Interplay of Gas and Electricity Systems at Distribution Level

Transcription

1 Interplay of Gas and Electrcty Systems at Dstrbuton Level Karen Tapa-Ahumada & Pablo Duenas (December 14th, 2016) Utlty of the Future Workng Paper Table of Contents 1. Introducton Technology descrpton Recprocatng nternal combuston engnes Mcroturbnes Fuel cells Strlng engnes Heat pumps Methodology Formulaton Key assumptons Case study Descrpton Results Concluson References Appendx: Mathematcal formulaton Nomenclature Objectve functon Constrants

2 1. Introducton Dstrbuted energy resources for space condtonng comprse a set of vared technologes, rangng from mature well establshed systems such as furnaces, bolers, and ar-condtonng (AC) unts to emergng ones such as mcro combned heat and power (mcro-chps), reversble heat pumps, and hybrd gas-electrcty condtonng systems. Mcro-CHP systems, for nstance, wll have dfferent prme movers dependng on the underlyng converson process. Therefore, recprocatng engnes, mcroturbnes, and fuel cells-based CHPs have dfferent technologcal characterstcs and dssmlar market maturty levels, whch make them attractve for a varety of applcatons at varous scales. Dependng on the qualty of the thermal energy contaned n the exhaust gas and coolng systems, ths can be used to produce hot water, low- to medum-pressure steam, and heatng and coolng for space condtonng. Ths paper looks nto the relatve value of usng gas- and electrcty-based systems for space condtonng for resdental consumers. The proftablty of these technologes s the key metrc for comparson, as t s what consumers mostly consder when decdng to adopt one technology over another. Performance characterstcs such as effcency and heat-to-power rato, as well as economc characterstcs such as captal and operatonal costs, energy prces and ther assocated tarff structure are expected to have a major mpact not only n ther proftablty, but also on how they compete each other to meet the consumers energy needs. Motvated by ths, the specfc queston we explore n ths case study s: What would the costs and benefts be of gas and electrcty DERs used for space condtonng under dfferent market and clmatc condtons? The structure of the paper s a follows. In the frst half of ths document, we concsely descrbe the salent features of these gas- and electrcty-based systems for space condtonng. In the second half of ths paper, we assess the relatve value of usng gas- and electrcty-based systems for space condtonng for resdental consumers, lookng at the prmary energy, ther proftablty and annual energy costs savngs under several scenaros, 2. Technology descrpton In ths secton, we present an overvew of the most salent characterstcs of a set of gas-based technologes consstng of recprocatng engnes, mcroturbnes, fuel cells, and Strlng engnes normally used n CHP applcatons, as well as electrcty-based heat pumps used for space condtonng. For the purpose of the Utlty of the Future project, we focus on a set of technologes that are ether well establshed n the market or look promsng n the near future. These technologes dffer mostly on the underlyng energy converson process, rangng from an engne- and a turbne-based combuston process, n the case of recprocatng engnes and mcroturbnes, to an electrochemcal converson process n the case of fuel cells. Gven ther dssmlar market maturty levels, n addton to ther dfferent technologcal characterstcs, we beleve that these three technologes encompass a representatve set worth of analyzng wthn the context of ths project. 2

3 2.1. Recprocatng nternal combuston engnes Recprocatng nternal combuston engnes are a well-establshed and wdely used technology, wth a worldwde mass producton. Recprocatng engnes nclude both desel and spark-gnton confguratons. They are mportant for both transportaton and for statonary uses. In general, ths technology s a relable and economc choce for stand-alone applcatons and as a prme mover for CHP applcatons (EPA, 2015). Recprocatng engnes are avalable n multple szes, rangng from few kws up to several MWs for DG applcatons. They can produce hot water, low pressure steam, and chlled water by means of an absorpton chller. They are characterzed for havng a fast start-up, makng them sutable for peakng or emergency stuatons. In the event of an electrc outage, they can provde black-start capablty 1 wth mnmal lary power requrement, normally only batteres. The avalablty 2 of ths technology s usually over 95% n statonary applcatons. In addton, these engnes have a good part-load effcency performance makng them approprate for electrc load followng applcatons. Recprocatng engnes are wdely used n combned heat and power (CHP) applcatons n unverstes, hosptals, water treatment facltes, ndustral facltes, and commercal and resdental buldngs. Thermal loads most amenable to engne-drven CHP systems n commercal/nsttutonal and resdental sectors are space heatng and hot water requrements, beng hot water the smplest one to supply. Accordng to the 2015 EPA Report (EPA, 2015), there are 2,194 stes or about 2.3GW of nstalled capacty n the U.S. usng ths technology as prme mover n CHP applcatons. Another common applcaton s for emergency. Standby generators are used n a wde varety of settngs from resdental homes to hosptals, scentfc laboratores, data centers, telecommuncaton equpment, and modern naval shps. Resdental systems nclude portable gasolne fueled sparkgnton engnes or permanent nstallatons fueled by natural gas or propane. Commercal and ndustral systems more typcally use desel engnes. Usually, desel engnes have low upfront cost, ablty to store on-ste fuel f requred for emergency applcatons, and rapd start-up and rampng to full load. However, they tend to have relatvely hgh emssons of ar pollutants (NOx and partculates) 3. Wthn CHP applcatons, two man components can be dentfed: Engne. Spark gnton engnes use spark plugs, wth a hgh-ntensty spark of tmed duraton, to gnte a compressed fuel-ar mxture wthn the cylnder. Natural gas s the predomnant spark gnton engne fuel used n electrc generaton and CHP applcatons. Natural gas engnes for 1 Black-start capablty s provded by gas-ders when they are equpped wth lary power requrements that can provde electrcty n the event of a utlty outage. 2 Avalablty ndcates the amount of tme that a unt s ether up and runnng or avalable for use. Systems are unavalable durng perods of scheduled mantenance or forced outages. 3 Another applcaton can be for peak shavng. Facltes enrolled n these type of programs are asked by the local utlty to run ts on-ste generator durng the utlty s peak load perod. In exchange, the utlty wll provde the faclty wth payments. 3

4 power generaton applcatons are prmarly 4-stroke engnes, avalable n szes up to about 18 MW. Desel engnes are ncreasngly restrcted to emergency standby or lmted duty-cycle servce because of ar emsson concerns 4 and also because of the hgh cost of fuel. Consequently, natural gas-fueled spark gnton engne s now the engne of choce for the hgher duty cycle statonary power market. Heat recovery. Thermal energy contaned n the exhaust gas and coolng systems, whch generally represents 60 to 70% of the nlet fuel energy. Most of the waste heat s avalable n the engne exhaust and jacket coolant, whle smaller amounts can be recovered from the lube ol cooler and the turbocharger's ntercooler and after-cooler (f so equpped). Usually, the waste heat from engne systems recovered from jacket coolng water and lube ol coolng systems s at a temperature too low to produce steam but can produce hot water (190 to 230 F). However, steam can be produced from the exhaust heat f requred (maxmum pressure of 400 psg). Exhaust temperatures can range from 720 to 1000 F. Based on the nformaton provded by EPA (2015), Table 1 presents some of performance characterstcs for typcal commercally avalable natural gas spark gnton engne CHP systems over a 100 kw to 9 MW sze range 5. The power ratngs of the technologes wll depend on the operatonal mode the engne s ntended for: Standby. Maxmum power output ratng, f contnuous full or cyclng load for a short duraton --usually less than 100 hours. Prme. 80 to 85% of the standby ratng, f contnuous operaton for an unlmted tme 6 but wth regular varatons n load. Baseload. 70 to 75% of the standby ratng, f contnuous full-load operaton for an unlmted tme. 7 4 Dependng on the engne and fuel qualty, desel engnes produce 5 to 20 tmes the NOx (on a ppmv bass) of a lean burn natural gas engne 5 In the EPA report (EPA, 2015), CHP thermal recovery estmates are based on producng hot water for process or space heatng needs. 6 Except for normal mantenance shutdowns. 7 Ibd. 4

5 CHP Technology: Recprocatng Internal Combuston Engnes Metrc Unts Range Notes Nomnal electrcty [kwe] ,000 Overall effcency [%] 80% % Electrc effcency HHV [%] 27% - 42% Thermal effcency HHV [%] 53% - 35% Power-to-heat rato [p.u] Start-up tme [sec] 10 seconds Black-start capablty Wth power storage unt Avalablty [%] 96% - 98% Part-load effcency OK, mnor loss of effcency Hours to overhaul [hour] 8,000-30,000 Thermal output Space heatng, hot water, coolng, low pressure steam Emssons [kg/mwh] NOx: [3] CO2: [4] O&M costs [$/kwh] [1],[2] Installed cost [$/kw] 2,900-1,500 [1] Economc lfe [hour] 30,000-72,000 Notes: [1] Costs fgures n US dollars for year 2013 [2] Costs based on 8,000 annual operatng hours [3] NOx, CO and VOCs can be mportant n natural gas-fred engnes [4] CO2 emssons after takng credt for heat. In stand-alone applcaton CO2: [kg/mwh] Source: 2015 Catalog of CHP Technologes, U.S. Envronmental Protecton Agency. Table 1: Cost & performance characterstcs for commercally avalable gas-fred nternal combuston engne CHP systems. 8 Regardng part-load effcency, recprocatng engnes generally drve synchronous generators at constant speed to produce steady alternatng current (AC) power. As load s reduced, the heat rate of spark gnton engnes ncreases and effcency decreases as shown n Fgure 1 for a 9.3MW natural gas engne genset. The effects of ambent condtons on performance are less sgnfcant on engnes than on gas turbnes. Recprocatng engne effcency and power are reduced by approxmately 4% per 1000 feet of alttude above 1000 feet, and about 1% for every 10 F above 77 F 9. 8 Characterstcs are for representatve natural gas engne gensets commercally avalable n Data based on (1) Tecogen Inverde Ultra 100, (2) GE Jenbacher (GEJ) JMS-312C65; (3) GEJ JMS-416B85, (4) GEJ JMS-620F01, and (5) Wartsla 20V34SG. a All engne manufacturers quote heat rates n terms of the lower heatng value (LHV) of the fuel. However, the purchase prce of fuels on an energy bass s measured on a hgher heatng value bass (HHV). For natural gas, the average heat content s 1030 Btu/scf on an HHV bass and 930 Btu/scf on an LHV bass a rato of approxmately 0.9 (LHV / HHV). b At rated load. The unt operates at varable speeds from 1,000 to 3,000 rpm, wth a peak output of 125 kw whle producng 60 Hz power through the nverter. c The unt operates through a gearbox to produce 60 Hz power. 9 Recprocatng engnes are generally rated at ISO condtons of 77 F and atmospheres (1 bar) pressure. 5

6 Fgure 1: Part-load generator termnal effcency for a 9.3MW Wartsla 20V34SG model. Source: EPA (2015). Performance curve for a 100kW CHP module s gven n the Fgure 2, where t s observed a good part-load performance --around 25-27% of electrcal effcency-- for a wde speed range. Fgure 2: Performance curve for a 100kW Tecogen InVerde Ultra INV-100 model. Source: Tecogen Mcroturbnes Mcroturbne technologes are a mature one tradtonally used n the automotve ndustry, but snce the early 1990s developed for CHP nstallatons. Mcroturbnes can provde stable and relable power, and voltage regulaton thanks to the use of nverters. Moreover, ther ablty to provde black-start capablty and to run under outage condtons makes mcroturbnes partcularly of nterest as back up for consumers wth crtcal load requrements (e.g., hosptals). Exhaust heat applcatons to obtanng hot water and heatng, or coolng s another sgnfcant advantage of mcroturbnes. As of 2014, n the U.S., mcroturbnes are not wdely extended, snce they only represent 8.4% of CHP nstallatons, and 0.1% of total CHP nstalled capacty (barely 80 MW). Ther hgh captal and 6

7 mantenance costs and reduced sze for ndustral purposes may explan ther current stuaton. However, research s beng conducted to reduce captal and mantenance costs, ncrease effcences and acheve better economcs of operaton. In addton, several mcroturbnes can be paralleled to reach larger power outputs. Mcroturbnes operaton s based on the thermodynamc cycle, known as Brayton cycle. Durng ths cycle, ar at atmospherc pressure s frst compressed, then heated by addng and combustng gas, and fnally expanded n a turbne that drves a drveshaft capable of provdng mechancal power and to whch the compressor s also connected. The exhaust heat s partally used for preheatng the ar before enterng the combustor n order to ncrease the effcency. Mcroturbnes operate at hgh rotatonal speeds, up to 60,000 rpm. Two solutons are mplemented when producng electrcty: 1) to connect drectly the drveshaft to a hgh-speed generator and use power electroncs to obtan 50/60 Hz electrcty, or 2) to connect the drveshaft to a gearbox and reduce the speed to 3,000/3,600 rpm (50/60 Hz). The advantage of usng power electroncs s reducng harmoncs and controllng voltage output, but at the expense of penalzng the effcency (about 5%). A summary of the man techncal characterstcs and economc aspects s shown n Table 2. The producton costs depend on the prce of the nput fuel, whch ncludes natural gas, sour gas, or landfll gas, and also lqud fuels (e.g., gasolne, desel fuel or kerosene). A useful characterstc of mcroturbnes s the possblty of operatng n sland mode and ther black-start capablty (a power storage unt lke a battery s necessary to start up). The generator can also operate at part load and, hence, follow power demand varatons, although droppng ts electrc effcency. As the thermal output does not decrease at the same rate, the overall effcency loss s reduced. Mcroturbnes present a low power to heat rato whch mples more heat than electrc producton n relatve terms. For ths reason, mcroturbnes should be desgned for applcatons that make the most of heat utlzaton. The exhaust gas temperature, around ºF ( ºC), and ts cleanlness, makes t sutable for both heatng and coolng applcatons. 7

8 CHP Technolgy: Mcroturbnes Metrc Unts Range Notes Nomnal electrcty [kwe] 30-1,000 Overall effcency [%] 63% - 70% Electrc effcency [%] 49% - 57% [1] Thermal effcency [%] 36% - 48% Power-to-heat rato [p.u] Start-up tme [sec] 60 seconds Black-start capablty Wth power storage unt Avalablty [%] 98% - 99% Part-load effcency Mnor loss of effcency Hours to major overhauls [hour] 20,000-40,000 Thermal output Hot water, heatng, coolng Emssons [kg/mwh] NOx: [2] CO2: [3] O&M costs [$/kwh] [4],[5] Installed cost [$/kw] 2,500-4,300 [5] Economc lfe [hour] 40,000-80,000 Notes: [1] Electrc effcency n the range of 22% - 28% for stand-alone applcatons [2] In stand-alone applcaton NOx [kg/mwh] [3] In stand-alone applcaton CO [kg/mwh] [4] Costs based on 6,000 annual operatng hours [5] Costs fgures n US dollars for year 2013 Source: 2015 Catalog of CHP Technologes, U.S. Envronmental Protecton Agency. Table 2: Cost & performance characterstcs for commercally avalable gas-fred mcroturbne CHP systems. The nput fuel supply pressure reaches as much as 50 to 140 psg (3.5 to 10 bar) whle the fnal dstrbuton ppelnes dstrbute gas at 1 to 50 psg (0.04 to 3.5 bar). For ths reason, a compressor s habtually needed unless the mcroturbne s drectly connected to the local medum-pressure dstrbuton network, whose pressures range from 30 to 130 psg (2 to 9 bar). The compressor consumes about 4-6% of power capacty. The ambent condtons also affect the performance of the mcroturbne. Frst, an elevated nlet ar temperature reduces both power capacty and effcency. The nlet ar s sometmes refrgerated. Second, the nlet ar pressure mpacts the power output, but not the effcency. The densty of the ar decreases wth the alttude; hence, the power output reduces wth the alttude. Fnally, there are relevant economes of scale. A common multple s 80%,.e., a 100% ncrease n sze results n an 80% ncrease n captal cost Fuel cells Fuel cells technology was developed durng 1830s, but frst practcal applcatons took place more than 100 years later when the U.S. space program rekndled ts research. Nowadays, fuel cells are agan beng developed and nstalled n dstrbuted generaton applcatons. Fuel cells are partcularly sutable for nstallatons whch requre clean, relable, quet and effcent power generaton. Although they are 8

9 more expensve than other gas-based CHP technologes, consumers who requre hgh qualty power are wllng to pay ts decreasng extra costs. Ther man advantages are a consequence of the approach to producng electrcty through an electrochemcal process nstead of an electromechancal one. Fuel cells work n a smlar manner to batteres, but usng a contnuous stream of fuel supply. By-product heat s manly used n the form of hot water, but low- to medum-pressure steam s also possble dependng on the fuel cell type. As of 2014, n the U.S., fuel cells were rarely utlzed among the gas-based CHP technologes. The number of nstallaton represented 3.7% and the total capacty amounted to 0.1% (equvalent to 84 MW) of total CHP nstallatons. Captal costs reman hgh despte the recent effort to reduce them; hence, dscouragng ther nstallaton. However, market subsdes together wth ther neglgble emssons rate of man pollutants and quetness put fuel cells n a promsng poston. Fuel cells operaton s based on an electrochemcal process, smlar to common batteres, n whch a contnuous supply of fuel s requred. In short, the process s based on the electrolyss of water: the reactants, hydrogen and oxygen n the form of gas, when combned produce water and electrc power 10. Ths chemcal reacton produces zero pollutant emssons. The hydrogen s however generated out of a hydrocarbon fuel (typcally, natural gas) n a process that produces some CO2 emssons, but neglgble amounts of other pollutants. The oxygen s obtaned from ambent ar. A fuel cell system s normally composed of three elements: Fuel processor converts natural gas (or other hydrocarbons) nto hydrogen. When a contnuous stream of hydrogen fuel s avalable, the fuel processor s not requred. There are three man types of fuel processors whch dffer n the thermal balance and the source of oxygen to combne wth the carbon and release the hydrogen. Steam reformers use steam and requre an addton of heat nput; partal oxdaton reformers use oxygen gas and produce heat; and auto-thermal reformers use both steam and oxygen, and are close to neutralty. Durng ths process CO2 s emtted. Fuel cell stacks n whch hydrogen and oxygen combne generate drect current electrcty. Power condtoners ether regulate the drect current electrcty or generate alternate current electrcty. The presence of an nverter allows for obtanng hgh-qualty power and enhancng the power factor. There are four man types of fuel cells for statonary purposes, such as CHP unts. Each type s defned by the electrolyte that makes the reacton between the hydrogen and oxygen possble. Accordngly, t can be dstngushed polymer electrolyte membrane (PEMFC), phosphorc acd (PAFC), molten carbonate (MCFC) and sold oxde (SOFC) fuel cells. Besdes the electrolyte materal, two relevant dfferences can be found: 1) the operatonal temperature whch change from 65-85ºC for PEMFC and ºC for PAFC to ºC for MCFC and ºC for SOFC; and 2) the electrcal 10 For a detaled descrpton of the basc operaton of fuel cells, please refer to Larmne (2003). 9

10 effcency whch ncreases wth the temperature from 25-35% for PEMFC and 35-45% for PAFC to 40-50% for MCFC and 45-55% for SOFC. Fuel cells hold some outstandng advantages. Systems are very flexble n capacty snce they are constructed out of ndvdual cells that generate from 100 W to 2 kw. Besdes ther hgh-qualty output power, fuel cells have shown n practcal nstances over 90% avalablty. They perform greatly well under partal load condtons (even better than typcal natural gas engnes), although the requred startup tme, whch s proportonally related to the workng temperature (hence the electrc effcency), may suggest avodng operatng cycles. Some of the man techncal characterstcs and economc aspects are shown n Table 3. As above mentoned, the values mostly depend on the type of fuel cell. Ambent temperature and elevaton may decrease ther performance when lary equpment, such as ar compressors, are utlzed. Fnally, fuel cells mantenance s cheap, but after 5 to 10 years fuel cells requre an expensve stack replacement. CHP Technology: Fuel Cells Metrc Unts Range Notes Nomnal electrcty [kwe] 200 W 2,800 kw Overall effcency [%] 55% - 80% Electrc effcency [%] 30% - 63% Thermal effcency [%] 20% - 50% Power-to-heat rato [p.u] Start-up tme [sec] From seconds to few hours Black-start capablty Yes Avalablty [%] > 95% Part-load effcency Good Hours to major overhauls [hour] 32,000-64,000 Thermal output Hot water, low- to hgh-pressure steam Emssons [kg/mwh] NOx: CO2: [1] O&M costs [$/kwh] [2],[3] Installed cost [$/kw] 23,000-4,600 [3] Economc lfe [hour] 30, ,000 Notes: [1] In stand-alone applcaton CO kg/mwh [2] Costs based on 6,000 annual operatng hours [3] Costs fgures n US dollars for year 2014 Source: 2015 Catalog of CHP Technologes, U.S. Envronmental Protecton Agency. Table 3: Cost & performance characterstcs for commercally avalable gas-fred fuel cells CHP systems Strlng engnes These engnes were nvented and patented n Ths technology s a heat engne that s based on an external combuston system, whch allows to use dfferent prmary energy sources ncludng fossl fuels (ol, natural gas) and even renewable energy sources (solar, bomass). Ths flexblty s one of the 10

11 attractve features of these engnes, whch has helped ths technology to become a component of CHP systems for varous applcatons. Strlng engne packages can be qute compact and they can be used for mcro-chp unts targeted to the resdental sector. However, as of today, ths technology has not been able to fully consoldate n the CHP market and current developments are focusng on bo/landfll gas and solar applcatons. Strlng engnes work by alternatvely heatng and coolng a workng gas, wth the combuston process takng place externally n a separate burner. The workng flud -- usually ntrogen, hydrogen or helum -- s enclosed wthn a hermetcally sealed pressure vessel. Heat s provded at a constant temperature at one end of a cylnder (the hot end), whle heat s rejected at a constant temperature at the opposte end (the cold end). Work s created as the expandng gas pushes aganst a pston. The workng gas s transferred back and forth between the two chambers, often wth the ad of a dsplacer. Whle the gas moves from the hot to the cold chamber, a regenerator captures the heat from the gas and then returns the heat to the gas as t moves back to the hot chamber, whch enhances the energy-converson effcency of the process. All SEs have two pstons. In the knematc engnes, these two pstons are physcally connected by a crank mechansm (connectng rods and a crankshaft, or a swash or wobble plate); whereas n the free-pston engne, there s no physcal lnkage and the dsplacer oscllates freely Refer to Goldsten et al. (2003) and Pehnt et al. (2006) for further nformaton on ths technology. The sze of natural gas Strlng engnes ranges from typcally 1kWe up to 10kWe. They have good performance at partal load, offer fuel flexblty, have low emssons level and have low vbraton and acceptable nose levels (Angrsan et al, 2012). However, they have very low electrc effcency compared to other gas-based dstrbuted generaton technologes --rangng from 12 up to 25%-- wth an overall energy effcency n CHP applcatons usually above 90%, and therefore hgh the heat-topower ratos. The heat recovered from the SE engne coolng and lubrcaton system and the exhaust gas results n sgnfcant amounts of heat sutable for space heatng, cookng, potable hot water, and low temperature processes (below 60 C). Gven the hgh thermal output of SEs, they clearly represent an alternatve to gas bolers or furnaces for sngle-famly homes, large resdences wth heated pools or even small commercal applcatons f multple systems are nstalled Heat pumps From all descrbed technologes n ths document, heat pumps are the only ones that do not produce electrcty, hence only provdes space condtonng servces (.e., heatng and coolng). Heat pumps have been n the market snce the 1950s. The physcal prncple behnd heat pumps operaton s transferrng heat n the opposte drecton whch heat would spontaneously flow. When n heatng operaton, heat pumps move heat from the cool outdoors nto the warm ndoor space. In contrast, when n coolng operaton, heat pumps move heat from the cool ndoor space out to the warm outdoors. The requred energy to move heat n the unnatural drecton s habtually provded n the form of electrcty. 11

12 In detal, a heat pump conssts of a crcut that s composed by compressor, a valve, and two cols: the condenser and the evaporator. A refrgerant flud flows wthn the crcut. The flud, n gaseous state, s frst compressed whle ncreases ts temperature, to then let t flow though the condenser n whch the flud releases heat and warms the area. The condensed refrgerant flud s subsequently passed through a valve, or any other lowerng-pressure devce, n whch the flud cools. Fnally, the refrgerant flud flows through the evaporator and absorbs heat from the space that s beng cooled. After ths last stage, the cycle starts agan. From the three type of heat pumps that exst (ar-to-ar, water source and geothermal), the most common ones are ar-source heat pump. Ar-to-ar heat pumps utlze ambent ar as the heat source and snk. In large facltes, water-source heat pumps are used snce water holds more capacty to move heat than ar. Hot water (heat source) s obtaned by means of a boler or solar panel, whle cool water (heat snk) s produced n a coolng tower or suppled by a rver, a lake, or the sea. Geothermal-sources heat pumps take advantage of constant underground temperature whch s used as heat source and snk. Heat pumps are effcent systems to coverng moderate heatng and coolng needs. However, ther utlzaton has not exploded yet. Accordng to Matley (2013), three man reasons can explan the delay n adoptng heat pumps: Intal cost. Home and busness owners must face hgh upfront costs. Although the payback perod s relatvely low (5 to 10 years), rsk averson may prevent from nvestng a relevant amount of captal. Lack of knowledge. There s lmted awareness about the technology and ts cost savngs. Consumer acceptance may also unte to prevous drawbacks as some heat pumps confguratons are related to other poorly performng devces. Fnally, n case of take-off, there s a lack of qualfed nstallers and system desgners. Dffcult of retroft. Very related to the upfront cost problem, retrofttng usually nvolves a sgnfcant project that most of the tmes requre that the prevous nstallaton s close to the end of ts lfetme and a new confguraton that cannot take advantage of the prevous nstallaton. 3. Methodology In order to assess the economc vablty of DERs, we used a combnaton of three modelng tools: DOE-Quck Energy Smulaton Tool (equest), LBNL-DERCAM and MIT-DRDRE as brefly descrbed below: The equest model s a buldng desgn and energy smulaton tool supported as part of the Energy Desgn Resource program 11, whch allows users to perform detaled energy related 11 Funded by Calforna utlty customers and admnstered by Pacfc Gas and Electrc Company, San Dego Gas & Electrc, and Southern Calforna Edson, under the auspces of the Calforna Publc Utltes Commsson. More nformaton can be found n the equest offcal webste at The EDR Buldng Smulaton Desgn Bref also offers addtonal nformaton avalable at 12

13 analyss of dfferent buldng desgns n a relatvely smple and ntutve way. By means of equest, we generate a set of dfferent energy profles for each of the type of buldng that t s later used to assess the economcs of dfferent technologes used to meet the energy requrements. The Dstrbuted Energy Resources Customer Adopton Model (DER-CAM) s an economc and envronmental optmzaton tool developed by the Laurence Berkeley Natonal Lab (LBNL) and funded by the U.S. Department of Energy. DER-CAM has been evolvng and mprovng for more than a decade and has multple versons talored for dfferent objectves 12. For ths paper, we used and adapted a verson that mnmzes the total energy related cost of utlty customers by mplementng optmal dstrbuted energy technologes and decdng ther respectve operatng schedules. The model s based on a mxed nteger lnear programng and utlzes CPLEX as the solver 13. The Demand Response and Dstrbuted Resources Economcs (DRDRE) model s used to analyze the DER techncal capabltes and end-user responses to prce sgnals. The model s desgned to optmze the operaton of a customer's on-ste energy resources and energy purchases n response to economc sgnals (as a prce-taker). For ths paper, we mplemented a gas and electrcty module ntended to analyss of the sutablty of dfferent technologes for space condtonng. Detals of ts formulaton are provded n the Appendx. The DRDRE s gas-electrcty module (stll under development) adopts a formulaton that mnmzes the annual energy costs of a consumer who adopts a dstrbuted technology to meet the buldng energy needs. It assumes a prce-based strategy as opposed to a more strngent operatonal one that follows the consumer s heat or electrcty load. In the case of mcro-chp systems, the unt produces electrcty and heat at an assumed fxed heat-to-power rato whch wll be dfferent dependng on the prme mover technology. In the case that the generated electrcty s beyond the on-ste demand, the excess power s fed back nto the grd. Alternatvely, f the produced electrcty s below on-ste demand level then supplementary power s acqured from the grd to cover any defct. The model also ncludes supplemental frng that supports the mcro-chp operaton n those stuatons where addtonal heat s needed by the consumer. In the case of heat-pump systems, the electrcty for space condtonng, ether heatng or coolng, s obtaned from the grd. Heat pumps and CHP systems are drect compettors,.e., mutually exclusve nstalled, for whch a supplemental frng could be avalable Formulaton In order to assess the proftablty of DERs, the DRDRE s gas-electrcty module formulaton maxmzes the proft or alternatvely mnmzes the annual energy costs of an end-user that adopts a dstrbuted technology to meet the buldng energy needs. As noted above, ths s a prce-based strategy 12 More nformaton about DER-CAM can be found at and 13 For the use of DER-CAM, MITEI and Lawrence Berkeley Natonal Laboratory (Berkeley Lab) sgned a collaboraton agreement. 13

14 as opposed to a more strngent operatonal strategy based on ether the consumer s heat or electrcty requrements. The annual costs C are gven by DER captal and operatonal expendtures, emsson costs f a tax s charged on customers, and expendtures (or revenues) assocated to utlty purchases (or sales). opex capex emssons utlty Mn TAC C C C C S The objectve functon has fve general terms: Operatonal costs opex C. Producton costs depend on the quantty of fuel and cost of fuel. Also, ths term ncludes O&M costs whch account for the costs related to the servce contracts offered by manufacturers that normally cover both scheduled and unscheduled events. For smplcty, O&M costs be recalculated n terms of power producton. Captal costs capex C. The relevant economes of scale suggest the utlzaton of a cost functon that depends on the level of nvestment 14. However n ths work, we defne the nvestment decson varable for the most common sze(s) of the equpment when applcable. For example, for mcroturbnes we defne varables for 30kW, 250kW, etc. Emssons costs emssons C. In the case of emssons, CO 2 and NO X emssons are proportonal to the energy producton. These costs represent an addtonal costs to consumers, f an emsson prce s set n the market. Utlty costs utlty C. Ths term ncludes both consumer s expendtures assocated to utlty purchases or revenues when sellng back to the system. Subsdes S. Ths s a term to be defned n the case of producton, nvestment or other type of subsdy. Total producton s lmted by the nstalled capacty of the equpment, whch we assume to be a contnuous decson 15. In addton, on-ste energy balances need to be taken nto account for heat and electrcty, as well as equpment mnmum operatng requrements. In our formulaton, exhaust heat producton s smply consdered proportonal to the power producton through a gven heat-to-power rato characterstcs for each technology 16. The electrcal effcency s a crtcal factor that mpact the performance of the energy system. By and large, the effcency s load and sze dependent. As seen n Fgure 3 for a natural gas-fred ICE, effcency s lower for small capactes, wth a clear non-lnear relatonshp between the nstalled electrcal power and the maxmum effcency. The fgure also shows the dependence on the load operatng level wth a poor part-load effcency performance below 50%. Accordng to Mlos et al. 14 Ths approach would however ntroduce a non-lnear term A/x 0.2, where x s the nvestment level. 15 Dscrete nvestments would requre the classcal constrants of any nvestment problem such as the contnuty constrant. 16 The exhaust heat could be used for ether heatng or coolng applcatons. 14

15 (2015) nternal combuston engnes and mcroturbnes exhbt consderable effcency varatons durng part-load operaton, whle gas turbnes and also fuel cells exhbt better part-load effcency. (a) (b) Fgure 3: Electrcal effcency as a functon of unt sze (a) and operatng load level (b) for a natural gas-fred ICE. Source: Mlan et al. (2015) Gong back to our formulaton, the load-dependence could be represented by pecewse lnearzng the effcency functon through bnary varables as follows 17 : v = v(q 0 ) + P [v(q +1 ) v(q )] δ q = Q 0 + (Q +1 Q ) δ δ +1 γ, P 1 γ, δ, P 1 0, δ 1, P Where δ are contnuous varables representng the load of each segment, and γ are bnary varables to force the so-called fllng condtons. If an nterval s chosen, then all ntervals to ts left must be completely used. For ths paper we have adopted a smple approach, where fuel consumpton for gas-der unts and furnace systems s a lnear expresson that depends on the energy producton. Fnally, the detaled mathematcal formulaton can be found n the Appendx of ths document Key assumptons Several assumptons and smplfcatons have been adopted for ths paper: a. Prce-responsve consumers. We assume that consumer s demand for heat and electrcty s prce elastc and able to adapt based on energy prces. We also assume that self-generaton comng from a mcro-chp unt s able to respond to these prce sgnals,.e. consumers can decde the operaton of ther machnes at tmes when t s most favorable. b. DERs techncal performance. We examne a set of varous resdental space condtonng systems that dffer mostly on the underlyng energy converson process, from mcro-chps, to bolers and to heat pumps. These technologes have dssmlar power and heat capactes, fuel converson effcences, heat qualty, heat-to-power ratos, coeffcent of performance, etc. 17 If the formulaton avods bnary varables, then the electrc effcency should be consdered constant wth a value close to ts value at full capacty. 15

16 whch for ths case study are based on Hawkes et al. (2014) and Navgant Consultng and Ledos (2015). c. DERs ramp tmes and start-up costs. Equpment start-up costs and rampng lmts depend on the technology beng used. For ICEs and MTs these values tend to be neglgble 18, but for FCs startup tme could be qute mportant dependng on the materals beng used. For ths paper, however, we gnore ramp tmes and start-up costs. d. Meterng scheme. We assume an hourly net meterng scheme, where energy usage and prce sgnals are regstered hour by hour. There s no daly or monthly aggregaton. The meter records the purchases or sales of electrcty and, under ths formulaton, t s not possble to have mported and exported power smultaneously durng the same hour. Only n the case that mcro-chp producton s larger than on-ste demand, excess of electrcty s possble (and the other way around, when mcro-chp s lower than on-ste demand the defct of electrcty wll be bought from the grd). Informaton on the retal prces for electrcty and gas s avalable to consumers n order to decde the economc valuaton of the energy usage on an hourly bass. e. Consumer energy tarff. We adopt a smple flat volumetrc prcng scheme for retal consumers that aggregates the varous prcng components such as energy prce, network costs and polcy costs. Ths smple $ per kwh allocaton purportedly devates from a more cost effcent allocaton, but t s an approach extensvely used n many countres nowadays. 4. Case study Ths secton presents the cases we analyzed for assessng the relatve value of usng gas- and electrctybased systems for space condtonng for resdental consumers, lookng at ther prmary energy, proftablty and annual energy costs savngs under dfferent market and clmatc condtons Descrpton Consumers consder the adopton of DER technologes wth the goal of meetng ther energy demand at a reduced energy cost. However, ths decson s not trval as heatng and coolng manufacturers offer a plethora of technologes to choose from. In addton, ths decson s often nfluenced by other factors such as clmate whch determnes energy requrements, and the market and regulatory condtons exstng at the tme of choosng the equpment. Inspred by ths, we explore the queston of what would the costs and benefts be of gas and electrcty DERs used for space condtonng? under dfferent market and clmatc condtons. 18 These lmtaton are gnored, snce normally they are less than one mnute and our formulaton s based on hourly tme perods. 16

17 For ths purpose, we analyzed a case study that smulates a sngle famly house of about 150m 2 and consder two dstnctve clmatc condtons, namely cold and warm 19. In addton, we use two combnatons of energy prces based on ther electrcty-to-gas rato, wth values of 3.6 and 1.9 for hgh and low rato scenaro respectvely. In terms of technologes, we nclude a set of sx dfferent DERs technologes used for space condtonng: four mcro-chps unts wth dfferent prme movers, a hgh effcent gas-fred condensng boler, and an ar-to-ar heat pump. The Table 4 below llustrates the scenaros used n the quanttatve assessment. Scenaros Descrpton Buldng 1 Sngle famly house ~150 m 2 Locatons 2 Ctes Cty Cold Cty Warm Energy prces 2 Combnatons based on EG rato 1 Rato Hgh Rato Low 2 Technologes 4 Resdental CHPs 3 ICE (1.2kWe) SE (1.0kWe) PEMFC (0.75kWe) SOFC (0.70kWe) 5 2 Resdental HVACs Boler A-to-A HP 4 Notes: 1 Electrcty-gas rato; 2 Hgh s an electrcty and gas prce of 3.6, and low s an electrcty and gas prce of 1.9; 3 Gas-fred combned heat and power (CHP) systems; 4 Gas-fred condensng boler, and ar-to-ar electrc heat pump; Internal combuston engne (ICE, Strlng engne (SE), Polymer electrolyte membrane fuel cell (PEMFC) and Sold oxde fuel cell (SOFC). Table 4: Descrpton of case study. Based on the set of optmzaton and smulaton tools above descrbed, we evaluate the costs and benefts of the set of technologes and compared outcomes to a base case that ncludes a conventonal dstrbuted heatng and coolng system --.e. a hgh effcent gas-fred condensng boler for water and space heatng and electrcty from the grd for an AC unt-- used for central space condtonng. Then, for each technology, we examne ts prmary energy, proftablty and annual energy costs savngs under the dfferent market and clmatc condtons Results The fgures below portray the results n terms of prmary energy, annual energy costs savngs and smple payback perod for the sx dfferent DER technologes presented n the above table. In Fgure 4, we observe that most of them perform well and they reduce prmary energy wth respect to the case of havng separate producton of heat and electrcty, although clmatc condtons mpact ther performance. It s mportant to note that snce prmary energy depends not only on technology effcency but also on the so-called source to ste 20 effcency, electrcty-based technologes tend to 19 Cold weather s characterzed by havng 2405 heatng degree days (HDD) and 669 coolng degree days (CDD), whle the warm one has 735 (HDD) and 1159 (CDD). Under these condtons, the peak thermal demand of the buldng s 11.4kWth and 5.2kWth for the cold and warm clmatc condtons respectvely. 20 The global effcency of buldng space condtonng systems s dependent on two metrcs: the effcency of the actual equpment also called the ste effcency, and the losses assocated of brngng the energy to the consumer that s then 17

18 be qute senstve to the grd characterstcs and energy portfolo. In our case, we observe that fuel cell-based mcro-chps and heat pumps outperform other technologes, but heat pumps seem to be more senstve to clmate and they are a better choce n warmer clmates. 50 PRIMARY ENERGY [MWH/YR] CCold RHgh CWarm RHgh BAU ICE AA HP SOFC PEMFC SE Fgure 4: Impact of clmate on prmary energy of gas- and electrcty-based technologes under hgh electrcty-to-gas prce rato. In Fgure 5 we observe that energy prces have a great mpact on potental energy savngs. The tradeoff between electrcty costs and fuel costs s key, as hgh electrcty prces wth hgh electrcty-to-gas rato clearly favor the economcs of mcro-chps, whereas electrc heat pumps fnd themselves as better alternatves n markets wth lower electrcty prces. However, as noted n Fgure 6 the proftablty of DER technologes also depends on clmatc condtons, wth cold clmates favorng cogeneraton systems. ANNUAL SAVINGS [$/YR] 1, CCold RHgh CCold Rlow ICE SE PEMFC SOFC AA HP Fgure 5: Impact of energy prces on annual savngs of gas- and electrcty-based technologes under cold clmatc condtons. used to operate the equpment gven by the source to ste energy effcency. Source to ste losses result from the extracton, refnement, converson, and transportaton of the fuels to the end user and are more pronounced n the case of electrcty because they are assocated to the generaton process. These electrcal source to ste losses are hghly dependent on the characterstcs and energy portfolo of the electrcty grd. For gas, the source to ste losses are dependent on the natural gas dstrbuton network and the method of extracton. 18

19 ANNUAL SAVINGS [$/YR] 1, CCold RHgh CCold Rlow CWarm RHgh CWarm Rlow ICE SE PEMFC SOFC AA HP Fgure 6: Impact of energy prces and clmatc condtons on annual savngs of gas- and electrcty-based technologes. Fnally, upfront costs of the varous technologes sgnfcantly determne ther economc vablty. Table 5 dsplays a sample of current retal prces for mcro-chp systems for resdental applcatons based on Hawkes et al. (2014). Resdental System Current Retal Prce [$] ICE - 1.2kWe 8,823 SE - 1.0kWe 6,620 PEMFC kWe 11,556 SOFC kWe 15,259 Table 5: Technology retal prces as of year Based on these numbers, the systems smple payback perods are above the expected equpment lfetme even when evaluated under favorable condtons.e. cold clmate and hgh electrcty prces (see Fgure 7). 150 SIMPLE PAYBACK PERIOD BASED ON CURRENT PRICES [YEARS] years 0 CCold RHgh CCold Rlow ICE SE PEMFC SOFC Fgure 7: Impact of energy prces and upfront costs on smple payback perods based on current retal prces. 19

20 If nstead we assess the economcs of these technologes takng projected prces avalable from varous publc sources 21, we observe that ther expected nternal rates of return are stll very hgh (see Fgure 8). EXPECTED INTERNAL RATE OF RETURN BASED ON PROJECTED PRICES [%] 50% 40% 30% 20% 10% 0% -10% -20% CCold RHgh CCold Rlow ICE SE PEMFC SOFC AA HP Fgure 8: Expected nternal rates of return of dfferent DERs based on technology prce projectons (and not current prces). Therefore, cost reductons are crucal to make these technologes compettve. Under favorable market condtons and current sellng prces, sgnfcant costs reductons are needed to make these technologes a vable alternatve for space condtonng. 5. Concluson Ths paper has addressed the queston of assessng the relatve value gas- and electrcty-based systems used for space condtonng by resdental consumers under dfferent market and clmatc condtons. We noted that mcro-chp systems contnue to face extraordnary upfront costs today (see Table 5 above). Although recprocatng engnes are the most mature and establshed technology for large and medum applcatons, ther costs are stll hgh for smaller applcatons and cause envronmental concerns. Fuel cell-based systems are promsng gven ther hgh electrcal effcences and low prmary energy consumpton. However, ther hgh equpment costs contnue to be a barrer for ther further deployment. In the case of heat pumps, these are already an avalable technology that s very effcent when provdng coolng and heatng need n areas where temperatures are moderate. However, the 21 For the purpose of ths analyss, we use projected costs as provded by varous U.S agences. Specfcally, projected total costs for heat pumps are based on the U.S. Energy Informaton Admnstraton (EIA) Report - Updated Buldngs Sector Applance and Equpment Costs and Effcences, Aprl 2015 (avalable at: Projected costs for resdental combned heat and power engnes are based on ARPA-E Generators for Small Electrcal and Thermal Systems - GENSETS Program Overvew (avalable at: Fnally, projected costs for resdental CHP fuel cell systems are based on the U.S. Department of Energy's (DOE's) Fuel Cell Technologes Offce Mult-Year Research, Development, and Demonstraton Plan Fuel Cells, Updated November 2014 (avalable at 20

21 hgh upfront costs together wth lack of customer awareness have not allowed ths technology to take off. Therefore, cost reductons are crucal to make these technologes compettve n the near future. We observed that the proftablty of DER technologes for space condtons depends on the energy prces and ther relatve dfference, as well as clmatc condtons. Markets wth low prces and low electrcty-to-gas dfference do not favor cogeneraton systems, whle markets wth low electrcty prces favor electrc heat pumps. Cold clmates favor cogeneraton systems, whle mld ones favor heat pumps. Fnally, the format of the electrcty tarff mpacts not only the DER szng decson but also ther operaton, whch ultmately determnes prmary energy consumpton and related emssons. Our results are algned wth other reports and studes. However, as long as the technologes evolve, new quanttatve analyses wth the presented modelng tools, or more advanced ones, wll be requred to support the transton towards more economcally effcent and envronmentally frendly technologes. 6. References Angrsan, G., Rosell, C., and Sasso, M. (2012). Dstrbuted mcrotrgeneraton systems. Progress n Energy & Combuston Scence, 38(4), EPA Report (2015). Catalog of CHP Technologes, U.S. Envronmental Protecton Agency - Combned Heat and Power Partnershp, March Goldsten, L., Hedman, B., Knowles, D., Freedman, S., Woods, R., and Schwezer, T. (2003). Gas- Fred Dstrbuted Energy Resource Technology Characterzatons. Report NREL/TP , Natonal Renewable Energy Laboratory (NREL). Hawkes, A., Entchev, E., Tzscheutschler, P. (2014). Impact of Support Mechansms on Mcrogeneraton Performance n OECD Countres: Energy n Buldngs and Communtes Programme October 2014; A Report of Annex 54 Integraton of Mcro-Generaton and Related Energy Technologes n Buldngs, publshed by Technsche Unverstät München, Germany, 10/2014. Larmne, J. and A. Dcks (2003). Fuel Cells Systems Explaned, John Wley & Sons Ltd., West Sussex, England, Matley, R. (2013). Heat Pump. An alternatve to ol heat for the Northeast nput for planners and polcy-makers, Rocky Mountan Insttute, March Mlan, C., Stadler, M., Cardoso, G., Mashayekh, S. (2015). Modellng of Non-lnear CHP Effcency Curves n Dstrbuted Energy Systems. Workng paper LBNL 6979E. Lawrence Berkeley Natonal Laboratory. 21

22 Navgant Consultng, Inc. and Ledos (2015). Updated Buldngs Sector Applance and Equpment Costs and Effcences. Prepared by Navgant Consultng, Inc. and Ledos for the U.S. Energy Informaton Admnstraton, Aprl Avalable at: Pehnt, M., Cames, M., Fscher, C., Praetorus, B., Schneder, L., Schumacher, K., Voß, J.-P. (2006). Mcro Cogeneraton: Towards Decentralzed Energy Systems. Sprnger Berln Hedelberg, Berln. 7. Appendx: Mathematcal formulaton The formulaton wll depend on the confguraton of the buldng heatng system and the technology adopted. For example, n warm-ar heatng applcatons, hot ar from a CHP unt and lary gasfred furnace can be used for central space heatng. In hydronc heatng applcatons, hot water from a CHP unt and lary gas-fred bolers combned wth a water tank can be used for space heatng and hot water. In addton, dfferent technologes can be used as prme movers n CHP systems rangng from nternal combuston engnes (ICE), mcroturbnes (MT) and fuel cells (FC). Dfferent technologes wll have dssmlar power and heat capactes, fuel converson effcences, heat qualty and heat-to-power ratos, among other characterstcs. The model presented n ths work (under development) s based on two possble heatng confguratons comprsed of a behnd the meter CHP unt along wth an lary heatng system (Fgure 9). For both confguratons, the CHP unt produces electrcty and heat at an assumed fxed heat-to-power rato whch wll be dfferent dependng on the prme mover technology. In the case that the generated electrcty s beyond the on-ste demand, the excess power s fed back to the grd. Alternatvely, f the produced electrcty s below on-ste demand level then supplementary power s acqured from the grd to cover any defct. On the heatng sde, both confguratons nclude supplemental frng that supports the CHP operaton n those stuatons where addtonal heat s needed by the consumer. 22

23 Load [kwh/h] Load [kwh/h] Electrc grd Supplemental power Excess power Electrc load Electrc load Hours durng day DER electrcty Gas grd Gas-DER DER heat Water tank Heat load Auxlary unt Aux heat Hours durng day Waste heat Heat load -Cool load- Fgure 9: Heatng and electrc systems usng a CHP unt. The frst confguraton s the so-called forced hot ar confguraton and ncludes a tank-less (ondemand) hot water heater. The second confguraton s the so-called hydronc confguraton and comprses an lary boler that delvers heat to a hot water tank. The heat from the tank can be later used for space heatng and domestc hot water. The tank provdes flexblty to the heatng system to store heat and usng t later when needed. In ths case, the dynamcs of the storage unt should be ncluded n the formulaton,.e. the amount of heat that needs to charge or dscharge from one hour to the next one. The hydronc confguraton also allows ncludng an absorpton chller after the water tank to provde coolng. Based on ths, the mathematcal formulaton represents a least-cost operaton of a CHP unt at resdental level subject to on-ste energy load condtons. Ths means that a consumer operates the CHP only f t s more cost-effectve than buyng electrcty and gas from the utlty company. As shown n the fgure above, some of the decson varables nclude electrc power mported from the grd, excess power fed back nto the grd, generated power and heat from the CHP unt, heat from the furnace, and any excess heat beyond on-ste heat demand Nomenclature Indexes I m M Data Hour Total number of hours Month Total number of months c Total nstalled cost for CHP unt e 23