Post on 11-Jan-2016
WADE 5th Intl Conference, 2004
Recycling Energy with CHP and Decentralized Energy
A Bridge to the Future
Thomas R. CastenChairman WADE
World Alliance for Decentralized Energy
World Energy SituationWorld Energy Situation
Growing energy demand is driving up Growing energy demand is driving up fossil fuel prices fossil fuel prices
132 nations increased energy use faster than 132 nations increased energy use faster than USA last decade, including China and IndiaUSA last decade, including China and India
““Hubbert’s Peak” says world oil production Hubbert’s Peak” says world oil production will peak in the 2003 to 2005, then declinewill peak in the 2003 to 2005, then decline
Oil purchases are a massive wealth transfer, Oil purchases are a massive wealth transfer, propping up dictators, religious zealots, and propping up dictators, religious zealots, and those supporting global terrorismthose supporting global terrorism
Fossil Use is Changing ClimateFossil Use is Changing Climate
Increasing atmospheric COIncreasing atmospheric CO22 is warming the is warming the
globe, causing:globe, causing: Increased frequency and severity of stormsIncreased frequency and severity of storms Rising seal level could flood low countries, Rising seal level could flood low countries,
such as Bangladeshsuch as Bangladesh More rapid species extinction & disease spreadMore rapid species extinction & disease spread
Failure to recycle energy, and over reliance Failure to recycle energy, and over reliance on central generation adds needless costs on central generation adds needless costs and COand CO22 emissions to every country emissions to every country
Cost of Work Drives Income per Cost of Work Drives Income per CapitaCapita
Changes in the real cost of work explain Changes in the real cost of work explain 80% of past per/capita income growth 80% of past per/capita income growth
““Work” is useful changes – moving people, Work” is useful changes – moving people, transforming materials, lighting, etctransforming materials, lighting, etc Cost of work function of: 1) fuel prices, 2) Cost of work function of: 1) fuel prices, 2)
conversion efficiencies, 3) transmission conversion efficiencies, 3) transmission losses, 4) appliance and vehicle conversion losses, 4) appliance and vehicle conversion efficiency; 5) other steps from fuel to useful efficiency; 5) other steps from fuel to useful work.work.
Policy ImplicationsPolicy Implications To promote improved standard of living, To promote improved standard of living,
reduce real cost of work, by:reduce real cost of work, by: Increasing energy conversion efficiency in all Increasing energy conversion efficiency in all
sectors – heat and power generation, sectors – heat and power generation, appliances, manufacturingappliances, manufacturing
Reducing losses and costs of transmitting Reducing losses and costs of transmitting energyenergy
Recycling energy Recycling energy
Widespread efficiency and energy Widespread efficiency and energy conservation policies would reduce conservation policies would reduce demand for fossil fuel, reducing energy demand for fossil fuel, reducing energy prices and thus reducing the cost of workprices and thus reducing the cost of work
Cost of Work Rising, WorldwideCost of Work Rising, Worldwide Real fuel prices are increasingReal fuel prices are increasing
Central electric generation efficiency has been Central electric generation efficiency has been frozen for 40 years at 33%frozen for 40 years at 33%
Electric T&D losses rising, due to grid Electric T&D losses rising, due to grid congestion, remote generationcongestion, remote generation
Appliance efficiency gains are slowingAppliance efficiency gains are slowing Mandated growth of renewable energy will Mandated growth of renewable energy will
raise electric prices raise electric prices
These trends hurt per capita incomesThese trends hurt per capita incomes
Energy Myths Lead to Bad Energy Myths Lead to Bad Policy ChoicesPolicy Choices
Myth #1: It is cheaper to move electricity Myth #1: It is cheaper to move electricity than to move fuel – build mine mouth than to move fuel – build mine mouth power stationspower stations
Myth #2: Central generation has economies Myth #2: Central generation has economies of scale, costs less capital than smaller of scale, costs less capital than smaller decentralized generationdecentralized generation
Myth #3: Energy can only be used onceMyth #3: Energy can only be used once Myth #4: Heat and power generation are Myth #4: Heat and power generation are
optimal, given current technologyoptimal, given current technology
The Rule of SevensThe Rule of SevensFacts Versus Myth #1Facts Versus Myth #1
Moving fuel (coal, gas, or oil) takes 7 times Moving fuel (coal, gas, or oil) takes 7 times lessless energy than moving electricity energy than moving electricity
Moving thermal energy takes 7 times Moving thermal energy takes 7 times moremore energy moving electricityenergy moving electricity
Thus, moving thermal energy takes 49 Thus, moving thermal energy takes 49 times times moremore energy than moving fuel. energy than moving fuel.
Implication: Burn fuel near thermal users in Implication: Burn fuel near thermal users in CHP plants to provide local heat and powerCHP plants to provide local heat and power
Asking the Right QuestionAsking the Right QuestionChallenges Myth #2Challenges Myth #2
Single large power plants are cheaper per Single large power plants are cheaper per kW than smaller plants, but:kW than smaller plants, but: Central power requires 1.1 to 1.25 kW new Central power requires 1.1 to 1.25 kW new
generation and new T&D wires to deliver 1 generation and new T&D wires to deliver 1 kilowatt of new power to users kilowatt of new power to users
Local power requires 1 kW new generation plus Local power requires 1 kW new generation plus 10% of new T&D to deliver 1 kW to users10% of new T&D to deliver 1 kW to users
Total capital cost for central power 1.8 Total capital cost for central power 1.8 times cost of DG (US$2,500 versus $1,400) times cost of DG (US$2,500 versus $1,400)
Energy Can be RecycledEnergy Can be RecycledChallenging Myth #3Challenging Myth #3
What Energy Can Be Recycled?What Energy Can Be Recycled? Fuel and electricity is typically used only one Fuel and electricity is typically used only one
time, with all waste discardedtime, with all waste discarded Power plants burn fuel and then discard 2/3’s as heatPower plants burn fuel and then discard 2/3’s as heat Industry transforms raw materials to finished goods Industry transforms raw materials to finished goods
and then vents heat, pressure, & waste fuelsand then vents heat, pressure, & waste fuels
Local power generation of heat and power Local power generation of heat and power recycles normally wasted heat recycles normally wasted heat
Industrial waste energy can be recycled to heat & Industrial waste energy can be recycled to heat & power without extra fuel or pollution. power without extra fuel or pollution.
Use blast furnace gas, carbon black gas, hot exhaust, Use blast furnace gas, carbon black gas, hot exhaust, pressure drop, combustible wastes, agricultural wastespressure drop, combustible wastes, agricultural wastes
Combined Heat and Power (CHP)Combined Heat and Power (CHP)
Fuel
100% Steam
Electricity
Chilled Water
90%
10% Waste Heat, no T&D loss
Pollution
(At or near thermal users)
CHP Plants
Recycled Energy Recycled Energy ((At user sites)
Waste Energy
100%
10% Waste Heat
Steam Generator
70%
Steam
25% Electricity
BP Turbine Generator
No Added Pollution
Capital costs similar to other CHP or DG plants
Recycled Energy Case Study: Recycled Energy Case Study: Primary EnergyPrimary Energy
We invested We invested $360$360 million in six projects to million in six projects to recycle blast furnace gas and coke oven recycle blast furnace gas and coke oven exhaust in four steel plants.exhaust in four steel plants. 440 MW electric and 460 MW steam capacity. 440 MW electric and 460 MW steam capacity.
Return on assets exceeds 15% Return on assets exceeds 15%
Steel mills save over Steel mills save over $100$100 million per year million per year and avoid significant air pollution and avoid significant air pollution
Reduced COReduced CO22 equals uptake of one million equals uptake of one million
acres of new trees.acres of new trees.
90 MW Recycled from Coke Production90 MW Recycled from Coke ProductionChicago in BackgroundChicago in Background
DG, Using Conventional DG, Using Conventional Technology, Saves 40% versus Technology, Saves 40% versus
Central GenerationCentral Generation
WADE model challengesWADE model challenges
Myth #4Myth #4
WADE Model DescriptionWADE Model Description Model database has all generation choices; Model database has all generation choices;
calculates costs to meet 20 year load calculates costs to meet 20 year load growth with CG or DGgrowth with CG or DG Central generation scenarios are user specified Central generation scenarios are user specified
mix of electric-only plants mix of electric-only plants DG scenarios include good CHP (4,000 Btu DG scenarios include good CHP (4,000 Btu
heat recovery per kWh electric,) industrial heat recovery per kWh electric,) industrial recycled energy, and renewable DGrecycled energy, and renewable DG
Model works for any country with local data Model works for any country with local data on existing generation, load growth, T&D on existing generation, load growth, T&D losseslosses
US Results, CG versus DG, for Next 20 years (Billion Dollars)
ItemItem All CG All DG Savings % Saved
Capacity + T&D $831 $504 $326 39%
Power CostPower Cost $145 $92 $53 36%36%
Tons NOxTons NOx 288288 122122 166166 58%58%
Tons SOTons SO22 333333 1919 314314 94%94%
MM Tonnes COMM Tonnes CO22 776776 394394 381381 49%49%
Extrapolating US Analysis the WorldExtrapolating US Analysis the World
We do not have sufficient data to run We do not have sufficient data to run WADE model for the world, but:WADE model for the world, but: We believe US numbers are directionally We believe US numbers are directionally
correct for CG versus DGcorrect for CG versus DG
We analyzed conventional approach of IEA We analyzed conventional approach of IEA Reference Case versus optimal solutions Reference Case versus optimal solutions with DG using US valueswith DG using US values
Worldwide CG for 2030 Load GrowthWorldwide CG for 2030 Load Growth
Fuel
100%
33% delivered electricityPower Plant
T&D and Transformers
Pollution
67% Total Waste
Line Losses 9%
Generation:$890 / kW4,800 GW worldwide
$4.2 trillion
Transmission:$1,380 / kW4,800 GW
$6.6trillion
Totals:$2,495 / kW4,368 GW
$10.8 trillion
Worldwide DG for 2030 Load GrowthWorldwide DG for 2030 Load Growth
Fuel
100% Steam
Electricity
Chilled Water
90%
10% Waste Heat, no T&D loss
Pollution
(At or near thermal users)
CHP Plants
Generation:$1,200/kW 4,368 GWWorld Cost: $5.2 trillion
DG vs. CG: ($1.0 trillion)
Transmission: $138/kW (10% Cap.) 0.44 GW DG$600 billion
$6.0 trillion
Totals:$1,338/kW 4,368 GW$5.8 trillion
$5.0 trillion
Worldwide Benefits of Meeting 2030 Worldwide Benefits of Meeting 2030 Load Growth with Decentralized EnergyLoad Growth with Decentralized Energy
Consume 122 billion fewer barrels of oil Consume 122 billion fewer barrels of oil equivalent (½ Saudi reserves)equivalent (½ Saudi reserves)
$2.8 trillion less fossil fuel purchases $2.8 trillion less fossil fuel purchases
Reduced illness from air pollution Reduced illness from air pollution
Much easier to supply electric services to Much easier to supply electric services to entire population entire population
Global warming might slow downGlobal warming might slow down
Potential Savings for ChinaPotential Savings for China
WADE model has been run with Chinese WADE model has been run with Chinese datadata
Tomorrow morning we will present resultsTomorrow morning we will present results
Summary and ImplicationsSummary and Implications
Worldwide energy policies, based on four Worldwide energy policies, based on four energy myths, promote excessive energy energy myths, promote excessive energy use and costuse and cost
The current energy trends hurt per capita The current energy trends hurt per capita income in all countriesincome in all countries
By promoting energy recycling, By promoting energy recycling, governments can lower the real cost of governments can lower the real cost of work, enhance income growth, work, enhance income growth, andand lessen lessen environmental damage environmental damage
Conference GoalsConference Goals
Help delegates, government officials, and Help delegates, government officials, and media move beyond today’s energy mythsmedia move beyond today’s energy myths
Offer a vision of the future based on DG Offer a vision of the future based on DG that recycles energy that recycles energy
Provide analytical tools and experiences to Provide analytical tools and experiences to illustrate value of needed policy changes illustrate value of needed policy changes
Encourage the widest possible dialogue Encourage the widest possible dialogue between top energy policy and application between top energy policy and application specialists from all over the worldspecialists from all over the world
The Coming DG RevolutionThe Coming DG Revolution
The DG revolution is as important as the The DG revolution is as important as the Green Revolution of 30 years agoGreen Revolution of 30 years ago
In time, the DG revolution will spread to all In time, the DG revolution will spread to all countries, but first movers will have countries, but first movers will have advantagesadvantages
We tip our hats to our enlightened hosts We tip our hats to our enlightened hosts who seek to foster a DG revolution in the who seek to foster a DG revolution in the world’s largest nationworld’s largest nation
Thank you for listening!