CHP and Industrial Applications-FINAL
- 1. Combined Heat and Power (CHP) at Industrial Facilities Satish Ravindran, P.E., CEM, - Sr. Energy Engineer - SW CHP TAP Suresh Jambunathan – Director Business Development; Veolia North America May 12 , 2016
- 2. CHP Technical Assistance Partnerships Education and Outreach Providing information on the energy and non-energy benefits and applications of CHP to state and local policy makers, regulators, end users, trade associations, and others. Technical Assistance Providing technical assistance to end-users and stakeholders to help them consider CHP, waste heat to power, and/or district energy with CHP in their facility and to help them through the development process from initial CHP screening to installation. Market Opportunity Analysis Supporting analyses of CHP market opportunities in diverse markets including industrial, federal, institutional, and commercial sectors
- 4. Outline CHP Overview CHP in Industrial Facilities - Veolia CHP Project Resources from the DOE SW CHP TAP Q&A
- 5. CHP Overview
- 6. Fuel 100 units CHP 75% efficiency Total Efficiency ~ 75% Fuel Fuel 30 units Power Plant 32% efficiency (Including T&D) Onsite Boiler 80% efficiency 45 units Electricity Heat Total Efficiency ~ 50% 94 units 56 units 30 to 55% less greenhouse gas emissions CHP efficiently recycles wasted energy to reduce operating costs & emissions but increases reliability
- 7. CHP System Schematic Prime Mover Reciprocating Engines CombustionTurbines Microturbines SteamTurbines Fuel Cells Electricity On-Site Consumption Sold to Utility Fuel Natural Gas Propane Biogas Landfill Gas Coal Steam Waste Products Others Generator Heat Exchanger Thermal Steam HotWater Space Heating Process Heating Space Cooling Process Cooling Refrigeration Dehumidification
- 8. Common CHP Technologies 50 kW 100 kW 1 MW 10 MW 20 MW Fuel Cells Gas TurbinesMicroturbines Reciprocating Engines Steam Turbines
- 9. CHP Today in the United States • 82.7 GW of installed CHP at over 4,400 industrial and commercial facilities • 8% of U.S. Electric Generating Capacity; 14% of Manufacturing • Avoids more than 1.8 quadrillion Btus of fuel consumption annually • Avoids 241 million metric tons of CO2 compared to separate production Source: DOE CHP Installation Database (U.S. installations as of December 31, 2014)
- 10. Attractive CHP Markets Industrial Chemicals Refining Food processing Petrochemicals Natural gas pipelines Pharmaceuticals Rubber and plastics Pulp and paper Commercial Data centers Hotels and casinos Multi-family housing Laundries Apartments Office buildings Refrigerated warehouses Restaurants Supermarkets Green buildings Institutional Hospitals Schools (K–12) Universities & colleges Wastewater treatment Correctional Facilities Agricultural Dairies Wood waste (biomass) Concentrated animal feeding operations
- 11. Emerging National Drivers for CHP o Benefits of CHP recognized by policymakers o President Obama signed an Executive Order to accelerate investments in industrial EE and CHP on 8/30/12 that sets national goal of 40 GW of new CHP installation over the next decade o State Portfolio Standards (RPS, EEPS), Tax Incentives, Grants, standby rates, etc. o Favorable outlook for natural gas supply and price in North America o Opportunities created by environmental drivers o Utilities finding economic value o Energy resiliency and critical infrastructure DOE / EPA CHP Report (8/2012) http://www1.eere.energy.gov/manufacturing/distributede nergy/pdfs/chp_clean_energy_solution.pdf
- 12. Finding the Best Candidates: Some or All of These Characteristics High and constant thermal load Favorable spark spread Need for high reliability Concern over future electricity prices Interest in reducing environmental impact Existing central plant is dilapidated Planned facility expansion or new construction; or equipment replacement within the next 3-5 years
- 13. Where are the Southwest opportunities for CHP Industrial Applications? (8,937 MW of CHP Potential at 5,607 Sites) Source: DOE CHP Technical Potential Study (2016) - 1,000 2,000 3,000 4,000 5,000 6,000 Wyoming Utah Texas Oklahoma New Mexico Colorado Arizona CHP Generating Capacity (MW) CHPTechnical Potential for Industry 50-500 kW 0.5 - 1 MW 1 - 5 MW 5-20 MW >20 MW
- 14. Project Snapshot: Port Arthur Steam Energy/Oxbow Port Arthur, TX Application/Industry: Petroleum Coke, Crude Oil Processing Capacity (MW): 5 MW Equipment: Waste heat recovery boilers; back pressure steam turbine Fuel Type: Waste Heat Thermal Use: Steam and electricity generation Installation Year: 2005 Environmental Benefits: CO2 Emissions reduced by 159,000 tons/year Testimonial: “Through the recovery of otherwise-wasted heat to produce high pressure steam for crude oil processing, Port Arthur Steam Energy LLP has demonstrated exceptional leadership in energy use and management.” — U.S. Environmental Protection Agency, in giving the 2010 Energy Star Award
- 15. Project Snapshot: Tesoro Petroleum Salt Lake City, UT Application/Industry: Refineries Capacity (MW): 22 MW Prime Mover: Gas Turbine and HRSG Fuel Type: Natural Gas Thermal Use: Process Steam Installation Year: 2004 Environmental Benefits: CO2 Emissions reduced by 85,100 tons/year Testimonial: The site can produce energy for $35-$40 per megawatt-hour, enabling it to save $200,000 per month on its energy bill. Additionally, it sells $300,000 of energy per month to its utility, making a net improvement to its operations of $500,000 per month.
- 16. CHP in Industrial Applications - Veolia North America
- 17. 4-Chicago based industrial CHP visionaries Thomas Casten, Chairman Recycled Energy Development (RED) Leif Bergquist, Vice President Recycled Energy Development (RED) Sean Casten, CEO Recycled Energy Development (RED) Richard J. Munson, Director Environmental Defense Fund
- 18. Veolia North America Who is Veolia? Project development tips & tools Selected references
- 19. Who is Veolia?
- 20. The big picture: US Industrial activity is up! Courtesy: Industrial Info. Resources, Inc, SugarLand TX 77479
- 21. A common industrial project planning scene UTILITIES: Flip side of a process. Power Thermal Energy delivered as steam hot water thermal oil refrigerant Compressed air, lighting Water treatment Wastewater treatment XYZ Chemical Company: Boss: We’re investing $$$$$$$ to build process XYZ Assistant: What about utilities? Boss: Utilities?......... Just get it done Assistant to Plant Manager: Get it done Plant Manager: Picks package boiler from “bigger & better boiler” company. Pays $$$$ to utility to upgrade electrical substation Rule of Thumb: $$Utilities = 10% - to - 40% of $$Process
- 22. CHP project development = sense + diligence Set objectives & gather data Quickly conceptualize configurations + appraise (FEL2 or FEL3) Project development Technical: Configuration, engineering, procurement, construction Legal: Structure of contracting entities (LLC, S or C Corp etc…) Commercial: Contracts for fuel, power, O&M, grants & incentives Environmental: Permits Financial: Financial models, equity & debt Risks & Mitigants: Project Execution Plan (PEP) Create value by “profitably recycling energy” from concept (FEL1) to completion (FEL5). CHP at Univ. of MA. Eff. > 80% Central generation. Eff. ~35%
- 23. Graph & ponder load (power + thermal) profiles, then sketch “promising” concepts
- 24. A rigorous Heat & Mass Balance (HMB) sizes & prices the project + aids off-design analysis
- 25. CHP can economically tie energy-to-water (or wastewater) + constitute core of a microgrid. http://www.wrri.nmsu.edu/publish/watcon/proc56/Al-Qaraghuli.pdf Profitably reduce GHG emissions: • Fresh water “stores” energy, thus optimizing utility supply. • Result ? Least cost/unit of power, steam, water
- 26. A successful project = risk mitigation
- 27. A schedule helps… even if (usually) wrong
- 28. Project structure: A Special Purpose Entity (“NewCo LLC”) can reduce investor risk
- 29. Implementation: Front End Loaded (FEL) view
- 30. Project development tailwinds & headwinds TAILWINDS HEADWINDS Tried & true technology CHP seen as a proven technology Inertia and unfamiliarity Compared to CHP, package boilers seen as “tried and true” 10% Investment Tax Credit (ITC) Reduces Project CapEx; improves Return on Investment (ROI) Upfront investment Greater upfront CapEx required. Accelerated depreciation Improves Return on Equity (ROE) Air permit CHP reduces pollution, yet requires a new permit MACT pollution control regulations allow retaining current air permit. Increasing recognition of the benefits of redundancy, resiliency & reliability Energy Policy Act, 2005 Hurts ability of regulated utilities to secure certain cost recovery for long-term Power Purchase Agreements (PPA) with CHP plants. Makes CHP financing difficult Standby & exit charges Imposed by some utilities before allowing CHP systems to interconnect with the grid.
- 31. The Boston-Cambridge area uses CHP and distributes recaptured thermal energy as "green steam," reducing greenhouse gas emissions by 475,000 tons annually, the equivalent of removing 80,000 cars from the road. The Boston-Cambridge network was recognized as 2015 System of the Year by the International District Energy Association. Selected Veolia CHP Case Studies "Veolia has been a strong and loyal partner with the city, and the completion of this project marks an important step forward in attaining our Greenovate Boston goal of reducing Boston's greenhouse gas emissions 25% by 2020 and 80% by 2050." -Boston Mayor Martin J. Walsh
- 32. Reference: MATEP Cogeneration Plant Located in Boston, MA Power, heating & chilling for complex with 2000 beds + 135,000 patients/yr Capacities ◦ Power: CHP 47 MW (83 MW total) ◦ Steam: 970 Kpph ◦ Chilling: 42,000 Tons Distribution piping: steam + chilled water Fuel: Natural Gas Long-term O&M for a mini-utility providing the energy requirements of six hospitals and encompassing electricity, heating, cooling and distribution. . The Longwood medical area in Boston, is home to six prominent hospitals that are affiliated with Harvard Medical School. Medical Area Total Energy Plant (MATEP) supplies the hospitals with steam, chilled water, and electricity, serving more than 9 million square feet of space.
- 33. Reference: Grays Ferry Cogeneration Plant Located in Philadelphia, PA Steam for Veolia Energy Philadelphia District Energy network plus power for the gird CHP capacity : 170 MW + 1,444 Kpph ◦ Gas Turbine: 120 MW ◦ Steam Turbine: 50 MW ◦ HRSG: 711 Kpph ◦ Package boiler: 735 Kpph Fuel: Natural Gas U.S. Environmental Protection Agency’s Leadership Award for reducing greenhouse gas emissions. “Power Plant of the Year Award” from Power Magazine. This facility serves ~ 300 customers, including the University of Pennsylvania, in the central business district of Philadelphia and surrounding area. Over 90% of the system’s steam demand is supplied from the CHP heat recovery systems.
- 34. Reference: Biogen IDEC Cogeneration Plant Located in Cambridge, MA Steam and cogenerated power for campus needs CHP capacity : 5 MW + 27 Kpph ◦ Gas Turbine: 5 MW ◦ HRSG: 27 Kpph ◦ Veolia Energy Cambridge steam network provides backup service Fuel: Natural Gas SourceOne, Veolia Energy’s energy management and advisory services subsidiary managed the CHP project from concept to completion Veolia Energy performs comprehensive O&M. Initial Initial 5-year agreement with performance guarantee was recently renewed for an additional 5-years
- 35. Reference: New York University CHP Plant Located in New York City, NY CHP capacity (after expansion): 13.4 MW + 90 Kpph ◦ 2-Gas Turbine: 6.7 MW each ◦ 2-HRSG: 45 Kpph each Fuel: Natural Gas SourceOne, Veolia Energy’s energy management and advisory services subsidiary served as Owners representative and managed the CHP project from concept to completion The CHP is the heart of a microgrid that saves $5 MM/yr and serves 22-buildings with power, steam/hot water 2013 EPA Energy Star awardee
- 36. How to Implement a CHP Project with the Help of the CHP TAP
- 37. CHP TAP Technical Assistance
- 38. High level assessment to determine if site shows CHP project potential ◦ Qualitative Analysis – Energy Consumption & Costs – Estimated Energy Savings & Payback – CHP System Sizing ◦ Quantitative Analysis – Understanding project drivers – Understanding site peculiarities DOE TAP CHP Screening Analysis 38 Annual Energy Consumption Base Case CHP Case Purchased Electricty, kWh 88,250,160 5,534,150 Generated Electricity, kWh 0 82,716,010 On-site Thermal, MMBtu 426,000 18,872 CHP Thermal, MMBtu 0 407,128 Boiler Fuel, MMBtu 532,500 23,590 CHP Fuel, MMBtu 0 969,845 Total Fuel, MMBtu 532,500 993,435 Annual Operating Costs Purchased Electricity, $ $7,060,013 $1,104,460 Standby Power, $ $0 $0 On-site Thermal Fuel, $ $3,195,000 $141,539 CHP Fuel, $ $0 $5,819,071 Incremental O&M, $ $0 $744,444 Total Operating Costs, $ $10,255,013 $7,809,514 Simple Payback Annual Operating Savings, $ $2,445,499 Total Installed Costs, $/kW $1,400 Total Installed Costs, $/k $12,990,000 Simple Payback, Years 5.3 Operating Costs to Generate Fuel Costs, $/kWh $0.070 Thermal Credit, $/kWh ($0.037) Incremental O&M, $/kWh $0.009 Total Operating Costs to Generate, $/kWh $0.042
- 39. CHP Project Resources DOE/EPA Catalog of CHP Technologies (updated 2014) Good Primer Report http://www.epa.gov/chp /technologies.html www.eere.energy.gov/chp DOE Project Profile Database (150+ case studies) www.eere.energy.gov /chp-profiles www.dsireusa.org DOE Database of incentives & policies
- 40. Next Steps Resources are available to assist in developing CHP Projects. Contact the Southwest CHP TAP to: Perform CHP Qualification Screening for a particular facility Identify existing CHP sites for Project Profiles Additional Technical Assistance
- 41. CHP plays a key role in the industrial processes providing energy savings, reduced emissions, and opportunities for resilience Emerging drivers are creating new opportunities to evaluate CHP and numerous examples exist to learn more how industrial facilities have incorporated CHP Engage with the US DOE Southwest CHP TAP to learn more about the technical assistance offerings in evaluating CHP in your facility Summary
- 42. Thank You! Satish Ravindran, P.E., CEM Houston Adv. Research Center 4800 Research Forest Drive The Woodlands TX Ph: 281-363-7906 sravindran@harcresearch.org Suresh Jambunathan Director of Business Development, Veolia 700 East Butterfield Road, Suite 201 Lombard IL 60148 Ph:630-335-4544 suresh.jambunathan@veolia.com