15th EPConf 5-14-2013 SJ Final
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Transcript of 15th EPConf 5-14-2013 SJ Final
GAS COMBINED HEAT & POWER:GAS COMBINED HEAT & POWER: A SILVER BULLET FOR BOILER MACT
Suresh Jambunathan, Director of Business Development,
Recycled Energy Development LLCRecycled Energy Development, LLCCell# 630-335-4544
May 14, 2013y ,Donald E. Stephens Convention Center
Rosemont, IL
EP13, Track 9, Session 9A
RED | the new green Slide # 1 www.recycled-energy.com
Recent Boiler MACT influenced headlines
RED | the new green Slide # 2 www.recycled-energy.com
Boiler MACT made simple
Emissions control rules for “major source” coal, oil, biomass and process gas boilers
Finalized by US EPA on Dec. 20, 2012. • Impacts > 500 coal units, >800 oil units and > 400 biomass units• 3-to-4 year compliance window from publication of final rule
Stringent limits for • Mercury (Hg)• Filterable Particulate Matter (PM)• Hydrochloric Acid (HCl)
Gas CHP is the most economical option.
Implementation is notdiffi lt b t i • Hydrochloric Acid (HCl)
• Carbon Monoxide (CO)
Compliance likely uneconomic for older coal and oil boilers. Options include• Spend on pollution control equipment
difficult, but requires careful planning
Spend on pollution control equipment• Convert boiler to burn natural gas• Invest in a gas Combined Heat and Power (CHP) system
Gas CHP implementation requires utility engagement via power buyback programsGas CHP implementation requires utility engagement via power buyback programs.
Utilities (Regulated and deregulated ) must recognize that their future is tied to the future of their customers, many of whom may just close shop under the weight of MACT compliance
RED | the new green Slide # 3 www.recycled-energy.com
An example site affected by industrial Boiler MACT150 psig
STG 10 MWRating
150 psig
30 psig
Steam250 K h
Process steam load
7 MW
Vintage stoker boiler
Rating300 Kpph600 psig
600 psig250 Kpph 7 MW
Condenser
ESP 600 F
ή~75%
FSF~ 1,600 Btu/lb
Coal 400 MMBtu/Hr
Flue GasCleaned Flue GasBag House FD
or
Stack
CondenserA “classic” CHP system.
Economical when coal i i d
Does this look like your coal boiler operations?
St k t 30 t 70 ld ή 75% d FSF 1 6 MMBt /Klb
ue G sBag Housefan
Stackwas inexpensive and pollution control was “not my problem”
Stoker system, 30-to-70 years old; ή ~75% and FSF~1.6 MMBtu/Klb
Burns costly compliance coal, steam load (250 Kpph) and 95% (8,322 hrs/yr) operations
Hi h f l O&M t ($3 t $4 illi / )High non-fuel O&M costs ($3-to-$4 million/year)
Minimal pollution control - ESP or BH only. Monitor SOx, NOx, PM, Hg, HCl and CO
B t o ha e a VALUABLE air permit
RED | the new green Slide # 4 www.recycled-energy.com
STG = Steam turbine Generator; ESP = Electro-Static Precipitator, FSF = Fuel-to-Steam Factor
But, you have a VALUABLE air permit
Selected Boiler MACT pollution control equipment
Boiler Air
ESP
or
Your system today controls PM. Less effective for Hg. Ineffective for HCl, NOx, SOx
Boiler Air heater
Bag House
FD fan Stack
or
SCR ESP
Standard Boiler MACT compliance
CapEx requiredO E i d
Option #1: Control PM, HCl. Less effective for Hg. Controls NOx, SOx
Boiler Air heater
Bag House
Wet FGDFD
fan StackSNCR
or or
OpEx increasedEfficiency decreased .Increase your delivered cost of steam
But…..
You keep your SCR ESP
Option #2: Control PM, HCl, Hg. Controls NOx. Less effective for SOx
air permit Boiler Air heater
Bag House
FD fan StackSNCR
or orSDA
CO control via combustion system improvements; i.e. more CapExRED | the new green Slide # 5 www.recycled-energy.com
Natural gas Combined Heat and Power (CHP) is a f d t ll i lt tifundamentally superior alternative
150 psig
50 psigProcess
Clean stack gas
Steam 250 Kpph
HRSG*
300 Kpph900 psig900 F
STG 10 MWRating900 psig
steam load
Power to Nat. gas to
CHP reduces delivered steam cost and increases reliability of delivered steam and
Gas Turbine45 MW
Nat. gas
Power to utility, 8 MW
Power to utility42 MW
Nat. gas to duct fire
power
This pollution control system Option #3:
• Reliably satisfy process steam load ~ 250 Kpph and 8 322 hours/yearyrequires a new air permit
Reliably satisfy process steam load ~ 250 Kpph and 8,322 hours/year
•Compared to a boiler MACT compliance case (Options #1 or #2), gas fired CHP (Option #3)• Reduces O&M• Reduces specific emissionsReduces specific emissions• Increases system efficiency Plus….
• Generates power (50 MW ~ 412,000 MWh/yr) and revenue as a valuable by-product
* HRSG = Heat Recovery Steam Generator
RED | the new green Slide # 6 www.recycled-energy.com
Is there a fuel switch risk? gas availability
Shale gas fracking has unlocked huge domestic gas supply
RED | the new green Slide # 7 www.recycled-energy.com
Is there a fuel switch risk? gas production
US gas production has increased dramatically.
Several LNG export j t i th l iprojects in the planning
stage
RED | the new green Slide # 8 www.recycled-energy.com
Is there a fuel switch risk? Gas versus coal price
2010 to 2012Currently, “burner-tip” price of coal and gas are essentially the same.
2010 to 2012
You can buy a 3-year gas strip for just over $4/MMBtu todayy
1950 to 2012
RED | the new green Slide # 9 www.recycled-energy.com
Gas CHP is a Boiler MACT pollution control device
80
90
100
Filterable PM stack emissions, tons/yr
30
40
50
60
70
Emission reductions
PM 77%
HCl 100%
0
10
20
30
Current system Blr. MACT limit GT-CHP
140
HCl stack emissions, tons/yr50
Hg stack emissions, lbs/yr
HCl 100%
Hg 100%
80
100
120
25
30
35
40
45
20
40
60
5
10
15
20
25
RED | the new green Slide # 10 www.recycled-energy.com
0Current system Blr. MACT limit GT-CHP
0Current system Blr. MACT limit GT-CHP
Gas CHP reduces other emissions
600
700
NOx stack emissions, tons/yr
300
400
500
0
100
200
Current system Blr. MACT limit GT-CHP
Emission reductions.
NOx: 91%
SOx 99% Current system Blr. MACT limit GT CHP
4,500
SOx stack emissions, tons/yr
SOx 99%
2,500
3,000
3,500
4,000
,
500
1,000
1,500
2,000
,
RED | the new green Slide # 11 www.recycled-energy.com
0Current system Blr. MACT limit GT-CHP
Economic snapshot: operating assumptions
VintageStokerBoilerή ~75%
Process steam loadFuel (coal)
OpEx
Steam 250 Kpph
Pollution
GasCHPSystemή ~ 80%
Process steam load
Steam 250 Kpph
Fuel (gas)
OpEx Po erFSF~1,600
Control Equipment
FSF~2,275OpEx Elec. utility
(Grid)
Power 50 MW
Parameter Unit Spend on Pollution Control Equipment
Invest in Gas CHP system
Process steam Klb/hrKlb/year
2502 080 500
2502 080 500
Power sold to utility, thus maintaining thermal host as utility customer.
Klb/year 2,080,500 2,080,500
Power sold MWMWh/year
---
50412,000
Requires utility engagement and a mind-set that views long-term survival of
Grid Power price* $/MWh $60
Coal Gas
$/MMBtu$/MMBtu
$4.0-
-$5.0
gthermal host as key to utility’s own business.
Gas $/MMBtu $5.0
RED | the new green Slide # 12 www.recycled-energy.com
*CHP power sold to utility per a gas indexed Power Purchase Agreement (PPA)FSF = Fuel-to-Steam Factor. Btu of fuel in per lb of steam out
Economic snapshot: operating results & steam cost
VintageStokerBoilerή ~75%
Process steam loadFuel (coal)
OpEx
Steam 250 Kpph
Pollution
GasCHPSystemή ~ 80%
Process steam load
Steam 250 Kpph
Fuel (gas)
OpEx Po er
P t U it Spend on Pollution Invest in Diff
FSF~1,600Control Equipment
FSF~2,275OpEx Elec. utility
(Grid)
Power 50 MW
Value created by Power significantly offsets cost of steam.
R i ili
Parameter Unit pControl Equipment or Gas CHP Difference
Fuel (coal or gas) $/Klb $6.4 $11.4 ($5.0)O&M $/Klb $1.4 $1.3 $0.1 Requires utility
engagement and a mind-set that views long-term survival of thermal host as key to
O& $/ b $ . $ .3 $0.*Power credit $/Klb $0.0 ($11.9) $11.9
Delivered steam cost $/Klb $7.8 $0.8 $7.0 y
utility’s own business.
CHP operating value created $MM/yr $14.5
N t i i l th ti i d d dNet savings is lower than operating savings and depends on • Capital for either approach – depends on scope• Weighted average cost of capital • Investment term.
RED | the new green Slide # 13 www.recycled-energy.com
*CHP power sold to utility per a gas indexed Power Purchase Agreement (PPA)FSF = Fuel-to-Steam Factor. Btu of fuel in per lb of steam out
Economic sensitivity: cost of gas versus coal
$16.0
CHP Operating Savings at points below Net Zero Line
$12.0
$14.0H
HV
What is your view of the long term relative price of coal versus gas?
$8.0
$10.0
s, $
/MM
Btu
, H
$4.0
$6.0
Del
iver
ed g
as
Current Operating savings ~$14.5 million
$0.0
$2.0
$2.0 $3.0 $4.0 $5.0 $6.0 $7.0
D
Delivered coal, $/MMBtu, HHVNet savings is lower than operating savings and depends on
• Capital for either approach – depends on scope• Weighted average cost of capital
RED | the new green Slide # 14 www.recycled-energy.com
Weighted average cost of capital • Investment term.
Gas CHP benefits
Benefit to Gridl id bili i l di f d d d li lLocal grid stability including power factor support and reduced line loss
Balance variable power from wind and solar, thus speed renewable energy deploymentDefer or avoid investment in
Remote central generation plantsRemote central generation plantsTransmission & Distribution infrastructure
Benefit to the thermal hostBenefit to the thermal hostReduced cost of steam and increased steam supply reliabilityMore reliable power supply
Benefit to societyReduced pollution and lower greenhouse gas emissionsNet reduced energy costs increases productivity
RED | the new green Slide # 15 www.recycled-energy.com
Hurdles facing natural gas CHP
Inertia and unfamiliarityStandard compliance solutions seen as “tried and true”Standard compliance solutions seen as tried and true
Energy Policy Act, 2005Hurts ability of regulated utilities to secure certain cost recovery for long-term Power Purchase Agreements (PPA) with CHP plants Makes CHP plant financing difficultAgreements (PPA) with CHP plants. Makes CHP plant financing difficult
Air permitMACT pollution control regulations allow retaining current air permit. CHP reduces pollution yet requires a new permitCHP reduces pollution, yet requires a new permit
Standby & exit chargesImposed by some utilities before allowing CHP systems to interconnect with the grid.
Upfront investmentGas CHP investment often significantly higher than cost of standard compliance solutions.
RED | the new green Slide # 16 www.recycled-energy.com
Questions?
Suresh [email protected]| (630) 335-4544
RED | the new green Slide # 17 www.recycled-energy.com
APPENDIX
Boiler MACT limits - Federal Questions, vol 78 #21, Jan 31, 2013Boiler MACT limits Federal Questions, vol 78 #21, Jan 31, 2013
RED | the new green Slide # 18 www.recycled-energy.com
APPENDIX
RED | the new green Slide # 19 www.recycled-energy.com