Christian Ohler, ABB Switzerland Corporate Research Efficiency versus Cost - a Fundamental Design Conflict in Energy Science ABB Group August 1, 2012 Slide 1
Purpose of this Presentation (1) Clarify the definition of «efficiency» (2) Describe the opposition between efficiency and cost (3) Remind of non technical obstacles to introduce higher efficiency technologies Examples are not only an illustration of the principles but important on their own Space heating Electro-Thermal Energy Storage for renewables integration Variable frequency drives August 1, 2012 Slide 2
Background: Role of Efficiency in CO 2 Abatement McKinsey Greenhouse Gas Abatement Cost Curve Efficiency measures Efficiency measures August 1, 2012 Slide 3
(1) What Efficiency? Exergetic efficiency often provides an adequate efficiency definition. The choice of boundary conditions can influence the efficiency analysis. August 1, 2012 Slide 4
Example for an awkward efficiency definition Condensing boilers with 105% efficiency August 1, 2012 Slide 5
Exergy is the energy that is available for use. It is the technically useful and economically valuable energy. As a consequence of the 2 nd law of thermodynamics energy conversions are subject to limitations, and energy can be thought of being composed of two forms: Exergy = energy that can be completely converted into any other energy form Examples: potential, kinetic energy, electricity Anergy = energy that is in equilibrium with the environment and can not be converted into exergy Example: heat flux from the cooling tower of a thermal power plant Reversible processes conserve the amount of exergy, irreversible processes convert exergy into anergy August 1, 2012 Slide 6
Exergy and anergy of heat depend on the heat s temperature and the temperature of the environment Q (T hot ) = E Q + A Q Exergy content of Q (T hot ) Reversible heat engine -P rev = E Q = (1-T env / T hot ) Q Anergy content of Q (T hot ) Q rev (T env ) = A Q = (T env / T hot ) Q Environment at T env August 1, 2012 Slide 7
Any heat transfer with finite temperature difference creates entropy and thus destroys some exergy T hot T cold Heat exchanger wall Q cold Q hot S irreversible S cold A cold E cold Anergy Exergy S hot A hot E hot Irreversibility of heat transfer converts exergy to anergy August 1, 2012 Slide 8
Exergy anergy flow diagram of resistive space heating Electricity in (100% exergy) 1 80 C 2 3 1 2 4 3 4 5 20 C 5 0 C Environment August 1, 2012 Slide 9
Exergy anergy flow diagram of combustion space heating (no condensation) Fuel in (approx. 100% exergy) 150 C 2 1 2 3 2 80 C 3 4 4 1 20 C 5 0 C 5 Environment August 1, 2012 Slide 10
Exergetic efficiency of fuel combustion Dependence on proportion and prewarming of air Exergetic efficiency Source: Baehr, 1989. August 1, 2012 Slide 11 (air proportion)
Exergy anergy flow diagram of combustion space heating (with condensation) Fuel in (approx. 100% exergy) 1 Air preheating 2 50 C 2 3 4 5 1 3 80 C 4 20 C 5 0 C Environment August 1, 2012 Slide 12
Heating with a heat pump minimizes the amount of exergy by upgrading ambient heat to high temperature Expander 3 60 C 0 C 1 2 Compressor 4 20 C 5 0 C August 1, 2012 Slide 13
Exergy anergy flow diagram of space heating with a heat pump Electricity 2 3 4 1 5 Environment Environment August 1, 2012 Slide 14
The exergetic efficiencies of room heating depend on thermal boundary conditions and origin of electricity assumed 60 C for water cycle and T of 10 K at evaporator and condensor Assumption: Room at 20 C, ambient at 0 C August 1, 2012 Slide 15
Summary of part 1 Exergetic efficiency often provides an adequate efficiency definition. The choice of boundary conditions can influence the efficiency analysis. Heat pumps provide thermodynamically optimized space heating, in particular if temperature differences can be kept small and heat exchange surfaces large. Quick quiz: what is the main advantage of ground source heat pumps in terms of exergy? August 1, 2012 Slide 16
(2) Not only efficiency, also cost Efficiency is never the only goal. Real systems optimize the trade-off between investment costs and efficiency. It can be analyzed by calculating the net present value of all cash flows. August 1, 2012 Slide 17
Efficiency measures have the character of investments Should I spend more money now to save money later????
The Net Present Value ( NPV ) of an investment is the sum of discounted cash flows + Energy savings NPV = sum of discounted cash flows 0 Time - Higher purchase price (investment) Operation cost NPV T t r t 0 1 CF t Other business metrics: Payback time Internal rate of return
Rational investors maximize the NPV by balancing operating costs (efficiency) and investment costs Example: 380 kv high voltage overhead line diameter Investment / Capitalized Losses ( /km) Current practice Sum Investment Cost Losses capitalized at 4000 / kw August 1, 2012 Slide 20 Line diameter (mm 2 )
What is the right compromise between efficiency and cost for bulk energy storage? Sum Investment / Cost of lost energy Adiabatic Compressed Air Electro-Thermal Energy Storage ETES NaS Battery Pumped Hydro Investment cost estimate Cost of lost energy: 30y * 365d * 8h 0.05 /kwh Compressed Air August 1, 2012 Slide 21 Roundtrip efficiency
The business and technology vision A storage power plant like pumped hydro without hills Large scale electric energy storage needed Site independent Scalability to 100 MW el, 1 GWh el and above August 1, 2012 Slide 22
Heat pump/heat engine approach Reversible cycle for ETES August 1, 2012 Slide 23
ETES Design Choosing real-world storage August 1, 2012 Slide 24
Electro-Thermal Energy Storage (ETES) Site Independent Bulk Storage of Power Plant Size Storage of electricity in the form of heat with heat pump charging and heat engine discharging Water as the storage material Turbomachines for compressors and turbines Transcritical CO 2 as the working fluid of the cycle Water storage vessels Plate heat exchanger Heat pump compressor ABB Group August 1, 2012 Slide 25
Thermoelectric Energy Storage G Cold / ice storage or Ambient heat source August 1, 2012 Slide 26
Thermoelectric Energy Storage G August 1, 2012 Slide 27 Cold / ice storage or Ambient heat source
Transcritical ETES Transcritical cycle: the cycle is partially located in the supercritical region. Highly advantageous for the heat exchange with water. ABB Group August 1, 2012 Slide 28
ETES charging and discharging cycle has only high exergy efficiency with transcritical working fluid (right) August 1, 2012 Slide 29
Summary of part 2 Real systems optimize the trade-off between investment costs and efficiency. It can be analyzed by calculating the net present value of all cash flows. Example for optimizing this trade-off: Electro-Thermal Energy Storage ( ETES ) August 1, 2012 Slide 30
(3) Other barriers for energy efficiency Lack of awareness, agency issues, and rapid payback requirements are market imperfections that inhibit profitable energy efficiency investments. August 1, 2012 Slide 31
Variable frequency drives can often increase the efficiency of processes substantially
Many CO 2 abatement measures have positive NPV: reducing global warming and making profit! Efficiency measures Why are these measures are implemented so slowly? Efficiency measures August 1, 2012 Slide 33
Other barriers for energy efficiency come from the fact that decision makers maximize not always NPV Lack of awareness To analyze the impact efficiency can have information costs (this is why normal people don t care about efficiency) Agency issues The entity paying the bills for low efficiency is often distinct from the entity deciding about the initial investment (tenant versus homeowner) Rapid payback requirements Industrial companies (as opposed to utilities) and private consumers tend to require irrational short payback times August 1, 2012 Slide 34
Summary (1) Exergy is a powerful analysis concept for efficiency questions (2) The opposition between efficiency and cost can be analyzed by net present value analysis (3) There are many non technical obstacles to introduce higher efficiency technologies Technology examples: Space heating Electro-Thermal Energy Storage for renewables integration Variable frequency drives August 1, 2012 Slide 35