Technical,Economic and Exgergeoconomic Assesment of Small Scale

Biomass Combine Heat and Power Plant

Asbtract
A technical, econmic and exergeoconomic is developed in order to verify the
economic feasibility of CHP as a technological solution to assure the eenery demand of
its productive process.

The assesment began with the attainment of heat and elevtricity demand of the
process. Second consdiering the current biomass and the existing bolier upgraded for
superheat steam generation, a small renkie cycle is defined for the CHP. A
themodynamic model of a thermal cycle of CHP was created in Egineering equation
slover is using to simulate the interaction and intergration with the production porcess
and external interface.

The simukation for steady state operation consdiered two hypothesis: selling or
not selling of electricity to the grid and burning wood chips or vegetal carbon residue
as fuel. For feasibilty assesment a cash flow is elaborated in microsft excel computing
the conventional financial indicator of the CHP plant implementation:

Net present value NPV

Internal rate of return IRR
Pay back PB

For the exergoeconomic assement is applied the thermoeconomic structural

theory. The result shown the mass, energy and entropy balance.

The main conclusion

1. There are no feasilbity of the CHP palant implementation at the current

electrivty tariff and fule price
2. The vegetal carbon residue is the fuel option with greater economic viablity
3. The value of electricity cost calculated in the exergoeconomic analysis are
coherent with the economic analysis one and are higher than the current price
of electricity purchased
4. The cost of the CHP plants prodcut increase as the exergetic efficiency of the
energy conversion process decrease
I. INTRODUCTION
National Electric system is composed primarily of hydroelectric plant, most of the
energy generation in year 2008 and 2017 will be carried out by thermal power plants
and their energy production forecast participation is distributed as follow

Natural gas ( 6,8 %-7,9%)

Coal ( 1,4%-2,1 % )
Fuel oil (0,9%-5,7%)
Diesel ( 1,1% to 1,0%)
Biomass (1,0% to 2,7%)

Fossil fuel will account 10,2%-16,7% increment and biomass will almost triple its
share. There are several sector that use a high heat demand such as petrochemical,
sugar alcohol, steel, paper adn pulp have used cogenertaion systematically in their
facilities and in new project. Howevet there are small to medium capcities that could
benefit from the CHP to increase their competitiveness. It has been estimated the
elecetricity production will increase from 41,3 TW/h to 100,3 TW/h in 2017.

It is believed that biomass can be further exploited no only in sugar cane industry
but a small scale facilties whose production processes have small and medium
capcities, there is a large avalibality of biomass thorughou the country various soruce:
agriculture waste, furniture waste, reforestation residue.

The study of the CHP plant implementation for cogeneration of lectricity biomass
in small scale is to analyse the feasibilty in industry such as flour indsutry, animal fat
for biodiesel, this focus has a steam generation system to assure process heat demand
and it is connected to heat grid using the power from local concessionaire to gurantee
the process electricity demand

The demand of industrial process in focus have following charateristic

At high value of heat demand there is proportional high value of electricity

demand
There are only three level of energy consumptoin (high, medium, low)
At any level eenrgy demand at steady state of operation, the demand value
can be considered constant

In order to assure the heat demand of the process the current heat generation
system consit of a boiler that produces ssaturated steam to the industrial process from
the burning of wood chips and vegetal carbon residues it has the psossibilties of
installing a super heater to it. This boiler has a combsution air preheater and a
furnance with high volume of post cimbustion chamberto ensure high combustion
efficiency. To guarantee the electricity demand of the process, below is the table of
the boiler perfomace

FIg 1. Heat demand & electricity demand

Table 1. Current energy supply

II. APPROACH
In the analysis of the integration of CHP plant with the industrial process, the
sale of electricity with the boiler operation at the nominal steam flow rate all time in
order to maximize the surplus of electricity sale to the grid was initially considered.
Later, the hypothesis of not selling electricity was also considered, generating the
minimum amount of electricity minimum necessary to supply the electric demand of
the process. For both alternatives new parameters of steam generated in the boiler
(2,620 kPa pressure and temperature 300C) are considered during the calculation of
thethermalcycle because it is being operated below the nominal parameters.The
feasibility assessment was carried out for both types of biomass mentioned above:
1. Woodchips
2. vegetal carbon residues.
To complete the three.criterion feasibility assessment of the CHP plant
implantationwereincluded:
Base case: steam generation in the boiler with current efficiency of 84%,
considering only the additional cost with biomass consumption due to the new
operating condition;
Increasing the efficiency of the boiler to 90%,considering only the additional cost
with biomass consumption due to the new operating condition
Increasing the efficiency of theboiler to 90%,considering only the additional cost
with biomass consumption due to the new operating condition, adding the income
for the commercialization of carbon credits.

This way, a total of 12 variants were analyzed in the technical and economic
assessment of small scale biomass CHP plant implementation Four variants had
thermodynamic character,derived from two hypotheses,selling or not selling electricity
to the grid and the use of wood chips or vegetal carbon residues in the boiler as fuel.
Three variants had financial character, which analyze both the improvements to increase
the parameters of steam and the boilere fficiency and the use of financial incentives
such as the possible sale of carboncredits. Below shows, the full scope of the12 variants
that were examined.

The peculiarity of the heat demand has set the use of a condensing turbine with
extraction at the controlled pressure of 950 kPa, defining the configuration of the
thermalcycle of CHP plant shown in Fig.3.At low level heat demand, the extraction
steam flow is minimum and electricity production is maximum. At this operation
condition, it is necessary to condense the maximum amount of steam.The unavailability
of water at the industry site location forced the use of an air cooled condenser. The
calculation of the air flow for condenser cooling was carried out considering data from
industrial ventilation systems provided by. Steam turbine manufacturers that are
consulted to supply the turbine for the project emphasized that, for cooling, it is
mandatory a minimum of 20% of the nominal steam flow at the low pressure turbine
outlet.

In order to assure the steam extraction for the process to reach the saturation state
when it arrives to the process, the CHP thermal cycle incorporates a desuperheater,
which reduces the temperature of the steam down to 3 or 5C above the temperature of
saturation to compensate the heat losses in pipes. The steam transfers heat to the process
by indirect heat exchange, returning to the CHP plant demineralized condensate to the
deaerator tank, which has the function to remove the oxygen and carbondioxide
dissolved in the water. The thermal cycle of the CHP plant has regenerative high
pressure water preheater after the feed waterpumpaiming at increasing the water
temperature at the boiler inlet. This reduces the fuel consumption in thermal cycles with
similar configurations, which allows the boiler in question to increase its efficiency by 6
percentage points.The condensate at preheater outlet is rained by a steam trap to the
deaerator tank.
III. THEORITICAL AND METHODOLOGY
Exergy cost formula can be expressed in the single product plant, boiler is used
for heating

= +

= =

= value of the boiler output per unit time

= cost of input energy per unit of time

Z= capital investment rate

=the rate of heat output and the corresposnding thermal exergy rate

=unit cost of energy and exergy respectively

Cost balance for boiler

+ + = + + +

Become

4 + 5 + = 1 + 2 + 3 +

Where E and Z is known before the exegetic and economic analysis, c1 is the cost per
exergy unit entering stream is also regarded as known

C3=0

fuel water E3=5MW LP steam

Boiler=ED 60 MW
HP Steam
T2=466,1 C
E1=100MW m=26.151kg/s W
E2=35 MW
C1=$ 4/GJ p2 =60 bars

Zb= $0.3/S

Zt=$ 0.02/s W/10MW

Fig 2. Simple Cogen System consisiting of a boiler

 Aiming at maximal use of the energy taht exist in the fuel, the operation of CHP
plant is assumed to follow the heat demand curve. In this case selling the elctricity, one
must assure the heat demand and the produce as much electricity as possible. And more
in case of not selling electricity it must be assured the heat demand and produce
electricity with the minimum deficit in relation to the power demand process. Heat and
electricty demand curved is sent to steam turbine supplier for obataining information
about technical spesification, mass and energy balance, price and etc.

Two manufacturere of turbine ENGECROL and TGM are able to operate close
to the heat deamnd curve but the first generates more electricity than the second one.
ENGERCROL steam turbine is seltected to be installed at CHP plant under the
hypothesis of selling electricity. And TGM for note selling electricity

A thermodynamic simualtion model of the rankine cycle is performed throguh

the sofware Enginering Equatiuon solver to predict the perfomance of the CHP plant for
both hypothesis. From the information above by ENGECROL with constant flow rate of
admission the EES can define correlation between Net work and mass flow of the steam
extraction in turbine

= 3345,28 542.982 + 10.1732 2

For the economic and sensibilty analysis the estimated capital investment does not
evaluate the bolier beacuse it exist in the plant. The installation of steam superheater
was considered in the item other equipment the avaiblity factor for the cycle is
assuemd to be 95% in 8460 h per year
The cashflow for each of the hypotheses,considering the two types of biomass, the
current price of electricity and the interest rate, was prepared for the base cases to obtain
the valuesof:
NPV(NetPresentValue)
IRR(InternalRate ofReturn)
PB(PayBack).

New results are obtained considering the same values but,with:1. Income of the boiler
efficiency with 90% And 2. Income of the boiler efficiency at 90% plus increase value
at selling the carbon credits

As well as we confirmed later, the expectation of the best results of the Rankine cycles
performance is with the variants 3, 6, 9 and 12, owed mainly to the increase of the
boiler efficiency. As shown in Table V, for each one of these variants will be simulated
hree operation modes seeking to assist the demand of heat of the process. To perform an
exergetic cost analysis, it is useful to define a productive or causal structure(Fig.4), the
counter part to the physical structure used to calculate the energy and the exergy flows
of a systems[14]. A productive structure shown in Fig. 4, is a schematic representation
of the plant based on the Fuel. Product concept [15]. Flows that connect components to
another are componet fuels and product but not necessarily physical flow. When
defining productive structure, component fuel and product must be define in terms of
exergy productive and dissipative unit, junction and bifurcation (separation unit) are
elements which make up a productive structure.
Productive units have the capacity for energy
Transformations which consume resources and produce one or more energy products
required by a systemsenvironmentor by another unit. The goal of dissipative units is
preparing a product, disposing of wastes or interacting with productive unitsinorder,for
example to improve system efficiency,asin the case of the condenser. Given that each
unit and each junction has a primary product flow, the total numbers of these flow
sequals the total number of internal products whose unit exergetic cost must be
calculated.
For the calculation of the unit exergetic cost a thermoeconomic model based the
structural theory of athermoeconomic is developed. The thermoeconomic model is
mathematical representation of the prodcutive structure of a system. Reference shows
deatled information about fule-prodcut definition, and the thermoeconomic model
developed for the exergetic cost analysis. The flow of theproductive structure shown on
the cycle who interact with external interface

Flow1:biomass consumed as fuel

Flow2: air for the biomass combsution in the boiler
Flow 10:Electricity produced for the process
Flow 12: electricity consumed from the grid
Flow 43: condesate water returned from the process
Flow 54: produced for the process

The mass and energy balances obtained with the thermodynamic simulation model were
used as input for the economic analysis of the implementation of CHP plant and to
carry out the feasibility study and the exergoeconomic assessment. Results of
thermodynamic, economic, sensibility and exergetic cost calculations are presented and
discussed in the next topic.
IV. RESULT

As examples, Table VI shows the results of the mass and energy balances of the
thermal cycle modeling obtained with the thermodynamic simulation model elaborated
in the ESS for the hypothesis without selling electricity, using vegetal carbon residue as
fuel, on the condition of maximum heat demand of the process ( operation mode 10).
The increase of water temperature in the boiler feed from 80 to 137 cause the increa of
boiler efficiency from 84% to 90%
 Under the hypothesis of selling electricity the fuel consumption is the highest
one, and with this option one has the highest values of electricity generation efficiency
and income due to the electricity sale. On the other hand, under the hypothesis of not
selling electricity, the fuel flow is reduced, the energy utilization factor is better with a
high

Efficiencyofheatproductionandlowefficiencyofelectricity generation but, with no

production of electricity for selling and no income from selling electric energy.The
difference in the energy utilization factor in both hypotheses is mainly a consequence of
the heat loss in the condenser due to the greater steam flow in the low pressure turbine
section for selling electricity. The net and useful powers are presented in Table VIII

together with the mass flow of steam sent to the process for different levels of
process heat demands. At operating condition 3, there is a significant difference
between the net

andusefulpowers,resultinginhigherenergyconsumptionin the condenser.air fans due to

the increase in air volumetric flow rate for cooling of the air.cooled condenser due to the

higher thermal load in the condenser. InFig.5it is possible to observe the

availability of surplus energyforselling,and the deficit of electricity that must still be
purchased for both, selling and notselling hypotheses, considered in the study.

Fig.5 Surplus or electricity deficit in theCHP plant operation accordingly to the heat
demand of the process.
 The results of cash flows carried out by the economic analysis for the wood chip
biomass were: NPV (i) R$ .6.36 million for electricity selling hypothesis, and (ii)
R$ .0.98 millionforthehypothesisofnotsellingelectricity.The results obtained in the
variants analyzed allow the conclusion that there is no feasibility for the implementation
of the CHP plant using this fuel. The results of cash flows carried out by the economic

Analysis for vegetal carbon residue biomass are summarized in Fig. 6 and Fig. 7.
These show that the feasibility of implementation of CHP plant is only achieved under
predefined conditions in variants 6 and 12, which are: the boiler efficiency of 90% and
commercialization of carbon credits.

The vegetal carbon residue is the fuel option with the greatest economic
feasibility,which is given by its energy cost of R$10.61GJ.1,less than the wood chips
that costs R$18.59 GJ.1. In a fuel option without cost, for example, when a residue of an
industrial process is used as fuel, the proposed CHP plant increase its feasibility even
more if the burning of waste fuel is already paid.According to the cost of wood ranges
about US$1.2GJ.1,which for a dollar conversion rate which the value is the lower than
the actual fuel
 Adopting this cost for the fuels that were considered,for the selling electricity
hypothesis,we have:(i) value for the woodchips of R$0.02324kg.1(ii) the NPV is
R$9.30million, (iii) the IRR is 30.3% and(iv) the PB is 5.0 years. For the hypothesis of
not selling electricity the results obtained are: (i) the NPV is R$ 2.19 million, (ii) the
IRR is 17.0% and (iii) the PB is 9.0 years. For the vegetal carbon residue as fuel with a
50% fuel price reduction, from the actual price, and considering the hypothesis of not
selling electricity, the obtained results are: (i) the NPV is R$ 2.33 million, (ii)the IRR
is17.46% and (iii) the PB is 8.8years. In the hypothesis of selling electricity, these
values are:R$8.76 million,28.75% and 5.3years, respectively. The sensibility economic
analysis, based on the variation of NPV, presented the following order from largest to
smallest influence on the profitability of the CHP plant implementation using wood
chips as fuel, under the electricity selling hypothesis: (i) price of fuel (ii) interest rate,
(iii) rate of EE, (iv) capital investment cost and (v) carbon credits. For the

electricity not selling hypothesis the order from largest to smallest influence was:
(i) rate of EE, (ii) price of fuel, (iii) interestrate ,(iv)capital investment and(v)
carboncredits.For vegetal carbon residue, the following order of influence for the
electricity selling hypothesis wa sidentified:(i)rate of EE, (ii)price of fuel,(iii)interest
rate,(iv)cost of investment and (v)carboncredits. For the electricity not selling
hypothesis the order of influence was: (i) interest rate, (ii) rate of EE, (iii)
priceoffuel,(iv)theinvestmentcostand(v)carboncredits. Another aspect that has a great
impact on the viability of the proposed CHP system is the rate of selling electric energy.

For vegetal carbon residue with a tariff of electricity of R$ 337.5MW.1h.1(50%

above the considered), and considering thehypothesisofselling electricitytheresultsare:(i)
theNPV is R$ 19.27 million, (ii) the IRR is 51.05% and (iii) the Pay Back is
3.3years.For the hypothesis of not selling electricity these values are: R$ 4.22 million,
23.64% and 6.4 years, respectively
Result of exergetic cost analysis operation mode 10
V.CONCLUSIONS

The technical and economic assessment that was carried out at a small scale
biomass CHP plant industry allows the following conclusions:
To decide whether to sell or not to sell electric energy in the first stages of
the assessment of CHP plant implementation is a relevant aspect of the
investment. For the particular case assessed in the study, the turbine required
for the electricity selling hypothesis is unsuitable for the other hypothesis,
mainly because at low admission of steam flow its performance fall;
The thermodynamic calculations demonstrated that increasing the boiler feed
water temperature improved the boiler efficiency, reducing the fuel
Consumption in the adoptedRankineCycle;
Under the hypothesis of selling electricity the fuel consumption was the
highest, as well as the electricity generation efficiency and the income due to
the electricity sale. On the other hand, the energy utilization factor was
low given by the heat loss in the condenser due to the greater steam flow in
the low pressure turbine section that flowed to the condenser
Under the hypothesis of not selling electricity, the fuel flow was lower and
the energy utilization factor was higher due to the high efficiency of heat
production (less heat loss in the condenser). However the electricity
generation efficiency was lower if compared with the hypothesis of selling
electricity;
The use of an air cooled condenser increased the auxiliary power
consumption in the operation conditions with high thermal load in the
condenser (more electricity generation);
The economic assessment results obtained in the variants analyzed led to the
conclusion that in the current economy scenario there was no feasibility in
any of the hypotheses considered for the implementation of the CHP plan
tusing woodchips as fuel;
The economic assessment results obtained in the variants analyzed led to the
conclusion that the feasibility of the implementation of the CHP plant using
vegetal carbon residueasfuel,inanyofthehypotheses,is only achieved under
predefined conditions which are: the boiler efficiency of 90% and
commercialization of carbon credits;
This means that the vegetal carbon residue is the most attractive fuel for the
electricity selling hypothesis (either future process upgrading, or attractive
electricity prices). By coincidence,from a thermodynamic point of view,this
fuel obtained the best values of the energy conversion index in kWht.1of
biomass;
The sensibility economic analysis revealed that the financial variables that had the
 most influence on the profitability of the small scale biomass CHP plant
implementation were the price of fuel,the interest rate and the price of electricity
purchase
At the minimum mass flow of extraction in the steam turbine, is high the amount
of steam that flows to the condenser, increasing the irreversibility in the CHP
plant and the values of the electricity and heat costs. The operation modes with
the minimum mass flow of extraction in the steam turbine are not feasible due to
the high costs registered for both fuels and hypotheses that were assessed;
The minimum values of electricity and heat costs were attained using vegetal
carbon residue as fuel for the hypothesis without selling electricity with the
maximum mass flow of extraction in the steam turbine;
The use of small scale biomas sCHP plant was conditioned to incentive
programs for its feasibility, which could include: very low biomass prices,
differentiated tariffs regarding the commercialization of the surplus electricity
Together with long term contracts that guarantee theselling of the electricity
produced, easy access to the carbon credits market and reduced taxes on capital
investment for the electricity generation equipment.