BACKPRESSURE STEAM TURBINEGENERATORS: TECHNOLOGY AND MARKET OPPORTUNITIES

Presentation to Regional CHP Center/Initiative Face-to-Face Meeting

Oak Ridge National Laboratory Washington DC May 2, 2006
Sean Casten Chief Executive Officer 161 Industrial Blvd. Turners Falls, MA 01376 www.turbosteam.com

Creating Value from Steam Pressure

Understanding 75% of US power generation in 30 seconds or less

Rankine Power Plant

Fuel (Coal, oil, nuclear, gas, etc.)

Steam Turbine Generator

Electricity to Grid

Boiler

High Pressure Steam

Low Pressure Steam

High Pressure Water

Low Pressure Water

Heat to atmosphere

Cooling Tower Pump

Understanding thermal energy plants in 30 seconds or less

Thermal Energy Plant

Pressure Reduction Valve(s)

Fuel

Boiler

High Pressure Steam

Low Pressure Steam

High Pressure Water

Low Pressure Water

Thermal load (kiln, dormitory, etc.)

Heat to load

Boiler Pump

The opportunity Steam Turbine Generator

Electricity to Plant Bus

Fuel

Boiler

Isolation Valve

Isolation Valve

Heat to load

Thermal Load Boiler Pump

Several non-intuitive benefits of this approach.

Operating Savings: The presence of the thermal load makes this generation ~ 3X as efficient as the central power it displaces.
More efficient than most other CHP technologies because all of input energy is recovered (comparable to a gas turbine that uses 100% of hot exhaust gas as hot air for a process).

Capital Savings: Since 75% of the power plant is already built, the effective (marginal) capital costs are quite low.
1,000 MW Rankine plant typical capital costs ~ $1 billion ($1,000/kW) 1 MW steam turbine generator integrated into existing facility typical installed capital costs ~ $500,000 ($500/kW) Turbosteam has done fully installed systems for as little as $300/kW

Similar logic applies to non-fuel operating costs, since most of Rankine cycle O&M are in the boiler and cooling tower. Turbine-generator O&M costs are negligible.
Long term Turbosteam service contract on 1 MW unit ~ 0.1 c/kWh

Key differences from other CHP technologies. Defined by how the downstream thermal energy is used, not by the technology itself
Backpresssure = use LP steam. Condensing = dump LP steam

Nationally, the dominant power generation technology

75% of US power-only plants are steam turbines (MW basis) 32% of all US CHP plants are steam turbines (MW basis)

System economics depend upon heat recovery

Only regulated utilities (or waste heat/fuel applications) install condensing turbines; all others rely on backpressure

T:E ratio usually >10 for BPTGs (compare to 2 5 for other prime movers).
BPTG target markets fundamentally different from engines, turbines, etc.

Operational and design considerations are backwards from power first CHP
Design for thermal load, take power as near-free byproduct
Power-first approaches design for power need, take heat as byproduct

Recycled commodity is the kWh, but heat costs $

In a power-first approaches heat is the recycled commodity

Can design to 100% of thermal load, but rare to be able to design for 100% of electrical load.
Power-first can be sized to electric demand, only recover heat that can be locally used.

Power production can be base-loaded or thermal following depending on size relative to thermal load, but generally cannot follow electric load
Power-first is exactly inverted from this approach

BUT the two approaches can be synergistic. UMCP gas turbine + HRSG + backpressure steam turbine is a great example.

Other design possibilities

Thermal balance & fuel costs sometimes lead to excess steam in certain applications. When this happens, can make economic sense to combine BP and CX approaches to maximize power.
Condensing (CX) Configuration
HP Steam Electricity

Backpressure/Condensing (BP+CX) Configuration

HP Steam Electricity

LLP Steam to condenser

LP Steam to load

LLP Steam to condenser

Thermal plants are usually suboptimally designed for CHP. BPTG design often includes increases in boiler pressure and/or reductions in distribution pressure to boost power output. At the (confusing) extreme, this can enable condensing turbines in backpressure operation. Like all CHP, STGs (both CX and BP) can be designed to provide ancillary benefits in addition to kWh savings (e.g., enhance reliability, power factor)

We have installed 111 systems in the U.S., and 178 worldwide since 1986.

NonNon-U.S.
>10,000 kW 5001 10000 kW 1001 5000 kW 501 1000 kW 1 500 kW

17 countries 67 installations 37,091 kW

Worldwide installations, by industry

Chemical/Pharmaceuticals Food processing Lumber & Wood Products District Energy Petroleum/Gas Processing Colleges & Universities Pulp & Paper Commercial Buildings Hospitals Waste-to-Energy Military Bases Prisons Textiles Auto manufacturing

28 21 20 19 17 16 11 10 8 6 5 2 1 1

Some (heavily qualitative) thoughts on market opportunities

Historically, market has been dominated by big energy users. Very common to see existing, 50+ year old BP (or extraction) installations of 10+ MW in integrated pulp & paper mills, big chemical plants, petroleum refineries. Conventional wisdom has long been that the economics dont make sense at < 10 MW size range.
CW driven by a combination of historic utility hassle, the relative lack of system integrators (like Turbosteam) who are interested in <10 MW projects and the relative lack of focus on energy costs in other industries

CW is no longer valid. The market opportunity is therefore in those industries that:

1. Have appropriate thermal/electrical needs 2. Have not historically considered BPTGs because of CW

Where Turbosteam sees the biggest market opportunities

In industries where individual facilities are big enough to have steady thermal loads, but not so big as to have historically focused on energy.
Paper mills (pulp and paper mills are more likely to have already invested) Mid size (petro)chemical plants: formaldehyde, carbon black, etc. Ethanol dry mills (wet mills are more likely to have already invested) <10 MW opportunities in big facilities that flew under the radar of previous energy investments

In institutional applications where energy costs, reliability and environmental impact are becoming more important drivers.
Universities Hospitals Prisons

In regions where there have been recent sudden increases either in energy costs or regulatory friendliness through barrier removal or incentive creation (ACEEE: volatility drives efficiency investments more than absolute energy cost)
Southeastern US recent electric rate spikes Ontario big new govt incentives VT, CT: states to watch

However, the design challenge posed by opportunities is different from that of power-first CHP.
In a power-first application, the power generation is a fairly standard device, but the heat recovery unit requires custom-engineering
Can pick a prime mover and power output fairly quickly, but then have an infinite number of ways to design the heat-recovery unit: there is no such thing as a standard, mass-produced heat recovery steam generator.

In a heat-first application, the steam boiler is a fairly standard device, but the power-recovery unit requires custom engineering
Boilers can be picked by frame size, but then have an infinite # of ways to design the steam turbine-generator, each with unique capital & operating cost characteristics: there is no such thing as a standard, massproduced steam turbine.

Example of turbine-generator design complexities

Midwest Steel Mill PRV reduces 900 psig steam down to 150 psig for plant-wide distribution
350 300 Steam Flow, mlbs/hr Inlet Steam Temp, 250 200 720 150 100 50 10/1/2003 11/1/2003 12/1/2003 1/1/2003 2/1/2003 3/1/2003 4/1/2003 5/1/2003 6/1/2003 7/1/2003 8/1/2003 9/1/2003 Steam Flow Steam Temperature 700 680 660 640 760 740
o

820 800 F 780

Design for Peak flow? 11.9 MW rated power 43.3 million kWh/yr $1.4 million annual savings 3 year simple payback

Design for baseload? 2.4 MW rated power 21.0 million kWh/yr $672 K annual savings 2.7 year simple payback

Sample customers financial optimization

50% 45% 6.5 MW 40% $1.44 million/year savings 10 MW 35% $1.59 million/year savings 30% 25% 20% 15% Gross ROA 10% Marginal ROA 5% 0% 150 200 250 Design Steam Flow (mlbs/hr)

Optimal system is designed here to balance desires for rapid capital recovery, high annual cash generation AND effective use of free cash.
300

15-year ROA

Rules of thumb for opportunity screening

Typical Values <2 years simple payback from energy savings >150 psig >100 psig (P-ratio >3) >10,000 lbs/hr >6 months/year >6 c/kWh Extreme Values Above-market returns and/or Non-financial drivers 15 psig 15 psig 2,500 lbs/hr 3 months/year >1.7 c/kWh

Target Financial Return

Inlet Steam Pressure Pressure drop across turbine-generator Steam flow Annual steam load factor Local electricity rate