Post on 26-Dec-2015
Modern Grid Initiative November 15, 2006
Energy Recycling – Enhancing the Grid
Thomas R. Casten
Past Chairman & CEOPrimary Energy, LLC
Conference MissionConference Mission(From Conference Invitation)(From Conference Invitation)
Create a shared national agenda for modernizing the electrical system.
Create a framework for upgrading the U.S. electric infrastructure
Actions taken will shape the direction of the grid for years, even decades
Collect best ideas from a broad group of stakeholders
An Inconvenient TruthAn Inconvenient Truth Al Gore has described global warming Al Gore has described global warming
as an ‘Inconvenient Truth’ – a reality that as an ‘Inconvenient Truth’ – a reality that we would rather not facewe would rather not face
Conventional wisdom: policy changes Conventional wisdom: policy changes that mandate GHG (Greenhouse Gas) that mandate GHG (Greenhouse Gas) reductions will increase energy costs reductions will increase energy costs and penalize industryand penalize industry
Electric generation produces 38% of US Electric generation produces 38% of US GHG emissionsGHG emissions
More ‘Inconvenient Truths”More ‘Inconvenient Truths” US industrial production shrinking at an US industrial production shrinking at an
alarming rate, especially in Midwestalarming rate, especially in Midwest
Electricity prices under pressure from Electricity prices under pressure from CAIR, added T&D system capital and CAIR, added T&D system capital and permanently higher fossil fuel pricespermanently higher fossil fuel prices
Our fossil fuel addiction dictates foreign Our fossil fuel addiction dictates foreign policy (and expensive wars), bloats balance policy (and expensive wars), bloats balance of payments deficits, and exacerbates of payments deficits, and exacerbates pollution control costspollution control costs
Final ‘Inconvenient Truth’Final ‘Inconvenient Truth’
Adding T&D does little to Adding T&D does little to mitigate the major energy mitigate the major energy
problems we faceproblems we face
‘‘A Convenient Truth’ A Convenient Truth’ Energy RecyclingEnergy Recycling
US industrial waste energy could produce 20% US industrial waste energy could produce 20% of US electricityof US electricity
Recycling creates significant new revenue streams Recycling creates significant new revenue streams for US manufacturers and reduces emissionsfor US manufacturers and reduces emissions
Power generation that recycles waste heat uses Power generation that recycles waste heat uses half of the fossil fuel of conventional generationhalf of the fossil fuel of conventional generation
Recycling cuts power costs, reduces emissionsRecycling cuts power costs, reduces emissions
US industries single best hope to regain US industries single best hope to regain competitiveness:competitiveness: recycle waste energy recycle waste energy
Examining Energy TrendsExamining Energy Trends New work by Robert U. Ayres examines New work by Robert U. Ayres examines
relationship of energy, conversion to relationship of energy, conversion to useful work, and GDP (Gross domestic useful work, and GDP (Gross domestic product)product)
Raw energy use and GDP do not Raw energy use and GDP do not correlate, economists treat energy as correlate, economists treat energy as simply a 4% factor in overall economysimply a 4% factor in overall economy
Ayres finds changes in useful work Ayres finds changes in useful work explain over 50% of past century’s explain over 50% of past century’s economic growtheconomic growth
Economic Growth Driven by Economic Growth Driven by Improving Energy EfficiencyImproving Energy Efficiency
Long trend of falling energy use per dollar Long trend of falling energy use per dollar of GDP, does not correlate with rising GDPof GDP, does not correlate with rising GDP
Also long trend of increasing efficiency of Also long trend of increasing efficiency of converting potential energy to useful workconverting potential energy to useful work
Useful work per $ of GDP was remarkably Useful work per $ of GDP was remarkably constant, explains most economic growthconstant, explains most economic growth
However, energy efficiency trends have However, energy efficiency trends have reversed, largely due to electric industry reversed, largely due to electric industry stagnationstagnation
US Exergy and Useful Work per $ GDP
-
2
4
6
8
10
12
14
16
18
Year
kWh
/ $G
DP
watts total exergy / $GDP watts useful work / $GDP 10 year moving average
KWh Useful Work / $GDP
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Year
kWh
/ $G
DP
kWh of useful work per $GDP 10 per. Mov. Avg. (kWh of useful work per $GDP)
Conversion Efficiency, Exergy to Useful Work
0%
2%
4%
6%
8%
10%
12%
14%
Year
Per
cent
of r
aw e
xerg
y to
use
ful w
ork
Conversion efficiency to useful work
5 per. Mov. Avg. (Conversion efficiency to useful work)
Conversion Efficiency, Exergy to Useful Work work 1960-2005
9%
10%
11%
12%
13%
14%
Year
% e
ffic
ienc
y of
con
vers
ion
% input exergy to useful work 5 per. Mov. Avg. (% input exergy to useful work)
Potential Energy (exergy) Conversion to Potential Energy (exergy) Conversion to Useful work by SectorUseful work by Sector
Look at the % of exergy converted to useful work Look at the % of exergy converted to useful work in low temperature heat, high temperature heat, in low temperature heat, high temperature heat, lighting, and electricitylighting, and electricity
Electricity is by far the most efficient way to use Electricity is by far the most efficient way to use energy, butenergy, but
Efficiency has stagnated in electricity productionEfficiency has stagnated in electricity production Stagnant power industry efficiency is key to many US Stagnant power industry efficiency is key to many US
problems, including industrial competitiveness, problems, including industrial competitiveness, pollution, jobs, balance of payments, and global pollution, jobs, balance of payments, and global warmingwarming
Conversion Efficiency of Low Temp Heat
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Year
Eff
icie
ncy
of C
on
vers
ion
Conversion Efficiency of High Temp Heat
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Year
Eff
icie
ncy
of C
onve
rsio
n
Conversion Efficiency of Electricity to Light
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Year
Effi
cien
cy o
f Con
vers
ion
US Electric Efficiency,1900-2005
0%
5%
10%
15%
20%
25%
30%
35%
Year
% E
ffic
ien
cy
Primary Efficiency, Delivered Electricity
Conversion Efficiency of All Electric Uses
46%
48%
50%
52%
54%
56%
58%
60%
2005
1995
1985
1975
1965
1955
1945
1935
1925
1915
1905
Year
Ele
c. C
on
vers
ion
to
Use
ful W
ork
US Electric Efficiency,1900-2005
0%
5%
10%
15%
20%
25%
30%
35%
Year
% E
ffic
ien
cy
Primary Efficiency, Delivered Electricity Final Efficiency raw energy to useful work
Ten year Moving Average 10 year moving average
We Need Better Generation We Need Better Generation OptionsOptions
Recycle energy to reduce cost Recycle energy to reduce cost and reduce pollutionand reduce pollution
Energy Recycling: Impact on Energy Recycling: Impact on the Gridthe Grid
Only local generation can recycle waste Only local generation can recycle waste energy – impossible to recycle waste energy – impossible to recycle waste energy from remote generation plantsenergy from remote generation plants
Local generation reduces loads on grid, Local generation reduces loads on grid, line losses, and need for new T&Dline losses, and need for new T&D
Local generation stabilizes voltages, can Local generation stabilizes voltages, can provide active capacitance and provide active capacitance and inductance, and reduces vulnerability to inductance, and reduces vulnerability to extreme weather and terroristsextreme weather and terrorists
Defining Recycled EnergyDefining Recycled Energy Recycled energy is useful energy Recycled energy is useful energy
derived from:derived from: Exhaust heat from any industrial process or Exhaust heat from any industrial process or
power generation power generation Industrial tail gas that would otherwise be Industrial tail gas that would otherwise be
flared, incinerated or vented, flared, incinerated or vented, Pressure drop in any gas Pressure drop in any gas
Conventional Central ApproachConventional Central Approach1960 Data (& 2003 Data)1960 Data (& 2003 Data)
Pollution
Fuel
100 units
Power Plant
=
67 units Waste Energy
33 units Electricity
End User
Waste HeatTransmission Line Losses
3 units (7.5%)
Decentralized Generation Option Decentralized Generation Option Combined Heat and PowerCombined Heat and Power
Pollution
Recycle Waste Heat
CHP Plant
End User Site
33 units Waste Energy
=66 units Useful Work 33 units
Electricity
33 units Thermal Energy
Fuel
100 units
Recycling Industrial EnergyRecycling Industrial Energy
ElectricitySteam
Hot Water
End User Site
Energy Recycling
Plant
Electricity
Process Fuel
Finished Goods
Waste Energy
SavedEnergy Input
Economies of Scale?Economies of Scale? Central versus Decentralized Generation Central versus Decentralized Generation
Transmission Transmission & Distribution& Distribution
$1380$1380
$138$138
$1,242$1,242
1000%1000%
GenerationGeneration
Central GenerationCentral Generation $890$890
Local GenerationLocal Generation $1,200$1,200
Savings (Excess) of Savings (Excess) of Central vs. Local Central vs. Local
GenerationGeneration$310$310
Central generation Central generation capital as a % of capital as a % of
local capitallocal capital 74%74%
Total / kW Total / kW of of
GenerationGeneration
$2,270$2,270
$1,338$1,338
$1,068$1,068
213%213%
KW KW required/ required/ kW LoadkW Load
1.441.44
1.071.07
0.370.37
135%135%
Total Total costs/ kW costs/ kW New LoadNew Load
$3,269$3,269
$1,432$1,432
$1,837$1,837
228%228%
Comparative Deployment of Combined Heat Comparative Deployment of Combined Heat and Power in 2004and Power in 2004
0
10
20
30
40
50
60
Denmar
k
Nether
lands
Finlan
d
Russia
Germ
any
Poland
Japa
n
China
Portugal
Canada
Mex
ico
WORLD US UK
Indon
esia
France
Brazil
India
Argentin
aDE
sh
are
as a
% o
f to
tal
po
wer
gen
erat
ion
Future Generation Options
Existing Coal Fossil Plant - No new T&D
New Coal
New Combined Cycle Gas Turbine
Coal Gassification CCGT
Remote Wind
Coal Gas with CO2 Sequestration
Balanced CHP Recycled Industrial Energy
0
5
10
15
20
-10123
Average Fossil Heat Rate (Units of fossil fuel per unit of delivered electricity)
Cen
ts /
kWh
Renewable Energy Options
Central Generation
Options
No incremental fossil fuel line
Recycled Energy Options
Avg. Industrial Power Price 5.5¢ / kWh
(33% efficiency) (50% efficiency) (100% efficiency) (net fossil savings)
Avg. Retail Power Price 8.1¢ / kWh
Power Cost and COPower Cost and CO22 Policy Choices Policy Choices
Cost down Cost / MWh Cost up
CO
2 dow
n
CO
2/M
Wh
C
O2 u
p
Coal gasification, CCGT,
Cost up, CO2 up
Central generation with coal, no criteria pollutant control
Cost down, CO2 up
Wind, Geothermal, CO2 sequestering, on grid solar
Cost up, CO2 down
CHP, industrial energy recycling(Requires local generation) off
grid solar, local hydro
Cost down, CO2 down
Cost and Emissions Today
Policy Goal
How Can Policy Spur Recycled How Can Policy Spur Recycled Energy? Energy?
Modernize old rules that are now Modernize old rules that are now barriers to modern technologybarriers to modern technology
Enable Enable recycled energyrecycled energy projects to projects to capture more of value they createcapture more of value they create Reward local generation for avoiding T&D Reward local generation for avoiding T&D
capital and line lossescapital and line losses Pay part of health and environmental Pay part of health and environmental
savings to savings to energy recyclingenergy recycling facilities facilities
More Specific SuggestionsMore Specific Suggestions Provide open standard offer for power Provide open standard offer for power
from energy recycling facilitiesfrom energy recycling facilities
Provide limited loan guarantees for Provide limited loan guarantees for industrial energy recycling plants, valid industrial energy recycling plants, valid only if waste energy supply ceases only if waste energy supply ceases
Identify specific barriers to efficiency Identify specific barriers to efficiency and enact new rules that serve the social and enact new rules that serve the social purpose but do not block efficiency.purpose but do not block efficiency.
Convenient Truth:Convenient Truth:Energy Recycling Solves Multiple ProblemsEnergy Recycling Solves Multiple Problems US can ‘mine’ industrial waste energy, create US can ‘mine’ industrial waste energy, create
added revenue streams for industryadded revenue streams for industry Recycle presently wasted energy streams to provide Recycle presently wasted energy streams to provide
affordable, clean energyaffordable, clean energy
Requires unconventional, innovative governanceRequires unconventional, innovative governance Remove barriers to efficiencyRemove barriers to efficiency Pay part of health savings to recycled energy facilities Pay part of health savings to recycled energy facilities
that create those savingsthat create those savings Pay T&D savings to energy recycling facilitiesPay T&D savings to energy recycling facilities Permit energy recycling as pollution control device Permit energy recycling as pollution control device
Denmark Changed in Two DecadesDenmark Changed in Two Decades
Source: Danish Energy CenterSource: Danish Energy Center
Conclusions:Conclusions: A modern infrastructure must address A modern infrastructure must address
more than transmission failures. more than transmission failures. Consider impact on local pollution, global Consider impact on local pollution, global
warming, and industrial competitiveness warming, and industrial competitiveness
Energy recycling reduces power costs Energy recycling reduces power costs and emissions and largely eliminates the and emissions and largely eliminates the need for more T&D investmentsneed for more T&D investments
Our collective future depends on how Our collective future depends on how fast governments remove barriers to fast governments remove barriers to efficiency and encourage clean energyefficiency and encourage clean energy
Thank you for listening