sioux City SLF - Sioux City, IA Winneshiek County Sanitary Landfill Decorah, IA 15

59 What are additional Landfill Gas Economics Rules-of-Thumb? LFG is essentially a free fuel -only the capital costs of gas collection, pipeline and treatment systems are required Landfills with over 2.5 million metric tons of waste in place are required by federal law to collect and either flare or utilize their gas Regional laws may have similar requirements for smaller landfills Landfills can expect to pay about $600,000 per million tons of waste to install gas collection equipment Pipeline construction typically costs about $260,000 per mile -most projects fall within the 2-5 mile range (up to 20 miles can be economically feasible, depending on gas recovery at the landfill and energy load at the end-use equipment) The efficiency of prime mover equipment is downgraded about 10 percent compared to NG, due to LFG s lower energy content -special equipment modifications may also be required 16

60 Example Landfill Gas CHP Project Antioch Community High School HOD Landfill Gas Collection System Tie-in Gas Cleaning and Compression Gas Piping to the Microturbine at the School Electric Generation Heat Generation (2003) Source: 17

61 HOD Landfill Gas Collection System Tie-in Collection system at HOD Landfill includes 35 LFG extraction wells, a blower, and a flare must remain operational to control LFG migration. Construction of the new CHP system required connection to the existing system to allow excess LFG to be combusted in the flare. Additional pipes and control valves were included in the system to route the gas to the conditioning and compression building to allow the existing blower and flare to remain operational, while providing the correct volume of LFG to the microturbines. Source: 18

62 Gas Cleaning and Compression Collected LFG from the landfill is conditioned through a series of chillers that drop the gas temperature to -10 F to remove moisture and siloxane compounds. An activated carbon unit is included to remove additional impurities. The LFG is compressed to 95 pounds per square inch to meet the input fuel requirements of the Capstone MicroTurbines. The gas cleaning and conditioning system is located at HOD Landfill in a building adjacent to the blower and flare. ($200,000) Source: 19

63 Gas Piping to the Microturbine at the School Piping Characteristics High-density polyethylene (HDPE SDR 9) pipe 4 inches in diameter 1/2 mile long pipe Installed 4 to 12 feet below ground Piped from HOD Landfill to microturbines at school ($450,000) Horizontal drilling techniques allowed pipe to cross beneath a stream, a road, public utilities, athletic fields, and a railroad Minimal disturbance of the ground surface. Extremely important for the community and the school's athletic programs Source: 20

64 Electric Generation 12-turbine system (30 kw ea.) was selected to provide a system that remains functional as LFG production from landfill decreases. Based on the initial LFG collection rates, up to 18 turbines could have been installed. The final payback for this project, based on conservative assumptions for future energy costs, is approximately eight years. Built-in relay protection (over/under voltage and over/under frequency) automatically trips off the microturbines in the event of a utility system outage or a power-quality disturbance. Excess electricity not used by ACHS is sold to ComEd. Source: 21

65 Heat Generation Each Capstone MicroTurbine produces exhaust energy of around 290,000 Btu/hr at 550 F. MT exhaust is routed through heat exchangers that heat the liquid, which then circulates through underground insulated steel pipes running beneath a parking lot to the school's boiler system. Because heat is being transferred to the school through insulated 4-inch-diameter pipes, locating the turbines next to the school was critical in preventing excess heat loss. When waste heat recovery is not required by ACHS, the microturbine exhaust is automatically diverted around the exchanger, allowing for continued electrical output. During extremely cold weather, the school boiler system automatically uses natural gas to supplement the heat output of the microturbines. Source: 22

66 Economics of LFGTE Project at ACHS Total Installed Costs $1,900,000 Grant from IL DECCA $500,000 Remaining cost secured through revenue bonds to paid off through energy savings Projected Annual Savings $100,000 (greater savings today with higher natural prices) 23

67 Antioch LFGTE Project Benefits Win-win situation for all involved, including HOD Landfill, ACHS, the Village of Antioch, the State of Illinois, Commonwealth Edison, and EPA Low energy costs for the high school Use of waste heat for internal use in the high school Clean, complete combustion of waste gas Decreased emissions to the environment through reduced need for traditional electrical generation sources Reduction in greenhouse gas emissions Public relations opportunities for ACHS and the community as the first school district in the United States to get electricity and heat from LFG Educational opportunities in physics, chemistry, economics, and environmental management for ACHS students as a result of this on-campus, state-of-the-art gas-to-energy system 24

68 Summary At most landfills, the gas collection equipment is already in place since they are required to flare their waste gas. Applications of LFG need to be identified. Only some pipes need to be built and a genset installed to create an electric generating DG or CHP landfill gas project. State and Federal incentives available. For more info, please visit 25

69 Industrial (Steam) 2004 The Trustees of the University of Illinois 26

70 Steam Turbine Steam turbines are one of the oldest prime mover technologies still in use. Steam turbines extract heat from steam and transform it into mechanical work by expanding the steam from high pressure to low pressure. From Boiler High Pressure Steam System Turbine To Generator or Mechanical Device To High Pressure Steam Loads To Low Pressure Steam Loads 27

71 Steam Turbine Characteristics Run from <1 MW to 500 MW High-pressure steam flows through the turbine blades and turns the turbine shaft Steam turbine shaft is connected to an electric generator for producing electricity Power output is proportional to the steam pressure drop in the turbine the larger the pressure drop of the steam, the larger the output capacity of the turbine/generator No emissions from a steam turbine emissions are from the boilers used to produce the steam 28

72 Two Classes of CHP Steam Turbines Condensing Fully Condensing Extraction Non-Condensing (Backpressure) 29

73 Condensing Turbine Operate with an exhaust pressure less than atmospheric (vacuum pressure) Experiences the maximum pressure drop through the turbine which results in greater energy extracted from each lbm of steam input Turbine efficiencies approx % The condenser can be either air or water cooled condenser cooling water can be utilized for process or space heating loads Usually more expensive than Non-Condensing Backpressure turbines 30

74 Non-Condensing Turbine (Backpressure) Operate with an exhaust equal to or in excess of atmospheric pressure Exhaust steam is used for lower pressure steam process loads Available in smaller sizes and pass large amounts of steam per MW of output (low efficiencies) Produce less useful work than a condensing turbine, but since the unused steam from the turbine is passed on to process loads, the lower turbine power generation efficiencies (15% to 35%) are not a concern Very cost effective when paralleled with pressure reduction valves (PRV), providing an efficient use of the pressure reduction requirements Usually less costly than condensing turbines 31

75 Simple Steam Cycle Turbine System Steam Fuel In Boiler Turbine To Generator or Mechanical Device Feedwater Pump Condenser Low Pressure Steam 32

76 Steam Turbine Rules-of-Thumb Power Generation Efficiency, % Steam Exhaust Pressure Steam Required, lb/h per kw Installed Cost, $/kw O & M Cost, /kwh Backpressure At or above atmospheric Condensing Below atmospheric

77 Extraction Steam Turbine Either condensing or backpressure Multi-stage turbines that are designed with one or more outlets to allow intermediate pressure steam (between inlet and exhaust pressures) to be withdrawn for process applications 34

78 Extraction Steam Turbine Steam Turbine To Generator or Mechanical Device Extraction Steam To Condenser 35

79 When are Steam Turbines Utilized in CHP System Prime Mover when operated directly by steam generated on-site in a boiler and used to generate electricity through an electric generator Thermally Activated Machine when operated by steam generated by recycling waste thermal energy or by replacing steam pressure reduction valves (PRVs) 36

80 Reducing Steam Pressure Wisely Before After 37

81 Typical Pressure Reduction Station 38

82 Applying Backpressure Steam Turbines 39

83 Backpressure Steam Turbine Instead of Pressure Reducing Valve Probably Not Attractive Probably Attractive Drop Dead Gorgeous Steam Flow Rate <4,000 lbm/h >4,000 lbm/h >10,000 lbm/h Inlet Pressure <125 psig >125 psig >150 psig Pressure Drop <100 psi >100 psi >150 psi Cost of Electricity <1.5 /kwh >1.5 /kwh >6.0 /kwh Capacity Factor <25% >25% >50% Source: TurboSteam 40

84 How Much Power Can Be Developed? 41

85 How Much Power Can Be Developed? Power Available from Backpressure Turbine 1 Inlet Pressure From Owner 600 psig 2 Outlet Pressure From Owner 65 psig 3 Steam Usage From Owner 40,000 pounds/hour 4 Steam Usage Divide Line 3 by 1, Mlb per hour 5 Power Gen Heat Rate Get Value from Chart kw/mlb-hour 6 Power Available Multiply Line 4 by Line 5 kw 42

86 How Much Power Can Be Developed? ~ 24 kw/mlb-hour 43

87 How Much Power Can Be Developed? Power Available from Backpressure Turbine 1 Inlet Pressure From Owner 600 psig 2 Outlet Pressure From Owner 65 psig 3 Steam Usage From Owner 40,000 pounds/hour 4 Steam Usage Divide Line 3 by 1, Mlb per hour 5 Power Gen Heat Rate Get Value from Chart 24 kw/mlb-hour 6 Power Available Multiply Line 4 by Line kw 44

88 What are the annual savings experienced by a backpressure steam turbine? Assumptions Gen Size: Hours of Operation: Average Electricity Cost: Backpressure Turbine Installed Cost: Backpressure Turbine O&M Cost: Standby Charge: 960 kw 3,000 hrs 6.0 /kwh $400 /kw 2.5 /kwh $3 /kw Calculations Electricity Generated: (960 kw) X (3,000 hrs) = 2,880,000 kwh Electricity Generated: (2,880,000 kwh) X (6.0 /kwh) = $172,800 O&M Charges: (2,880,000 kwh) X (0.25 /kwh) = $7,200 Standby Charges: (960 kw) X ($3/kW) X (12 months) = $34,560 Annual Savings: ($172,800) - ($7,200) - ($34,560) = $131,040 Installed Costs: (960 kw) X ($400/kW) = $384,000 Simple Payback: ($384,000) / ($100,800) = 2.9 years 45

89 Steam Turbine Summary If a facility is utilizing a Pressure Reducing Valve (PRV) to reduce steam pressure, a backpressure steam turbine can be substituted in using free fuel (steam) to reduce the steam pressure and generate electricity simultaneously One of the more easily applied CHP technologies Relatively short paybacks 46

90 Ethanol / Biodiesel Production (Coal Gas / Steam) 2004 The Trustees of the University of Illinois 47

91 Overview Why CHP for Ethanol What are the viable CHP options What are the critical cost and performance parameters Illustrative economics Critical factors 48

92 Why CHP Is a Good Fit for Ethanol Energy is the second largest cost of production for dry mill ethanol plants Electric and steam demands are large and coincident Electric and steam profiles are relatively flat Operating hours are continuous 24/7 49

93 Ethanol Energy Demand Plant Capacities, mmgal/yr Electricity Demand, kwh/gal Steam Demand, lbs/gal Boiler Fuel, Btu/gal DDGS Drier Fuel, Btu/gal Power to Steam Ratio ,000 27,500 13,

94 Gas Turbine CHP 51

95 Gas Turbine/Supplemental Firing CHP 52

96 Boiler/Steam Turbine CHP 53

97 CHP System Cost and Performance Gas Turbine Gas Turbine w/duct Firing Boiler/Steam Turbine Capacity, MW Electrical Efficiency, % (HHV) Steam Output, Btu/kWh 4,500 6,700 12,000 20,000 35,000 40,000 Overall Efficiency, % (HHV) Power to Steam Ratio Installed Costs, $/kw 1, ,000 1, * Non-fuel O&M Costs, $/kwh <0.004 * Incremental costs of steam turbine generator and supporting systems only 54

98 The Value Equation - Reduced purchased electricity costs + Increased fuel costs + Increased O&M costs + Increased capital expenditure - Displaced capital? - Reliability, other operational savings? - Overall Savings 55

99 Simple Payback Analysis Payback = Capital Cost/Operating Savings Generic, first cut analysis Parametric calculation of payback as a function of fuel and electricity prices. Useful to identify sites for more complete assessment. 56

100 Simple Payback Analysis Assume new construction or expansion of existing facility Compare operating costs of CHP system with conventional plant design Natural gas CHP compared to conventional natural gas boilers/purchased electricity Coal CHP compared to coal boiler/purchased electricity 57

101 Plant Operating Assumptions Plant Capacity, mmgal/yr Operating Hours Electric Use, kwh/gal Annual Electric Use, MWh Baseload Electric Demand, MW Steam Use, lb/gal Steam Use, lbs/hr Annual Steam Use, mmlbs Boiler Fuel Use, Btu/lb Annual Boiler Fuel Use, mmbtu Annual Drier Fuel Use, mmbtu Electric Costs, $/kwh Gas Costs, $/mmbtu , , ,600 24,125 1,206, ,

102 Gas Turbine CHP System Assumptions Capacity, MW Run Hours Gas Turbine Fuel, mmbtu/hr Duct Burner Fuel, mmbtu/hr Steam Output, lb/hr Power to Steam Ratio O&M Costs, $/kwh Capital Costs Turbine Genset, $/kw HRSG, $/kw Interconnect, $/kw Misc Equipment, $kw Engineering, installation, etc, $/kw Total Installed Cost, $/kw Gas Turbine , ,045 Gas Turbine w/duct Firing , ,205 59

103 Gas Turbine CHP Payback Capital Costs = $5,434,000 Payback = 7.2 yrs Annual Savings = $755,000 Capital Costs = $4,980,000 Payback = 6.6 yrs CHP System $5,434,000 - Boiler credit $ 450,000 $4,984,000 60

104 Sensitivity to Electricity and Natural Gas Prices - Gas Turbine CHP 8 Natural Gas Price, $/mmbtu $5 $6 $7 $8 $9 $10 Simple Payback, yrs Electricty Price, cents/kwh 61

105 Gas Turbine CHP w/duct Burner Payback Capital Costs = $6,266,000 Payback = 4.8 yrs Annual Savings = $1,296,000 Capital Costs = $5,366,000 Payback = 4.1 yrs CHP System $6,266,000 - Boiler credit $ 900,000 $5,366,000 62

106 Sensitivity to Electricity and Natural Gas Prices - Gas Turbine CHP w/duct Firing 8 Natural Gas Price, $/mmbtu $5 $6 $7 $8 $9 $10 Simple Payback, yrs Electricty Price, cents/kwh 63

107 Boiler/Steam Turbine CHP System Assumptions Capacity, MW Run Hours Boiler Fuel, mmbtu/hr Steam Output, lb/hr Overall Efficiency, % (HHV) Power to Steam Ratio O&M Costs, $/kwh Incremental Capital Costs Steam Turbine Genset, $/kw Incremental Boiler Costs, $/kw Total Incremental Cost, $/kw Coal Price, $/mmbtu Gas Turbine ,

108 Coal Boiler/Steam Turbine CHP Energy Results Purchased Electricity, MWh Generated Electricity, MWh Boiler Steam, mmlbs Boiler Fuel, mmbtu W/O CHP 48, ,204,500 W/ CHP 22,680 25, ,325,000 65

109 Coal Boiler/Steam Turbine CHP Financial Results Purchased Electricity, 1000 $ Boiler Fuel, 1000 $ Energy Costs*, 1000 $ O&M Costs, 1000 $ Standby Charges, 1000 $ ($3/kW) Total Operating Costs, 1000 $ W/O CHP 3, , , ,781.7 W/ CHP 1, , , ,450.4 * Does not include DDGS drier fuel Operating Savings = $1,331,300 66

110 Coal Boiler/Steam Turbine CHP Payback Incremental Capital Costs = $2,175,000 Steam Turbine $1,200,000 Incremental Boiler $ 975,000 Operating Savings = $1,331,300 Payback = 1.6 yrs 67

111 Sensitivity to Electricity and Coal Prices - Boiler/Steam Turbine CHP 4 Coal Price, $/mmbtu Simple Payback, yrs Electricty Price, cents/kwh 68

112 Critical Issues Affecting CHP Economics Reasonable projections of fuel and retail electricity prices are key Understanding and accounting for specific electric rate structures is critical Demand rate Standby tariffs Site requirements will impact capital costs Space and access Permitting Interconnection 69

113 Critical Issues Affecting CHP Economics (continued) In general, CHP system should be sized to supply within-the-fence energy needs Difficult to sell excess power However, explore opportunities to partner with utility Increased thermal utilization improves economics Increasing thermal output displaces less efficient boiler output Consider the entire range of potential savings Credits for displaced boiler capacity Are there operating savings from increased reliability? 70

114 Thermal Oxidizer/Steam Turbine CHP 71

115 Ethanol Facility CHP Market Summary Options for Operating CHP at an Ethanol Plant NG Gas Turbine CHP NG CHP Turbine w/ Supplemental Firing CHP Coal Boiler / Steam Turbine CHP Thermal Oxidizer / Steam Turbine CHP Growing Market for Larger Systems Increasing Large Permitting Source Requirements Other Fuels 72

116 Summary / Available Evaluation Tools 2004 The Trustees of the University of Illinois 73

117 Overview Feasibility Evaluation Walkthrough Data Sheet Level II Analysis Software Models CHP Workshop Recap 74

118 Screening Walk-Thru Steps in the Evaluation Full Engineering Planning is Expensive Screening and Concept Design Steps Determine Practicality in Incremental Stages Screening Economics Practical Investment Concept Design Good Potential? CHP Financial Analysis Owners Agreement? Develop Engineering Plans, Bid, Build 75

119 Walkthrough Data Sheet Questions for the Facility Operator Utility Bills and Facility Loads (Page 47) 12 Months of Electric, Gas, and Fuel Oil Bills Industrial or Commercial Loads Operating Schedule and Hours of Operation Description of Heating or Process Loads Operating Pressure Type of Cooling Systems 76

120 Walkthrough Data Sheet Questions for the Facility Operator Electric Parameters (Page 48) Number of Electric Feeds Power Quality Issues Low Voltage and/or Poor Frequency Quality Number of Momentary Electric Power Outages and associated costs Complete Electric Power Outages and Cost Information on Backup Generators 77

121 Walkthrough Data Sheet Questions for the Facility Operator Overall Location and Equipment (Page 49) Central Heating System: hot water or steam Proximity to Electric Feeds Boiler Information (fuel, efficiency, etc.) Central Cooling System: types of chillers Noise / Vibration Issues 78

122 Walkthrough Data Sheet Questions for the Facility Operator Other Questions (Page 50) Price reduction on increased gas consumption Utility Standby Charges Rebate Programs Non-Profit or For-Profit (tax rate) Interested in Leasing Interest in 3 rd Party Ownership 79

123 Feasibility Evaluation Conclusions Each site requires an in-depth analysis to verify if CHP will be feasible. Once the preliminary analysis has been completed and results look favorable, moving on to a Level II Analysis is appropriate 80

124 Building Energy Analyzer Developed by InterEnergy Software (Gas Technology Institute) Primary use: Screening of CHP applications in commercial buildings using DOE-2 simulation engine Data libraries: 8 types of generation equipment, 17 types of HVAC equipment, utility rates, weather, 15 specific building types (e.g., hospital, office, hotel, school, retail) CHP applications: Hot water, space heating/cooling, thermal storage, dehumidification Economic analyses: cash flow, payback, IRR Cost: $800 ( 81

125 BCHP Screening Tool Commercial Developed by DOE/ORNL Primary use: Screening of CHP applications in commercial buildings using DOE- 2 simulation engine CHP applications: Hot water, chilled water, space heating Data libraries: Generation equipment, HVAC equipment, 14 specific building types (e.g., hospital, office, hotel, school, retail) Results are returned to the user in tabular and graphical forms with displays of annual and monthly energy use hourly equipment inputs and outputs for a typical weather year simultaneous comparisons of up to 25 CHP configurations with a non-chp baseline system Users can select locations from 239 cities in the U.S. and utility rates from over 100 gas and 100 electric utilities throughout the country Cost: Free (download from /success_analysis_bchp.htm 82

126 BCHP Screening Tool Commercial 83

127 Cogen Ready Reckoner Industrial Primary use: Screening of industrial cogeneration applications Equipment data library: GT and recip engine gen sets CHP applications: Process steam, hot water, chilled water Hourly and annual mass flows, fuel flows, electricity usage Economic analyses: cash flow, payback, NPV, IRR Cost: Free (download from hp/chp-eval2.html 84

128 CHP Workshop Recap Resource Guidebook Rules-of-Thumb Frequently Asked Questions (Page 53) 5 Market Sector Rules-of-Thumb MAC Web Site Project Profiles approx. 40 CHP Baseline Analysis for the Iowa Market 85

129 Thank You John Cuttica (312) Cliff Haefke (312)