Co-generation—A Feasibility Screening Analysis Using Excel Spreadsheet Doanh Van, PhD., PE., CEM Associate Professor and Chair, Engineering Union University
I. Abstract
Co-generation is good for economic development in that it reduces energy operating cost significantly1. Co-generation is good for the environment2,3 and so it fits the model of Sustainability well4. Co-generation is good for the state of Tennessee as it encourages such installation and provides loan for such projects5. Making a decision concerning concer ning the feasibility of Co-generation technology, however, is often regarded as a monumental task and, because of this seemingly involved first step, the win-win option from the standpoint of business business success and environmental protect pro tection ion is overlooked. overloo ked. How can Engineering provide the foundation for success in promoting this energy effici efficiency ency option? This paper presents pr esents a portabl por tablee screening screening tool to ol to conduct a feasibil feasibility ity study of co-generation. It is portable in a sense that it uses Excel spreadsheet to facilitate the required engineering analyses. Not only o nly does it analyze the feasibil feasibility ity of the technology, it provides the means means to focus on the optimal co-generation configuration whether it is gas turbine, steam turbine or reciprocal engine. II. Introduction
Co-generation is the generation of both heat and electricity at the same time from a single combustion of (mostly) fossil fuel. In other part of o f the world, particularly par ticularly the EU, this process is better known as Combined Combined Heat and Power Po wer (CHP). Attractive savings savings are the 1 driving force behind the promotion promot ion of this technology. techno logy. At least least 10% savings can be expected as compared to separated processes of heat and and power generation. In terms of system efficiency, the gap of generating electricity alone and that of co-generating electricity and heat is even more astounding about 32% vs. over 80%7. Environmental benefit benefit is yet another form of incentive incentive for co-generation technology. Environmental Environmental benefit benefit such as the reduction in greenhouse gases emissi emission on is indeed very timely timely for the 6 time we are in . If such benefi benefits ts are so attractive, why co-generation strategy is is not widely used today? tod ay? The barriers to using co-generat co- generation ion strategy is well published and 1,7 documented such as permitting processes—lengthy, complex and political; regulations—power wheeling and air emission; economics—high first cost, higher operating cost from low low load factor, etc. This paper focuses on one most most important important barrier that is yet to be pointed po inted out and that t hat is the complicated complicated feasibil feasibility ity study aspect of the strategy has not been made easy to the people who have to make the first cut in the decision making process.
III. The Technology
Simultaneous generation of heat and power 11,12,14 may be accomplished by the following 3 most widely used technologies (1) gas turbine, (2) steam turbine, and (3) reciprocating engine. Depending on the order according to which energy is produced, co-generation can be classified as topping cycle or bottoming cycle, or combined cycle. Topping cycle is when electrical power is produced first followed by thermal energy. Bottoming cycle is just the reverse. Combined cycle is when electrical is first to be produced and from the recovered waste heat, electrical power is again produced. How is energy generated? 1. Gas Turbine: air is highly compressed to be ignited in a combustion chamber fueled by natural gas or light oil (such as kerosene). The expanded energetic gas imparts kinetic energy to the turbine blades that rotate the shaft of the generator set to produce electrical power. Hot gas is the working fluid hence the name gas turbine. The exhausted high temperature gas stream is then directed to a waste heat boiler to produce highly quality steam to satisfy thermal load as secondary type of energy or even to be converted back to electrical power as in the case of a combined cycle configuration. This is shown in figure 1 below. Standby/supplemental boilers
Waste Heat Steam Generator Fuel Supply
High Pressure Steam (@50%)
Generator for Electrical Power (@35%)
Turbine Air intake
Figure 1: Gas Turbine Co-generation
2. Steam Turbine: feedwater is used to generate high pressure steam which is directed to the multi-stage turbine to turn the generator set for the purpose of generating electrical power. Steam is the working fluid hence the name steam turbine. The resultant low pressure steam exits the turbine is then used to satisfy the required thermal load before turning to condensate and pumped back to the steam generator to complete the cycle. High pressure steam may also be extracted from the turbine to satisfy other high pressure steam demand as required (ref. Fig. 2 below) Standby/supplemental boilers
High Pressure Steam
Turbine
Boiler/Steam Generator
Generator for Electrical Power (@30%)
Low Pressure Steam Fuel in
Figure 2: Steam Turbine Co-generation
3. Reciprocating Engine: like a big automobile engine, the rotating shaft turns the generator set to produce electrical power instead of turning the wheel axle to mechanically move the vehicle. Waste heat from this reciprocating engine is recovered to satisfy the thermal load as required in the plant (ref. Fig. 3).
Standby/supplemental boilers
Heat Recovery
High temp engine coolant
Fuel in
Reciprocating Engine
Thermal loads
High temp exhaust gas
Generator for Electrical Power (@40%)
Figure 3: Reciprocating Engine Co-generation
There are 2 ways to satisfy the electrical and thermal load requirements of any particular industry. There is a normal way, which is the purchase electricity offsite via transmission line and the generation of steam or hot water onsite to satisfy the thermal load. And then there is a co-generation way, which would produce electrical power first and then the resultant waste heat from the combustion process is recovered to produce steam or hot water to satisfy the thermal load. If the thermal load is satisfied first and then the electrical load, we have a bottoming cycle. For the co-generation process, every 100 units of energy input can produce about 35% electrical power output and about 50% thermal load requirement. The question under consideration is why not getting the very same outputs, electrically and thermally, for only 100 units of energy input instead of 18014 units as would be required if they are to be produced separately. It turns out that the question is not at all a rhetorical one because the analysis to support the co-generation energy strategy is rather involved. Because of this complexity, many people who avoid entertaining the exploratory question often miss excellent opportunities to realize financial savings for their companies and the side benefit of environmental protection for the society. This paper serves to simplify the co-
generation analysis with a modeling of the energy problem using Excel spreadsheet thereby making it portable and readily accessible to desktop computers with spreadsheet capability.
IV. The Screening Tool
The tool that this paper is presenting has the following objectives (1) to establish a first stepping stone to entertain the subject “is co-generation feasible”, (2) to screen which cogenerating technology is most beneficial economically and environmentally, and (3) to make the analyses portable and desktop-based. This tool is not to take place of a formal engineering study. This is a good tool, however, to decide on whether or not such formal engineering study is warranted and cost justified. Cost savings of such preliminary study could range anywhere from $30,000 to $50,000. The screening tool consists of the following 3 parts: 1. To co-generate or not to co-generate—that is the question
The feasibility of co-generation is a function of many variables9,10,15. They are fuel cost, power cost, annual operating hours, electrical load, thermal load and pressure at which thermal loads are required. And then there are political issues from the perspective of the power utility companies and from the state and local regulatory bodies concerning the wheeling of power or grid connectivity, air permit restriction, new source issue concerning NOx and Qualified Facility (or QF) analysis and application from the US Department of Energy. The attached Excel spreadsheet has been designed with imbedded prompts to address these fundamental criteria for a go- or-no-go decision. 2. To co-generate using which technology
The question that naturally follows the decision to go ahead and explore the cogeneration energy option is which co-generation technology will best yield the intended results financially, operationally and environmentally. The screening tool is designed to examine each technology one at a time. a. The Gas Turbine Option
Variables to be considered for input to the model in this option are the following: Average electrical load Average purchased power cost Average steam load Average purchased fuel cost Average total annual operating hours Average purchased power cost as a result of co-generation option Standby charge of power as a result of co-generation option Estimated O&M cost of a gas turbine Supplemental cost of fuel to the boiler as a result of co-generation option
The following can be expected as output from the co-generation screening tool model: Annual operating cost without co-generation unit Annual operating cost with the co-generation unit Net annual savings Simple payback for the co-generation option ROI CO2 gas emission avoided
b. The Steam Turbine Option
The variables to be considered as input to the model in this option are the same as those required in the gas turbine model previously. Additional information regarding the base load of the co-generation unit as well as the steam flow rate allocated to the steam turbine will be required. Same outputs will be the results. c. The Reciprocating Engine Option
The variables to be considered as input to the model in this option are the same as those required the gas turbine model previously with only one addition, which is the base load of the co-generating unit. Same output format can be expected. V. Static Demonstration of the Excel Screening Tool and Conclusion
Upon loading the spreadsheet, the user will be prompted to the first tab as following first tab which will flow orderly to other tabs as prompted: Screening Tab Technical Issues Fuel cost in $/mmBtu Electrical cost in cents/kwh Operating hours/year Electric load in MW Steam load in '000 lbs/hr Steam Pressure requirement in psig
Range of feasibility from to 3 6 5 8 6000 8760 1 10 10 100 10 80
Average
4.5 6.5 7380 5.5 55 45
Political Issues
Utility friendly? State is on board with this technology?
Environmental Issues
Air permit restriction? New Source? NOx limited? QF analysis and application from DOE
Ready for Next Step?
Please select one of the following tabs: 1. Gas Turbine tab for Gas Turbine Analysis, or 2. Steam Turbine tab for Steam Turbine Analysis, or 3. Recip Engine tab for Reciprocating Engine Analysis.
Gas Turbine Tab The user will be prompted to provide the input as highlighted in yellow. These are the characteristics of the operation of the plant as well as some information about the utility tariff. Gas Turbine Cogeneration Feasibility and Economic Analyses Variable Input (All Are Required)
1. 2. 3. 4. 5. 6. 7. 8. 9.
What is the average electric load? What is the average purchased power cost? What is the average steam load? What is the average purchased fuel cost? What is the average total operating hours? W hat is the average new purchased power as a result of the cogen unit? W hat is the standby charge of power as a result of the cogen unit? What is the O&M cost of a gas turbine? Recommended based load for the cogeneration unit
4000 7.5 20000 4 8760 7.5 10 0.004 4000
kw cents/kwh lbs/hr $/mmBtu hrs/year cents/kwh $ per kw.mo $ per kwh kw
Based on the inputs, 3 different algorithms will be used to generate the charts below to highlight the economic impacts of the decision of to co-generate or not to co-generate issue. The charts are dynamically linked with the inputs and the behind-the-scene algorithms to allow for sensitivity analyses. The computing algorithms and the relevant assumptions can be accessed by scrolling behind the frozen displayed windows of charts and the associated inputs. One chart will display the simple payback period. The other chart will display the Return on Investment information.
Sensitivity Analysis for Gas T urbine Cogeneration Option $4,100,000 t $3,600,000 s o $3,100,000 C $2,600,000 g n $2,100,000 i t a $1,600,000 r e p $1,100,000 O $600,000 $100,000
3.5 3 2.5 2 1.5 1 0.5 0 Without Cogen
With Cogen
) s r y ( d o i r e P k c a b y a P
Sensitivity Analysis of Gas Turbine Cogeneration Option
t s o C
25 t
$4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000
n e 20 t m s e 15 v ) n I % ( 10 n o n 5 r u t e 0 R
Without Cogeneration
With Cogeneration
Please select Steam Turbine tab to continue the analysis.
Steam Turbine Tab will not be shown here because of the similarities with the Gas Turbine tab. Reciprocating Engine Tab will not be shown here because of the similarities with the Gas Turbine tab. ROI Tab This tab will return the following page of economic and environmental information:
Return on Investment Calculations Average net savings per year Less cost of depreciation Income before tax Less income tax costs (@ 31%) Net income per year (average) Incremental capital required Return-on-Investment (RoI)
$ $ $ $ $ $
Gas Turbine Opti on 1,474,357 (110,000) 1,364,357 (422,951) 941,406
4,400,000 21
$ $ $ $ $ $
St eam Turbine Option 866,950 (52,500) 814,450 (252,479) 561,970
2,100,000 27
$ $ $ $ $ $
Recip Engine Option 388,253 (25,000) 363,253 (112,608) 250,645
1,000,000 25
The above summary tabulation is dynamically linked with the 3 previous tabs of Gas Turbine, Steam Turbine and Recip Engine. The ROI chart and the environmental savings are also linked and will change accordingly.
Cogeneration Technology Economic C onsideration 30 )
$1,000,000 t s o C t n e m t s e v n I
25
$800,000
20
$600,000
15 $400,000
10
$200,000
5
$-
0 Gas Turbine
Steam Turbine
% ( t n e m t s e v n I n o n r u t e R
Recip Engine
The reason co-generation is such a good energy strategy for businesses and industries is that it yields fast and substantial financial savings. The other reason Corporations ought to seriously consider the option is that it causes significantly less greenhouse gas, specifically Carbon Dioxide, to be emitted causing. CO2 is believed to be the culprit of the alarming global warming phenomenon. This screening tool will highlight that environmental enhancement through the following summary.
Environmental Benefits
Greenhouse Gas Emission Equivalent acres of Reduction Metric Tons CO2 Trees to be planted Gas Turbine 13,403 2,949 Steam Turbine 7,881 1,734 Recip Engine 3,530 777
This co-generation technology screening tool has been shown to be capable of: Saving money on preliminary study. Making sensitivity analyses of co-generation more friendly, affordable and readily accessible through spreadsheet. Creating more opportunities for co-generation as a viable energy strategy. Enhancing the Environment by reducing greenhouse gas emission.
VI. Appendix
A spreadsheet with dynamic links of formula to enable live analysis is available upon request. It is unfortunate that the live file cannot be attached here for downloading purposes. Please contact the author at the following address for a copy of this tool. D. Van, PhD, PE, CEM Union University
[email protected] www.uu.edu/dept/engineering VII. References:
1. European Commission Directorate General for Energy and Transport, “Promotion of Combined Heat and Power”, July 2002. (http://europa.eu.int/comm/energy/library/chpmemodirectiveen.pdf) 2. D. Simbeck, “Cogeneration for CO2 Reduction and Polygeneration for CO2 Sequestration”, presented at the US DOE NETL First National Conference on CO2 Sequestration, May 14-17, 2001 Washington, D.C. 3. R. Hellebrand, “Use of Energy Management, CHP, and ISO 14001 to Make Substantial Reduction in Global Warming Potential”, UNIDO Expert Group Meeting (EGM) on Industrial Energy Efficiency, Cogeneration & Climate Change Mitigation, December 2-3, 1999, Vienna. 4. D. Van, “Teaching Design for Energy Sustainability”, Proceedings of the 2003 American Society for Engineering Education Annual Conference & Exposition, Nashville, TN. 5. Tennessee Energy Division Annual Report 2000-2001. 6. D. Van, “Application of the Engineering Method: Key to Successful Energy Project Proposals”, Strategic Planning for Energy and the Environment . 22 (3) 2003, Assoc. Energy Engineers. 7. http://www.energy.rochester.edu/cogen/ 8. http://www.aceee.org/pubs/ie014full.pdf 9. Armstrong’s Energy Management Council (1994) 10. http://www.eren.doe.gov/der/chp/screeningtool.htlm 11. http://www.cogen.org/Downloadables/Projects/EDUCOGEN_Cogen_Guide.pdf 12. http://www.energy.rochester.edu/cogen/chpguide.htm 13. http://www.eere.energy.gov/consumerinfo/refbriefs/ea6.html 14. http://www.aceee.org/energy/chp.htm 15. http://www.aceee.org/pubs/ie022/pdf
