Profitable EPA Boiler MACT Compliance at Eastman Business Park€¦ · Profitable EPA Boiler MACT...

lRED | the new green

Profitable EPA Boiler MACT

Compliance at Eastman Business Park

1

Thomas Casten, ChairmanRecycled Energy Development LLC


Eastman Business Park

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Built by George Eastman in 1890, EBP has continuously operated, always with onsite steam/power generation.

EBP is the largest industrial complex east of Mississippi River.

EBP Utilities service 134 buildings / 17 million square feet of manufacturing operations on 1250-acre EBP campus in Rochester NY.

EBP assets include:

125 MW backpressure steam turbine generation

2.1 million lbs/hr coal, oil and gas fired steam generation

64,000 tons installed chilled water capacity

Chilled water, steam, electric and compressed air distribution infrastructure throughout EBP

EPB Utility Service District ~1252 Acres

RED | the new green 3 www.recycled-energy.com


EPB Tenants/Owners


Presentation summary

Presentation shares RED’s approach to profitably reducing greenhouse gas emissions by recycling normally wasted energy.

The presentation covers three areas, including:

Definitions and analytic metrics for CHP development

Application of these concepts to Eastman Business Park with resulting metrics.

Barriers to profitably reducing CO2 with best possible CHP



Today’s EBP plant

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SteamBoilersCoal, some

oil and natural Gas

Steam Turbines

High Pressure

Steam

Chillers

EB

P E

nerg

y U

sers

Chilled Water

Steam

Electricity

Electricity purchases / salesexports

Low/MedPressure

Steam

Fuel

MP Steam


MACT compliance option 1

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SteamBoilersCoal, Oil,

Natural Gas

Steam Turbines

High Pressure

Steam

Chillers

EB

P E

nerg

y U

sers

Chilled Water

Steam


Low/MedPressure

Steam

Coal

MP Steam

/Electricity

Add $40-$50

MM controls

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Replacing controls with

efficiency

Analytic approaches to good CHP


Measure fuel energy in lower heating value (LHV)

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Coal LHV is 99% of HHV, Oil LHV is 95% of HHV, while natural gas LHV is 91% of HHV. A dekatherm of natural gas, with 1000 Btus HHV only releases 910 Btus, (except with a special trick).

The trick; use condensing economizers with gas firing, extract some of the latent heat of vaporization.


‘Byproduct power’

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‘Byproduct power’ is power generated by backpressure turbines that reduce steam pressure and temperature, before delivering the exhaust steam to site process and HVAC loads.

Backpressure steam turbines use about 3600 Btus per kWh, regardless of inlet and exhaust conditions.

This power is a byproduct of satisfying thermal demand by a ‘steam first’ CHP plant

By contrast, condensing turbines in electricity-only plants consume 10,000 to 13,000 Btus per kWh.


Net Economic Heat Rate

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• ‘Net Economic Heat Rate’ is the net fuel credited to

electric generation divided by generated kWh.

• Take total fuel less the fuel conventional boilers

would have burned to produce the useful

thermal energy, then divide by the net kWh.

• Don’t be surprised if the ‘Net Economic Heat

Rate’ is lower than the 3,412 Btus of enthalpy /

kWh.

• Laws of physics remain intact! This is an

economic measure, which reflects the saved fuel

from generating steam with conventional boilers.


Gas enables multiple cycles, increasing value capture

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• Solid fuel must be burned externally, in a Rankine cycle

that typically makes HP steam for a steam turbine.

• Gas (or liquid) can fuel gas turbines and piston engines

– a Brayton cycle – and then produce steam with hot

exhaust to power a second cycle.

• Best coal ~ 40% electric efficiency

• Best gas electric only CCGT ~ 50% efficiency

• Best CHP with CCGT >85% efficiency.

• Gas enables more value capture

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Supplementary Firing of GT Exhaust

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• GTs use four times the air required for combustion,

so GT exhaust has 16% free O2, which enables sup

firing.

• Sup firing avoids heating ambient air to exhaust

temperatures by burning pre-heated combustion air.

• Each Btu of sup fire produces 1.01 to 1.06 Btus of

steam energy, because sup firing lowers exhaust

temperature, thus recovering more of the energy in the

gas turbine’s exhaust.

• Sup firing can follow the site demand for steam, with

over 100% efficient conversion versus low part-load

efficiency of conventional boilers.


Measure CO2 avoidance per unit of useful energy

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• Compare projected CO2 against the CO2 from conventional

separate generation of the same useful energy.

• The goal should be to produce goods and services with less

CO2,

• Environmental regulation of carbon that is based on

historic emissions ignores useful energy output and

blinds developers to optimal cycles.

• Regulating site total emissions of CO2 based on

historic emissions kills CHP, since it gives no credit for

the displaced grid CO2.

• PPM regulation is essentially an input standard –

pollution per Btu of fuel.

• The ideal regulation would tie allowed emissions to

output of useful energy services.


MACT compliance with fuel switch

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New Gas-fired

SteamBoilers

,

Steam Turbines

High Pressure

Steam

Chillers

EB

P E

nerg

y U

sers

Chilled Water

Steam

Electricity


Low/MedPressure

Steam

Coal

MP Steam

Switch to Gas

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MACT compliance with fuel switch and efficiency

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Steam Turbines

High Pressure

Steam

Chillers

EB

P E

nerg

y U

sers

Chilled Water

Steam

Electricity

Electricity purchases / exports

Low/MedPressure

Steam

Heat Recovery Boilers

Gas turbines with Heat recovery steam gen

Added elec. Gen.

<MP Steam


Impact of various design options for MACT compliance at EBP

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The chart that follows depicts key variables per thousand MMMBtus of fuel,

We must also increase efficiency to pay the cost of added capital investment .

The biggest efficiency gain comes from BP turbine generators with effective heat rates of ~3,600 Btus/kWh versus 10,000 average for electric-only plants

Key metrics are per thousand MMBtus of consumed fuel.


Key metrics per MMMBtu of fuel for EBP MACT Compliance options

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Values per

MMMBtus

Operating

margin

Avoided

CO2 tonnes

MWh Elec.

& shaft

power

Thermal

MMBtus

Econ. Heat

Rate

Coal, Boilers and

BP turbines

$1.08 5.6 707 4,297

Switch to gas $2.43 80.7 5.2 691 4,698

Gas, boilers and

BP turbines

$2.33 81 45.7 732 4,085

1 X GT/HRSG

train

$3.01 93.5 6.4 686 4,122

2 X 11MW SGT /

HRSG trains

$3.47 104 65.5 712 3,188

3 X 11 MW GT /

HRSG trains

$3.59 107 69.1 711 3,035

Observations on MACT compliance options for EBP

Best margin, net economic heat rate and avoided CO2 achieved with 2 gas turbines, 22 MW new capacity

However, gain versus one 11 MW GT does not provide risk-adjusted return on incremental capital without capacity sales

If NYISO allows CHP plants to sell capacity, two turbines support incremental capital

Switching to gas saves 85% of carbon, given existing CHP, but cuts margin per MMMBtu by25%

Coal fired margin per MMMBtu is ~ 1/3rd of 2 GT approach


What is best MACT compliance option?

Answer depends on:

Whether project can capture value for added capacity,

Cost of capital given Kodak is dominant load, just out of bankruptcy

Likely load growth in EBP

Imposed pollution controls on new gas turbines

Carbon avoidance now trading at $5 to $7 per tonne, could be worth $4 to $5 million / year, but regulations do not count the avoided carbon dioxide, so no value capture

With value for carbon, optimal solution would be to install three 11 MW gas turbines.



Barrriers to profitable CHP

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Subsidies of fossil, nuclear and renewable suppress prices and thus undervalue the efficiency of CHP.

Most ISO’s don’t allow CH{ plants to sell capacity and ancillary services, reducing potential revenue.

Environmental rules do not recognize efficiency as a pollution control strategy.

Environmental rules deny tradeoffs between emissions.

Although RED MACT compliance plan cuts NOx, PM and mercury by 95% to 99%, it slightly increases CO emissions

To obtain an air permit, we must install CO catalysts, with no discernible societal benefit.


Outsourcing values and problems

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The complexities and capital requirements of optimized CHP cry out for outsourcing industrial utility services.

Good CHP is not a core competency of any industrial or other campus

Smart utility managers seldom persuade managers to invest above

minimum capital for reliable utility service, but good CHP takes capital

However, utility outsourcing scares management and the specialist CHP firm.

The industrial management fears loss of reliability – if the third party

does not make steam, the brewery cannot make beer

The third party returns depend on continued demand for utility services

from the industrial(s), which could drop for exogenous reasons.

Outsourcing cost of capital will likely exceed utility cost of capital, due to

the site risk and lack of diversity. Better for multiple tenant industrial

sites, but still problematic.


Conclusions

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There are numerous ways to develop combined cycle CHP

plants to served industrial utility loads that profitably reduce

carbon emissions

Deploying those approaches requires a new vocabulary and

analytical approaches that are foreign to the electric-only

generating industry.

Numerous barriers tilt the playing field against CHP and in favor

of less efficient separate generation of heat and power.

Meanwhile, worldwide human activity adds 5 million tonnes of

CO2 equivalent greenhouse gas every 90 seconds.

We must join together to level the playing field and enable more

efficient CHP to profitably lower CO2 emissions.


Thank You

24

Thomas Casten, ChairmanRecycled Energy Development [email protected]

mailto:[email protected]

Profitable EPA Boiler MACT Compliance at Eastman Business Park€¦ · Profitable EPA Boiler MACT...

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