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6/5/2014

Tim Burkhalter Burns & McDonnell 1

Onsite Power Generation

IS IT A GOOD DECISION FOR MY PLANT?

Presented by:

Kurt Koenig, Burns & McDonnell

Lee Hoffman, Pullman & Comley

Combined Heat and Power (CHP): The on-site simultaneous generation of two forms of energy from a single fuel/energy source

OVERVIEW

MARKET APPLICATIONS

TYPICAL TECHNOLOGIES

PROJECT DEVELOPMENT APPROACH

ECONOMICS

START TODAY

RESOURCES

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“BEHIND THE FENCE”

COLLEGE CAMPUS

HOSPITALS

MILITARY BASES

MANUFACTURING FACILITIES

RESEARCH FACILITIES

DATA CENTERS

INDUSTRIAL

COMMERCIAL

WHERE CHP?

IS CHP A GOOD DECISION FOR MY PLANT?

EFFICIENCY

Coal Plant = 30-40%

Combined Cycle Plant = 40-50%

CHP (overall electrical/thermal) = 70-90%

RELIABILITY

EMISSIONS REDUCTION

UTILITY COST SAVINGS

ECONOMICS / LCCA

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CHP CONFIGURATIONS

Bottoming Cycle

Generate Electricity

Local Use Export/Sale

Drive a Steam Turbine

Condensing Back Pressure

Generate Steam

Boiler HRSG

Waste Heat from Process

Furnaces Kilns Exothermic Reactions

Topping Cycle

Utilize Energy Space

Heating/DHW Process Needs

Cooling

Create Useful Energy

Steam Hot

Water Chilled Water

Capture Waste Heat

Flue Gas Jacket Cooling

Extraction Steam

Generate Electricity Combustion

Turbine Recip

Engine Boiler +Steam

Turbine

TRADITIONAL CONCEPT

Fossil Plant (coal)

Combined Cycle

Plant

Nuclear Plant

Hydro

Wind

Utility Owned

Factory/Process Facility

College Campus

Hospital

Mixed Use Development

High Rise

Casino

City

Privately Owned

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CHP CONCEPT

HTTP://WWW.C2ES.ORG/TECHNOLOGY/FACTSHEET/COGENERATIONCHP

CHP RELIABILITY

MAINTAIN POWER THROUGH UTILITY OUTAGE LOW COST FOR BLACK START CAPABILITY MAINTAIN THERMAL GENERATION FUEL DIVERSITY CLIENT SPECIFIC

Research Needs

Emergency Response

Natural Disasters

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CHP EMISSIONS

AVERAGE US GRID

80% EFFICIENT BOILERS

25MW GAS TURBINE UNFIRED HRSG

VS

*Results from EPA emissions estimating tool

MARKET APPLICATIONS

Type MW Heat/Power Ratio

Universities 5-30 High

Hospitals 2-10 Medium

Industrial/Manufacturing 5-60+ Medium-High

Government/Military 5-60 Low-Medium

District Energy Systems 5-50 Medium-High

Mixed Use Developments 3-10 Low

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MARKET POTENTIAL MARKET POTENTIAL

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MARKET POTENTIAL OPPORTUNITY FOR CHP IN U.S.

Source: ICF Report The Opportunity for CHP in the United States

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TYPICAL TECHNOLOGIES &

TECHNOLOGY SELECTION

TURBINES

HRSG’S

RECIPROCATING ENGINES

STEAM TURBINES


GAS TURBINES (4-50MW)

Solar, Siemens, GE (aero’s) HRSG’S (5,000-350,000 LBS/H)

Rentech, Cleaver Brooks RECIPROCATING ENGINES (2-18MW)

GE Jenbacher, Wartsilla STEAM TURBINES (2-50MW)

Siemens, Elliot, GE, TurboSteam

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HEAT RECOVERY POTENTIAL (RULES OF THUMB) GAS FIRED RECIPROCATING ENGINES

1.2 lbs/h of 100psig sat steam per kw

2.5-3.0 MMBtu of hot water per MW (jacket water and exhaust in series) GAS TURBINES

Unfired ~ 4.0-6.0 lbs/h of 100psig sat steam per Kw

Fired to 1600F ~ 2 x unfired capacity


TYPICALLY A BALANCE BETWEEN SUMMER THERMAL LOAD AND WINTER ELECTRIC LOAD

If summer thermal load is small - limits prime mover size (cooling a possibility?)

If winter electric load is small – limits prime mover size (export?) TYPICALLY NO ELECTRIC EXPORT LIMITING FACTOR MAY CHANGE SEASONALLY HOURLY MODEL IS A MUST!


https://www.google.com/url?q=http://www.northeastchptap.org/whatischp/basics.turbines.php&sa=U&ei=QU91U9DWE4aMqgbRtYCYCw&ved=0CDoQ9QEwBg&usg=AFQjCNH_XCK5HJtH2RMmUXiDUsLeqrO8Nw

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TECHNOLOGY SELECTION DISPATCH

OTHER KEY SELECTION CRITERIA

ELECTRICAL EFFICIENCY VS STEAM PRODUCTION TURN DOWN EMISSIONS PROFILES (SCR?) NOISE STARTS/STOPS SPACE REQUIRED DUCT FIRING CAPACITY INLET COOLING GAS PRESSURE

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STAGE 1 - QUALIFICATIONS

STAGE 2 – LEVEL 1 FEASIBILITY ANALYSIS


STAGE 4 – PROCUREMENT

PROJECT DEVELOPMENT

APPROACH DEVELOPMENT APPROACH

STAGE 1 - QUALIFICATION TIMELINE 1-7 Days KEY INPUTS Spark Spread Min/Max/Annual Loads Current Utility Operations Goals/Key Drivers DELIVERABLES Potential Annual Savings Calculation Go/No-Go Recommendation Level I Proposal

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DEVELOPMENT APPROACH


TIMELINE 4-8 Weeks

KEY INPUTS Rate Structures or Assumptions Thermal and Electric Load Profiles (prefer hourly) Current Asset Condition/Performance Growth Assumptions Financial Parameters Understanding of current operations/Permits Base Case Definition

DELIVERABLES Hourly Dispatch Model (3-6 Cases) Conceptual Layouts Heat Balance/Flow Diagrams/One-lines(MV) Permitting Hurdles Cost Estimate +/-40% LCCA, IRR, Payback Configuration Recommendation Level 2 Proposal



TIMELINE 8-12 Weeks

KEY INPUTS Detailed Rate Structures and Procurement Strategies Historic Hourly Loads Capital Replacement Plan, Deferred Maintenance, Other O&M Costs Growth Assumptions Financial Parameters, Financing Options Detailed Interviews with Operations Staff Current Permits

DELIVERABLES Hourly Dispatch Model (1-2 Cases) 15% Design Documents (Heat Balance/PID’s/One-lines/Plans and Sections) Multidiscipline Cost Estimate +/-20% LCCA, IRR, Payback Sensitivity Analysis (Rates, Load, Capital, etc.) Delivery Method Analysis/Discussion Recommendation

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FULL LCCA/PRO FORMA

Hourly Compensated Dispatch Model Detailed Rate Information/Escalation Load Growth Forecasts Avoided Costs Value for REC’s/Carbon Detailed Capital Cost Maintenance Costs Value for lost revenue Sensitivity/Risk Analysis

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

An

nu

al

Co

st

/ S

avin

gs

($M

illio

ns)

Maintenance Capital Energy Savings

0.0

0.2

0.4

0.6

0.8

1.0

1.2

-

200

400

600

800

1,000

1,200

-$25 -$15 -$5 $5 $15 $25 $35 $45 $55 $65 $75 $85

Exceed

an

ce P

rob

ab

ilit

y

Fre

qu

en

cy

Option 2 NPV Savings vs. Base Case (Millions)


STAGE 4 - PROCUREMENT DEVELOP BID PACKAGE PROCEED WITH DESIGN ONLY DESIGN-BUILD DESIGN-BUILD-OWN-OPERATE PROGRAM MANAGER/OWNERS ENGINEER COMMISSIONING

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PROJECT COSTS

TURBINE AND RECIP - $1500 TO $5000/KW

Existing Site?

Load available?

Prime Mover

Supporting Infrastructure/Distribution BACK PRESSURE STEAM TURBINE – $450 -$650/KW

Condensing turbine adds cost – condenser, towers, piping, water treatment, etc. MAINTENANCE COSTS – OEM VS THIRD PARTY

ECONOMICS

($1.7)

$2.9

$18.0

$2.1 $1.5

$0.0 $5.9

($15.2)($1.4)

($0.2)

($25.0)

($20.0)

($15.0)

($10.0)

($5.0)

$0.0

$5.0

$10.0

$15.0

Purchased

Electricity -

Energy

Purchased

Electricity -

Demand

Purchased

Electricity -

Standby

Purchased

Electricity -

Generation

Capacity

Natural

Gas

Non Fuel

O&M

Initial Capital

Thru 2016

Capital

After 2016

Cumulative

With

Current GHG

Policies

NP

V,2

01

3 $

MM

Incremental Cost Of Utility Service, NPV 2013$MM

Option 7 vs. Option 2, Expected Value

Savings, decrease in costIncrease in costEnding incremental present value

STATE INCENTIVES

CEFIA/Green Bank CHP Program

PROBABLY BEST BET FOR CHP IN CONNECTICUT

CEFIA is seeking proposals for grants, loans, loan enhancements or power purchase incentives Incentives vary based on technology and efficiency – cap is $450/kw REQUEST FOR PROPOSALS

Issued July 9, 2013 Applications available at www.energizect.com/chp Responses to RFPs due no later than February 27, 2015 at 5 pm ELIGIBLE APPLICANTS Almost anybody—except single family homeowners: For-profit companies Not-for-profit entities Municipalities State and federal agencies Colleges and Universities School districts Not-for-profit and for-profit affordable housing companies Public housing agencies

http://www.energizect.com/chp

6/5/2014


STATE INCENTIVES

CEFIA/Green Bank CHP Program

FOCUS

Focus is on projects that have large electrical and thermal loads Hospitals, POTWs, colleges and schools, manufacturing facilities and multi-family housing/hotels are all good bets CRITERIA FOR APPLICATIONS

Must be in development phase. NO construction Past grant winners, and LREC/ZREC winners are not eligible Systems must be 5 MW or less Systems must be commercially available CHP systems Located in UI or CL&P service territory Generate electricity for on-site use, but excess may be sold on the wholesale market The Financial Assistance Agreement must be taken “as is.”

STATE INCENTIVES

CEFIA/Green Bank C-PACE Program

“SQUARE PEG” – BUT OCCASIONALLY THERE IS A SQUARE HOLE

Commercial Property-Assessed Clean Energy Program Developed for energy efficiency projects, but can be used for CHP CRITERIA FOR PARTICIPATION

Must demonstrate energy savings sufficient to justify repayment Must be a permanent structure Must be in a municipality that has agreed to the C-PACE program Renewable CHP projects are best bets CHP projects that are peak shavers can be eligible

6/5/2014


STATE INCENTIVES

CEFIA/Green Bank C-PACE Program Geographic Scope

Source: www.energizect.com

STATE INCENTIVES

CEFIA/Green Bank C-PACE Program -- How it works:

Source: CEFIA

6/5/2014


FEDERAL INCENTIVES

NOT AS ROBUST AS STATE INCENTIVES, BUT AVAILABLE

BUSINESS ENERGY INVESTMENT TAX CREDIT FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS BUSINESS AND INDUSTRY GUARANTEED LOANS MODIFIED ACCELERATED COST-RECOVERY SYSTEM

SIMPLE METHOD

SPARK SPREAD = ELECTRIC COST ($/MMBTU) – GAS COST ($/MMBTU)

BREAKPOINT ~ 11-12 Gas Cost = $5/MMBtu Electric Cost = $0.10/kWh * 293 = $29.3/MMBtu Delta = 24.3 Gas Cost = $6/MMBtu Electric Cost = $0.06/kWh * 293 = $17.5/MMBtu Delta = 11.5

SPARK SPREAD

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SPARK SPREAD SPARK SPREAD

Operating Cost to Generate

CHP Fuel Costs, $/kWh $0.0588

Thermal Credit, $/kWh ($0.0292)

Incremental O&M, $/kWh $0.0090

Operating Costs to Generate Power, $/kWh $0.0386

Capital Charge, $/kWh $0.0333

Total Costs to Generate Power, $/kWh $0.0719

Current Average Electricity Price, $/kWh $0.0800

Spark Spread, $/kWh** $0.0081

SPARK SPREAD – BETTER METHOD – EPA CHP

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PUBLIC RESOURCES

DOE CLEAN ENERGY APPLICATION CENTERS

http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs.html EPA CHP EMISSIONS CALCULATOR

http://www.epa.gov/chp/basic/calculator.html EPA SPARK SPREAD ESTIMATOR EPA CATALOG OF CHP TECHNOLOGIES EPA CHP PROJECT DEVELOPMENT HANDBOOK

http://www.epa.gov/chp/

ANALYSIS TOOLS

COMBINED HEAT & POWER TURBINE SELECTION GUIDE HOURLY DISPATCH MODELS PERFORMANCE MODELS

Excel

Gatecycle CASE STUDIES

6/5/2014


Questions?

Kurt Koenig [email protected]

919-900-1864

Lee Hoffman [email protected]

860-424-4315

mailto:[email protected]

mailto:[email protected]