PEAK D E W D SHAVING BY COGENERATION

M IEmam
Organization for Energy Pianning
Cairo,Egypt

M.Ei-Shibini
M.El-Marsafawy
Electrical Engineering Department,Faculty
of Engineering,Cairo University,Cairo,Egypt

Abstract - The paper presents a methodology for the

calculation of the optimal cogeneration facility capacity
and operation suitable for demand side peak shaving
ensuring a reliable service and economic utilization of
the facility.The developed methodology takes into consideration steam conditions in the plant,electric load
profile,fuel price,operating hours,plant critical load,power factor penalty ,and economic indicators.The nethodology depends upon increasing the shaving amount to
increase the facility utility factor for improving its
economy.The computer program developed for this study
provides cogeneration facility capacity,costs,payback
period,benefit to cost ratio and facility utilization
factor.The output of the program also contains improved
load factor,reduced demand leve1,new contracting demand,
future tariff evolution,and project cash flow table The
results of the application of the proposed methodology to
an industrial company in Egypt have shown that it is
technically and economically feasible to use cogeneration
facility for peak demand shaving.
I. INTRODUCTION

Since Middle East War in 1973 the efficient usage of

energy has become an important objective all over the
wor1d.Cogeneration and electric load management have been
considered as energy conservation programs measures.Load
management has been used to control o r shift the peak of
aggregate electric loads in order to reduce the need for
system expansion
and t o reduce fuel cost. Many of
Utilities planners started programs to extend tiieir
activities to the other side of demand meters,taking into
consideration the demand side requirements which can be
briefly summarized in reducing cost, conserving energy,maintaining lifestyle, increasing service options,and
enhancingquality of service[l].These activities are known
by demand side management (DSM)which can be defined as the
planning, implementation and monitoring of those utilit,y
activities designed to influence customer use of electricity in ways that will produce desired changes in the
utilitys load shape.

DSM objectives include peak shaving,valley filling,load

shifting,strategic load Growth,and strategic Conservation.The evaluation of demand side management is based on
its cost effectiveness. Each utility has its own specific
cost effectiveness measures which should be related to
utility avoided cost. If the DSM alternative costs are
less than o r equal to avoided costs, the proposed alternative is considered to be cost-effective. There would be a

0-7803-1462-x/93$03.00
01993IEEE

periodic evaluation process t o be done by the utility

dealing with DSM
Adoption of DSM alternatives by any
utility reduces supply-side costs by scheduling proposed
capacity addition o r by changing operation program[2].

Electric power Research Institute has presented its

final report in April 1981 on the potential for load
management in selected industries.The study evaluated the
technical and economical feasibility of altering existing
load shapes in seven industrialoperations,which were,petroleum refiner,chlorine/caustic production,steel production,cement production,aluminum production,paper production,and pipelines[3].
In this paper a methodology for optimum peak shaving by
cogeneration facility has been developed.Input data
required for the computer program are steam conditions in
the plant,electric load profile,fuel price,operating
hours,plant critical load,power factor penalty,and economic indicators.The methodology depends upon increasing
the shaving amount to increase the facility utility factor
for improving its economy.The output of the program are
cogeneration facility capacity,costs,payback period,benefit to cost ratio and facility utilization factor.The
output of the program also contains improved load factor
reduced demand leve1,new contracting demand, future tariff
evolution,and project cash flow table .The application of
the developed program to an industrial Company for Coke
and Chemicals indicated that the use of cogeneration
facility for peak demand shaving has proven to be technically and economically feasible.
11. COGENERATION AS A DSM ALTERNATIVE

Cogeneration is the sequential use of a primary energy

source to produce two energy forms,heat and power. The
improvement of overall efficiency in case of combining two
systems may exceed 70 percent,while the conventual energy
system will be less than 47%[41.
There are two fundamental types of cogeneration systems,topping and bottoming cycles,differentiated on the basis
of whether power or thermal energy is produced first[Z].The evaluation of cogeneration system starts by the
technical feasibility analysis and finalized by the economic feasibility study. The technical feasibility depends
upon the difference between generated steam pressure and
the process needs,that difference is usually dissipated in
reducing valve which can be replaced by a steam turbine to
generate power instead of the dissipation of the steam
power. The turbine can be a back pressure turbine which
may drive mechanical load directly coupled to it o r
electric generator,to feed the electric load of the
factory.The required investment in this case is the cost
of turbo-generator set alone. The factors affecting the
cogeneration feasibility are:process steam pressure,process steam rate,electric load,operating hours,electric
cost,and fuel cost.Beside the six main factors mentioned
above which affect the feasibility of cogeneration
system,there are other economic factors which influence
the results.These factors are:the cost of equipment,installation,equipment depreciation,operation and maintenance
cost in addition to inflation rate for each cost items
(fuel,electric,spare parts,and salaries), life cycle of
equipment,and banking interest.

1384

The normal operation of any cogeneration facility is to

be switched off only in the emergency cases for repair or
according to maintenance schedule requirement. Cogeneration facility can be used for peak load shaving ,but
this would affect the economy of the cogeneration project
if it was not chosen for that task.The task will be the
design of cogeneration facility to feed part of site
electric load on peak time.The facility can be operated
partially during off-peak time.

d-Check electric supply reliability and determine contracting demand.Considering that utilities capabilities
can ensure the power supply for contracting demand ,it is
required to check system reliabilbty, which should fulfill
the following constrains: duration of any outage should be
less than maximum allowable outage time for critical
loads,and a minimum power supply should be avallable for
critical 1oads.The process conditions determine these two
1imits.In general critical demand ZC is the sum of the
main loads which are supposed to be in operation or ready
to operate any time.In case that critical demand was less
than after-shaving maximum demand,contracting demand ZN
would be chosen equal to that after-shaving maximum demand
as shown in following equation

I I I . PROPOSED METHODOLOGY

If
3.1. Technical Considerations:The calculation of
cogeneration capacity which is equivalent to the difference between peak demand and the shaving level is made
based on the steam paths pressures,rates,constrains and
electric load profile, taking into consideration required
reliability as shown below.

H(i))*EFF(i)/36OO

MW
MW

(1)

where: H(1) is boiler house output steam enthalpy,Q(i),and H(i) are input steam rate and enthalpy,EFF(i) is
efficiency and conversion factor,GT is total generation
capacity,and i is the generation unit number.
b-Determine the required power shaving:starting with
initial value of shaving power which is a fraction of the
available generation,the initial value of after shaving
maximum demand will be given as shown below:

ZR = ZM AF*GT
(2)
where: ZR is after shaving maximum demand,ZM is maximum
load demandland AF is fraction.
The initial value of after shaving maximum demand will
be modified according to other constrains calculationB.The
required power shaving(DZ) will be in general the difference betweenmaxiaum load demand and after shaving maximum
demand as shown by the following equation
DZ

= ZM

GT

(4)

DZ

The power capacity can be reduced by reducing the steam

flow through one of the turbine using a parallel steam
path equipped by steam reducing valve.The required reduction of flow (DQ)can be calculated as shown below:
DQ = DG*3600/((H(l)

ZN =

take

ZR

(7)

The occurrence of different outage levels of cogeneration and each demand level time should be checked.If this
time exceeds the allowable outage time ,the difference
between critical demand and cogeneration output power
should be supplied through utility network.The contracting
demand should ensure the supply of critical load during
cogeneration outages.This can be done using the following
formula:
TST(i,j)

= OZi

qj* HRS $60

(8)

where: TST( i,j) is time of coincident cogeneration capacity(j) outage and load demand level (i)in minutes,HRS is
operating hours,qi is outage of (j)cogeneration capacity
per unit time, and OZi is per unit time occurrence of load
demand level(i).

(3)

ZR

C-Adjust cogeneration power to the recommended shaving

1evel.The total facility power should be compared with the
recommended shaving in case that facility total power is
less than or equal to recommended shaving,there will be no
other trial for modifying the generation capacity ,but if
that capacity was greater than recommended shaving the
generation unit capacities should be reduced by a portion(DG) equal to the difference as follows:
DC =

ZR

If critical demand was higher than after-shaving maximum

denandla reliability test should be carried on.This will
require the following data:the probabilityof cogeneration
units outage and load occurrence probability table.For
cogeneration facility,the probability of outages data can
be obtained/estimated by
the help of vendors and/or
utility experts.The load occurrence probabilities have to
be calculated by the analysis of load duration data.These
data have to be recorded over a sample of days representing loading profile of the site. The load occurrence
probabilities could be obtained through changing duration time of each demand level to per unit value with
respect to overall time of the sample.

a- Calculate the available power generation according to

steam conditions using the following equation
GT
C C(i)
G(i) = Q(i)
(H(1)

ZC <

H(i))*EFF(i))

Compare TST(i,j) with allowance outage time as shown

below:
If

TST(i,j) < TAL.

take
ZN(i,j) = ZC GTj

where :TAL is maximum allowed outage time,ZN(i,j) is the

required contracting demand foe consequence cogeneration
capacity(j)outage and load demand level (i)in ninutes,and
GTj is cogeneration facility output power for outage
condition level ( j ) ,and is given by
m
GTj = GT .Ejzl Gj
(10)

(5)

where: Gj is output power of unit (j), and GT cogeneraThe steam rate flow through that path has to be calcu- tion total rated output power.
lated again as shown below :
These calculations should be repeated for simultaneously
Q(i) = Q(i) - DQ
(6) different generation outage levels and load demand levels.
The results of previous test will be a group of recomThat unit capacity should be calculated again according mended contracting demands and the maximum value will be
to the new steam flow through it.
the suitable one.

1385

3.2 Economical Considerations:The saving of purchased

electricity will be lhe revenue of the project which is
equal to the difference of electricity cost with and
without cogeneration.This saving has to be compared with
the other cost items to get the net saving each year
along the life cycle of the project.Cost items include
equipment capital cost,depreciation cost,banking interest
cost,maintenance cost,operation cost and fuel cost.These
cost items are calculated as follows:

f-Electric Cost:Electric cost is the most effective item

in the cogeneration economy.The cost of purchased electric
energy composed in general of two main terms,demand charge
and energy charge.These two terms are the base for the
electric bill in addition to the power factor penalty
which will be applied to the energy charge .Electric cost
for loads higher than 500 KW will be estimated according
to the following formula which was developed by the
authors:

14

EC =b,*Zt B"-'ai*bi*Ztbn(X-Bn-'ai*Z))[ ltppf)

(15)
a-Capital Cost: In the feasibility analysis phase,capii.1
tal cost has to be calculated according to known specific
cost o r estimated specific cost.The specific cost of these Such that
n < 6 and
X >
1500 *Z
equipment varies according to vendors nationality and
and
X
>
E"-' ai *Z
quality ,as for example far east products are cheaper than
I=1
western products.Capita1 cost of a cogeneration facility
includes the cost of turbo-generation unit in addition to
where : EC is Purchased electric cost ,Z is Contracting
any modification to electric board and installation.The
cogeneration facility cost could be estimated as shown demand, X is Electric energy consumed in the year,ppf
Power factor penalty,ai(i=l-5)are equal to 1000,500,
below[5]:
10000,1000,1500hours respectively b is the demand charge
CC = SCC C
(11) (28.9 LE/KW in yea^-1989), and b, (lif1-6)is the ith block

price(Theywere51.8,48,8,42.5,36.5,27.7,23.7respectively

where:CG is the cogeneration facility cost,SCC is the in 1989).

cogeneration specific cost,and C is the cogeneration
The previous formula illustrates that unity load factor
facility capacity.
brings the calculation of electric cost to the lowest
price block which is 23.7 mils/kwh.
b-Depreciation Cost: The value of any equipment decreases by time.This decrease has to be considered as a cost
item in the analysis.The most common method for calciilating depreciation cost is the straight line nethod.The
depreciation cost will be related to capital cost and life
IV. OPTIMIZATION MODEL
cycle of equipment as shown below.
DCG = CG/LC

(12)

The objective function is to maximize accumulated

levelized benefit to cost ratio along the expected life
where: DCC is the depreciation costsand Lc is the life cycle of the generating units.The benefit to cost ratio
cycle years of equipment.
(BCR) is given by[6]:
c-Banking 1nterest:The profit of banking interest which
will be lost by this investment has to be considered as a
cost item in the evaluation of the payback period.The
yearly cost of this item will be the book value interest.
d-Yearly Maintenance and Operation Costs:Maintenance
cost depends mainly upon the spare parts cost which is
normally related to the capital cost of equipment by an
estimated percentage.The prices of spare parts are inis not the same as
creasillg by tine . ~ l price
~ i ~ increasing
inflation rate
it is considered as a price iridicator.0peration cost depends mainly upon the worker salaries which varies according country and plant conditions.Numbers of operating and maintenance staff depends upon
the size of the facility,so operation cost can be related
to the capital cost of the units for this particular
application.The increasing rates of salaries would tie
considered in the evaluation program.

LC
BCR= B

((R(k)-C(k))/(ltFLT)

K = l

)/c.c.

(16)

where:FLT is the inflation rate,LC is the life cycle

years,C.C.is the considered cost of capital,R(k) is
project revenue in year k,and C(k) is cost items sum in
year k.
The revenue R(k) Will equal to the difference between
purchased electricity costs with and without cogeneration
as shown
R(k) = EC(1,K)

EC(2,K)

(17)

where:EC(l,K) i s purchased electricity cost for year

(k)without cogeneration,and EC(2,K) is purchased electricity cost for year (k)with cogeneration.

The cost difference will be due to the difference in

three items :demand charge,energy charge,and Power factor
penalty.The cost of purchased electricity increases each
e-Yearly Fuel Cost: Input fuel to boiler is distributed year according to the tariff structure inflation.Electric
between power generation and processheating.The term fuel tariff historical data could be used to forecast the
charged to power FCP(i) for unit i will be calculated future electric prices by least square curve fitting tectiaccording to the steam flow rate and its enthalpy differ- n i n i i p s .ence ,as shown below:
The term C(K) represents maintenance ,operation and
FCP(i) = Q(i)
(H(1) - H(i))/Q(l)*H(l)
( 1 3 ) fuel costs.These costs are also increasing each year
according to their own inflation rates or prices indicaThe cost of fuel for each generation unit Will be esti- tors,and they should be calculated for each year as shown
mated according to the fuel price and total consumed fuel below:
-___ .
during the year of analysis as shown below:
-Maintenance cost represents spare parts cost each year
CPF(i) = FCP(i)*FP*TFC
(14) This cost will be calculated according to the following
equation:
where: CPF(i) is cost of fuel for generation unit (i),FP
K
is the fuel price,and TFC is total yearly consumed fuel.
MC(K)= CMT*(ltFLM)
(18)
-.-_1---

1386

5.1 Description of the Study system: Chemical process

requiring heating steam,consumes 20 ton/hr steam of
pressure 15 bar and temperature of 350 C, in addition to
55 ton/hr steam of pressure 5 bar and temperature 250
C.The boiler house is equipped with six boilers and two
-Operation cost represents working staff cost including steam turbine sets.0ne set drives compressor used as gas
salaries,social careland other related expenditures.The exhausters and the second set is used for electric power
cost operation will be calculated for each year according generation.The main data of the Turbo-generation set
to the following relation:
are:input steam conditions 14.7 bar & 350 C. Out put steam
k
conditions 4.5 bar 250 C(steam rate is Glton/hr).Design
(19) power is 3.2 MW.This system has fulfilled the following
WC(k) = CWT*(ltFLW)
tasks:
where: WC(K) is operation cost for year (K),CWT is operation cost required each year according to base year
-Ensuring the safety of batteries by avoidi~~gpower
conditions and it is estimated as a per cent of capital interruption
costland FLW is operation cost inflation rate.
-Ensuring power supply to other critical loads and re-Fuel cost is corresponding to generated energy and it ducing the electric energy cost by generating portion of
is calculated through energy flow balance analysis as the electric energy consumed.
shown by equations 13 and 14.Fuel cost will increase by
its inflation rate as shown below:
5.2-Planned Expansion: It is planned to install a new
k
industrial unit in the company.The erection of this new
FC(k) = PET*(l+FLF)
(20) unit will require additional steam.The steam required will
be in the average of 95-120 ton/hour.For the additional
where:FC(K) is fuel cost for year (K),PET is fuel cost steam required,two boilers will be added within the
required each year according to base year priceeland FLF contract of the new industrial unit.The rating of these
two boilers are 50 ton/hour and of pressure of 40 bar with
is fuel coat inflation rate.
The term(C.C )considers capital cost and its compound a temperature of 440 C for each one.
banking interest profit accumulated to the end of facility
*Expected Boilers Conditions:The future conditions of
life levelieed by inflation rate to the base year as shown
below:
the boilers will determine the availability of steam
C.C.= CGT*((ltR)/(ltFLT))Lc
(21) energy for cogeneration.The company can provide only 180
Ton/HR of steam as follows:
where:CGT is capital cost paid in base year,and R is
-100 Ton of steam of 40 bar &440 C from the new boilers
bank interest,FLT is inflation rate.
-80 Ton of steam of 15 barb 350 C from old boilers
The optimal solut'ion is the naximun BCR represented in
*Expected Electric Loading:The increase of electric
equation 16 by choosing a cogeneration facility of a
capacity sufficient to be used in shaving the maximum demand is estimated to be less than 3 MW,and in the
demand to the required demand 1evel.The loading to the average of 2 MW(company staff estimation).So the average
electric utility will be reduced to the level which demand will be less than 6 MW(2 MW expected increase,and
4 MW current average demand) while maximum demand will be
fulfills the task as shown in the following equations:
less than 10 MW.The expected maximum demand will be about
GT < ZM ZR
(22) 9 MW.The load profile of the plant after expansion is
expected to be as current loading profile but with a
different maximum demand.A computer program was also
developed to estimate(f0recast)the future electricity
tariff.
The operation of this facility will be limited to the
shaving level required and utility contracting conditio5.3 Cogeneration for Peak Shaving : The objective is to
ns.Economic evaluation may require changing shaving level test the feasibility of using cogeneration to supply peak
and generating units operation hours.Payback period could loading which means that the base loading would be fed
be calculated by considering additional costs which are through Electric Utility feeders.The electric loading to
depreciation costs and book value banking interest profit Utility in this case will be of higher load factor.Steam
.Payback period is that number of years sufficient to conditions in the factory under study determine the
recover capital investment considering all cost items available power generation.The levels of steam conditions
mentioned before as shown below :
will be as follows:
where: MC(K) is maintenance cost for year (K), CMT is
spare parts cost required each year according to base
year prices and it is estimated as a per cent of capital
costland FLM is inflation rate of spare parts cost.

CGT =

c'?R(K)-

k= 1

C(K)

DCG -BCG(K))

(23)

where: L is the payback period ,and BCG(K) is the facility book value banking interest for year (k)and is calculated by the following equation
BCG(K)= (CGT-K*DCG)*R

(24)

V. CASE STUDY
The industrial company tor coke and chemicals is one of
the major industrial enterprises in Egypt.The production
of this company includes the following products:industrial
and laboratory chemicals, tar and Electrode pitch,anmonium
sulfate fertilizer,and coke oven gas.

-Higher level of 40 bar and 440 C Its enthalpy is about

3308 KJ/KG.The quantity is about 100 Ton/HR.
-Second level of 15 bar and 350 C its enthalpy is about
3148 KJ/KG.The quantity is about 25 Ton/HR.
-Third level is of 5 bar and 250 C its enthalpy is about
2960KJ/KG.The quantity is about 85Ton/HR.
Through recording the electric power consumption during
three weeks representing the normal loading the loading
profile has been developed.This load curve was normalized
and adjusted to expected future maximum demand to get
demand occurrence probability curve shown in Fig.1, which
shows that the occurrence of loads higher than 7000KW is
less than 7X.The ratio between the average demand to the
peak of that profile (load factor) is about 0.57.If apart
of the peak demand is shaved, the load factor will
increase.The amount of shaving controls the load factor
improvement.Fig.2 shows that the load factor increases by
the increase of shaving amount.

1387

lo5

II __

95

__
/--

-.- .. ..-

..- .

- - ... . .. .. . .. - .

/
20. ___

. -.__I

2000
07

3ooo

5000

4000

6000

h
"
P1q.I
Y.I.U.

7000

8000

55

9000

M IT

OEEYI~IIC~

D...nd

1000 2000 3000 4000 5000 6000 7000 8000 9

S h a d P a n in Kr

Probability

Flq.2

hv.1

Load Factor V e r s u s

shaved Power

5doo 6000 7doO 8doo 9 i

SJUlId

XT
riP.4

tlq.3 Genermtcd and P u r c h a s e d

~ n e r g y .gainst

The use of cogeneration for peak shnvirtg has the advantages of improving load factor and decreasing contracting
demand,but it has the disadvantage of less operating time
and uneconomic use of the facility.The utility factor(defined by generated energy to available energy ratio)will
be low.To improve the this economy application'it is
required to increase the amount of shaving.Fig.3 shows
generated and purchased electric energy corresponding to
shaving amount.It is clear that using cogeneration for
peak shaving decreases the purchased energy but it doesn't
use all possible generation capability. Fig 4 shows the
load factor and generators utility factor for different
possible generators rating,which are equal to the shaving
amount.It is clear that load factor and generators utility
factors are improved as the shaving amount increase.Although Fig 3 shows that purchased electricity decreases but
this doesn't mean that electricity cost decreases as the
investment in cogeneration project has t o be recovered in
certain period of years.That cost should be considered as
a portion of yearly electricity cost.Fig 5 shows the
purchased electricity cost and total cost including
capital cost of equipment assuming a payback period of
five years at different shaving arnounts.It is clear that
increasing shaving amount improves the economy of the
facility,except that portion near to the peak where occurrence probability is very low for concerned application.It
is clear in Fig.1 that base load is about 4 MW,while peak
demand is semi-sharp and starts from 6.3 MW and reaches 9
MW.This type of loading requires the increase of shaving
to improve the application economy.Fig 6 shows generators
rating and corresponding payback period.This curve shows
that payback period decreases by increasing generators
ratings

Load a n d G e n e r a t o r u t i l i t y

n c t o r m V ~ ~ D Y~ e. n c r a t o r s R ~ L ~ , , ~

shaved power

Fig.5.The recommended system shown in Fig.7 satisfies the

process heat requirements which will be about 120 tons/hour of steam(35ton/hour of 15 bar and 350 C in addition to
85 yon/hour of 5 bar and 250 C).
*New Boi1ers:They will supply the process heat requirement by 100 ton/hour steam of 40 bar and 440 C.It's
enthalpy is 3309KJ/KG.This amount of steam will flow into
two paths:
-first path to be through first turbine is about 40ton/hr,the back pressure will be 5 bar and temperature will be
250 C.Its enthalpy is 2961KJ/KG.
-second path to be through second turbine is about 60ton/hr,the back pressure will be 15 bar and temperature will
be 350 C.Its enthalpy is 3149 KJ/KG.
*-Benefit to Cost Ratio:Economic factors have to be
known o r estimated to be considered in running the developed program The following are the estimated factors:
-banking interest was considered to be
8%
-inflation rate was considered to be
13%
-spare parts price inflation rate was considered to be
about 4%
-increasing rate of workers wages to be about 6%
-foreign currency exchange LE/US$ to be
3.3
-specific cost of cogeneration facility will be according
to equation(25)
SCC

K/G"

where : K = 340

(25)

and

n= 0.333

-power factor penalty will be reduced from 0.15 to

Recommended Cogeneration System:
condition
previous shaving analysis indicated that maximum penalty
Possible power generation will be the optimum as shown in -starting date for fiscal year 1992 is June 1991
-yearly operating hours is 8760 hours.
As

1388

110

TlP.5 V a r l o t l o a of Purehas*d L l . e t r l e l t y c o s t
ond 'Sotol E h c t r i c l t y C o s t Ylth A m o u n t of shmvlnq

3 50
3 50
350

350
350

30

50
I

4LD

G1

Existing cogeneration Unit

G2

Planned Cogeneration Units

d1->06

Existing boilers

87->88

new boilers
Fig.7

Planned Cogeneration System

1389

20-

01992 1994 1996 1998 2000 2002 2004 2006 2006 2010 2
1 ra

FIG.0. .PURCHASED ELECOST WITHBWITHOUT

COGENERATIONBPROFIT ALONG LIFE CYCLE

FIG. 9 Y.PROFlT,BENEFIT BLNELIZED

BENEFIT ALONG LIFE CYCLE OF PROJECT

, I
0.1
I l q . 1 0 P e a k shivins Cost a n d B a n e Load Cost

\rer.u.

coqcneration P O Y e l ( 1 9 9 1

FIG

Price.)

0.2

0.3
IDZJ, F.4TOR

0.4

0.5

0.6

WADFACTOR&ELE.AIERAGE PRICES
AC.191 PIKES H1M D.CH.4RGE=bO/lfl

.I1

..

98&0.6

__

0.85
LOM FACTDR

0.65 0.7 0.75 016

019

0.95

1
riq.13

Peek Shmvinq Coat nnd 8.m.

Lead Cost versus

Cegenrr*tion Power (1991 P r l c e m YlthD.Charqe-bo/Lrl

1390

The main results of running the developed program are

summarized as follows:

load factor which was 0.56 increased to 0.8075

reduced from 9000 KW to 2794.8 KW
- The recommended cogeneration facility consists of two
generating units ,their ratings are:

- Contracting demand

G(1) First generating unit

G(2) Second generating unit

Payback period
Actual benefit to cost ratio
Relative benefit to cost ratio
(This ratio take into consideration
banking interest )
- Total levelized benefit
- Total capital cost

= 3.67 MW
= 2.53 MW

= 3.0 years
=

8.63
21.35
inflation rate and

= 41.22 M.L.E.
1.447 M US$
= 4.2
M.L.E.

This suggestion leads to an increase in per unit electricity prices for low load factor up to more than 120LE/KWH for load factor less than 0.1 as shown in Fig.11,while it will be less than 0.1 LE/KWH for load factors
higher than 0.85 as shown in Fig.12.The test of this
suggestion to the studied Company for Coke and Chemicals
indicated that the total cost of electricity decreased by
using cogeneration facility either in supplying base load
or in shaving peak demand.Fig.13 shows that the decrease
of cost is steeper in the first case than in the second
applicationland overall electricity cost is higher in the
second application.The electricity cost for first application starts to incrense sharply at about 4500 KW generating power,while cost for peak shaving continues its
decrease as generation rating increases,and starts to be
less than first application electricity cost in the range
5000 KW and higher,where peak shaving by cogeneration will
be more economic than supplying the base loading

VI. CONCLUSIONS
Fig.8 shows the expected evolution of factory purchased
electricity without and with cogeneration project in
addition to yearly profit.It is clear that these values
are increasing along the life of the project while Fig.9
shows that even that yearly profit and benefit are increasing but levelized benefits are slightly decreasing
near the end of the project life.

Discussion:Cogeneration facility could be used as a

main power supply which is the normal case keeping Electric Utility feeders to be loaded by peak loading .The
second application for cogeneration facility is to supply
peak loading keeping Electric Utility feeders to supply
the base 1oading.The first application decreases Electric
Utility loading factor with a high value for local
generation utility factor while the second npylication is
of reverse result.Economics of the application determine
the best solution.Egyptian tariff encourages electric
loading to be higher than 0.57,but the first application
is still m r e economical than the second as shown in
Fig.lO,which was prepared according to tariff structure in
year 1991.The figure showed that both application total
electricity costs decrease by the increase of cogeneration
rating ,but supplying base loading by local generation is
still more economical than shaving peak.

The application of the developed program to the

studied Company for Coke and Chemicals has indicated that
it is possible to have technically and economically
feasible application for peak shaving by cogeneration
fac i1ity

The analysis and discussion has indicated that according

to the applied tariff structure and the case study loading
profile the cogeneration facility as a main power supply
to the base loading w i l l be of higher economy than peak
shaving application.
The suggestion of modifying tariff structure by relating
demand charge to load factor has divided the economy of
cogeneration facility application into two rating regions
as shown for the case study.In the first region the usage
of cogeneration facility for base loading supply could be
more economic than for shaving ,while in the second region
the shaving application could be more economic than base
load supplying.
VIL. REFERENCES

Different modifications for tariff structure have been

tried,the best suggestion was to float the demand charge(bo in equation 15) to be related to load factor such
that the demand charge would be high for low load factor
and to be normal for high load factor.The sugge6ted demand
charge ratecould be calculated according to the following
equation.
bo = bu / LF

(26)

where: b is unity load factor demand charge rate ,and

LF is loadrng factor to Utility network.

M.Wayne and C.Gellings,"Demand planning in the

80's",EPRI Journal December 1984.
J.E.Runnels and D.W. Hyte,"Evaluation of Demand Side
Management" Proceeding IEEEIVol.73,NO.10,0ctober,1985.
K.Stern and B.Wait,"The potential for load management
in selected industries" EPRI EA-1821-SY Project 1212.3
April 1981.
"COGENERATION TECHNOLOGY" Short course,University of
Wisconsin-Madison, Dallas,Texas,January 1988.
F.E1-Mahelwi and H.E1 Nakib,"Cogeneration report of
EL-Nasr Company for Coke and Chemicals",Report,
Organization for Energy Planning(OEP),Dec. 1988.
S.Anis, "Economic Evaluation of Energy Conservation
Projects" ,Energy Conservation short course, OEP,
Cairo,1989.

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