Environmental Aspects of Electrotechnology

ME3023 Energy EfficiencyCase Study - Combined Heat and Power

Background

Most domestic, commercial and industrial energy users require both heat for comfort and/or processing and electricity for heat, lights and drives. Usually heat and power are supplied independently, typically as both gas and electricity. The electricity, as a refined fuel, has itself been produced in a thermal process. Combined Cycle Gas Turbine (CCGT) power stations have a high thermal efficiency because the waste heat from the gas combustion cycle is used to heat steam to drive a second turbine.

On a large scale the waste heat produced in the generation of electricity can be used to provide local heat in the form of steam and hot water. District heating schemes are possible but require the heat load to be close to the power station. In general in the UK this is not the case.

On a smaller scale some energy users require simultaneously both heat and power. In such circumstances both energy demands may possibly be satisfied through the use of a Combined Heat and Power (CHP) system. The viability of CHP depends on many factors and the full economic analysis can be complex. This case study will investigate a typical CHP application.

A CHP unit is usually a gas or steam turbine or a diesel engine connected to an electrical generator. In the case of a diesel engine, heat from the exhaust is recovered with a waste heat recovery boiler. Heat is also recovered from the engine's cooling water. In this way a large proportion of the fuel supplied is used to provide heat and power. The following diagram, Figure 1, illustrates the energy flows.

Figure 1 CHP v Conventional Heat and Power SupplyFigure 1 gives illustrative data for a CHP system with 100 units of energy input. In this case 40 units of heat and 40 units of power are produced. The CHP unit therefore has a heat to power ratio of 1:1. To produce the same amount of heat conventionally will require 150 units of primary energy.

For the two approaches the overall thermal efficiency values are

CHP unit

efficiency = 80%

Conventional approach efficiency = 80/150 or 53%.

The heat to power ratio is significant. At high values, that is where considerably more heat is required than electrical power, the energy savings offered by CHP are reduced. The ideal application of CHP is where the end user has a constant demand for heat and power in proportion similar to that of typical prime movers. This situation does not occur too often on a large scale. However there are many instances in industry and commerce where a CHP unit can be designed to meet a base heat load with any excess power being exported to the supply network. Applications for CHP have been reported in a wide range of scenario including hotels, leisure centres, residential care homes, dairies, single site industrial processes such as chemical works etc. A concise review of CHP is given by Eastop and Croft[1] on which the following case study is based.

Case Study

The Energy manager of a university campus is considering the economic benefits of a gas turbine driven CHP system. The electricity supplied would replace that currently purchased from the local REC. The hot exhaust gases would be used to provide steam and hot water and hence reduce the load on oil fired boiler plant. Using the information provided calculate the simple payback period for the project.

Data

Capital equipment costs/tax etc

Gas turbines

1.5M

(inc ancillaries and installation)

Gas Turbine Costs

Fuel

25 p/therm

Operation and maintenance costs0.1p/kWh

Overall thermal efficiency

20%

Furnace Running Costs

Fuel

50/tonne

Calorific value

40MJ/kg

Boiler efficiency

60%

Operation and maintenance costs0.025p/kWh

Standby monthly charge (CHP)

2000

Exhaust heat

2.5kWh thermal energy per

kWh of electricity generated

Electricity Consumption Data

Average electrical power demand10 MWe (over one year)

Average unit price

3.8 p/kWh

(a simplification, ignoring supply contracts etc)

Solution

The objective is to compare the running costs of the current scheme and the proposed CHP scheme. Any savings can then be compared with the capital cost and the simple payback period can be calculated.

Current Scheme

The total operation and running costs of the current scheme will comprise

Electricity costs (electricity demand is the base load in this example)

Cost of fuel to provide that amount of heat which a CHP unit would provide.

Operation and maintenance costs.

The electricity costs are

Average demand x hours per annum x unit price

10 MWe x (365 x 24) x 0.038/kWh=3.329 M

Cost of fuel

Here it is necessary to calculate the total electrical energy produced per annum. As the heat to power ratio is given as 2.5:1 the resulting heat output can be calculated. In the CHP scheme this heat is the waste heat from the gas turbines. However in the current scheme this heat must be produced by burning oil. The analysis is further complicated by the fact that furnace efficiency and calorific value of the fuel must be considered.

Annual electricity demand = 10 MWe x 365 days x24 hours = 87600 MWh

Associated CHP heat output = 2.5 x 87600 = 219000 MWh

Furnace fuel cost is given by

The conversion factor from MWh to MJ is 3600, so the fuel cost is

or1.643 M

The furnace maintenance costs are 0.025 p/kWh and so the total annual operation and maintenance costs are given by

219000 MWh x 1000 x 0.00025 = 0.055 M

The total annual running costs of the current scheme are therefore

3.329 M + 1.643 M + 0.055 M

or5.027 M

CHP Scheme

For the CHP scheme the total cost will comprise fuel costs, maintenance charges and annual service charges.

Fuel Costs

The fuel costs are found by first considering the electrical output required. Dividing this figure by the thermal efficiency will give the actual primary fuel input required.

Fuel required is given by

or438000 MWh

The fuel cost is given as 25 p/therm. The conversion factor from therms to kWh is 29.307. Therefore the cost of fuel in per kWh is given by

So the annual fuel cost is

(438000 x 1000) kWh x 0.00853 /kWh = 3.736M

Other Costs

Added to this is the annual service charge and the operations and maintenance costs.

The service charge is given as 5000 per month or 60,000 per annum.

The operations and maintenance cost is given as 0.1 p/kWh, which over 12 months is

(87600 x 1000) kWh x 0.001 /kWh= 87,600

So the total CHP running costs per annum are

3.736M + 0.060M + 0.088M

or3.884MThe CHP scheme offers an annual saving of 5.027M - 3.884M = 1.143MThe capital cost of the CHP system including installation is 1.5M, so the payback on the expenditure will be

In summary the 10 MW CHP scheme described will have a simple payback on capital of about 16 months. In practice a more detailed financial appraisal would consider the full life of the plant and additional factors such as the cost of a grid connection and back up heat supply in case of system failure. The main factors in the analysis are the respective fuel prices, with a small change making a considerable difference to the financial outcome.

The above example and the data contained are meant only for illustration of the method of appraisal.

Reference[1]T. D. Eathop and D. R. Croft, "Energy Efficiency for Engineers and Technologists", Longman, Harlow, 1980

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