Industrial Application Guide For Innovative Combined Heat and Power EEA Energy and Environmental Anaylsis and Exergy Partners Group, Jan'2004

Industrial Application Guide For Innovative Combined Heat and Power
Prepared for: Energy Solutions Center & U.S. Department of Energy Prepared by: Energy and Environmental Analysis, Inc. and Exergy Partners Corp.
January 2004
Energy Solutions Center

The Energy Solutions Center is a 501(c)6 technology commercialization and market development organization representing energy utilities, municipal energy authorities, and equipment manufacturers and vendors. The mission of the Center is to accelerate the acceptance of and deployment of new energy-efficient, gas-fueled technologies that enhance the operations and productivity of commercial and industrial energy users, and improves comfort and reliability for residential energy users. The Energy Solutions Center and its members identify, evaluate, and prioritize new market opportunities and then implement market development initiatives designed to move products from R&D success to broad market acceptance. Center members and staff have successfully brought to market technologies such as engine-driven air compressors, vacuum furnaces, boilers, large tonnage chillers, and small package air conditioning equipment. The Centers initiatives fund, facilitate, and manage on-site technology demonstrations at end-user facilities. Additionally, the Center creates marketing materials, case studies, training manuals, decision analysis software, and other products designed to facilitate the promotion and application of these new technologies. The Centers success is based on the development of market-driven technology consortia consisting of energy companies, equipment manufacturers/vendors, trade allies, and energy users. The consortia are responsible for the implementation of the Centers programs. The Center has formed a Distributed Generation Consortium supported by fourteen utility members. The Consortium provides market development support for distributed generation technologies. The Centers Technology and Market Assessment Forum is a highly sought-after opportunity for manufacturers and vendors of new gas-fueled equipment to address the nations utilities and seek market entry support. Energy utilities employ technical and marketing specialists responsible for building relationships with thousands of commercial and industrial customers. These specialists serve on the Centers technical and marketing committees. The Center is thus uniquely positioned to promote the use and sale of new technologies to thousands of end-users seeking to increase productivity, reliability, energy efficiency, and comfort. A board of directors oversees the Center, which operates with an Executive Director and staff of four professionals. Offices are located in Washington, DC. For additional information, see www.escenter.org. Legal Notice: "This report was prepared by Energy and Environmental Analysis, Inc. (EEA) and Exergy Partners Corp. as an account of work cosponsored by UT-Battelle/DOE, the Energy Solutions Center (ESC), and certain ESC members. Neither UT-Battelle/DOE, the ESC, members of ESC, EEA, Exergy Partners nor any person acting on behalf of either; "a. Makes any warranty or representation, express or implied with respect to the accuracy, completeness, or usefulness of the information contained in this report, or that the use of any information, apparatus, method, or process disclosed in this report may not infringe privately-owned rights, or "b. Assumes any liability with respect to the use of, or for damages resulting from the use of, any information, apparatus, method, or process disclosed in this report."
Application Manual
Table of Contents
TABLE OF CONTENTS ............................................................................................................................................III LIST OF TABLES..................................................................................................................................................... VII LIST OF FIGURES .................................................................................................................................................... IX 1. INTRODUCTION .....................................................................................................................................................1 1.1 1.2 OBJECTIVES OF APPLICATION MANUAL ...........................................................................................................1 USE OF APPLICATION MANUAL ........................................................................................................................2
2. COMBINED HEAT AND POWER BASICS...........................................................................................................3 2.1 BENEFITS OF CHP ............................................................................................................................................4 2.1.1 Energy Benefits......................................................................................................................................4 2.1.2 Environmental Benefits..........................................................................................................................4 2.1.3 Economic Benefits .................................................................................................................................6 2.1.4 Ancillary Benefits...................................................................................................................................8 3. CHP MARKET..........................................................................................................................................................9 3.1 CURRENT CHP INSTALLATIONS .......................................................................................................................9 3.1.1 Commercial/Institutional CHP Markets ..............................................................................................11 3.1.2 Industrial CHP Market ........................................................................................................................17 3.2 FUTURE MARKET OUTLOOK ..........................................................................................................................22 3.2.1 Industrial CHP Market Potential.........................................................................................................22 3.2.2 Commercial CHP Market Potential.....................................................................................................25 3.2.3 Factors Impacting Market Penetration................................................................................................25 4. CHP TECHNOLOGIES ..........................................................................................................................................29 4.1 RECIPROCATING ENGINES ..............................................................................................................................29 4.1.1 Technology Description.......................................................................................................................31 4.1.2 Performance ........................................................................................................................................34 4.1.3 Emissions .............................................................................................................................................34 4.1.4 CHP Applications ................................................................................................................................37 4.1.5 Thermal Energy Generation ................................................................................................................37 4.1.6 Current Market Applications ...............................................................................................................39 4.1.7 CHP Potential......................................................................................................................................40 4.2 MICROTURBINES ............................................................................................................................................40 4.2.1 Technology Description.......................................................................................................................42 4.2.2 Performance ........................................................................................................................................46 4.2.3 Emissions .............................................................................................................................................48 4.2.4 CHP Applications ................................................................................................................................49 4.2.5 Thermal Energy Generation ................................................................................................................50 4.2.6 Current Market Applications ...............................................................................................................50 4.2.7 CHP Potential......................................................................................................................................50 4.3 GAS TURBINES ...............................................................................................................................................51 4.3.1 Technology Description.......................................................................................................................52 4.3.2 Performance ........................................................................................................................................53 4.3.3 Emissions .............................................................................................................................................55 4.3.4 CHP Applications ................................................................................................................................57 4.3.5 Thermal Energy Generation ................................................................................................................57 4.3.6 Current Market Applications ...............................................................................................................59
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4.3.7 CHP Potential......................................................................................................................................60 4.4 FUEL CELLS ...................................................................................................................................................60 4.4.1 Technology Description.......................................................................................................................62 4.4.2 Performance ........................................................................................................................................67 4.4.3 Emissions .............................................................................................................................................69 4.3.4 CHP Applications ................................................................................................................................69 4.3.5 Thermal Energy Generation ................................................................................................................70 4.4.6 Current Market Applications ...............................................................................................................71 4.4.7 CHP Potential......................................................................................................................................71 4.5 STEAM TURBINES AND RANKINE BOTTOMING CYCLES..................................................................................72 4.5.1 Applications .........................................................................................................................................72 4.5.2 Technology Description.......................................................................................................................73 4.5.3 Types of Steam Turbines ......................................................................................................................76 4.5.4 Steam Turbine Design Characteristics ................................................................................................79 4.5.5 Process Steam and Performance Tradeoffs .........................................................................................81 4.5.6 Performance and Efficiency Enhancements ........................................................................................81 4.5.7 Capital Cost .........................................................................................................................................82 4.5.8 Maintenance ........................................................................................................................................84 4.5.9 Fuels ....................................................................................................................................................84 4.5.10 Availability...........................................................................................................................................84 4.5.11 Emissions and Control.........................................................................................................................84 4.5.12 Organic Rankine Cycle........................................................................................................................87 5. INDUSTRIAL PROCESSES AND APPLICATIONS TO INTEGRATE CHP SYSTEMS ..................................89 5.1 HOT WATER/DIRECT CONTACT WATER HEATERS .........................................................................................90 5.1.1 Process Uses........................................................................................................................................90 5.1.2 Integrating for CHP.............................................................................................................................91 5.1.3 Currently Available Systems ................................................................................................................91 5.2 INDIRECT HEATING OF THERMAL FLUIDS ......................................................................................................92 5.2.1 Process Uses........................................................................................................................................92 5.2.2 Integrating for CHP.............................................................................................................................93 5.3 DIRECT HEATING/DRYING .............................................................................................................................94 5.3.1 Process Uses........................................................................................................................................95 5.3.2 Integrating for CHP.............................................................................................................................97 5.4 INDIRECT AIR/GAS HEATING .........................................................................................................................97 5.4.1 Process Uses........................................................................................................................................97 5.4.2 Integrating for CHP.............................................................................................................................98 5.5 ABSORPTION COOLING...................................................................................................................................98 5.5.1 Process Uses........................................................................................................................................98 5.5.2 Integration for CHP.............................................................................................................................99 5.6 DEHUMIDIFICATION .......................................................................................................................................99 5.6.1 Process Uses......................................................................................................................................100 5.6.2 Integration for CHP...........................................................................................................................101 5.7 EXHAUST GAS FOR COMBUSTION AIR..........................................................................................................101 5.7.1 Processes Uses...................................................................................................................................102 5.7.2 Integration of CHP Systems...............................................................................................................102 6. SITE ASSESSMENT, DESIGN, AND INSTALLATION TIPS ..........................................................................105 6.1 UTILITY DATA .............................................................................................................................................107 6.2 SITE DATA ...................................................................................................................................................108 6.3 ENERGY USE DATA ......................................................................................................................................108 6.3.1 Hot Water/Direct Contact Water Heaters .........................................................................................109 6.3.2 Indirect Heating of Thermal Fluids ...................................................................................................109 6.3.3 Direct Heating/Drying Direct............................................................................................................109 6.3.4 Indirect Air/Gas Heating ...................................................................................................................109 6.3.5 Refrigeration/Freezing.......................................................................................................................109
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6.3.6 Dehumidification ...............................................................................................................................110 6.3.7 Use of Exhaust Gas as an Oxidant (including boiler systems) ..........................................................110 6.4 COMPANY-SPECIFIC DATA ...........................................................................................................................110 6.5 CHP EQUIPMENT DATA ...............................................................................................................................111 6.5.1 Cost Estimate .....................................................................................................................................112 6.6 TECHNICAL FEASIBILITY ASSESSMENT ........................................................................................................113 6.7 ECONOMIC FEASIBILITY ASSESSMENT .........................................................................................................116 6.8 RULES OF THUMB FOR CHP ENGINEERING AND INSTALLATION COSTS .......................................................116 6.8.1 Site Feasibility Screening ..................................................................................................................116 6.8.2 General Equipment Costing...............................................................................................................117 7. EVALUATING ECONOMIC VIABILITY ..........................................................................................................119 7.1 SIMPLE PAYBACK ANALYSIS .......................................................................................................................119 7.2 LIFE CYCLE COST/NET PRESENT VALUE ANALYSIS ....................................................................................119 7.3 DATA NEEDS OF ECONOMIC EVALUATION ...................................................................................................120 7.4 ILLUSTRATIVE EXAMPLE ASSESSMENT OF CHP ECONOMIC VIABILITY .......................................................122 7.4.1 Simple Payback..................................................................................................................................122 7.4.2 Life Cycle Costs/Net Present Value ...................................................................................................123 7.4.3 Other Considerations.........................................................................................................................124 7.5 ENERGY PRICE VOLATILITY IN CHP APPLICATIONS ....................................................................................124 7.5.1 Sources of Volatility...........................................................................................................................124 7.5.2 Risks and Hedging Mechanisms..............................................................................................................125 7.5.3 Impacts of Energy Price Volatility.....................................................................................................126 8. CASE HISTORIES................................................................................................................................................129 8.1 FAITH PLATING SUMMARY DESCRIPTION ....................................................................................................129 8.1.1 Description ........................................................................................................................................129 8.1.2 Operation and Data Collection .........................................................................................................132 8.1.3 Results and Key Data.........................................................................................................................133 8.1.4 Benefits ..............................................................................................................................................136 8.1.5 Recommendations ..............................................................................................................................137 8.1.6 Acknowledgements.............................................................................................................................138 8.2 C&F PACKING SUMMARY DESCRIPTION ......................................................................................................138 8.2.1 Description ........................................................................................................................................138 8.2.2 Operation and Data Collection .........................................................................................................141 8.2.3 Results and Benefits ...........................................................................................................................141 8.2.4 Additional Considerations:................................................................................................................142 8.2.5 Acknowledgement: .............................................................................................................................142
Application Manual
List of Tables
Table 3-1: CHP Fuel Use by Sector............................................................................................... 9 Table 3-2: CHP Technology Type vs. Fuel ................................................................................. 10 Table 3-3: CHP Size Range vs. Fuel Type .................................................................................. 10 Table 3-4: CHP Technology Type vs. Size Range ...................................................................... 11 Table 3-5: CHP Customer Sector vs. Fuel Type (No. of Sites and Capacity (MW)).................. 12 Table 3-6: Commercial Sector CHP by Prime Mover in terms of Capacity, Number of Sites, and Average Size ......................................................................................................................... 15 Table 3-7: Commercial Sector CHP by Size Range and Prime Mover (Sites)............................ 18 Table 3-8: Existing Industrial CHP Size Range by Prime Mover Technology ........................... 20 Table 3-9: Statewide Industrial CHP Capacity by Prime Mover Technology............................. 21 Table 3-10: Total CHP Potential, Existing CHP, and Remaining Potential by 2-Digit SIC (Megawatts) .......................................................................................................................... 24 Table 3-11: Commercial CHP Potential ...................................................................................... 26 Table 4-1: Gas Engine CHP - Typical Performance Parameters................................................. 35 Table 4-2: Microturbine CHP - Typical Performance Parameters .............................................. 47 Table 4-3: Gas Turbine CHP Typical Performance Parameters................................................ 54 Table 4-4: Power Requirements For Natural Gas Compression.................................................. 55 Table 4-5: Characteristics of Major Fuel Cell Types................................................................... 66 Table 4-6: Fuel Cell CHP - Typical Performance Parameters..................................................... 68 Table 6-1: Industrial Thermal Energy Use ................................................................................ 111 Table 6-2: Equipment Costing Guidelines................................................................................. 117 Table 6-3: Maintenance Costs (labor and materials) ................................................................. 118 Table 6-4: Relative Owning and Operating Costs ..................................................................... 118 Table 7-1: Sample Projected Annual CHP Saving .................................................................... 123 Table 7-2: Sample CHP Annual Cash Flows ($000) ................................................................. 123 Table 8-1: First Six Months Energy Savings............................................................................. 136 Table 8-2: Annualized Cost Savings.......................................................................................... 136
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List of Figures
Figure 2-1: Example of CHP Energy Savings ............................................................................... 4 Figure 2-2: NOx Reduction Benefits of CHP................................................................................. 5 Figure 2-3: CO2 Reduction Benefits of CHP ................................................................................ 6 Figure 2-4: Comparative Retail Economics of CHP...................................................................... 7 Figure 3-1: Capacity of Commercial CHP by Type of Commercial Application (MW) ............ 17 Figure 3-2: Existing Industrial CHP Capacity - 45,466 MW (2000).......................................... 19 Figure 4-1: Reciprocating Engine System ................................................................................... 30 Figure 4-2: Closed-Loop Heat Recovery..................................................................................... 38 Figure 4-3: Existing Reciprocating Engine CHP - 801 MW at 1,055 sites ................................. 40 Figure 4-4: Microturbine System................................................................................................. 41 Figure 4-5: Gas Turbine System .................................................................................................. 52 Figure 4-6: Heat Recovery from a Gas Turbine System...58 Figure 4-7: Existing Simple Cycle Gas Turbine CHP 9,854 MW at 359 sites......................... 59 Figure 4-8: Fuel Cell System ........................................................................................................ 61 Figure 4-9: Fuel Cell Electrochemical Process............................................................................ 63 Figure 4-10: Components of a Boiler/Steam Turbine System..................................................... 74 Figure 4-11: Non-Condensing (Back-Pressure) Steam Turbine.................................................. 77 Figure 4-12: Extraction Steam Turbine ....................................................................................... 78 Figure 4-13: Organic Rankine Cycle Courtesy of UT Power..................................................... 88 Figure 5-1: Direct Contact Water Heater System ........................................................................ 90 Figure 5-2: Indirect Fluid Heater System .................................................................................... 92 Figure 5-3: Direct Heating/Drying System.................................................................................. 95 Figure 5-4: Indirect Air/Gas Heating System .............................................................................. 98 Figure 5-5: Absorption Cooling System ....................................................................................... 99 Figure 5-6: Dehumidification System........................................................................................ 100 Figure 5-7: Exhaust Gas for Combustion Air for a Boiler System............................................ 101 Figure 6-1 Feasibility Assessment Process................................................................................ 106 Figure 6-2: Sample CHP Conceptual Design ............................................................................ 115 Figure 8-1: Chrome-Plated Bumpers and Exhaust Pipes........................................................... 129 Figure 8-2: Faith Plating Work for 1957 Cadillac ..................................................................... 130 Figure 8-3: CHP System Schematic .......................................................................................... 131 Figure 8-4: Four Capstone 30 kW Microturbines...................................................................... 131 Figure 8-5: Faith Platings Existing Need for Hot Water .......................................................... 132 Figure 8-6: CHP System Performance....................................................................................... 133 Figure 8-7: CHP System Performance Electric Generating Savings Compared to Boiler Hot Water Heating ..................................................................................................................... 134 Figure 8-8: Electric Cost Savings Assuming the Displacement of Electric Heaters ................. 135 Figure 8-9: One of Two Waukesha 1,125 kW Engine Generator Units..................................... 139 Figure 8-10: Heat Recovery System .......................................................................................... 139 Figure 8-11: Jacket-Water Recovery, Steam and Hot Water Systems ...................................... 140 Figure 8-12: On-Peak Energy Usage 15 Minute Data ............................................................ 141
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1. Introduction
Distributed generation has captured the interest of policymakers at the federal and state level, potential users and developers, and is entering into the business strategies of many utilities, unregulated energy service providers, and customers. Distributed generation has the potential to dramatically change the existing structure of electricity generation and distribution and redefine how electric services are delivered to the customer. At the same time, distributed generation faces the difficulties of introducing new technologies and practices to the market, an uncertain and changing regulatory environment, and high expectations. Combined Heat and Power (CHP), also called cogeneration, is a distributed generation application that, can significantly increase the efficiency of energy utilization, reduce emissions of criteria pollutants and CO2, and lower a user's operating costs Potential benefits of distributed generation to energy users include lower energy costs, increased reliability, improved power quality, enhanced energy management through options such as peak shaving, ability to arbitrage gas and electric costs, and the ability to economically provide both power and heat. The largest potential growth markets for distributed generation will be commercial and small to medium size industrial customers (a large percentage of large industrials have already embraced on-site power). Longer term markets could include multifamily housing and single residential units. A key element of distributed generation's promise is the emergence of small, modular natural gas generating technologies with relatively high efficiencies and low emissions. These technologies will enable local distribution companies (both gas and electric), energy service companies and customers to respond to changing energy markets with increased flexibility and with cost effective alternatives to the traditional utility infrastructure. In most cases, natural gas will be the fuel of choice for distributed generation, creating new loads and new business opportunities for local distribution companies. The Energy Solutions Center (ESC) and its members in partnership with the Department of Energy (DOE) play an important role in facilitating the development of the distributed generation market by helping to increase the awareness of distributed generation options among customers and by working to overcome critical market, technology application, regulatory and institutional barriers to widen market acceptance. To facilitate this effort, the ESC has formed the Distributed Generation Consortium, supported by fourteen utility members, to co-fund with DOEs Distributed Energy Resources group the collection of data for key applications in replicable industrial settings.
1.1
Objectives of Application Manual
This guide for replicable innovative industrial CHP applications is intended to assist gas companies and potential customers to better understand the related benefits, barriers, technologies, and issues related to the practical application of CHP. This comprehensive
document provides valuable information needed to understand the CHP market and implement projects. While each potential CHP project requires its own detailed analysis which must incorporate unique site-specific considerations, this guide provides the tools for initial assessment of CHP market opportunities, identification of applicable CHP technologies, and initial technical and economic feasibility of CHP project opportunities for industrial and institutional sites. The guide presents an overview of CHP technologies, applications, and project assessment approaches. It concludes with case history reports that highlight the installation and operations experience of industrial CHP projects. This manual covers the following topics: CHP Basics CHP Market CHP Technologies Integration of CHP into Industrial Processes CHP Assessment, Design, and Installation Issues Economic Evaluation of CHP Projects CHP Case Histories
1.2
Use of Application Manual
The application manual allows those pursuing specific CHP project opportunities to become familiar with traditional applications of CHP, current performance of primary CHP prime movers, the steps to take to ensure fair and reasonable evaluation of specific project opportunities, and lessons learned from recent industrial customers electing to employ CHP projects. The guide can be broken down into four basic components: CHP markets, CHP technology, CHP project assessment and development, and CHP implementation. Chapters 2 and 3 provide background information and insights into the current state of the CHP market. Chapters 4 and 5 look at the technical aspects of generation equipment and integrating them into industrial processes. Chapters 6 and 7 provide the process for assessing and implementing a CHP project. Chapter 8 summarizes actual CHP experience at industrial customer sites.
2. Combined Heat and Power Basics

A strategy to control energy costs that has been successfully employed by many industrial facilities is on-site power generation. When coupled with waste heat recovery, the system is referred to as combined heat and power (CHP)1. On-site power generation allows industry to utilize the waste heat that central power stations typically discharge to the environment. CHP is the sequential or simultaneous generation of two different forms of useful energy mechanical and thermal - from a single primary energy source in a single, integrated system. CHP systems usually consist of a prime mover, a generator, a heat recovery system, and electrical interconnections configured into an integrated package or system. The prime mover is generally an engine or gas turbine used to convert fuel to shaft power or mechanical energy. The generator converts the mechanical energy into electricity. The heat recovery system captures and converts the energy in the prime movers exhaust into useful thermal energy. The mechanical energy from the prime mover is most often used to drive a generator for producing electricity, but may also drive rotating equipment such as compressors, pumps and fans. The thermal energy from the heat recovery system can be used either for direct process applications or indirectly to produce steam, hot water, hot air for drying or chilled water for process cooling. CHP can reduce energy costs, increase the reliability of the electric service, and increase productivity. From a national perspective, CHP reduces U.S. consumption of energy and decreases regional air emissions and greenhouse gases that contribute to global warming. Power-Only on-site generation (without heat recovery) also provides benefits by reducing the facilitys peak power costs, deferring the need for power system expansion, increasing reliability for the facility and the grid, and improving power quality. On-site generation systems, whether CHP or power-only, are further referred to as distributed generation (DG) to distinguish them from traditional central station power plants. On-site power generation is not a new concept for the U.S. industrial sector. Historically, the onsite power market was driven by the availability of waste fuels, locally high retail electricity prices, and attractive wholesale power purchase agreements. Existing on-site generation capacity in the industrial sector, exclusive of emergency generator sets, is in excess of 45,000 MW with a vast majority (42,000 MW) being combined heat and power (CHP) plants. A high percentage of applications employing large on-site power plants have already been implemented as CHP and dominate the installed capacity. Much of the remaining potential can be characterized as smaller discrete loads, mechanical drive applications providing chilled water, compressed air, refrigeration, and facilities with smaller electric and/or thermal loads.
Combined heat and power systems are also known as cogeneration systems. The term cogeneration has become strongly associated with a particular regulatory process and contracting approach that was imposed on utilities in 1978 by Federal and state regulation. The term CHP is now used to distinguish the underlying technology from an outdated regulatory configuration of that technology.
2.1
Benefits of CHP
CHP provides many benefits compared to separate heat and power production. These benefits include increased energy efficiency, operating cost savings, and reduced air pollution and global warming. This section describes and quantifies these benefits for the existing and remaining CHP potential. There are additional benefits for industry including increased reliability, power quality, and higher productivity. The electric power industry and its customers can also benefit when industrial CHP capacity is used to support and optimize the overall power grid.
2.1.1 Energy Benefits

Power generation systems create large amounts of heat in the process of converting fuel into electricity. For the average central utility power plant, approximately two thirds of the energy content of the input fuel is converted to heat and wasted. As an alternative, an end-user with significant thermal and power needs can simultaneously generate both its thermal and electrical energy in a CHP system located at or near its facility. CHP can significantly increase the efficiency of energy utilization as shown in Figure 2-1. Figure 2-1: Example of CHP Energy Savings
70
(Losses)
Combined heat and power systems sequentially produce electricity and thermal energy
GRID
Pow er station fuel (100)
Com bined Heat and Power
Electricity
163
Boiler fuel (63) BOILER Heat
30 50
Electricity
CHP
CHP fuel
100
Heat
Conventional Generation
13 (Losses)
20 (Losses)
The figure shows that a typical CHP system can reduce energy requirements by close to 40 percent compared to separate production of heat and power. For 100 units of input fuel, CHP converts 80 units to useful energy of which 30 units are electricity and 50 units are for steam or hot water. Traditional separate heat and power components require 163 units of energy to accomplish the same end use tasks.
2.1.2 Environmental Benefits

By increasing energy efficiency, CHP significantly reduces emissions of criteria pollutants such as NOx and SO2, and non-criteria greenhouse gases such as CO2. CHP is an option that can provide environmental benefits as part of an economically attractive investment. Figures 2-2 and 2-3 show NOx and CO2 emission comparisons respectively by power generation technology and fuel type conducted in 2000. Nationwide and California utility emissions are shown for reference. While reductions in both NOx and CO2 result by switching from solid and liquid fuels to natural gas, the figures show the added reductions due to efficiency. CHP technologies can
significantly reduce emissions and compare favorably to advanced low emission central station technologies such as gas-fired combined cycle systems. Figure 2-2: NOx Reduction Benefits of CHP
5.5
Power Only
C H P
Utility Steam Turbine Plant 200 MW Combined Cycle (9 ppm) <1 MW Lean Burn Engine (.7 g/hph)
<1 MW Engine w/ Convertor (.15 g/hph)
Coal
Oil
4.5
2.8 0.25 1.1 0.25 0.167

<0.001
5 MW Gas Turbine (9 ppm)

Fuel Cell
U.S. Utility Mix Year 2000 (ave) CA Electricity Mix Year 2000 (ave)
1.56
4.9
7% T&D Losses
Lbs NOx /MWh
Source: USCHPA, DOE, CEC, AGA, Onsite Energy
Natural
Gas
Figure 2-3: CO2 Reduction Benefits of CHP

Power Only CHP 1.06 0.63 Tons CO2/MWh 1.17 Utility Steam Turbine Plant 0.66 200 MW Combined Cycle <1000 kW Recip Engine 5 MW Gas Turbine U.S. Utility Mix Year 2000 (ave) CA Electricity Mix Year 2000 (ave) 0.45 0.35 0.30 0.99 Coal Oil Gas 7% T&D Losses Natural
2.1.3 Economic Benefits

The primary economic driver for DG and CHP is the production of power at rates that are lower than the utilitys delivered price. Figure 2-4 demonstrates how power prices from DG and CHP units compare with traditional central station generation combined with the cost of transmission and distribution (T&D). This was based on the same 2000 analysis referred to above. However is does use gas price assumptions lower than current gas prices.
Figure 2-4: Comparative Retail Economics of CHP
Peaking
150 MW Simple Cycle DG (5 MW Gas Turbine)
Intermediate
225 MW Combined Cycle CHP (5 MW Gas Turbine) Busbar T& D
Baseload
225 MW Combined Cycle CHP (5 MW Gas Turbine)
10
15
Comparative Retail Economics (c/kWh)

It can be seen that the cost for electricity production from a CHP system using an industrial-sized gas turbine, including fuel, capital and operation and maintenance (O&M) expenses, is less than $0.05/kWh for a base-loaded operation. This cost compares favorably to a base-loaded centralstation combined-cycle plant at the busbar even before adding T&D costs. As shown in Figure 2-4, CHP can compete against large simple cycle gas turbine plants for intermediate duty and peaking power after adding T&D costs. The cost of such power from CHP varies by application, technology, and grid circumstances, but as this example illustrates, the economic fundamentals will frequently favor CHP. In a restructured power market, end-users may place significant economic value on the stand-by capability and increased reliability that CHP can provide, further enhancing the potential economic benefits of CHP. For many areas of the U.S., the economics of CHP are often compelling when compared against retail power prices.
2.1.4 Ancillary Benefits

In a restructured power market, DG, CHP and other on-site generation options can offer grid support to the local distribution utility. On-site generation can offer ancillary benefits to the grid including: Voltage and frequency support to enhance reliability and power quality Avoidance or deferral of high cost, long lead time T&D upgrades Bulk power risk management Reduced line losses, reactive power control Outage cost savings Reduced central station generating reserve requirements Transmission capacity release
DG and CHP offers a customer enhanced reliability, operational and load management flexibility, ability to arbitrage electric and gas prices, and energy management techniques including peak shaving and thermal energy storage. The value of these benefits depends on the characteristics of the facility, energy use and prices, load profiles, and electric rate tariffs, etc. A DG or CHP investment should consider the possible ancillary benefits including the revenue stream from sale of T&D benefits to the independent system operator (or equivalent) and reduced operating costs, along with the other costs and benefits of the project.
Application Manual
3. CHP Market
An understanding of existing CHP sites provides insights with respect to project sizes, prime mover technologies, locations, site applications, and the role of natural gas. The next section explores existing CHP projects as a backdrop to the summary of potential CHP market opportunities. Data presented on the current CHP market is based on Energy and Environmental Analysis, Inc. (EEA) 2000 CHP database.
3.1
Current CHP Installations
Table 3-1 presents an estimate of the current use of natural gas and other fuels energizing US CHP projects in commercial, industrial and other sectors2. The table summarizes 2,167 CHP projects with a capacity of 53,300 MW of electricity. Natural gas is used in 69% of the projects and represents 64% of the total CHP capacity. Table 3-1: CHP Fuel Use by Sector
Sector Commercial/ Institutional Industrial Coal 18 440.1 MW sites 147 7631.1 sites MW Other 5 245.5 MW sites Total 170 8,317.3 sites MW Source: EEA, PA Consulting Natural Gas 866 3547.3 sites MW 484 27939.0 sites MW 148 2659.7 sites MW 1498 34146.0 sites MW Oil 30 sites 63 sites 11 sites 104 sites 110.6 MW 1243.4 MW 9.7 MW 1363.7 MW Waste 25 655.3 sites MW 84 3249.6 sites MW 2 0.4 sites MW 111 3905.3 sites MW Wood 4 46.7 sites MW 137 232.2 sites MW Other 37 125.5 sites MW 101 3070.4 sites MW 5 0.2 sites MW 143 3196.1 sites MW
141 sites
2378.9 MW
Commercial and industrial markets have roughly equal number of projects; however, the industrial sites are almost ten times as large on average. The other fuel category designation represents a wide variety of energy sources including propane, chemical off-gases, mill byproducts, with wastewater plant biogases the largest component. Waste is primarily urban waste, factory waste, and mine waste. The Tables and discussion that follow will provide the details and origins of these summary statistics. Table 3-2 presents the use of natural gas and other fuels with respect to the prime mover technology utilized. Natural gas is used by all prime mover technologies while coal, waste, and wood are generally limited to the boiler/steam turbine technology. Note that almost half the generating capacity is represented by 176 natural gas-fired combined cycle projects. Natural gas is not only utilized by all CHP technologies, but it is also used across the CHP project size range spectrum as shown by Table 3-3. As expected, the preponderance of capacity
Data throughout this guide book on current CHP installations is taken from the 2000 EEA Installed CHP Database. This database is revised every three years and is considered the most comprehensive data on installed CHP capacity.
Application Manual
is associated with the largest projects. Conversely, while there are many small projects, their total combined capacity is negligible. Natural gas is well represented across all size levels. Table 3-2: CHP Technology Type vs. Fuel
Prime Mover Boiler/Steam Turbine Combined Cycle Gas Turbine Reciprocating Engines Other Total 170 sites Source: EEA, PA Consulting 8,317.3 MW 169 sites 1 site Coal 8252.8 MW 64 MW Natural Gas 67 1401.2 sites MW 176 25080.5 sites MW 319 7041.9 sites MW 920 614.6 sites MW 16 7.8 MW sites 1498 34146.0 sites MW Oil 31 sites 3 sites 9 sites 61 sites 443.2 MW 284.5 MW 514.9 MW 121.1 MW Waste 83 2959.9 sites MW 9 736.8 sites MW 8 199.2 sites MW 11 9.4 sites MW Wood 141 2378.9 sites MW Other 85 2743.2 sites MW 1 27.0 site MW 9 295.4 sites MW 35 33.1 sites MW 13 97.3 sites MW 143 3196.1 sites MW
104 sites
1363.7 MW
111 sites
3905.3 MW
141 sites
2378.9 MW
Table 3-3: CHP Size Range vs. Fuel Type

Size Range <1 MW Coal 8 3.0 MW sites 1.0 - 4.9 MW 21 55.1 MW sites 5.0 MW 60 594.9 MW 19.9 MW sites > 20 MW 81 7664.3 sites MW Total 170 8,317.3 sites MW Source: EEA, PA Consulting Natural Gas 824 138.8 sites MW 246 652.5 sites MW 156 1451.3 sites MW 272 31903.3 1498 sites 34146.0 MW Oil 43 sites 33 sites 16 sites 12 sites 104 sites 16.9 MW 76.9 MW 144.5 MW 1125.4 MW 1363.7 MW Waste 10 2.3 sites MW 20 53.7 sites MW 28 319.9 sites MW 53 3529.4 sites MW 111 3905.3 sites MW Wood 28 12.6 sites MW 28 77.6 sites MW 48 504.8 sites MW 37 1783.9 sites MW 141 2378.9 sites MW Other 34 10.0 sites MW 23 61.6 sites MW 23 263.5 sites MW 63 2861.0 sites MW 143 3196.1 sites MW
The relationship between CHP technology type and size range is presented in Table 3-4. Reciprocating engines dominate the under 1 MW size range while combined cycle facilities are almost always over 20 MW and combined cycle sites comprise almost 50% of the total capacity. Interestingly, the boiler/steam turbine and gas turbine technologies are represented across all size ranges. With respect to location, natural gas fired CHP projects are concentrated in several states with the top 7 states having 77 % of capacity and 77 % of sites, as follows: Texas 8,626 MW, 85 sites. California 5,664 MW, 640 sites New York 4,061 MW, 156 sites New Jersey 2,691 MW, 158 sites Louisiana 2,367 MW, 28 sites Michigan 1,719 MW, 39 sites Massachusetts 1,017 MW, 44 sites
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Table 3-4: CHP Technology Type vs. Size Range

Prime Mover Boiler/Steam Turbine Combined Cycle Gas Turbine <1000 MW 50 22.5 MW sites 1.0 - 4.9 MW 113 309.1 sites MW 2 8.6 MW sites 110 345.3 sites MW 143 306.8 sites MW 3 7.8 MW sites 371 977.6 sites MW 5.0 -19.9 MW 183 1907.7 sites MW 16 141.7 sites MW 97 930.7 sites MW 32 266.9 sites MW 3 sites 31.8 MW 104 1363.7 sites MW >20.0 MW 230 15939.9 sites MW 172 26043.1 sites MW 111 6758.9 sites MW 3 66.3 sites MW 2 59.0 sites MW 111 3905.3 sites MW 576 sites 190 sites 345 sites 1027 sites 29 sites 2167 sites Total 18179.3 MW 26193.3 MW 8051.3 MW 778.2M W 105.1M W 53307.3 MW
27 16.4 MW sites Reciprocating 849 138.22 Engines sites MW Other 21 6.48 MW sites Total 947 183.7 MW sites Source: EEA, PA Consulting
Table 3-5 presents a summarization of applications of CHP by 4-digit SIC Code. The table shows that CHP is broadly distributed over commercial, industrial and, even residential sites (39 sites). Natural gas is represented in almost all SIC application areas with solid waste and mining notable exceptions. As described previously, industrial sites are larger than commercial and other sites on average. Major commercial users are colleges/university campuses, district energy/utility facilities, and hospital-type facilities. Medical care facilities average 3.75 MW capacity per site. Colleges/universities average about 12.5 MW per site. Primary schools, on the other hand, have numerous sites but only average 135 kW per site. Industrial CHP users can be found in most SIC industries with chemical and petroleum plants leading the way. Paper mills, food processing plants, and metal working are also large users. Natural gas is used across the industrial spectrum, including petroleum refineries and paper mills. The largest industrial user group of natural gas CHP is in chemical plants, which account for 50% of industrial natural gas use. Crude oil producers dominate the Other Sector of noncommercial and non-industrial users. The following two sections provide more detailed information on the commercial/institutional and industrial CHP markets.
3.1.1 Commercial/Institutional CHP Markets

This section characterizes the 980 sites and 4,926 MW of identified CHP in the commercial sector according to the following characteristics: 1. Fuel use 2. Type of technology (prime mover) 3. Type of commercial application 4. State 5. Size of CHP system
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Table 3-5: CHP Customer Sector vs. Fuel Type (No. of Sites and Capacity (MW))
Class Application\Fuel SIC 4200 Warehousing SIC 4500 Airports SIC 4901 Water Treatment SIC 4902 Solid Waste SIC 4903 District Energy/Utilities SIC 5411 Food Stores SIC 5812 Restaurants SIC 6512 Commercial Buildings SIC 6513 Apartment Buildings SIC 7011 Hotels SIC 7200 Laundries SIC 7542 Car Washes SIC 7990 Health/Country Clubs SIC 8051 Nursing Homes SIC 8060 Hospitals SIC 8211 Schools SIC 8220 Colleges/Universities SIC 8400 Museums SIC 9100 Government Facilities SIC 9223 Prisons Coal Natural Gas 4 58.29 7 151.44 12 116.03 1 0.01 9 372.45 3 88.50 10 1.38 11 0.91 1 70.00 97 95.38 78 25.74 76 3.27 2 0.16 81 163.06 1 1.00 1 5.00 101 13.69 8 215.57 2 3.79 4 60.65 14 48.00 26 501.45 2 45.70 3 57.20 1 4.00 37 46.73 125.48 1 37.00 980 4,926.13 18 134.70 33 619.30 93 1,103.90 8 20.36 119 413.16 1 0.12 1 62.00 1 1.13 1 11.00 2 3.79 72 9.68 8 16.07 1 55.00 1 2.00 4 0.42 112 1,413.95 1 0.15 106 14.23 131 491.38 3 1.21 4 0.15 1 0.03 73 10.68 85 164.30 2 3.39 2 0.03 6 0.31 45 109.60 1 0.98 3 1.04 78 3.30 83 30.16 2 5.73 1 0.27 1 28.00 3 22.05 98 96.35 1 0.07 52 235.38 13 1.25 16 728.39 1 54.00 2 31.70 1 39.60 5 12.50 10 1.38 1 5.50 1 3.00 2 5.80 28 954.69 12 21.89 11 378.25 1 3.00 Oil 1 0.08 1 13.50 26 140.93 9 170.44 Waste Wood Other 6 61.37 Totals
C O M M E R C I A L
Commercial Totals 18 866 30 25 4 Commercial Totals 440.72 3,547.31 110.62 655.28
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Table 3-5: CHP Customer Sector vs. Fuel Type (Continued)

SIC 01 Agriculture SIC 07 Agriculture Services SIC 10 Metal Mining SIC 12 Coal Mining SIC 14 Mining (except fuels) SIC 20 Food SIC 21 Tobacco SIC 22 Textiles SIC 24 Wood SIC 25 Furniture SIC 26 Paper SIC 27 Printing SIC 28 Chemicals SIC 29 Petroleum SIC 30 Rubber SIC 32 Stone, Clay, Glass SIC 33 Primary Metals SIC 34 Fabricated Metals SIC 35 Machinery SIC 36 Electrical Equipment SIC 37 Transportation Equip. SIC 38 Technical Instruments SIC 39 Misc. Manufacturing 2 257.84 1 4.00 1 124.00 6 232.30 4 116.00 37 982.82 4 129.48 10 331.75 1 44.00 1 63.00 43 1,543.56 8 16.68 32 2,598.98 2 182.50 4 249.15 1 170.00 2 842.00 22 76.58 3 30.50 4 179.08 2 53.00 2 50.83 2 28.50 15 203.45 7 57.02 12 674.11 2 8.26 4 61.48 3 23.00 4 28.68 3 81.20 12 97.88 2 1.30 2 3.70 15 1,245.72 2 1.80 1 7.50 1 9.70 14 528.37 1 0.10 8 533.50 1 1.20 14 781.70 1 3.00 40 3,397.71 127 13,917.90 5 632.90 11 118.07 21 1,284.05 2 0.30 3 74.00 1 4.00 69 2,791.58 1 2.50 12 356.40 4 85.63 5 120.46 26 615.28 12 276.06 2 169.00 44 1,617.83 5 180.62 7 274.80 1 0.70 7 5.02 50 2,154.52 9 19.18 212 17,692.26 73 5,617.62 15 786.94 19 773.57 33 2,872.52 24 78.38 19 149.28 6 180.38 17 808.31 4 59.09 35 402.12 220 8,552.54 1 12.20 70 543.43 3 37.50 8 68.02 105 3,362.90 12 46.40 1 1.50 4 31.76 80 806.25 22 650.51 18 154.43 5 47.13 1 0.70 5 130.98 178 4,594.37 4 116.00 6 232.30 1 124.00 14 287.29 5 201.29 1 0.15 3 0.52 1 4.00 25 747.10
I N D U S T R I A L
Industry Totals 147 484 63 84 137 101 1016 Industry Totals 7,631.08 27,939.00 1,243.41 3,249.64 2,332.17 3,070.41 45,465.70
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Table 3-5: CHP Customer Sector vs. Fuel Type (Continued)

SIC 13 Crude Oil SIC 40 Railroad Transport SIC 46 Pipeline Transport SIC 48 Communication SIC 49 Utility Services SIC 50 Trade SIC 83 Services SIC 86 Non-Profits SIC 88 Households SIC 89 Misc. Services SIC 99 Nonclassifiable No SIC Other Totals Other Totals TOTALS TOTALS 4 235.60 1 10.00 1 17.00 2 9.25 1 6.20 11 5.45 10 0.87 3 1.36 32 0.50 7 0.88 1 2.40 2 2.41 5 245.50 148 2,659.67 11 9.68 1 0.25 2 0.37 5 0.19 171 2,915.41 3 2.66 2 0.33 1 2.40 4 0.03 3 0.03 9 1.21 2 0.16 39 0.56 5 1.52 2 0.28 10 0.87 13 5.73 1 6.20 2 9.25 1 5.00 1 17.00 77 2,608.37 2 8.80 2 0.37 2 15.00 85 2,853.14
O T H E R
170 1498 104 111 141 143 2167 8,317.30 34,145.97 1,363.72 3,905.29 2,378.90 3,196.07 53,307.25 Key: No. of Sites Electric Capacity MW
12 6,000.26
Source: EEA, PA Consulting
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Fuel Type Natural gas is by far the most common fuel type comprising over 72% of the total. The next most important fuel type is waste. Waste includes a variety of fuels but is dominated by landfill gas and biogas from sewage treatment facilities. Coal, oil, wood, and other fuel types make up the remaining 15% of installed CHP capacity. Type of Prime Mover Table 3-6 characterizes the commercial sector CHP in terms of the prime mover. The largest share of capacity (42.8%) comes from combined cycle power plants consisting of a gas turbine and a heat recovery steam generator (HRSG) that drives a backpressure or extraction steam turbine. These plants are capable of high efficiency and are typically used only in comparatively large installations. Boilers and steam turbines make up 27% of total capacity. Boilers can fire any fuel type, but they are the only type of technology today that can be used to generate power from solid fuels like coal, wood, and certain types of waste. Gas turbines make up about 19% of installed capacity. Both combined cycle and gas turbines are technically capable of burning a variety of gaseous or liquid fuels, but, in U.S. CHP applications, they nearly always burn natural gas. Reciprocating engines make up 10% of capacity but represent 79% of the total number of installations. Reciprocating engines are commonly used in smaller installations; the average size for operating engine CHP systems is 0.7 MW. The average size for all operating commercial CHP is 5 MW. Table 3-6: Commercial Sector CHP by Prime Mover in terms of Capacity, Number of Sites, and Average Size Prime Mover Combined Cycle Boiler/Steam Gas turbine Reciprocating Engine Other/not specified Total Capacity MW 2,110 1,341 933 506 36 4,926 Share % 42.8% 27.2% 18.9% 10.3% 0.7% 100.0% Sites 27 60 104 770 19 980 Share % 2.8% 6.1% 10.6% 78.6% 1.9% 100.0% Avg. Size MW 78.1 22.4 9.0 0.7 1.9 5.0
Type of Commercial/Institutional Applications The commercial and institutional sectors are comprised of a broad range of activities that include private and government services but not including manufacturing, mining, or agriculture. Commercial applications, typically but not exclusively, are based on energy use in buildings. Unlike the industrial sector that, on balance, reflects an electric load limited environment for CHP, the commercial sector is predominantly thermal load limited. This limitation can occur in two ways; either the thermal load is inadequate or it is highly seasonal, i.e., noncoincident with the electric load as in the thermal needs for space heating. Another limitation of commercial applications is the more limited hours of operation compared to an industrial process operation. An office building may operate 3,500 hours per year compared to a refinery that is operated continuously, or 8,760 hours per year. High and fairly constant thermal loads and a high number
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of operating hours per year characterize the commercial applications that are favorable to CHP. CHP systems are also typically sized to operate on a baseload basis and utilize the electric grid for supplementary and backup power. Figure 3-1 shows the installed capacity of CHP by commercial application. The top eight applications represent 90% of the commercial sector installed CHP. These top eight sectors are as follows: 1. Colleges and Universities This is the number one commercial CHP application with 29% of the total installed capacity. Universities resemble district-heating systems for small cities. CHP systems in universities typically serve the power and thermal needs of a multi-building site. 2. District Energy/Utilities About 20% of the total is for district energy or utility applications. These systems tend to be large, multi-megawatt facilities serving a variety of applications and buildings. 3. Government Government use represents a broad range of activities and commercial/institutional buildings. 4. Hospitals Hospitals are large facilities with around-the-clock operation and large, steady thermal and electric requirements. They typically have engineering and operating staff on-site to manage a CHP system. 5. Solid Waste This is not necessarily a building energy application but reflects landfill or waste to energy projects with some form of heat recovery. 6. Offices This is one of the largest types of commercial applications in terms of building space. 7. Airports Nine major airports have CHP systems to serve multiple buildings. These systems are generally in the multi-megawatt size range. 8. Health/Sports Centers Rounding out the top 90% of commercial applications are health clubs and sports centers. These facilities represent a good match of steady electric and thermal loads. CHP sites that utilize gas turbines in the 1-10 MW range are concentrated in the applications of Commercial Office Buildings (12 sites, 56 MW), Hospitals (30 sites, 97 MW), Colleges and Universities (39 sites, 563 MW), Government Facilities (7 sites, 22 MW), and Prisons (4 sites, 49 MW). Airports and District Energy applications have 3 sites and 23 MW combined. These segments can be characterized as large commercial or institutional markets. Commercial/Institutional CHP Distribution by State Commercial CHP is concentrated in the populous industrialized states of the Northeast, Midwest and California and Texas. In addition to large population and economic activity, these states typically have higher energy costs than the rest of the United States. Nearly half the total installed capacity is in three states New York, California, and Pennsylvania. Adding in the next five largest states Texas, Wisconsin, Michigan, New Jersey, and Florida brings the cumulative share up to 75%.
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Figure 3-1: Capacity of Commercial CHP by Type of Commercial Application (MW)

1,600
1,414.0
1,400
Installed Capacity MW
1,200 1,000 800 600 400 200 0

tri ct En Co l er gy lege /U s G tiliti ov es er nm e H os nt So pi lid tals W as te O H ffi ea ce lth s /S Air po po W rts at rts C er lu Tr b ea s tm W e ar eh Pr nt ou Ap iso si ng art ns an me n d St ts or ag e H ot e N Sc ls ur si hoo ng l H s om M us es eu La ms u Fo nd od rie s R Sto es re s ta C ura ar nt s W as he s
954.7
619.3 491.4 378.3 235.4 170.4 164.3 140.9 134.7
96.4 61.4 30.2 14.2 10.7
3.8
3.3
1.4
1.2
0.3
With regard to gas turbine sites in the 1-10 MW range, California has the largest concentration with 35 sites making up 318 MW. New Jersey has the next highest concentration with 12 sites making up 75 MW. Michigan (7 sites, 68 MW), Connecticut (7 sites, 45 MW), Texas (5 sites, 49 MW), Illinois (5 sites, 27 MW), and Pennsylvania (4 sites, 21 MW) make up the majority of remaining gas turbine based CHP in the 1-10 MW range. A limited number of sites are located in Massachusetts, Florida, Ohio, Tennessee, and New Mexico. Commercial/Institutional CHP Distribution by Prime Mover Table 3-7 shows the size breakdown of commercial CHP by prime mover. Over 70% of the existing facilities are under 1 MW. Most of these small systems are powered by reciprocating engines. While the number of sites is dominated by the smaller sized systems, the total capacity impact of these small systems is comparatively small. The majority of the CHP capacity comes from the smaller number of large systems. There are 63 sites with capacities greater than 20 MW including gas turbine, combined cycle, and boiler/steam systems. These 63 large sites make up 77% of the existing commercial sector CHP capacity. The CHP sites tabulated include some multi-unit sites. The gas turbine based sites in the 1-10 MW range represent 58 sites and approximately 215 MW.
3.1.2 Industrial CHP Market

The industrial CHP market profile was developed to understand the technologies and applications that comprise existing CHP capacity and to provide insight into future market development. As was done in the commercial CHP review, the PA Consulting Hagler-Bailly
is
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Table 3-7: Commercial Sector CHP by Size Range and Prime Mover (Sites)
Size Range 0 999 kW 1.0 4.9 MW 5.0 9.9 MW 10.0 14.9 MW 15.0 19.9 MW 20.0 29.9 MW 30.0 49.9 MW 50.0 74.9 MW 75.0 99.9 MW 100 199 MW 200 499 MW Total Boiler/ Steam 7 15 4 3 7 5 8 11 Combined Cycle Combust. Turbine 20 42 16 11 2 5 6 2 Recip. Engine 662 83 16 7 2 Other 16 1 2 Total 705 140 40 23 9 18 19 15 4 5 2 980
60
6 5 4 2 5 2 27
104
770
19
database was used to characterize the existing industrial CHP base. Figure 3-2 provides a summary perspective on industrial CHP. Several conclusions can be immediately drawn from the existing Industrial CHP capacity. CHP installations in the following industries were reviewed: SIC 01 07 11 12 14 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Industry Agriculture - Crops Agriculture - Services Metal Mining Coal Mining Mining - nonmetallic Minerals Food & Kindred Products Tobacco Products Textile Mill Products Apparel Lumber & Wood Products Furniture & Fixtures Paper & Allied Products Printing & Publishing Chemicals & Allied Products Petroleum Refining and Related Industries Rubber & Misc. Plastic Products Leather & Leather Products Stone, Clay, Glass and Concrete Primary Metals Fabricated Metal Products Industrial & Commercial Machinery Electronic & Other Electrical Equipment Transportation Equipment Measuring, Analyzing and Controlling Instruments Miscellaneous Manufacturing Industries
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Figure 3-2: Existing Industrial CHP Capacity - 45,466 MW (2000)
I n d u st ri a l C H P C a p a c ity b y A p p lic a ti o n
M et al s 6% Food 10 % O th e r M a n u f 10 %
O th e r In d u s tri a l 3%
R e fin i n g 13%
P a p er 19%
C h e m i c a ls 39%
I n d u s tr ia l C H P C a p a c ity b y T e c h n o lo g y
G a s T u r b in e 11%
C o m bi n ed C y c le 5 1%
R e c ip E n g in e 2%
B o i le r /S T 3 6%
I n d u s tr ia l C H P C a p a c i ty b y F u el
W oo d 4% O il 3% C oa l 16% N a tu r a l G a s 64% W a s te 9% O th e r 4%
Existing industrial CHP capacity is concentrated in a few industries. CHP facilities can be found in all manufacturing industries except Apparel Manufacturing and Leather and Tanning. However, Paper and Allied Products, Chemicals and Allied Products, and Petroleum Refining and related Products (SIC Groups 26, 28 and 29 respectively) combined represent more than two thirds of the total electric and steam capacities at existing industrial CHP installations. In industrial applications gas turbines can use their high quality recoverable exhaust heat as an advantage over competing technologies such as reciprocating engines. Some industries have power to heat demands that make gas turbines the most attractive CHP option. For example, paper industry CHP (SIC 26) has approximately the same steam capacity as the chemicals industry (SIC 28) but only half the electrical capacity, a reflection of the types of CHP systems employed. Consequently, the paper industry has relied primarily on boiler/steam turbine systems
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with low power to heat ratios; the chemical industry CHP capacity is primarily gas turbine and combined cycle systems that have much higher power to heat ratios. Existing industrial CHP depends on a variety of technologies and fuels. Natural gas is the primary fuel used for industrial CHP (61.3 % of capacity), but coal, wood and process wastes are used extensively by many industries (16.7 %, 5.1 %, and 7.1 % respectively). Accordingly, gas turbines are the predominant technology in use representing 62.8 % of installed industrial CHP capacity in combined and simple cycle systems and are used by almost all industry segments. Boiler/steam turbines represent 36.4 % of installed industrial CHP capacity and are concentrated in the paper, chemicals and primary metals industries. In terms of number of facilities, reciprocating engines are used in over 161 sites (almost 16 % of facilities), primarily in the food, chemicals and fabrication and equipment industries. Large systems account for most existing industrial CHP capacity. Table 3-8 provides data on size by prime mover technology. Gas turbine based CHP is concentrated in the sectors shown in Table 3-8. There is great variation in site electrical capacity at existing industrial CHP facilities, however, 80 % of existing capacity is represented by facilities of 50 MW and greater. Two thirds of the coal is used in systems over 100 MW size. Reciprocating engines predominate in facilities below 1 MW, and are used extensively in facilities up to 5 MW. Combined cycle systems dominate the larger facilities. Table 3-8: Existing Industrial CHP Size Range by Prime Mover Technology
Prime Mover Boiler/Steam Turbine Combined Cycle Gas Turbine <1000 MW 43 sites 19 MW 1.0 - 4.9 MW 97 sites 2 sites 56 sites 50 sites 3 sites 208 sites 271 MW 9 MW 187 MW 100 MW 8 MW 574 MW 5.0 - 9.9 MW 86 sites 6 sites 29 sites 6 sites 575 MW 41 MW 217 MW 40 MW 10 .0 - 14.9 MW 46 535 sites MW 4 52 sites MW 8 90 sites MW 2 22 sites MW 15.0 -19.9 MW 36 611 sites MW 1 16 site MW 10 165 sites MW 1 15 site MW >20.0 MW 202 sites 144 sites 72 sites 1 site 2 sites 421 sites 14581 MW 23543 MW 4253 MW 20 MW 69 MW 42466 MW
4 sites Reciprocating 101 Engines sites Other 4 sites Total 152 sites Source: EEA, PA Consulting
2 MW 36 MW 2 MW 60 MW
127 sites
872 MW
60 sites
699 MW
48 sites
806 MW
CHP is an important resource to a number of states. Table 3-9 presents existing CHP capacity by state as a function of system prime mover. Texas has the most industrial CHP capacity followed by California, Florida, Louisiana, New Jersey and New York.
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Table 3-9: Statewide Industrial CHP Capacity by Prime Mover Technology

State AK AL AR AZ CA CO CT DE FL GA GU HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR 12 366 12 260 4 456 15 109 2 499 2 220 1 49 18 657 Steam 2 14 556 6 126 2 82 33 581 2 43 8 236 4 89 25 1494 17 490 1 0 7 240 8 135 10 120 13 314 8 1123 3 8 1 4 18 1094 13 76 4 232 18 745 23 289 13 250 4 44 13 345 4 68 29 1064 3 24 1 7 3 5 11 592 1 33 4 310 21 3003 1 7 8 129 4 5 6 676 24 29 19 2406 1 3 1 1 1 0 17 271 66 3528 5 311 8 46 1 1 18 13 1 12 1 1 2 37 57 3057 1 0 5 18 2 7 2 185 2 8 3 24 33 1258 1 4 3 28 4 68 16 373 1 262 4 1542 1 1 5 48 8 59 6 4 15 513 41 1894 1 240 18 745 7 941 8 1421 4 32 12 732 4 5 5 472 2 1 28 1053 40 3248 1 40 2 55 1 18 1 10 1 4 10 176 1 4 5 58 3 23 8 13 2 6 10 1145 35 564 13 143 1 180 1 9 1 300 1 50 3 1 8 135 12 430 7 712 1 2 10 293 2 2 1 2 2 50 22 796 42 2499 2 82 4 429 1 5 25 1710 4 47 5 4 4 89 16 327 1 50 43 1024 52 46 28 2 125 2 38 2 7 1 0 10 519 154 3362 5 139 CC 4 1 40 8 164 CT 51 3 Recip. 16 Other 9 17 720 Totals 95
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Table 3-9: Statewide Industrial CHP Capacity by Prime Mover Technology

PA PR RI SC TN TX UT VA VT WA WI WV WY Totals Totals 7 374 16 338 26 719 3 5 25 1400 2 21 8 194 20 409 2 139 1 7 510 16591 157 23660 179 1 3 4912 161 1 0 233 9 69 1016 3 10 45466 4 590 1 180 3 165 1 1 2 139 22 590 2 476 1 8 2 20 1 0 15 949 27 7157 1 15 4 12 4 28 33 1907 29 1467 1 67 2 500 1 24 5 4 1 1 4 21 1 7 2 59 88 9349 19 421 10 881 35 1261 4 194 3 9 4 109 1 20 1 67 9 15 4 29 52 1580
Key: No. of Sites Electric Capacity, MW
12 26,000
3.2
Future Market Outlook
This section summarizes the U.S. CHP technical potential and describes issues related to market development.
3.2.1 Industrial CHP Market Potential

The data presented are based on analysis completed by EEA in 2001 in support of Oak Ridge National Laboratory and are based on existing industrial facilities and estimates of their current power and steam consumption. The estimated potential is a snapshot of the technical potential for CHP at these facilities at the end of 1999 and does not include an analysis of sector growth over the time period of the forecast. The technical market potential is an estimation of market size constrained only by technological limitsthe ability of CHP technologies to fit existing customer energy needs. No consideration of economics was included in the analysis. The analysis also considered only traditional steam/electric power CHP. No estimate was made for mechanical drive applications or for uses of thermal energy other than steam. Table 3-10 summarizes CHP potential in terms of electric capacities (MW) by 2-digit SIC. Major conclusions from review of the previous analysis include: Significant CHP potential remains at existing industrial facilities - Existing CHP capacity (MW) represents about one third of the total CHP potential at existing industrial
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facilities. Certain industries such as Chemicals and Petroleum Refining have saturation rates that are much higher (65% and 45% respectively). Total remaining potential is estimated to be in the range of 75,000 to 100,000 MW (the analysis developed a specific estimate of 88,000 MW based on a limited technology match - the range of 75,000 to 100,000 MW reflects the wide range of technologies that could be utilized and the varying power to heat ratios of those technologies). Much of the remaining CHP potential is with industries that have traditionally employed CHP - Two thirds of the remaining CHP potential is in five industries (Food, Paper, Chemicals, Refining, Primary Metals) that currently have significant levels of CHP saturation (i.e., > 25 %). CHP development to-date has focused on large systems - Over 90 % of existing CHP capacity in the industrial market is represented by systems of 20 MW or greater. Existing CHP capacity represents over 45 % of total CHP potential in this size range. Large systems represent a significant share of remaining CHP potential - Fifty five percent of the remaining CHP potential is in system sizes of 20 MW or greater. Small systems represent a large untapped market for CHP - Forty five percent of the remaining CHP potential (over 39,000 MW) is in system sizes of less than 20 MW. Thirty two percent of the remaining potential is in system sizes of 4 MW or less. Market saturation in these size categories is currently very low (7 % for systems less than 20 MW, 1% for systems less than 4 MW).
Another study, completed in 2001 and jointly funded by the Energy Solutions Center and DOEs Distributed Energy Resources group, focused on the market potential of CHP systems generating 1 MW or less in power. Resource Dynamics Corp. and CSGI, Inc. completed a comprehensive analysis that indicated a market potential of over 10,000 MW for this size range. This report entitled, Assessment of Replicable Innovative Industrial Cogeneration Applications is provided separately as an Addendum.
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Table 3-10: Total CHP Potential, Existing CHP, and Remaining Potential by 2-Digit SIC (Megawatts)
SIC SIC Description Small Plants 1001,000kW total CHP Potential > 1MW, P/S*< 0.4 CHP Potential >1MW, 0.4<P/S*<1.5 CHP Total Potential Existing CHP Remaining CHP Potential* Existing CHP Saturation of Total MW Potential
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Food and Kindred Products Tobacco and Allied Products# Textile Mill Products Apparel Manufacturing Lumber and Wood Products Furniture Paper and Allied Products Printing and Publishing Chemicals and Allied Products Petroleum and Coal Products Rubber and Misc. Plastics Leather and Tanning Stone, Clay, Glass, Concrete Primary Metals Industries Fabricated Metal Products Industrial Machinery and Equip. Electrical and Electron. Equip. Transportation Equipment Instruments and Related Prod. Miscellaneous Manufacturing Total
2,683 16 766 n.a. 595 n.a. 1,168 n.a. 1,780 154 2,772 n.a. n.a. 294 4,050 4,787 n.a. 1,169 972 784 21,990
6,652 24 1,854 77 1,220 108 28,774 258 17,957 8,067 839 89 2,348 4,744 920 403 327 1,242 344 270 76,518
---- Total MW Capacity ---3,345 12,680 4,594 63 103 131 1,157 3,777 651 86 163 0 726 2,542 806 294 401 68 4,810 34,751 8,553 146 404 19 7,395 27,132 17,692 4,186 12,407 5,618 802 4,413 787 9 98 0 351 2,698 774 4,776 9,814 2,873 756 5,726 78 1,195 6,385 149 660 987 180 3,001 5,412 808 246 1,562 59 73 1,128 402 34,075 132,583 44,242
8,086 0 3,126 163 1,736 333 26,198 385 9,440 6,789 3,626 98 1,924 6,941 5,648 6,236 807 4,604 1,503 726 88,341
36.2% 100.0% 17.2% 0.0% 31.7% 16.9% 24.6% 4.7% 65.2% 45.3% 17.8% 0.0% 28.6% 29.3% 1.4% 2.3% 18.2% 14.9% 3.8% 35.6% 33.4%
* P/S is power to steam ratio. # Existing CHP is greater than estimated CHP potential
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3.2.2 Commercial CHP Market Potential

This section summarizes analysis of CHP technical potential in the commercial/institutional sector of the U.S. economy. This analysis was based on existing facilities and estimates of their current power and thermal consumption. The derived potential is a snapshot of the technical potential for CHP at these facilities at the end of 1999 and does not include an analysis of sector growth over the time period of the forecast. The technical market potential is an estimation of market size constrained only by technological limitsthe ability of CHP technologies to fit existing customer energy needs. No consideration of economics is included in the analysis. The technical potential for CHP in terms of MW capacity was estimated assuming that the CHP systems would be sized to meet the average electric demand for most applications. For the majority of the target markets there is a reasonable match between electric to thermal ratios of the application and the power to heat output of existing CHP technologies. Sizing to meet average electric demand supplies thermal needs for these applications and maximizes the energy efficiency of CHP deployment. It should be noted that the existing CHP capacity includes a number of large installations that are sized to sell significant amounts of excess power to the grid. The estimate of technical potential in this study assumes all power will be used on-site. A mean system size was calculated for each size category assuming a log normal distribution (220 kW for 100 to 500 kW; 700 kW for 500 to 1000 kW; 2.5 MW for 1 to 5 MW; and 9.5 MW for > 5 MW) and applied to the number of establishments estimated. The exceptions to this methodology are Office Buildings, Restaurants and Supermarkets. Thermal loads in these applications are generally inadequate to support CHP systems sized to the average electric demand based on current CHP technologies. MW capacities for these applications were reduced using factors that better reflect the electric to thermal ratio of these building types: 0.6 for Office Buildings, 0.5 for restaurants, and 0.25 for supermarkets. Based on this methodology, we estimate that the technical potential for CHP systems in existing commercial/institutional buildings approaches 77,300 MW electric capacity. Table 3-11 presents estimated market potential in terms of MW capacity by specific target application and size category.
3.2.3 Factors Impacting Market Penetration

Decentralized combined heat and power systems located at industrial and municipal sites were the foundation of the early electric power industry in the United States. However, as generating technologies advanced, the power industry began to build larger and larger central station facilities to take advantage of increasing economies of scale. CHP became a limited practice utilized by a handful of industries - paper, chemicals, refining and steel - with certain characteristics - high and relatively constant steam and electric demands, access to byproduct or waste fuels. These systems were typically sized to meet the base-load thermal demand and produced electricity as a "byproduct." A large percentage of these systems consisted of boiler/steam turbines that burned low cost/low quality fuels. The very low power to heat ratio of these systems ensured that electricity generated would not exceed plant demand and resulted in very high overall fuel utilization.
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Table 3-11: Commercial CHP Potential

Application MW Capacity (100 - 500 kW) MW Capacity (500 - 1000 kW) MW Capacity (1 - 5 MW) MW Capacity (> 5 MW) MW Capacity Total
Hotels/Motels Nursing Homes Hospitals Schools Colleges/Universities Commercial Laundries Car Washes Health Clubs/Spas Golf Clubs Museums Correctional Facilities Water Treatment/Sanitary Extended Service Restaurants Supermarkets Refrigerated Warehouses Office Buildings Total
2,642 1,014 647 7,130 221 183 253 665 836 73 261 452 2,802 897 131 7,532 25,739
627 2,837 904 6,781 407 279 28 2,839 574 202 517 342 173 203 448 5,055 22,216
1,353 3,923 5,275 973 1,693 23 0 48 513 123 1,515 155 415 84 183 4,362 20,638
2,081 219 2,052 0 1,929 0 0 0 285 0 428 0 0 0 30 1,665 8,689
6,703 7,993 8,878 14,884 4,250 485 281 3,552 2,208 398 2,721 949 3,390 1,184 792 18,614 77,281
By the 1970s, a mature, regulated electric utility industry controlled the electricity market in the U.S. Utilities more often then not discouraged customer CHP by imposing high back-up and standby rates and by refusing to purchase excess power from on-site generators. Along with utility resistance, a host of regulatory barriers at the state and federal level served to further discourage broader CHP development. In 1978 Congress passed the Public Utilities Regulatory Policies Act (PURPA), partly to encourage energy efficiency in response to the second oil crisis. A portion of PURPA was meant to encourage energy efficient cogeneration (CHP) and small power production from renewables by requiring servicing utilities to interconnect with "qualified facilities" (QFs), to provide such facilities with reasonable standby and back-up charges, and to purchase excess electricity from these facilities at the utilities avoided cost. PURPA also exempted QFs from regulatory oversight under the Public Utilities Holding Company Act and from constraints on natural gas use imposed by the Fuel Use Act. PURPA had the expected effect on CHP. Installed CHP capacity increased from about 12,000 MW in 1980 to over 52,000 MW in 1999. But PURPA also had unforeseen results. PURPA was enacted coincidentally with the availability of larger, more efficient, lower cost gas turbines and combined cycle systems with high power to heat ratios. The power purchase provisions of PURPA coupled with the availability of this new technology resulted in the development of a number of very large merchant plants leveraged towards high electricity production. For the first time since the inception of the industry, non-utility participation was being allowed in the power market. This triggered the development of third party DG and CHP developers who had greater interest in electric markets than thermal markets, and ultimately started the progression towards wholesale generation and open access.
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In the 1980s and early 1990s CHP was a requirement for participation in the electric market and third party developers actively sought industrial facilities to serve as thermal hosts. As a result, CHP penetration in sites greater than 20 MW now approaches 45% and over half of existing CHP capacity -- 29,000 MW -- is concentrated in a relative small number of plants over 100 MW in size -- 120 facilities. The environment changed again in the mid 1990s with the advent of the wholesale market for electricity. Independent power producers could now sell directly to the market without the need for QF status and CHP development slowed. In the transition to a fully restructured market, CHP is once again disadvantaged in many ways, particularly in small applications. Access to power markets is restricted, utilities are again imposing high back-up rates and offering low buyback rates, and users are delaying purchase decisions with an expectation of low retail prices in the future. Whether this is a temporary situation or a long term trend is unclear. Most analysts agree that CHP optimized to meet in-plant needs can be a very competitive energy option in a fully restructured market and that a variety of institutional and market hurdles are currently limiting CHP growth in the transition. Factors that could lead to more aggressive market penetration in the future include: Technology Improvements - Over 45% of the remaining potential in the industrial market is in systems below 20 MW. Projects in this size range are currently marginal in many areas. Equipment and development costs are high and users perceive CHP to be a high risk, non-core investment. New technologies are entering the market that promise to significantly improve CHP economics for small to medium facilities due to reduced capital costs, higher efficiencies, and inherently low emissions. The development of packaged systems that minimize site engineering are essential. Streamlined Project Implementation - Along with technology improvements, many analysts expect project implementation to become easier as well. This includes faster project implementation, lower interconnection costs due to standardization of technology and contracts, and lower installation costs due to a more competitive and stable environment for CHP. Third Party Financing and/or Ownership - Energy users use a variety of methods to determine if a particular investment is economically desirable. Simple payback is often used for preliminary evaluation of projects, and many users will not pursue an energyrelated investment unless it has a payback of 2-3 years or less. Leasing arrangements and third party financing eliminate the need for the user to provide the initial investment, and are becoming more prevalent in CHP transactions -- over 57% of existing industrial CHP capacity has some third party involvement in the transaction. Third party transactions typically have much lower economic hurdle rates as well. Third party financers often have a better understanding of the technology, have different risk aversion profiles, and will base project decisions on more flexible internal rate of return expectations. Electric Industry Restructuring - Restructuring is proceeding unevenly across the nation, but many states are considering provisions to ensure that on-site generation is not unfairly
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disadvantaged in a restructured environment. As an example, several states including California, New York and Texas are looking into the structure, level and equity of existing standby/back-up rates. Others including Texas, New Jersey, Massachusetts, Michigan, Illinois and California are exempting CHP either totally or partially from stranded cost recovery charges. Recognizing the Value of Ancillary Services - Users are beginning to realize that electric service is more than just the commodity cost. Services such as power quality, reliability, flexibility and independence are beginning to be recognized as having value and can impact project economics if properly monetized. Similarly, the value that on-site CHP can provide to the T&D system is beginning to be recognized, and may eventually be quantified and shared between the utility and the user. Recognizing Environmental Benefits of CHP - It is becoming widely accepted that CHP offers inherent environmental benefits because of its increased efficiency. Future market penetration could be increased by efforts underway to advance adoption of output-based emissions standards that promote deployment of efficient technologies such as CHP and to streamline the environmental permitting process for efficient CHP installations. CHP Competes with Retail Rates - CHP optimized to meet plant thermal and power needs competes with retail electricity rates. Project economics are heavily dependent on the structure and level of the applicable rate structure including demand and time of use charges. CHP Initiatives - Financial incentives for CHP (e.g., investment tax credits) provided by either the federal or state governments are being discussed by various parties to promote CHP's efficiency and emissions benefits. The rationale for these incentives is that increased penetration of efficient CHP results in broad public benefits that accrue to the public at large. Increased Marketing Efforts - The competitive market has created a large number of energy service providers that will be aggressively marketing energy service options including CHP. With higher marketing efforts, market penetration rates will increase for a given level of economic value. As marketing efforts and government programs are implemented, customer confidence in the technology will increase, reducing the very high risk premium that has been placed on CHP projects.
The enactment of PURPA was a watershed event that substantially changed the landscape for cogeneration in the U.S. and accelerated the penetration of large systems into the industrial market. Electric industry restructuring, the need for additional capacity to meet growing demand and maintain system integrity, advances in smaller generation technology, and concerns over climate change may collectively represent another watershed event that initiates a new cycle of accelerated growth for CHP. The evolution of the factors outlined above will determine how rapidly this new cycle grows and how sustained a market it becomes.
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4. CHP Technologies
This chapter characterizes the prime mover technologies typically used in CHP applications. The characterizations include reciprocating engines, microturbines, gas turbines, steam turbines, and fuel cells. Historically the primary industrial technologies are gas turbines, reciprocating engines and steam turbines. Conventional large industrial systems are relatively widely deployed and utilize readily available thermal technologies. Even though the commercial sector is about 75% as large as the industrial sector in terms of electricity demand, the existing applications of CHP are nine times larger in the industrial sector. There are viable CHP opportunities in the commercial sector, but technology and application matching in the commercial sector is more difficult: On average, commercial sites are much smaller than industrial sites. Technologies for smaller applications have been more expensive and less efficient than larger CHP. Commercial establishments generally operate fewer hours per year and have lower load factors, providing fewer hours of operation per year in which to payback their higher first costs.
Unlike the majority of industrial projects that can absorb the entire thermal output of a CHP system onsite, many commercial sites have either an inadequate thermal load or a highly seasonal load such as space heating. The best overall efficiency and economics come from a steady thermal load. These loads are concentrated in relatively few types of commercial applications. These have been the focus of the traditional commercial/institutional CHP market (e.g., education, hospitals, and hotels).
4.1
Reciprocating Engines
Reciprocating internal combustion engines are a widespread and well-known technology. North American production exceeds 35 million units per year for automobiles, trucks, construction and mining equipment, marine propulsion, lawn care, and a diverse set of power generation applications. A variety of stationary engine products are available for a range of power generation market applications and duty cycles including standby and emergency power, peaking service, intermediate and baseload power, and combined heat and power (CHP). Reciprocating engines are available for power generation applications in sizes ranging from a few kilowatts to over 5 MW. A schematic of a reciprocating engine based CHP system is shown in Figure 4-1. There are two basic types of reciprocating engines spark ignition (SI) and compression ignition (CI). Spark ignition engines for power generation use natural gas as the preferred fuel, although they can be set up to run on propane, gasoline, or landfill gas. Compression ignition engines (often called diesel engines) operate on diesel fuel or heavy oil, or they can be set up to run in a dual-fuel configuration that burns primarily natural gas with a small amount of diesel pilot fuel.
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Figure 4-1: Reciprocating Engine System
Diesel engines have historically been the most popular type of reciprocating engine for both small and large power generation applications. However, in the United States and other industrialized nations, diesel engines are increasingly restricted to emergency standby or limited duty-cycle service because of air emission concerns. As a result, the natural gas-fueled SI engine is now a popular choice for the higher-duty-cycle stationary power market (over 500 hr/yr). Current generation natural gas engines offer low first cost, fast start-up, proven reliability when properly maintained, excellent load-following characteristics, and significant heat recovery potential. Electric efficiencies of natural gas engines range from 28% LHV for small stoichiometric engines (<100 kW) to over 40% LHV for very large lean burn engines (> 3 MW)3. Waste heat can be recovered from the hot engine exhaust and from the engine cooling systems to produce either hot water or low pressure steam for CHP applications. Overall CHP system efficiencies (electricity and useful thermal energy) of 70 to 80% are routinely achieved with natural gas engine systems. Reciprocating engine technology has improved dramatically over the past three decades, driven by economic and environmental pressures for power density improvements (more output per unit of engine displacement), increased fuel efficiency and reduced emissions. Computer systems have greatly advanced reciprocating engine design and control, accelerating advanced engine
3
Lower Heating Value. Most of the efficiencies quoted in this report are based on higher heating value (HHV), which includes the heat of condensation of the water vapor in the combustion products. In engineering and scientific literature the lower heating value (LHV which does not include the heat of condensation of the water vapor in the combustion products) is often used. The HHV is greater than the LHV by approximately 10% with natural gas as the fuel (i.e., 50% LHV is equivalent to 45% HHV). HHV efficiencies are about 8% greater for oil (liquid petroleum products) and 5% for coal.
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designs and making possible more precise control and diagnostic monitoring of the engine process. Stationary engine manufacturers and worldwide engine R&D firms continue to drive advanced engine technology, including accelerating the diffusion of technology and concepts from the automotive market to the stationary market. The emissions signature of natural gas SI engines in particular has improved significantly in the last decade through better design and control of the combustion process and through the use of exhaust catalysts. Advanced lean burn natural gas engines are available that produce NOx levels as low as 50 ppmv @ 15% O2 (dry basis).
4.1.1 Technology Description

There are two primary reciprocating engine designs relevant to stationary power generation applications the spark ignition Otto-cycle engine and the compression ignition Diesel-cycle engine. The essential mechanical components of the Otto-cycle and Diesel-cycle are the same. Both use a cylindrical combustion chamber in which a close fitting piston travels the length of the cylinder. The piston is connected to a crankshaft that transforms the linear motion of the piston into the rotary motion of the crankshaft. Most engines have multiple cylinders that power a single crankshaft. The primary difference between the Otto and Diesel cycles is the method of igniting the fuel. Spark ignition engines (Otto-cycle) use a spark plug to ignite a pre-mixed air fuel mixture introduced into the cylinder. Compression ignition engines (Diesel-cycle) compress the air introduced into the cylinder to a high pressure, raising its temperature to the auto-ignition temperature of the fuel which is injected at high pressure. Engines are further categorized by crankshaft speed (rpm), operating cycle (2- or 4-stroke), and whether turbocharging is used. Reciprocating engines are also categorized by their original design purpose automotive, truck, industrial, locomotive and marine. Many automotive engine models are used in hundreds of small-scale stationary power, CHP, irrigation, and chiller applications. These are generally low-priced engines due to large production volumes. However, unless conservatively rated, these engines have limited durability. Truck engines have the cost benefit of production volume and are designed for reasonably long life (e.g., one million miles) and offer longer durability than automotive engines in stationary applications. A number of truck engines are available as stationary engines. Engines intended for industrial use are designed for durability and for a wide range of mechanical drive and electric power applications. Their sizes range from 20 kW up to 6 MW, including industrialized truck engines in the 200 to 600 kW range and industrially applied marine and locomotive engines above 1 MW. Both the spark ignition and the diesel 4-stroke engines most relevant to stationary power generation applications complete a power cycle in four strokes of the piston within the cylinder: 1. Intake stroke introduction of air (diesel) or air-fuel mixture (spark ignition) into the cylinder 2. Compression stroke compression of air or an air-fuel mixture within the cylinder. In diesel engines, the fuel is injected at or near the end of the compression stroke (top dead center or TDC), and ignited by the elevated temperature of the compressed air in the
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cylinder. In spark ignition engines, the compressed air-fuel mixture is ignited by an ignition source at or near TDC. 3. Power stroke acceleration of the piston by the expansion of the hot, high pressure combustion gases, and 4. Exhaust stroke expulsion of combustion products from the cylinder through the exhaust port. The simplest natural gas engines operate with natural aspiration of air and fuel into the cylinder (via a carburetor or other mixer) by the suction of the intake stroke. High performance natural gas engines are turbocharged to force more air into the cylinders. Natural gas spark ignition engines operate at modest compression ratios (compared with diesel engines) in the range of 9:1 to 12:1 depending on engine design and turbocharging. Modest compression is required to prevent auto-ignition of the fuel and engine knock, which can cause serious engine damage.4 Using high energy ignition technology, very lean fuel-air mixtures can be burned in natural gas engines, lowering peak temperatures within the cylinders and resulting in reduced NOx emissions. The lean burn approach in reciprocating engines is analogous to dry low-NOx combustors in gas turbines. All major natural gas engine manufacturers offer lean burn, low emission models and are engaged in R&D to further improve their performance. Natural gas spark ignition engine efficiencies are typically lower than diesel engines because of their lower compression ratios. However, large, high performance lean burn engine efficiencies approach those of diesel engines of the same size. Natural gas engine efficiencies range from about 28% (LHV) for small engines (<50 kW) to over 40% (LHV) for the largest high performance, lean burn engines. Lean burn engines tuned for maximum efficiency may produce twice the NOx emissions as the same engine tuned for minimum NOx. Tuning for low NOx typically results in a sacrifice of 1 to 1.5 percentage points in electric generating efficiency from the highest level achievable. Many natural gas spark ignition engines are derived from diesel engines, i.e., they are built using the same block, crankshaft, main bearings, camshaft, and connecting rods as the diesel engine. However, natural gas spark ignition engines operate at lower brake mean effective pressure (BMEP) and peak pressure levels to prevent knock.5 Due to the derating effects from lower BMEP, the spark ignition versions of diesel engines often produce only 60 to 80% of the power output of the parent diesel. Manufacturers often enlarge cylinder bore about 5 to 10% to increase the power, but this is only partial compensation for the derated output. Consequently, the $/kW capital costs of natural gas spark ignition engines are generally higher than the diesel engines from which they were derived. However, by operating at lower cylinder pressure and bearing loads as well as in the cleaner combustion environment of natural gas, spark ignition engines generally offer the benefits of extended component life compared to their diesel parents.
4
Knock is produced by explosive auto-ignition of a portion of the fuel in the cylinder due to compression and heating of the gas mixture ahead of the flame front. The term knock and detonation are often used interchangeably. Brake mean effective pressure (BMEP) can be regarded as the average cylinder pressure on the piston during the power stroke and is a measure of the effectiveness of engine power output or mechanical efficiency.
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Dual fuel engines are diesel compression ignition engines predominantly fueled by natural gas with a small percentage of diesel oil as the pilot fuel. The pilot fuel auto-ignites and initiates combustion in the main air-fuel mixture. Pilot fuel percentages can range from more than 15% to 1% of total fuel input. Dual fuel operation is a combination of Diesel and Otto cycle operation, approaching the Diesel cycle more closely as the pilot fuel percentage is reduced to very low values. Most dual fuel engines can be switched back and forth on the fly between dual fuel and 100% diesel operation. In general, because of lower diesel oil usage, NOx, smoke and particulate emissions are lower for dual fuel engines than for straight diesel operation particularly at full load. Particulate emissions are reduced in line with the percentage reduction in diesel oil consumption while the level of NOx reduction depends on combustion characteristics. However, CO and unburned hydrocarbon emissions are often higher, partly because of incomplete combustion. There are three basic types of dual fuel engines: Conventional, low pressure gas injection engines typically require about 5 to 10% pilot fuel and may be derated to about 80 to 95% of the rated diesel capacity to avoid detonation. The minimum pilot fuel requirement is generally set by the turndown ratio of the diesel fuel injection system. Conventional diesel injectors cannot reliably turn down to less than 5 to 6% of the full load injection rate. Natural gas input is controlled at each cylinder by injecting gas before the air intake valves open. NOx emissions of conventional dual fuel engines are generally in the 5 to 8 gm/kWh range (compared to lean burn natural gas engines with NOx emissions in the 0.7 to 2.5 gm/kWh range). High pressure gas injection engines attempt to reduce derating by injecting natural gas at very high pressures (3,600 to 5,100 psig) directly into the main combustion chamber as the pilot fuel is injected. However, the parasitic power for gas compression can be as high as 4 to 7% of the rated power output partly offsetting the benefit of reduced derating. This technology has not proved particularly popular because of this issue and the additional equipment costs required for gas injection. Pilot fuel consumption is typically 3 to 8% and NOx emissions are generally in the 5 to 8 gm/kWh range. Micropilot prechamber engines are similar to spark ignition prechamber engines in that the pilot fuel injected into a prechamber provides a high energy torch that ignites the very lean, compressed fuel air mixture in the cylinder. Leaner mixtures than spark ignition engines are achievable since the energy provided by the diesel-fueled micropilot chamber is higher than that obtained with a spark ignition prechamber. Micropilot dual fuel engines with 1% pilot fuel can operate at or close to the diesel engines compression ratio and BMEP, so little, if any, derating occurs. In this case the high power density and low $/kW cost advantage of the original diesel engine are retained and engine efficiency at 75 to 100% load is close to that of the 100% diesel engine. NOx and other emissions are comparable to those of lean burn spark ignition prechamber engines (NOx emissions in the 0.7 to 2.5 gm/kWh range). These engines must be equipped with conventional diesel fuel injectors in order to operate on 100% diesel. Several independent developers and engine manufacturers are testing and commercializing dual fuel retrofit kits for converting existing diesel engines to dual fuel operation. The level of sophistication of these kits varies widely and some require major engine modifications.
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Derating, efficiencies, and emissions also vary widely and have yet to be fully tested or certified. However, dual fuel conversions are not expected to be as low in emissions as dedicated natural gas engines. In addition, manufacturers may not honor warrantees on an engine that has been retrofitted by an independent third party.
4.1.2 Performance
Table 4-1 summarizes performance characteristics for typical commercially available natural gas spark ignition engine CHP systems over a 100 kW to 5 MW size range. This size range covers the majority of the market applications for engine-driven CHP. Heat rates and efficiencies shown were taken from manufacturers specifications and industry publications. Available thermal energy was calculated from published engine data on engine exhaust temperatures and engine jacket and lube system coolant flows. CHP thermal recovery estimates are based on producing hot water for process or space heating needs. As shown in the table, 50 to 60% of the waste heat from engine systems is recovered from jacket cooling water and lube oil cooling systems at a temperature too low to produce steam. This feature is generally less critical in commercial/institutional applications where it is more common to have hot water thermal loads. Steam can be produced from the exhaust heat if required (maximum pressure of 150 psig), but if no hot water is needed, the amount of heat recovered from the engine is reduced and total CHP system efficiency drops accordingly. The data in the table show that electrical efficiency increases as engine size becomes larger. As electrical efficiency increases, the absolute quantity of thermal energy available to produce useful thermal energy decreases per unit of power output, and the ratio of power to heat for the CHP system generally increases. A changing ratio of power to heat impacts project economics and may affect the decisions that customers make in terms of CHP acceptance, sizing, and the desirability of selling power.
4.1.3 Emissions
Exhaust emissions are the primary environmental concern with reciprocating engines. The primary pollutants are oxides of nitrogen (NOx), carbon monoxide (CO), and volatile organic compounds (VOCs unburned, non-methane hydrocarbons). Other pollutants such as oxides of sulfur (SOx) and particulate matter (PM) are primarily dependent on the fuel used. Emissions of sulfur compounds, primarily SO2, are related to the sulfur content of the fuel. Engines operating on natural gas or distillate oil, which has been desulfurized in the refinery, emit insignificant levels of SOx. In general, SOx emissions are an issue only in large, slow speed diesels firing heavy oils. Particulate matter (PM) can be an important pollutant for engines using liquid fuels. Ash and metallic additives in the fuel contribute to PM in the exhaust. NOx emissions are usually the primary concern with natural gas engines and are a mixture of (mostly) NO and NO2 in variable composition. In measurement, NOx is reported as parts per million by volume in which both species count equally (e.g., ppmv at 15% O2, dry). Other common units for reporting NOx in reciprocating engines are gm/hp-hr and gm/kWh, or as an output rate such as lbs/hr. Among engine options, lean burn natural gas engines produce the lowest NOx emissions and diesel engines produce the highest (without further exhaust treatment).
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Table 4-1: Gas Engine CHP - Typical Performance Parameters Cost & Performance Characteristics6
Baseload Electric Capacity (kW) Total Installed Cost (YR 2001 $/kW)7 Electric Heat Rate (Btu/kWh), HHV8 Electrical Efficiency (%), HHV Engine Speed (rpm) Fuel Input (MMBtu/hr) Required Fuel Gas Pressure (psig)
System 1
100 $1,515 11,147 30.6% 1800 1.11 <3 1.0 1060 0.20 0.37 0 0.57 167 Hot H20 81% 51% 0.60 4,063 0.84
System 2
300 $1,200 10,967 31.1% 1800 3.29 <3 3.3 1067 0.82 0.69 0 1.51 443 Hot H20 77% 46% 0.68 4,687 0.73
System 3
800 $1000 10,246 33.3% 1200 8.20 <3 10.9 869 2.12 1.09 0.29 3.50 1,025 Hot H20 76% 43% 0.78 4,774 0.71
System 4
3,000 $920 9,492 36.0% 900 28.48 43 48.4 688 5.54 4.37 1.22 11.12 3,259 Hot H20 75% 39% 0.92 4,857 0.70
System 5
5,000 $920 8,758 39.0% 720 43.79 65 67.1 698 7.16 6.28 1.94 15.38 4,508 Hot H20 74% 35% 1.11 4,914 0.69
CHP Characteristics
Exhaust Flow (1000 lb/hr) Exhaust Temperature (Fahrenheit) Heat Recovered from Exhaust (MMBtu/hr) Heat Recovered from Cooling Jacket (MMBtu/hr) Heat Recovered from Lube System (MMBtu/hr) Total Heat Recovered (MMBtu/hr) Total Heat Recovered (kW) Form of Recovered Heat Total Efficiency (%)9 Thermal Output/Fuel Input (%) Power/Heat Ratio10 Net Heat Rate (Btu/kWh)11 Effective Electrical Efficiency12
Source: EEA
Characteristics for typical commercially available natural gas engine gensets. Data based on: MAN 150 kW 100 kW; Cummins GSK19G 300 kW; Caterpillar G3516 LE 800 kW; Caterpiller G3616 LE 3 MW; Wartsila 5238 LN - 5 MW; Energy use and exhaust flows normalized to nominal system sizes. 7 Installed costs based on CHP system producing hot water from exhaust heat recovery (250 F exhaust from heat recovery heat exchanger), and jacket and lube system cooling 8 All engine manufacturers quote heat rates in terms of the lower heating value (LHV) of the fuel. However the purchase price of fuels on an energy basis is typically measured on a higher heating value basis (HHV). For natural gas, the average heat content of natural gas is 1030 Btu/kWh on an HHV basis and 930 Btu/kWh on an LHV basis or about a 10% difference. 9 Total CHP Efficiency = (net electric generated + net thermal energy recovered)/total engine fuel input 10 Power/Heat Ratio = (CHP electric power output (Btu))/useful thermal output (Btu) 11 Net Heat Rate = (Total fuel input to the CHP system - the fuel that would be normally used to generate the same amount of thermal output as the CHP system thermal output assuming an efficiency of 80%)/CHP electric output (kW). 12 Effective Electrical Efficiency = (CHP electric power output)/(Total fuel into CHP system total heat recovered/0.8); Equivalent to 3412 Btu/kWh/Net Heat Rate
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The control of peak flame temperature through lean burn conditions has been the primary combustion approach to limiting NOx formation in gas engines. Diesel engines produce higher combustion temperatures and more NOx than lean burn gas engines, even though the overall diesel engine air/fuel ratio may be very lean. There are three reasons for this: (1) heterogeneous near-stoichiometric combustion; (2) the higher adiabatic flame temperature of distillate fuel; and (3) fuel-bound nitrogen. The diesel fuel is atomized as it is injected and dispersed in the combustion chamber. Combustion largely occurs at near-stoichiometric conditions at the airdroplet and air-fuel vapor interfaces, resulting in maximum temperatures and higher NOx. In contrast, lean-premixed homogeneous combustion used in lean burn gas engines results in lower combustion temperatures and lower NOx production. For any engine there are generally trade-offs between low NOx emissions and high efficiency. There are also trade-offs between low NOx emissions and emissions of the products of incomplete combustion (CO and unburned hydrocarbons). There are three main approaches to these trade-offs that come into play depending on regulations and economics. One approach is to control for lowest NOx accepting a fuel efficiency penalty and possibly higher CO and hydrocarbon emissions. A second option is finding an optimal balance between emissions and efficiency. A third option is to design for highest efficiency and use post-combustion exhaust treatment. There are several types of catalytic exhaust gas treatment processes that are applicable to various types of reciprocating engines three-way catalyst, selective catalytic reduction, oxidation catalysts, and lean NOx catalysts. The catalytic three-way conversion process (TWC) is the basic automotive catalytic converter process that reduces concentrations of all three major criteria pollutants NOx, CO and VOCs. The TWC is also called non-selective catalytic reduction (NSCR). NOx and CO reductions are generally greater than 90%, and VOCs are reduced approximately 80% in a properly controlled TWC system. Because the conversions of NOx to N2 and CO and hydrocarbons to CO2 and H2O will not take place in an atmosphere with excess oxygen (exhaust gas must contain less than 0.5% O2), TWCs are only effective with stoichiometric or rich-burning engines. Typical engine out NOx emission rates for a rich burn engine are 10 to 15 gm/bhp-hr. NOx emissions with TWC control are as low as 0.15 gm/bhp-hr. Stoichiometric and rich burn engines generally have lower efficiencies than lean burn engines. The TWC system also increases maintenance costs by as much as 25%. TWCs are based on noble metal catalysts that are vulnerable to poisoning and masking, limiting their use to engines operated with clean fuels e.g., natural gas and unleaded gasoline. Also, the engines must use lubricants that do not generate catalyst poisoning compounds and have low concentrations of heavy and base metal additives. Unburned fuel, unburned lube oil, and particulate matter can also foul the catalyst. TWC technology is not applicable to lean burn gas engines or diesels. Lean burn engines equipped with selective catalytic reduction (SCR) technology selectively reduces NOx to N2 in the presence of a reducing agent. NOx reductions of 80 to 90% are achievable with SCR. Higher reductions are possible with the use of more catalyst or more reducing agent, or both. The two agents used commercially are ammonia (NH3 in anhydrous
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liquid form or aqueous solution) and aqueous urea. Urea decomposes in the hot exhaust gas and SCR reactor, releasing ammonia. Approximately 0.9 to 1.0 moles of ammonia is required per mole of NOx at the SCR reactor inlet in order to achieve an 80 to 90% NOx reduction. SCR systems add a significant cost burden to the installation cost and maintenance cost of an engine system, and can severely impact the economic feasibility of smaller engine projects. SCR requires on-site storage of ammonia, a hazardous chemical. In addition ammonia can slip through the process unreacted, contributing to environmental health concerns. Oxidation catalysts generally are precious metal compounds that promote oxidation of CO and hydrocarbons to CO2 and H2O in the presence of excess O2. CO and NMHC conversion levels of 98 to 99% are achievable. Methane conversion may approach 60 to 70%. Oxidation catalysts are now widely used with all types of engines, including diesel engines. They are being used increasingly with lean burn gas engines to reduce their relatively high CO and hydrocarbon emissions. Lean-NOx catalysts utilize a hydrocarbon reductant (usually the engine fuel) injected upstream of the catalyst to reduce NOx. While still under development, it appears that NOx reduction of 80% and both CO and NMHC emissions reductions of 60% may be possible. Long-term testing, however, has raised issues about sustained performance of the catalysts. Current lean-NOx catalysts are prone to poisoning by both lube oil and fuel sulfur. Both precious metal and base metal catalysts are highly intolerant of sulfur. Fuel use can be significant with this technology the high NOx output of diesel engines would require approximately 3% of the engine fuel consumption for the catalyst system.
4.1.4 CHP Applications

Potential distributed generation applications for reciprocating engines include standby, peak shaving, grid support, and CHP applications in which hot water, low pressure steam, or wasteheat-fired absorption chillers are required. Reciprocating engines are also used extensively as direct mechanical drives in applications such as water pumping, air and gas compression and chilling/refrigeration. While the use of reciprocating engines is expected to grow in various distributed generation applications, the most prevalent on-site generation application for natural gas SI engines has traditionally been CHP, and this trend is likely to continue. The economics of natural gas engines in on-site generation applications is enhanced by effective use of the thermal energy contained in the exhaust gas and cooling systems, which generally represents 60 to 70% of the inlet fuel energy.
4.1.5 Thermal Energy Generation

There are four sources of usable waste heat from a reciprocating engine: exhaust gas, engine jacket cooling water, lube oil cooling water, and turbocharger cooling. Heat can generally be recovered in the form of hot water or low pressure steam (<30 psig). Medium pressure steam (up to about 150 psig) can be generated from the engines high temperature exhaust gas, but the hot exhaust gas contains only about one half of the available thermal energy from a reciprocating engine. Some industrial CHP applications use the engine exhaust gas directly for process drying. Generally, the hot water and low pressure steam produced by reciprocating engine CHP systems
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is appropriate for low temperature process needs, space heating, potable water heating, and to drive absorption chillers providing cold water, air conditioning or refrigeration. The most common method of recovering engine heat is the closed-loop cooling system as shown in Figure 4-2. These systems are designed to cool the engine by forced circulation of a coolant through engine passages and an external heat exchanger. An excess heat exchanger transfers engine heat to a cooling tower or radiator when there is excess heat generated. Closed-loop water cooling systems can operate at coolant temperatures from 190 to 250F. Depending on the engine and CHP systems requirements, the lube oil cooling and turbocharger aftercooling may be either separate or part of the jacket cooling system. Figure 4-2: Closed-Loop Heat Recovery
Customer Heat Exchanger
Exhaust
Engine Heat Recovery Excess Heat Exchanger

T
Gear Box
Oil Cooler
Jacket Water
Ebullient cooling systems cool the engine by natural circulation of a boiling coolant through the engine. This type of cooling system is typically used in conjunction with exhaust heat recovery for production of low-pressure steam. Cooling water is introduced at the bottom of the engine where the transferred heat begins to boil the coolant generating two-phase flow. The formation of bubbles lowers the density of the coolant, causing a natural circulation to the top of the engine. The coolant at the engine outlet is maintained at saturated steam conditions and is usually limited to 250F and a maximum of 15 psig. Inlet cooling water is also near saturation conditions and is generally 2 to 3F below the outlet temperature. The uniform temperature throughout the coolant circuit extends engine life and contributes to improved combustion efficiencies. Exhaust heat is typically used to generate hot water to about 230F or low-pressure steam (up to 150 psig). Only a portion of the exhaust heat can be recovered since exhaust gas temperatures are generally kept above temperature thresholds to prevent the corrosive effects of condensation in the exhaust piping. For this reason, most heat recovery units are designed for a 250 to 350F exhaust outlet temperature.
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Exhaust heat recovery can be independent of the engine cooling system or coupled with it. For example, hot water from the engine cooling can be used as feedwater or feedwater preheat to the exhaust recovery unit. In a typical district heating system, jacket cooling, lube oil cooling, single stage aftercooling and exhaust gas heat recovery are all integrated for steam production.
4.1.6 Current Market Applications

There were an estimated 1,055 engine-based CHP systems operating in the United States in 2000 representing over 800 MW of electric capacity. Facility capacities range from 30 kW to 30 MW, with many larger facilities comprised of multiple units. Reciprocating engine CHP systems are installed in a variety of applications as shown in Figure 4-3. Spark ignited engines fueled by natural gas or other gaseous fuels represent 84% of the installed reciprocating engine CHP capacity. Thermal loads most amenable to engine-driven CHP systems in commercial/institutional buildings are space heating and hot water requirements. The simplest thermal load to supply is hot water. Primary applications for CHP in the commercial/institutional sectors are those building types with relatively high and coincident electric and hot water demand such as colleges and universities, hospitals and nursing homes, and lodging. Office buildings, and certain warehousing and mercantile/service applications can be economic applications for CHP if space heating needs can be incorporated. Technology development efforts targeted at heat activated cooling/refrigeration and thermally regenerated desiccants are designed to expand the application of engine-driven CHP by increasing the thermal energy loads in certain building types. Use of CHP thermal output for absorption cooling and/or desiccant dehumidification could increase the size and improve the economics of CHP systems in existing CHP markets such as schools, lodging, nursing homes and hospitals. Use of these advanced technologies in applications such as restaurants, supermarkets and refrigerated warehouses provides a base thermal load that opens these applications to CHP. A typical commercial application for reciprocating engine CHP is a hospital or health care facility with a 1 MW CHP system comprised of multiple 200 to 300 kW natural gas engine gensets. The system is designed to satisfy the baseload electric needs of the facility. Approximately 1.6 MW thermal (MWth) of hot water is recovered from engine exhaust and engine cooling systems to provide space heating and domestic hot water to the facility, and to drive absorption chillers for space conditioning during summer months. Overall efficiency of this type of CHP system can exceed 70%. Engine-driven CHP can be used in a variety of industrial applications where hot water or low pressure steam is required for process needs or space heating. A typical industrial application for engine CHP would be a food processing plant with a 2 MW natural gas engine-driven CHP system comprised of multiple 500 to 800 kW engine gensets. The system provides baseload power to the facility and approximately 2.2 MWth low pressure steam for process heating and washdown. Overall efficiency for a CHP system of this type approaches 75%.
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Figure 4-3: Existing Reciprocating Engine CHP - 801 MW at 1,055 sites

Other Industrial 155 MW Other Commercial 186 MW Universities 100 MW
Chemicals Processing 36 MW Office Buildings 57 MW Food Processing 79 MW Water Treatment 92 MW
Hospitals 95 MW
Source: EEA
4.1.7 CHP Potential

The economics of engines in on-site power generation applications often depend on effective use of the thermal energy contained in the exhaust gas and cooling systems, which generally represents 60 to 70% of the inlet fuel energy. Most of the waste heat is available in the engine exhaust and jacket coolant, while smaller amounts can be recovered from the lube oil cooler and the turbocharger's intercooler and aftercooler (if so equipped). The most common use of this heat is to generate hot water or low pressure steam for process use or for space heating, process needs, domestic hot water or absorption cooling. However, the engine exhaust gases can also be used as a source of direct energy for drying or other direct heat processes. Heat in the engine jacket coolant accounts for up to 30% of the energy input and is capable of producing 200 to 210F hot water. Some engines, such as those with high pressure or ebullient cooling systems, can operate with water jacket temperatures up to 265F. Engine exhaust heat represents from 30 to 50% of the available waste heat. Exhaust temperatures of 850 to 1200F are typical. By recovering heat in the cooling systems and exhaust, approximately 60 to 70% of the fuel's energy can be effectively utilized to produce both power and useful thermal energy.
4.2
Microturbines
Microturbines are small electricity generators that burn gaseous and liquid fuels to create highspeed rotation that turns an electrical generator. Todays microturbine technology is the result of development work in small stationary and automotive gas turbines, auxiliary power equipment
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and turbochargers, much of which was pursued by the automotive industry beginning in the 1950s. Microturbines entered field testing around 1997 and began initial commercial service in 2000. The size range for microturbines available and in development is from 30 to 400 kilowatts (kW), while conventional gas turbine sizes range from 500 kW to 350 megawatts (MW). Microturbines run at high speeds and, like larger gas turbines, can be used in power-only generation or in combined heat and power (CHP) systems. They are able to operate on a variety of fuels, including natural gas, sour gases (high sulfur, low Btu content), and liquid fuels such as gasoline, kerosene, and diesel fuel/distillate heating oil. In resource recovery applications, they burn waste gases that would otherwise be flared or released directly into the atmosphere. Designed to combine the reliability of auxiliary power systems used on board commercial aircraft with the design and manufacturing economies of turbochargers, the units are targeted at CHP and prime power applications in commercial buildings and light industrial applications. A schematic of a microturbine-based CHP system is shown in Figure 4-4. In most configurations, a high speed turbine (100,000 rpm) drives a high speed generator producing direct current (DC) power that is electronically inverted to 60 Hz (or 50 Hz) AC. Microturbine systems are capable of producing power at around 25-33 percent efficiency by employing a recuperator that transfers exhaust heat back into the incoming air stream. Efficiencies generally decrease at elevated ambient temperatures. The systems are air cooled and some designs use air bearings, thereby eliminating both water and oil systems used by reciprocating engines. Low emission combustion systems are being demonstrated that provide emissions performance comparable to larger gas turbines. The potential for reduced maintenance and high reliability and durability is currently being demonstrated in actual applications.
Figure 4-4: Microturbine System
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Microturbines are ideally suited for distributed generation applications due to their flexibility in connection methods, ability to be stacked in parallel to serve larger loads, ability to provide stable and reliable power, and low emissions. Types of applications include:

Peak shaving and base load power (grid parallel) Combined heat and power Stand-alone power Backup/standby power Ride-through connection Primary power with grid as backup Microgrid Resource recovery.
Target customers include financial services, data processing, telecommunications, restaurant, lodging, retail, office building, and other commercial sectors. Microturbines are currently operating in resource recovery operations at oil and gas production fields, wellheads, coal mines, and landfill operations, where byproduct gases serve as essentially free fuel. Unattended operation is important since these locations may be remote from the grid, and even when served by the grid, may experience costly downtime when electric service is lost due to weather, fire, or animals. In CHP applications, the waste heat from the microturbine is used to produce hot water, to heat building space, to drive absorption cooling or desiccant dehumidification equipment, and to supply other thermal energy needs in a building or industrial process.

Microturbines are small gas turbines, most of which feature an internal heat exchanger called a recuperator. In a microturbine, a radial compressor compresses the inlet air that is then preheated in the recuperator using heat from the turbine exhaust. Next, the heated air from the recuperator mixes with fuel in the combustor and hot combustion gas expands through the expansion and power turbines. The expansion turbine turns the compressor and, in single-shaft models, turns the generator as well. Two-shaft models use the compressor drive turbines exhaust to power a second turbine that drives the generator. Single-shaft models generally operate at speeds over 60,000 revolutions per minute (rpm) and generate electrical power of high frequency, and of variable frequency (alternating current --AC). This power is rectified to direct current (DC) and then inverted to 60 hertz (Hz) for U.S. commercial use. In the two-shaft version, the power turbine connects via a gearbox to a generator that produces power at 60 Hz. Some manufacturers offer units producing 50 Hz for use in countries where 50 Hz is standard, such as in Europe and parts of Asia.
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Microturbines operate on the same thermodynamic cycle, known as the Brayton cycle, as larger gas turbines. In this cycle, atmospheric air is compressed, heated, and then expanded, with the excess power produced by the expander (also called the turbine) over that consumed by the compressor used for power generation. The power produced by an expansion turbine and consumed by a compressor is proportional to the absolute temperature of the gas passing through those devices. Consequently, it is advantageous to operate the expansion turbine at the highest practical temperature consistent with economic materials and to operate the compressor with inlet airflow at as low a temperature as possible. As technology advances permit higher turbine inlet temperature, the optimum pressure ratio also increases. Higher temperature and pressure ratios result in higher efficiency and specific power. Thus, the general trend in gas turbine advancement has been towards a combination of higher temperatures and pressures. However, microturbine inlet temperatures are generally limited to 1,800F or below to enable the use of relatively inexpensive materials for the turbine wheel, and to maintain pressure ratios at a comparatively low 3.5 to 4.0. The basic components of a microturbine are the compressor, turbine generator, and recuperator. The heart of the microturbine is the compressor-turbine package, which is commonly mounted on a single shaft along with the electric generator. Two bearings support the single shaft. The single moving part of the one-shaft design has the potential for reducing maintenance needs and enhancing overall reliability. There are also two-shaft versions, in which the turbine on the first shaft directly drives the compressor while a power turbine on the second shaft drives a gearbox and conventional electrical generator producing 60 Hz power. The two-shaft design features more moving parts but does not require complicated power electronics to convert high frequency AC power output to 60 Hz. Moderate to large-size gas turbines use multi-stage axial flow turbines and compressors, in which the gas flows along the axis of the shaft and is compressed and expanded in multiple stages. However, microturbine turbomachinery is based on single-stage radial flow compressors and turbines. Radial flow turbomachinery handles the small volumetric flows of air and combustion products with reasonably high component efficiency. Large-size axial flow turbines and compressors are typically more efficient than radial flow components. However, in the size range of microturbines -- 0.5 to 5 lbs/second of air/gas flow -- radial flow components offer minimum surface and end wall losses and provide the highest efficiency. In microturbines, the turbocompressor shaft generally turns at high rotational speed, about 96,000 rpm in the case of a 30 kW machine and about 80,000 rpm in a 75 kW machine. There is no single rotational speed-power size rule, as the specific turbine and compressor design characteristics strongly influence the physical size of components and consequently rotational speed. For a specific aerodynamic design, as the power rating decreases, the shaft speed increases, hence the high shaft speed of the small microturbines. The radial flow turbine-driven compressor is quite similar in terms of design and volumetric flow to automobile, truck, and other small reciprocating engine turbochargers. Superchargers and turbochargers have been used for almost 80 years to increase the power of reciprocating engines by compressing the inlet air to the engine. Todays world market for small automobile and truck turbochargers is around two million units per year. Small gas turbines, of the size and power
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rating of microturbines, serve as auxiliary power systems on airplanes. Cabin cooling (air conditioning) systems of airplanes use this same size and design family of compressors and turbines. The decades of experience with these applications provide the basis for the engineering and manufacturing technology of microturbine components.
Generator
The microturbine produces electrical power either via a high-speed generator turning on the single turbo-compressor shaft or with a separate power turbine driving a gearbox and conventional 3,600 rpm generator. The high-speed generator of the single-shaft design employs a permanent magnet (typically Samarium-Cobalt) alternator, and requires that the high frequency AC output (about 1,600 Hz for a 30 kW machine) be converted to 60 Hz for general use. This power conditioning involves rectifying the high frequency AC to DC, and then inverting the DC to 60 Hz AC. Power conversion comes with an efficiency penalty (approximately five percent). To start-up a single shaft design, the generator acts as a motor turning the turbo-compressor shaft until sufficient rpm is reached to start the combustor. If the system is operating independent of the grid (black starting), a power storage unit (typically a battery UPS) is used to power the generator for start-up.
Recuperators
Recuperators are heat exchangers that use the hot turbine exhaust gas (typically around 1,200F) to preheat the compressed air (typically around 300F) going into the combustor, thereby reducing the fuel needed to heat the compressed air to turbine inlet temperature. Todays microturbines require a recuperator to achieve the efficiency levels needed to be competitive in continuous duty service. Depending on microturbine operating parameters, recuperators can more than double machine efficiency. However, since there is increased pressure drop in both the compressed air and turbine exhaust sides of the recuperator, power output typically declines 10 to 15%. Recuperators also lower the temperature of the microturbine exhaust, reducing the microturbines effectiveness in CHP applications.
Bearings
Microturbines operate on either oil-lubricated or air bearings, which support the shaft(s). Oillubricated bearings are mechanical bearings and come in three main forms high-speed metal roller, floating sleeve, and ceramic surface. The latter typically offer the most attractive benefits in terms of life, operating temperature, and lubricant flow. While they are a well-established technology, they require an oil pump, oil filtering system, and liquid cooling that add to microturbine cost and maintenance. In addition, the exhaust from machines featuring oillubricated bearings may not be useable for direct space heating in cogeneration configurations due to the potential for contamination. Since the oil never comes in direct contact with hot combustion products, as is the case in small reciprocating engines, it is believed that the reliability of such a lubrication system is more typical of ship propulsion diesel systems (which have separate bearings and cylinder lubrication systems) and automotive transmissions than cylinder lubrication in automotive engines.
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Air bearings have been in service on airplane cabin cooling systems for many years. They allow the turbine to spin on a thin layer of air, so friction is low and rpm is high. No oil or oil pump is needed. Air bearings offer simplicity of operation without the cost, reliability concerns, maintenance requirements, or power drain of an oil supply and filtering system. Concern does exist for the reliability of air bearings under numerous and repeated starts due to metal on metal friction during startup, shutdown, and load changes. Reliability depends largely on individual manufacturers' quality control methodology more than on design engineering, and will only be proven after significant experience with substantial numbers of units with long numbers of operating hours and on/off cycles. Air bearings significantly lengthen microturbine startup time (one to two minutes).
Power Electronics
As discussed, single-shaft microturbines feature digital power controllers to convert the high frequency AC power produced by the generator into usable electricity. The high frequency AC is rectified to DC, inverted back to 60 or 50 Hz AC, and then filtered to reduce harmonic distortion. This is a critical component in the single-shaft microturbine design and represents significant design challenges, specifically in matching turbine output to the required load. To allow for transients and voltage spikes, power electronics designs are generally able to handle seven times the nominal voltage. Most microturbine power electronics are generating threephase electricity. Electronic components also direct all of the operating and startup functions. Microturbines are generally equipped with controls that allow the unit to be operated in parallel or independent of the grid, and internally incorporate many of the grid and system protection features required for interconnect. The controls also allow for remote monitoring and operation. Microturbines are more complex than conventional simple-cycle gas turbines, as the addition of the recuperator both reduces fuel consumption (thereby substantially increasing efficiency) and introduces additional internal pressure losses that moderately lower efficiency and power. As the recuperator has four connections -- to the compressor discharge, the expansion turbine discharge, the combustor inlet, and the system exhaust -- it becomes a challenge to the microturbine product designer to make all of the connections in a manner that minimizes pressure loss, keeps manufacturing cost low, and entails the least compromise of system reliability. Each manufacturers models have evolved in unique ways. The addition of a recuperator opens numerous design parameters to performance-cost tradeoffs. In addition to selecting the pressure ratio for high efficiency and best business opportunity (high power for low price), the recuperator has two performance parameters, effectiveness and pressure drop, that also have to be selected for the combination of efficiency and cost that creates the best business conditions. Higher effectiveness recuperation requires greater recuperator surface area, which both increases cost and incurs additional pressure drop. Such increased internal pressure drop reduces net power production and consequently increases microturbine cost per kW. Microturbine performance, in terms of both efficiency and specific power, is highly sensitive to small variations in component performance and internal losses. This is because the high
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efficiency recuperated cycle processes a much larger amount of air and combustion products flow per kW of net powered delivered than is the case for high-pressure ratio simple-cycle machines. When the net output is the small difference between two large numbers (the compressor and expansion turbine work per unit of mass flow), small losses in component efficiency, internal pressure losses and recuperator effectiveness have large impacts on net efficiency and net power per unit of mass flow. For these reasons, it is advisable to focus on trends and comparisons in considering performance, while relying on manufacturers guarantees for precise values.
4.2.2 Performance
Table 4-2 summarizes the performance characteristics of typically commercially available microturbines. Heat rates and efficiencies shown were taken from manufacturers specifications and industry publications. Electrical efficiencies are net of parasitic and conversion losses. It should be noted that performance is also affected by ambient air temperatures. High ambient air temperatures do result in a significant drop in efficiency. Available thermal energy is calculated based on manufacturer specifications on turbine exhaust flows and temperatures. CHP thermal recovery estimates are based on producing hot water for process or space heating applications. Total CHP efficiency is the sum of the net electricity generated plus hot water produced for building thermal needs divided by total fuel input to the system. The data in the table show that electrical efficiency increases as the microturbine becomes larger. As electrical efficiency increases, the absolute quantity of thermal energy available decreases per unit of power output, and the ratio of power to heat for the CHP system increases. A changing ratio of power to heat impacts project economics and may affect the decisions that customers make in terms of CHP acceptance, sizing, and other characteristics. Each microturbine manufacturer represented uses a different recuperator, and each has made individual tradeoffs between cost and performance. Performance involves the extent to which the recuperator effectiveness increases cycle efficiency, the extent to which the recuperator pressure drop decreases cycle power, and the choice of what cycle pressure ratio to use. Consequently, microturbines of different makes will have different CHP efficiencies and different net heat rates chargeable to power. As shown, microturbines typically require 50 to 80 psig fuel supply pressure. Because microturbines are built with pressure ratios between 3 and 4 to maximize efficiency with a recuperator at modest turbine inlet temperature, the required supply pressure for microturbines is much less than for industrial-size gas turbines with pressure ratios of 7 to 35. Local distribution gas pressures usually range from 30 to 130 psig in feeder lines and from 1 to 50 psig in final distribution lines. Most U.S. businesses that would use a 30, 70, or 100 kW microturbine receive gas at about 0.5 to 1.0 psig. Additionally, most building codes prohibit piping higher-pressure
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Table 4-2: Microturbine CHP - Typical Performance Parameters

Cost & Performance Characteristics13 Nominal Electricity Capacity (kW) Net Electrical Capacity (kW)14 Package Cost (2003 $/kW)15 Total Installed Cost for Power-only (YR 2003 $/kW) Total Installed Cost for CHP (YR 2003 $/kW)16 Electric Heat Rate (Btu/kWh), HHV17 Net Electrical Efficiency (%), HHV18 Fuel Input (MMBtu/hr) Required Fuel Gas Pressure (psig)19 Required Fuel Gas Pressure w/GBC (psig)20 CHP Characteristics Exhaust Flow (lbs/sec) GT Exhaust Temp (degrees F) Heat Exchanger Exhaust Temp (degrees F)21 Heat Output (MMBtu/hr) Heat Output (kW equivalent) Total CHP Efficiency (%), HHV22 Thermal Output/Fuel Input Power/Heat Ratio23 Net Heat Rate (Btu/kWh)24 System 1 30 kW 28 $1,280 $2,263 $2,636 15,071 22.6% 0.423 55 0.2-15 0.68 530 220 0.186 54 67% 0.44 0.52 6,795 System 2 70 kW 67 $1,070 $1,658 $1,926 13,544 25.2% 0.91 70 0.2-15 1.60 450 220 0.325 95 61% 0.36 0.70 7,485 System 3 80 kW 76 $1,100 $1,663 $1,932 14,103 24.2% 1.09 85 0.2-15 1.67 500 220 0.412 121 63% 0.38 0.63 7,320 System 4 100 kW 100 $1,000 $1,526 $1,749 13,127 26.0% 1.31 90 0.3-15 1.76 520 220 0.466 136 62% 0.35 0.73 7,300
13
EEA estimates of characteristics are representative of typical commercially available microturbine systems. Table data are based on: Capstone Model 330 30 kW; IR Energy Systems 70LM - 70 kW (two-shaft); Bowman TG80 80 kW; Turbec T100 100 kW. Performance characteristics are based on ISO standard ambient temperature of 59 degrees F. 14 Net of parasitic losses from gas boost compressor (GBC) and conversion losses from power conversion equipment 15 Microturbine package cost only. The cost for all units except for 30 kW unit includes integral heat recovery water heater. All unit estimates include a fuel gas booster compressor (GBC). 16 Installed costs based on CHP system producing hot water from exhaust heat recovery. The 70 kW, 80 kW and 100 kW systems are being offered with integral hot water recovery built into the equipment. The 30 kW units are currently built as electric (only) generators and the heat recovery water heater is a separate unit. 17 All turbine and engine manufacturers quote heat rates in terms of the lower heating value (LHV) of the fuel. On the other hand, the usable energy content of fuels is typically measured on a higher heating value (HHV) basis. In addition, electric utilities measure power plant heat rates in terms of HHV. For natural gas, the average heat content of natural gas is 1,030 Btu/scf on an HHV basis and 930 Btu/scf on an LHV basis or about a 10% difference. 18 Electrical efficiencies are net of parasitic and conversion losses. Fuel gas compressor needs based on 1 psi inlet supply. 19 Fuel gas pressure required at the combustor. This value determines the GBC requirements at a specific site 20 Fuel gas pressure required to the gas boost compressor (GBC) 21 Heat recovery calculated based on hot water production (180 to 200 F) and heat recovery unit exhaust temperature of 220 F. 22 Total CHP Efficiency = (net electric generated + net heat produced for thermal needs)/total system fuel input 23 Power/Heat Ratio = CHP electrical power output (Btu)/ useful heat output (Btu) 24 Net Heat Rate = (total fuel input to the CHP system - the fuel that would be normally used to generate the same amount of thermal output as the CHP system output assuming an efficiency of 80%)/CHP electric output (kW).
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natural gas within the structure. Thus, microturbines in most commercial locations require a fuel gas booster compressor to ensure that fuel pressure is adequate for the gas turbine flow control and combustion systems. Most microturbine manufacturers offer the equipment package with the fuel gas booster included. This packaging facilitates the purchase and installation of a microturbine, as the burden of obtaining and installing the booster compressor is no longer placed on the customer. Also, it might result in higher reliability of the booster through standardized design and volume manufacture. Booster compressors can add from $50 to $100 per kW to a microturbine CHP systems total cost. As well as adding to capital cost, booster compressors lower net power and efficiency so operating cost is slightly higher. Typically, the fuel gas booster requires about 5% of the microturbine output. For example, a single 60 kW unit requires 2.6 kW for the booster, while a booster serving a system of three 30 kW units would require 4.4 kW. Such power loss results in a penalty on efficiency of about 1.5 percentage points. For installations where the unit is located outdoors, the customer can save on cost and operating expense by having the gas utility deliver gas at an adequate pressure and obtaining a system without a fuel gas booster compressor.
4.2.3 Emissions
Microturbines have the potential for extremely low emissions. All microturbines operating on gaseous fuels feature lean premixed combustor technology, which was developed relatively recently in the history of gas turbines and is not universally featured on larger gas turbines. Because microturbines are able to meet emissions requirements with this built-in technology, post-combustion emission control techniques are not needed. The primary pollutants from microturbines are oxides of nitrogen (NOx), carbon monoxide (CO), and unburned hydrocarbons. They also produce a negligible amount of sulfur dioxide (SO2). Microturbines are designed to achieve the objective of low emissions at full load; emissions are often higher when operating at part load. NOx is a mixture of mostly NO and NO2 in variable composition. In emissions measurement it is reported as parts per million by volume in which both species count equally. NOx forms by three mechanisms: thermal NOx, prompt NOx, and fuel-bound NOx. The predominant NOx formation mechanism associated with gas turbines is thermal NOx. Thermal NOx is the fixation of atmospheric oxygen and nitrogen, which occurs at high combustion temperatures. Flame temperature and residence time are the primary variables that affect thermal NOx levels. The rate of thermal NOx formation increases rapidly with flame temperature. Prompt NOx forms from early reactions of nitrogen modules in the combustion air and hydrocarbon radicals from the fuel. It forms within the flame and typically is about 1 ppm at 15% O2, and is usually much smaller than the thermal NOx formation. Fuel-bound NOx forms when the fuel contains nitrogen as part of the hydrocarbon structure. Natural gas has negligible chemically bound fuel nitrogen. Thermal NOx formation is a function of both the local temperatures within the flame and residence time. In older technology combustors used in industrial gas turbines, fuel and air were separately injected into the flame zone. Such separate injection resulted in high local
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temperatures where the fuel and air zones intersected. The focus of combustion improvements of the past decade was to lower flame local hot spot temperature using lean fuel/air mixtures whereby zones of high local temperatures were not created. Lean combustion decreases the fuel/air ratio in the zones where NOx production occurs so that peak flame temperature is less than the stoichiometric adiabatic flame temperature, therefore suppressing thermal NOx formation. All microturbines feature lean pre-mixed combustion systems, also referred to as dry low NOx or dry low emissions (DLE). Lean premixed combustion pre-mixes the gaseous fuel and compressed air so that there are no local zones of high temperatures, or "hot spots," where high levels of NOx would form. DLN requires specially designed mixing chambers and mixture inlet zones to avoid flashback of the flame. Optimized application of DLN combustion requires an integrated approach to combustor and turbine design. The DLN combustor is an intrinsic part of the turbine design, and specific combustor designs are developed for each turbine application. Full power NOx emissions below 9 ppmv @ 15% O2 have been achieved with lean premixed combustion in microturbines. CO and unburned hydrocarbons both result from incomplete combustion. CO emissions result when there is insufficient residence time at high temperature. In gas turbines, the failure to achieve CO burnout may result from combustor wall cooling air. CO emissions are also heavily dependent on operating load. For example, a unit operating under low loads will tend to have incomplete combustion, which will increase the formation of CO. CO is usually regulated to levels below 50 ppm for both health and safety reasons. Achieving such low levels of CO had not been a problem until manufacturers achieved low levels of NOx, because the techniques used to engineer DLN combustors had a secondary effect of increasing CO emissions. While not considered a regulated pollutant in the ordinary sense of directly affecting public health, emissions of carbon dioxide (CO2) are of concern due to its contribution to global warming. Atmospheric warming occurs because solar radiation readily penetrates to the surface of the planet but infrared (thermal) radiation from the surface is absorbed by the CO2 (and other polyatomic gases such as methane, unburned hydrocarbons, refrigerants, water vapor, and volatile chemicals) in the atmosphere, with resultant increase in temperature of the atmosphere. The amount of CO2 emitted is a function of both fuel carbon content and system efficiency. The fuel carbon content of natural gas is 34 lbs carbon/MMBtu; oil is 48 lbs carbon/MMBtu; and (ash-free) coal is 66 lbs carbon/MMBtu.

In CHP operation, a second heat exchanger, the exhaust gas heat exchanger, transfers the remaining energy from the microturbine exhaust to a hot water system. Exhaust heat can be used for a number of different applications, including potable water heating, driving absorption cooling and desiccant dehumidification equipment, space heating, process heating, and other building or site uses. Some microturbine-based CHP applications do not use recuperators. With these microturbines, the temperature of the exhaust is higher and thus more heat is available for recovery.
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Thermal loads most amenable to CHP systems in commercial/institutional buildings are space heating and hot water requirements. The simplest thermal load to supply is hot water. Retrofits to the existing hot water supply are relatively straightforward, and the hot water load tends to be less seasonally dependent than space heating, and therefore, more coincident to the electric load in the building. Meeting space heating needs with CHP can be more complicated. Space heating is seasonal by nature, and is supplied by various methods in the commercial/institutional sector, centralized hot water or steam being only one example.

Effective use of the thermal energy contained in the exhaust gas can improve microturbine system economics. Exhaust heat can be recovered and used in a variety of ways, including water heating, space heating, direct or indirect drying, and driving thermally activated equipment such as an absorption chiller or a desiccant dehumidifier. While, electrical efficiency is a function of the temperature drop across the turbine expansion stage, microturbine CHP total system efficiency is a function of exhaust temperature. Recuperator effectiveness strongly influences the microturbine exhaust temperature. Consequently, the various microturbine CHP systems have substantially different CHP efficiency and net heat rate chargeable to power. These variations in CHP efficiency and net heat rate are mostly due to the mechanical design and manufacturing cost of the recuperators and their resulting impact on system cost, rather than being due to differences in system size.

Microturbines are currently being tested in a number of different market segments. Applications include CHP, power-only applications (sometimes referred to as Prime Power), peak generation, premium power (High Reliability/Power Quality) applications, and resource recovery. Relatively new to commercial use, the outlook for microturbine-based CHP systems in the restructured electric industry is still uncertain. Primary targets for microturbine CHP in the commercial/institutional sectors are those building types with electric to hot water demand ratios consistent with microturbine capability: Education, Health Care, Lodging, and certain Public Order and Public Assembly applications. Office Buildings, and certain Warehousing and Mercantile/Service applications can be target applications for CHP if space conditioning needs can be incorporated.
4.2.7 CHP Potential

The simplest integration of microturbine-based CHP into the commercial, institutional and industrial sectors is in applications that meet the following criteria:

relatively coincident electric and thermal loads thermal energy loads in the form of hot water electric demand to thermal demand ratios in the 0.5 to 2.5 range moderate to high operating hours (>3000 hours per year)
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Microturbine exhaust can also be used to produce heat at high temperatures that can be used directly or by means of a heat exchanger to drying or pre-heating processes. Exhaust can also be used for preheated combustion air.
4.3
Gas Turbines
Gas turbines are an established technology available in sizes ranging from several hundred kilowatts to over several hundred megawatts. Gas turbines produce high quality heat that can be used for industrial or district heating steam requirements. Alternatively, this high temperature heat can be recuperated to improve the efficiency of power generation or used to generate steam and drive a steam turbine in a combined-cycle plant. Gas turbine emissions can be controlled to very low levels using dry combustion techniques, water or steam injection, or exhaust treatment. Maintenance costs per unit of power output are about a third to a half of reciprocating engine generators. Low maintenance and high quality waste heat often make gas turbines a preferred choice for many industrial or large commercial CHP applications greater than 3 MW. A schematic of a gas turbine-based CHP system is shown in Figure 4-5. Gas turbines can be used in a variety of configurations: (1) simple cycle operation which is a single gas turbine producing power only, (2) combined heat and power (CHP) operation which is a simple cycle gas turbine with a heat recovery heat exchanger which recovers the heat in the turbine exhaust and converts it to useful thermal energy usually in the form of steam or hot water, and (3) combined cycle operation in which high pressure steam is generated from recovered exhaust heat and used to create additional power using a steam turbine. Some combined cycles extract steam at an intermediate pressure for use in industrial processes and are combined cycle CHP systems. The most efficient commercial technology for central station power-only generation is the gas turbine-steam turbine combined-cycle plant, with efficiencies approaching 60% (LHV). Simplecycle gas turbines for power-only generation are available with efficiencies approaching 40% (LHV). Gas turbines have long been used by utilities for peaking capacity. However, with changes in the power industry and advancements in the technology, the gas turbine is now being increasingly used for base-load power. Gas turbines produce high-quality exhaust heat that can be used in CHP configurations to reach overall system efficiencies (electricity and useful thermal energy) of 70 to 80%. By the early 1980s, the efficiency and reliability of smaller gas turbines (1 to 40 MW) had progressed sufficiently to be an attractive choice for industrial and large institutional users for CHP applications.
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Figure 4-5: Gas Turbine System

Gas turbine systems operate on the thermodynamic cycle known as the Brayton cycle. In a Brayton cycle, atmospheric air is compressed, heated, and then expanded, with the excess of power produced by the expander (also called the turbine) over that consumed by the compressor used for power generation. The power produced by an expansion turbine and consumed by a compressor is proportional to the absolute temperature of the gas passing through the device. Consequently, it is advantageous to operate the expansion turbine at the highest practical temperature consistent with economic materials and internal blade cooling technology and to operate the compressor with inlet air flow at as low a temperature as possible. As technology advances permit higher turbine inlet temperature, the optimum pressure ratio also increases. Higher temperature and pressure ratios result in higher efficiency and specific power. Thus, the general trend in gas turbine advancement has been towards a combination of higher temperatures and pressures. While such advancements increase the manufacturing cost of the machine, the higher value, in terms of greater power output and higher efficiency, provides net economic benefits. The industrial gas turbine is a balance between performance and cost that results in the most economic machine for both the user and manufacturer. Gas turbine exhaust is quite hot, up to 800 to 900F for smaller industrial turbines and up to 1,100F for some new, large central station utility machines and aeroderivative turbines. Such high exhaust temperatures permit direct use of the exhaust. With the addition of a heat recovery steam generator, the exhaust heat can produce steam or hot water. A portion or all of the steam generated by the HRSG may be used to generate additional electricity through a steam turbine in a combined cycle configuration. There are two basic types of gas turbines:
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Aeroderivative gas turbines for stationary power are adapted from their jet and turboshaft aircraft engine counterparts. While these turbines are lightweight and thermally efficient, they are usually more expensive than products designed and built exclusively for stationary applications. The largest aeroderivative generation turbines available are 40 to 50 MW in capacity. Many aeroderivative gas turbines for stationary use operate with compression ratios in the range of 30:1, requiring a high-pressure external fuel gas compressor. With advanced system developments, larger aeroderivative turbines (>40 MW) are approaching 45% simple-cycle efficiencies (LHV). Industrial or frame gas turbines are exclusively for stationary power generation and are available in the 1 to 350 MW capacity range. They are generally less expensive, more rugged, can operate longer between overhauls, and are more suited for continuous base-load operation with longer inspection and maintenance intervals than aeroderivative turbines. However, they are less efficient and much heavier. Industrial gas turbines generally have more modest compression ratios (up to 16:1) and often do not require an external fuel gas compressor. Larger industrial gas turbines (>100 MW) are approaching simple-cycle efficiencies of approximately 40% (LHV) and combined-cycle efficiencies of 60% (LHV). Industry uses gas turbines between 500 kW to 40 MW for on-site power generation and as mechanical drivers. Small gas turbines also drive compressors on long distance natural gas pipelines. In the petroleum industry turbines drive gas compressors to maintain well pressures and enable refineries and petrochemical plants to operate at elevated pressures. In the steel industry turbines drive air compressors used for blast furnaces. In process industries such as chemicals, refining and paper, and in large commercial and institutional applications turbines are used in combined heat and power mode generating both electricity and steam for use on-site.
4.3.2 Performance
Table 4-3 summarizes performance characteristics for typical commercially available gas turbine CHP systems over the 1 to 40 MW size range. Heat rates shown are from manufacturers specifications and industry publications. Available thermal energy (steam output) was calculated from published turbine data on turbine exhaust temperatures and flows. CHP steam estimates are based on an unfired HRSG with an outlet exhaust temperature of 280F producing dry, saturated steam at 150 psig. Total efficiency is defined as the sum of the net electricity generated plus steam produced for plant thermal needs divided by total fuel input to the system. Higher steam pressures can be obtained but at slightly lower total efficiencies. Additional steam can be generated and total efficiency further increased with duct firing in the HRSG (see heat recovery section). To estimate fuel savings effective electrical efficiency is a more useful value than overall efficiency. Effective electric efficiency is calculated assuming the useful-thermal output from the CHP system would otherwise be generated by an 80% efficient boiler. The theoretical boiler fuel is subtracted from the total fuel input and the remaining fuel input used to calculate the effective electric efficiency which can then be compared to traditional electric generation. Gas turbines need minimum gas pressure of about 100 psig for the smallest turbines with substantially higher pressures for larger turbines and aeroderivative machines. Depending on the supply pressure of the gas being delivered to the site the cost and power consumption of the fuel
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Table 4-3: Gas Turbine CHP Typical Performance Parameters

Cost & Performance Characteristics25 Electricity Capacity (kW) Total Installed Cost (YR 2000 $/kW)26 Electric Heat Rate (Btu/kWh), HHV27 Electrical Efficiency (%), HHV Fuel Input (MMBtu/hr) Required Fuel Gas Pressure (psig) CHP Characteristics Exhaust Flow (1,000 lb/hr) GT Exhaust Temperature (Fahrenheit) HRSG Exhaust Temperature (Fahrenheit) Steam Output (MMBtu/hr) Steam Output (1,000 lbs/hr) Steam Output (kW equivalent) Total CHP Efficiency (%), HHV28 Power/Heat Ratio29 Net Heat Rate (Btu/kWh)30 Effective Electrical Efficiency (%)31
* For typical systems commercially available
Source: EEA
System 1 1,000 $1,780 15,580 21.9% 15.6 95 44 950 280 7.1 6.7 2,080 68% 0.48 6,673 51%
System 2 5,000 $1,010 12,590 27.1% 62.9 160 162 950 280 26.6 25.0 7,800 69% 0.64 5,947 57%
System 3 10,000 $970 11,765 29.0% 117.7 250 316 915 280 49.6 46.6 14,540 71% 0.69 5,562 61%
System 4 25,000 $860 9,945 34.3% 248.6 340 571 950 280 95.6 89.8 28,020 73% 0.89 5,164 66%
System 5 40,000 $785 9,220 37.0% 368.8 435 954 854 280 136.8 128.5 40,100 74% 1.0 4,944 69%
25
26
27
28 29 30
31
Characteristics for typical commercially available gas turbine generator system. Data based on: Solar Turbines Saturn 20 1 MW; Solar Turbines Taurus 60 5 MW; Solar Turbines Mars 100 10 MW; GE LM2500+ 25 MW; GE LM6000PD 40 MW. Installed costs based on CHP system producing 150 psig saturated steam with an unfired heat recovery steam generator. All turbine and engine manufacturers quote heat rates in terms of the lower heating value (LHV) of the fuel. On the other hand, the usable energy content of fuels is typically measured on a higher heating value basis (HHV). In addition, electric utilities measure power plant heat rates in terms of HHV. For natural gas, the average heat content of natural gas is 1,030 Btu/scf on an HHV basis and 930 Btu/scf on an LHV basis or about a 10% difference. Total Efficiency = (net electric generated + net steam produced for thermal needs)/total system fuel input Power/Steam Ratio = CHP electrical power output (Btu)/ useful steam output (Btu) Net Heat Rate = (total fuel input to the CHP system - the fuel that would be normally used to generate the same amount of thermal output as the CHP system output assuming an efficiency of 80%)/CHP electric output (kW). Effective Electrical Efficiency = (CHP electric power output)/(Total fuel into CHP system total heat recovered/0.8); Equivalent to 3,412 Btu/kWh/Net Heat Rate.
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gas compressor can be a significant consideration. Table 4-4 shows the power required to compress natural gas from supply pressures typical of commercial and industrial service to the pressures required by typical industrial gas turbines. Required supply pressures generally increase with gas turbine size.
Table 4-4: Power Requirements For Natural Gas Compression32
System 1
Turbine Electric Capacity (kW) Turbine Pressure Ratio Required Compression Power (kW) 50 psig gas supply pressure 150 psig gas supply pressure 250 psig gas supply pressure
Source: EEA
System 2
5,000 10.9 125 26 NA
System 3
10,000 17.1 310 120 40
System 4
25,000 23.1 650 300 150
System 5
40,000 29.6 1,310 675 380
1,000 6.5 17 NA NA
4.3.3 Emissions
The primary pollutants from gas turbines are oxides of nitrogen (NOx), carbon monoxide (CO), and volatile organic compounds (VOCs). Other pollutants such as oxides of sulfur (SOx) and particulate matter (PM) are primarily dependent on the fuel used. The sulfur content of the fuel determines emissions of sulfur compounds, primarily SO2. Gas turbines operating on desulfized natural gas or distillate oil emit relatively insignificant levels of SOx. In general, SOx emissions are greater when heavy oils are fired in the turbine. SOx control is thus a fuel purchasing issue rather than a gas turbine technology issue. Particulate matter is a marginally significant pollutant for gas turbines using liquid fuels. Ash and metallic additives in the fuel may contribute to PM in the exhaust. It is important to note that the gas turbine operating load has a significant effect on the emissions levels of the primary pollutants of NOx, CO, and VOCs. Gas turbines typically operate at high loads. Consequently, gas turbines are designed to achieve maximum efficiency and optimum combustion conditions at high loads. Controlling all pollutants simultaneously at all load conditions is difficult. At higher loads, higher NOx emissions occur due to peak flame temperatures. At lower loads, lower thermal efficiencies and more incomplete combustion occurs resulting in higher emissions of CO and VOCs. See the previous discussion of NOx formation in (section 4.2.3). The focus of turbine NOx control and combustion improvements of the past decade was to lower flame hot spot temperatures using lean fuel/air mixtures and pre-mixed combustion. Lean combustion decreases the fuel/air ratio in the zones where NOx production occurs so that the
32
Fuel gas supply pressure requirements calculated assuming delivery of natural gas at an absolute pressure 35% greater than the compressor discharge in order to meet the requirements of the gas turbine flow control system and combustor mixing nozzles. Mass flow of fuel based on the fuel flow of reference gas turbines in the size range considered, and assuming an electric motor of 95% efficiency driving the booster compressor. Gas supply pressures of 50 psig, 150 psig and 250 psig form the basis of the calculations.
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peak flame temperature is less than the stoichiometric adiabatic flame temperature, therefore suppressing thermal NOx formation. Lean premixed combustion (DLN/DLE) pre-mixes the gaseous fuel and compressed air so that there are no local zones of high temperatures, or "hot spots," where high levels of NOx would form. Lean premixed combustion requires specially designed mixing chambers and mixture inlet zones to avoid flashback of the flame. Optimized application of DLN combustion requires an integrated approach to combustor and turbine design. The DLN combustor becomes an intrinsic part of the turbine design, and specific combustor designs must be developed for each turbine application. While NOx levels as low as 9 ppm have been achieved with lean premixed combustion, few DLN equipped turbines have reached the level of practical operation at this emissions level necessary for commercialization the capability of maintaining 9 ppm across a wide operating range from full power to minimum load. One problem is that pilot flames, which are small diffusion flames and a source of NOx, are usually used for continuous internal ignition and stability in DLN combustors and make it difficult to maintain full net NOx reduction over the complete turndown range. Noise can also be an issue in lean premixed combustors as acoustic waves form due to combustion instabilities when the premixed fuel and air ignite. This noise also manifests itself as pressure waves, which can damage combustor walls and accelerate the need for combustor replacement, thereby adding to maintenance costs and lowering unit availability. All leading gas turbine manufacturers feature DLN combustors in at least parts of their product lines. Turbine manufacturers generally guarantee NOx emissions of 15 to 42 ppm using this technology. NOx emissions when firing distillate oil are typically guaranteed at 42 ppm with DLN and/or combined with water injection. A few models (primarily those larger than 40 MW) have combustors capable of 9 ppm (natural gas fired) over the range of expected operation. The development of market-ready DLN equipped turbine models is an expensive undertaking because of the operational difficulties in maintaining reliable gas turbine operation over a broad power range. Therefore, the timing of applying DLN to multiple turbine product lines is a function of market priorities and resource constraints. Gas turbine manufacturers initially develop DLN combustors for the gas turbine models for which they expect the greatest market opportunity. As time goes on and experience is gained, the technology is extended to additional gas turbine models. The primary post-combustion NOx control method in use today is selective catalytic reduction (SCR). Ammonia is injected into the flue gas and reacts with NOx in the presence of a catalyst to produce N2 and H2O. The SCR system is located in the exhaust path, typically within the HRSG where the temperature of the exhaust gas matches the operating temperature of the catalyst. The operating temperature of conventional SCR systems ranges from 400 to 800F. The cost of conventional SCR has dropped significantly over time -- catalyst innovations have been a principal driver, resulting in a 20% reduction in catalyst volume and cost with no change in performance.
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Low temperature SCR, operating in the 300 to 400F temperature range, was commercialized in 1995 and is currently in operation on approximately twenty gas turbines. Low temperature SCR is ideal for retrofit applications where it can be located downstream of the HRSG, avoiding the potentially expensive retrofit of the HRSG to locate the catalyst within a hotter zone of the HRSG. High temperature SCR installations, operating in the 800 to 1,100F temperature range, have increased significantly in recent years. The high operating temperature permits the placement of the catalyst directly downstream of the turbine exhaust flange. High temperature SCR is also used on peaking capacity and base-loaded simple-cycle gas turbines where there is no HRSG. SCR reduces between 80 to 90% of the NOx in the gas turbine exhaust, depending on the degree to which the chemical conditions in the exhaust are uniform. When used in series with water/steam injection or DLN combustion, SCR can result in low single digit NOx levels (2 to 5 ppm). SCR systems are expensive and significantly impact the economic feasibility of smaller gas turbine projects. For a 5 MW project electric generation costs increase approximately half a cent per kWh.33 SCR requires on-site storage of ammonia, a hazardous chemical. In addition, ammonia can slip through the process unreacted, contributing to environmental health concerns.

The economics of gas turbines in process applications often depend on effective use of the thermal energy contained in the exhaust gas, which generally represents 60 to 70% of the inlet fuel energy. Figure 4-6 shows a typical gas turbine/HRSG configuration. An unfired HRSG is the simplest steam CHP configuration and can generate steam at conditions ranging from 150 psig to approximately 1,200 psig. Gas turbine exhaust can also be used for heat and drying process either directly or by means of a heat exchanger.

Gas turbines produce a high quality (high temperature) thermal output suitable for most combined heat and power applications. High-pressure steam can be generated or the exhaust can be used directly for process drying and heating. Overall or total efficiency of a CHP system is a function of the amount of energy recovered from the turbine exhaust. The two most important factors influencing the amount of energy available for steam generation are gas turbine exhaust temperature and HRSG stack temperature.
33
Cost Analysis of NOx Control Alternatives for Stationary Gas Turbines, ONSITE SYCOM Energy Corporation, November, 1999.
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Figure 4-6: Heat Recovery from a Gas Turbine System

Gas Turbine
Electricity
Med/High Pressure Steam to Process (Simple Cycle with Heat Recovery) Feed water HRSG Electricity
Steam Turbine (Combined Cycle)
Low Pressure Steam to Process or Condenser
Turbine firing temperature and turbine pressure ratio combined determine gas turbine exhaust temperature. Typically aeroderivative gas turbines have higher firing temperatures than do industrial gas turbines, but when the higher pressure ratio of aeroderative gas turbines is recognized, the turbine discharge temperatures of the two turbine types remain somewhat close, typically in the range of 850 to 950F. For the same HRSG exit temperature, higher turbine exhaust temperature (higher HRSG gas inlet temperature) results in greater available thermal energy and increased HRSG output. Similarly, the lower the HRSG stack temperature, the greater the amount of energy recovered and the higher the total-system efficiency. HRSG stack temperature is a function of steam conditions and fuel type. Saturated steam temperatures increase with increasing steam pressure. Because of pinch point considerations within the HRSG, higher steam pressures result in higher HRSG exhaust stack temperatures, less utilization of available thermal energy, and a reduction in total CHP system efficiency. In general, minimum stack temperatures of about 300F are recommended for sulfur bearing fuels. Generally, unfired HRSGs can be designed to economically recover approximately 95% the available energy in the turbine exhaust (the energy released in going from turbine exhaust temperature to HRSG exhaust temperature). Since very little of the available oxygen in the turbine air flow is used in the combustion process, the oxygen content in the gas turbine exhaust permits supplementary fuel firing ahead of the HRSG to increase steam production relative to an unfired unit. Supplementary firing can raise the exhaust gas temperature entering the HRSG up to 1,800F and increase the amount of steam produced by the unit by a factor of two. Moreover, since the turbine exhaust gas is essentially preheated combustion air, the fuel consumed in supplementary firing is less than that required for a stand-alone boiler providing the same increment in steam generation. The HHV efficiency of incremental steam production from supplementary firing above that of an unfired HRSG is often 85% or more when firing natural gas.
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Supplementary firing also increases system flexibility. Unfired HRSGs are typically convective heat exchangers that respond solely to exhaust conditions of the gas turbine and do not easily allow for steam flow control. Supplementary firing capability provides the ability to control steam production, within the capability of the burner system, independent of the normal gas turbine operating mode. Low NOx duct burners with guaranteed emissions levels as low as 0.08 lb NOx/MMBtu can be specified to minimize the NOx contribution of supplemental firing.

The oil and gas industry commonly use gas turbines to drive pumps and compressors, process industries use them to drive compressors and other large mechanical equipment, and many industrial and institutional facilities use turbines to generate electricity for use on-site. When used to generate power on-site, gas turbines are often used in combined heat and power mode where energy in the turbine exhaust provides thermal energy to the facility. There were an estimated 40,000 MW of gas turbine based CHP capacity operating in the United States in 2000 located at over 575 industrial and institutional facilities. Much of this capacity is concentrated in large combined-cycle CHP systems that maximize power production for sale to the grid. However, a significant number of simple-cycle gas turbine based CHP systems are in operation at a variety of applications as shown in Figure 4-7. Simple-cycle CHP applications are most prevalent in smaller installations, typically less than 40 MW.
Figure 4-7: Existing Simple Cycle Gas Turbine CHP 9,854 MW at 359 sites
Universities 561 MW Other 1,594 MW
Food Processing 605 MW Paper 911 MW
Oil Recovery 2,478 MW
Refining 1,576 MW Chemicals 2,131 MW
Source: EEA
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Gas turbines are ideally suited for CHP applications because their high-temperature exhaust can be used to generate process steam at conditions as high as 1,200 pounds per square inch gauge (psig) and 900 degree Fahrenheit (F) or used directly in industrial processes for heating or drying. A typical industrial CHP application for gas turbines is a chemicals plant with a 25 MW simple cycle gas turbine supplying base-load power to the plant with an unfired heat recovery steam generator (HRSG) on the exhaust. Approximately 29 MW thermal (MWth) of steam is produced for process use within the plant. A typical commercial/institutional CHP application for gas turbines is a college or university campus with a 5 MW simple-cycle gas turbine. Approximately 8 MWth of 150 to 400 psig steam (or hot water) is produced in an unfired heat recovery steam generator and sent into a central thermal loop for campus space heating during winter months or to single-effect absorption chillers to provide cooling during the summer. While the recovery of thermal energy provides compelling economics for gas turbine CHP, smaller gas turbines supply prime power in certain applications. Large industrial facilities install simple-cycle gas turbines without heat recovery to provide peaking power in capacity constrained areas, and utilities often place gas turbines in the 5 to 40 MW size range at substations to provide incremental capacity and grid support. A number of turbine manufacturers and packagers offer mobile turbine generator units in this size range that can be used in one location during a period of peak demand and then trucked to another location for the following season.
4.3.7 CHP Potential

The benefits of gas turbines used in CHP stem from the high temperature and flow rate of gas turbine exhaust. The economics of gas turbines in process applications depend on effective use of the thermal energy contained in the exhaust gas, which generally represents 60 to 70% of the inlet fuel energy. The most common use of this energy is for steam generation in unfired or supplementary fired heat recovery steam generators. However, the gas turbine exhaust gases can also be used as a source of direct process energy, for unfired or fired process fluid heaters, or as preheated combustion air for power boilers. Overall or total efficiency of a CHP system is a function of the amount of energy recovered from the turbine exhaust. The two most important factors influencing the amount of energy available for steam generation are gas turbine exhaust temperature and HRSG stack temperature.
4.4
Fuel Cells
Fuel cells are an entirely different approach to the production of electricity than traditional prime mover technologies, and are currently in the early stages of development. Fuel cell stacks available and under development are silent, produce no pollutants, have no moving parts, and have potential fuel efficiencies far beyond the most advanced reciprocating engine or gas turbine power generation systems. Fuel cell systems with their support ancillary pumps, blowers, and reformers maintain most of these advantages. A schematic of a fuel-cell-based CHP system is shown in Figure 4-8.
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Figure 4-8: Fuel Cell System
As with most new technologies, fuel cell systems have several disadvantages, such as product immaturity, over-engineered system complexities, and unproven product durability and reliability. These translate into high capital cost, lack of support infrastructure, and technical risk for early adopters, which in turn cause market resistances that propagate the disadvantages. However, the many advantages of fuel cells over other prime movers suggest that they could well become the prime mover of choice for many applications and products in the future. Fuel cells produce power electrochemically from hydrogen delivered to the negative pole (anode) of the cell and oxygen delivered to the positive pole (cathode). The hydrogen can come from a variety of sources, but the most economic method is by reforming of natural gas or liquid fuels. There are several different liquid and solid media that support these electrochemical reactions phosphoric acid (PAFC), molten carbonate (MCFC), solid oxide (SOFC), and proton exchange membrane (PEM) are the most common systems. Each of these media comprises a distinct fuel cell technology with its own performance characteristics and development schedule. PAFCs are the most widely deployed fuel cells in commercial service now with 200 kW units delivered to over 200 customers. PEM fuel cells are now entering the market and SOFC, and MCFC technologies are in field test or demonstration stages. Direct electrochemical reactions are generally more efficient than using fuel to drive a heat engine to produce electricity. Fuel cell efficiencies range from 35-40 percent for the PAFC to upwards of 60 percent for developing systems. Fuel cells are inherently quiet and have extremely low emissions levels as only a small part of the fuel is combusted. Like a battery, fuel cells produce direct current (DC) that must be run through an inverter to get 60 Hz AC. These power electronics components can be integrated with other power quality components as part of a power quality control strategy for sensitive customers. Because of current high costs, fuel cells are best suited to environmentally sensitive areas and customers with power quality concerns.
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This section describes five types of fuel cell under development for a variety of distributed generation (DG) applications. These are: 1) phosphoric acid (PAFC), 2) proton exchange membrane (PEMFC), 3) molten carbonate (MCFC), 4) solid oxide (SOFC), and 5) alkaline (AFC). Each type is distinguished by the electrolyte used and by operating temperatures. These fuel cells operate from near-ambient temperature through 1,000 C. As a result, they can have very different performance characteristics, advantages and limitations, and therefore will be suited to DG applications in a wide variety of approaches. The different fuel cell types share certain important characteristics. First, fuel cells are not Carnot cycle (thermal energy-based) engines. Instead, they use an electrochemical or battery-like process to convert the chemical energy of hydrogen into water and electricity. As simple cycle devices, they can achieve extremely high electrical efficiencies. The second shared feature is that they use hydrogen as their fuel, which is typically derived from a hydrocarbon fuel such as natural gas. Third, each fuel cell system is composed of three primary subsystems: 1) the fuel cell stack that generates direct current electricity; 2) the fuel processor that converts the natural gas into a hydrogen-rich feed stream; and 3) the power conditioner that processes the electric energy into alternating current or regulated direct current. Finally, all types of fuel cells emit minimum emissions. This is because the only combustion process is the burning of a low energy hydrogen exhaust stream that is used to provide heat to the fuel processor. Fuel cells produce direct current electricity through an electrochemical process, much like a standard battery. Unlike a standard battery, the fuel cell is chemically replenished on a continuous basis. The reactants, most typically hydrogen and oxygen gas, are fed into the fuel cell reactor, and power is generated as long as these reactants are supplied. The hydrogen (H2) is typically generated from a hydrocarbon fuel such as natural gas or LPG, and the oxygen (O2) is from ambient air.
Basic Processes and Components
Fuel cell systems designed for DG applications are primarily natural gas or LPG fueled systems. Each fuel cell system is composed of three primary subsystems: 1) the fuel cell stack that generates direct current electricity; 2) the fuel processor that converts the natural gas into a hydrogen rich feed stream; and 3) the power conditioner that processes the electric energy into alternating current or regulated direct current. In a fuel cell it is the change in the Gibbs free energy of formation that results in energy release. This change is the difference between the Gibbs free energy of the product and the Gibbs free energy of the reactants. Water (H2O) is the chemical product of this process. The overall reaction in a fuel cell is characterized as follows: 2H2 (gas) + O2 (gas) 2H2O (vapor) + Energy
The hydrogen and oxygen gases are not directly mixed and combustion does not occur. Instead, the hydrogen is oxidized one molecule at a time, in the presence of a catalyst. Because the
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reaction is controlled at the molecular level, there is no opportunity for the formation of NOx and other pollutants as there is inside piston and turbine engines. Figure 4-9 illustrates the electrochemical process in a typical single cell, acid-type fuel cell. The hydrogen and oxygen are fed to the anode and cathode, respectively. The anode and cathode are electrically conductive, porous electrodes separated by an ionic conductive (non-electrically conductive) media, known as the membrane, ionic matrix or electrolyte layer. At the anode the hydrogen gas is electrochemically dissociated into hydrogen ions (H+) and free electrons (e-). The half-cell reaction is the following 2H2 (gas) 4H+ + 4eEo = 0.0 volts
Figure 4-9: Fuel Cell Electrochemical Process
H2 H2 - - - Anode Electrolyte Cathode O2

Source: EEA
H+ H+ H+ H + H2O H2 O
The electrons flow out of the anode through an external electrical circuit. The hydrogen ions flow into the electrolyte layer and eventually to the cathode, driven by both concentration and potential forces. At the cathode the oxygen gas is electrochemically combined with the hydrogen ions and free electrons to generate water. The half-cell reaction is the following:
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O2 (gas) + 4H+ + 4eO2 (gas) + 4H+ + 4e-
2H2O (vapor) 2H2O (liquid)
Eo = 1.23 volts (LHV)34, or Eo = 1.48 volts (HHV)34
As power is generated, electrons flow through the external circuit, ions flow through the electrolyte layer and chemicals flow into and out of the electrodes. Each process has natural resistances that must be overcome, which reduces the operational cell voltage below the theoretical potential. Therefore, some of the chemical potential energy is converted into heat. The electrical power generated by the fuel cell is the product of the current measured in amps and the operational voltage. Based on the application and economics, a typical operating fuel cell will have an operating voltage of between 0.55 volts and 0.80 volts. The ratio of the operating voltage and 1.48volts represents a simplified estimate of the stack electrical efficiency on a HHV basis. As stated, resistance heat is also generated along with the power. Since the electric power is the product of the operating voltage and the current, the quantity of heat that must be removed from the fuel cell is the product of the current and the difference between the Gibbs free energy potential and the operating voltage. In most cases the water produced by the fuel cell reactions exits the fuel cell as vapor, and therefore, the 1.23-volt LHV free energy potential should be used to estimate sensible heat generated by the fuel cell electrochemical process. Practical fuel cell systems require voltages higher than 0.55 to 0.80. This is achieved by combining several cells in electrical series into a fuel cell stack. Typically, several hundred cells are use in a single cell stack. The current is managed by increasing the active area of individual cells. Typically, cell area can range from 100 cm2 to over one m2 depending on the type of fuel cell and application power requirements.
Fuel Processors
In distributed generation applications, the most viable fuel cell technologies use natural gas as the stock fuel. To operate on natural gas or other fuels, fuel cells require a device that converts the stock fuel into the hydrogen-rich gas stream. This device is known as a fuel processor or reformer. While adding fuel flexibility to the system, the reformer adds significant cost, complexity, and the potential for undesired emissions. There are three primary types of reformers: steam reformers, autothermal reformers and partial oxidation reformers. The fundamental differences are the source of oxygen used to combine with the carbon within the fuel to release the H2 gases and the thermal balance of the chemical process. Steam reformers use steam; while partial oxidation units use oxygen gas and autothermal reformers use both steam and oxygen. Partial oxidation units combust a portion of the fuel (i.e. partially oxidize it), the thermal balance is exothermic and releases heat.
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Lower heating value (LHV) and higher heating value (HHV). Most of the efficiencies quoted in this report are based on higher heating value (HHV), which includes the heat of condensation of the water vapor in the products. In engineering and scientific literature the lower heating value (LHV which does not include the heat of condensation of the water vapor in the products) is often used. The HHV is greater than the LHV by approximately 10% with natural gas as the fuel (i.e., 50% LHV is equivalent to 45% HHV). HHV efficiencies are about 15% for hydrogen, 8% greater for oil (liquid petroleum products) and 5% for coal.
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Steam reforming is extremely endothermic and requires a substantial amount of heat input. Autothermal reformers are typically operated at or near the thermal neutral point, and therefore, do not generate or consume thermal energy. When integrated into a fuel cell system that allows the use of anode-off gas, a typical natural gas reformer can achieve efficiencies in the 75 to 90% LHV range with 83 to 85% being an expected characteristic. These efficiencies are defined as the LHV of hydrogen generated divided by the LHV of the natural gas consumed by the reformer. Some fuel cells can be constructed and operated as internally steam reforming fuel cells. Since the reformer is an endothermic catalytic converter and the fuel cell is an exothermic catalytic oxidizer, the two are combined into one with mutual benefits from the thermal processes. More complex than a pure hydrogen fuel cell, these types of fuel cells are more difficult to design and operate. While combining two catalytic processes is difficult to arrange and control, these internally reforming fuel cells are expected to account for a significant market share as fuel cellbased DG becomes more common.
Power Conditioning Subsystem
The fuel cell generates direct current electricity, which must be conditioned before being used within a DG application. Depending on the cell area and number of cells, this direct current electricity is approximately 200 to 400 volts per stack. If the system is large, enough, stacks can be operated in series to double or triple individual stack voltages. Since the voltage of each individual cell decreases with increasing load or power, the output is considered an unregulated voltage source. In the power conditioning subsystem, the output voltage can be boosted to provide a regulated higher voltage input source to an electronic inverter. The inverter then uses a pulse width modulation technique at high frequencies to generate simulated alternating current output. The frequency of the output is controlled by the inverter and can be adjusted to enhance power factor characteristics. Because the alternating current is generated within the inverter the output power is considered to be a very clean, reliable source. This characteristic can be important to sensitive electronic equipment in premium power applications. The efficiency of the power conditioning process is typically 92 to 96%, and is dependent on system capacity and input voltage-current characteristic.
Types of Fuel Cells
There are five basic types of fuel cell under consideration for DG applications. The fuel cells electrolyte or ion conduction material defines the basic type. Two of these fuel cell types, polymer electrolyte membrane (PEM) and phosphoric acid fuel cell (PAFC) have acidic electrolytes and rely on the transport of H+ ions. Two others, alkaline fuel cell (AFC) and carbonate fuel cell (MCFC) have basic electrolytes that rely on the transport of OH- and CO3= ions, respectively. The fifth type, solid oxide fuel cell (SOFC), is based on a solid-state ceramic electrolyte in which oxygen ions (O=) are the conductive transport ion. Each fuel cell type has been designed to operate at optimum temperatures, which are a balance between the ionic conductivity and component stability. These temperatures differ significantly among the five basic types, ranging from near-ambient to as high as 1800 F. The proton conducting fuel cell type generates water at the cathode and the anion conducting fuel cell type generates water at the anode. Table 4-5 presents fundamental characteristics for each fuel cell type.
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Table 4-5: Characteristics of Major Fuel Cell Types

Type of Electrolyte PEMFC H+ ions (with anions bound in polymer membrane) Plastic, metal or carbon No Air to O2 150- 180F (65-85C) 25 to 35% CO, Sulfur, and NH3 AFC OH- ions (typically aqueous KOH solution) Plastic, metal PAFC H+ ions (H3PO4 solutions) MCFC CO3= ions (typically, molten LiKaCO3 eutectics) High temp metals, porous ceramic Yes, Good Temp Match Air 1200-1300F (650-700C) 40 to 50% Sulfur SOFC O= ions (Stabilized ceramic matrix with free oxide ions) Ceramic, high temp metals Yes, Good Temp Match Air 1350-1850F (750-1000C) 45 to 55% Sulfur
Typical construction
Internal reforming Oxidant Operational Temperature DG System Level Efficiency, % HHV Primary Contaminate Sensitivities
Source: EEA
No Purified Air to O2 190-500F (90-260C) 32 to 40% CO, CO2, and Sulfur
Carbon, porous ceramics No Air to Enriched Air 370-410F (190-210C) 35 to 45% CO < 1%, Sulfur
PEMFC (Proton Exchange Membrane Fuel Cell or Polymer Electrolyte Membrane) This type of fuel cell was initially developed in the 1960s for the first NASA manned spacecraft. The PEMFC uses a solid polymer electrolyte and operates at low temperatures, about that of boiling water. Over the past ten years, the PEMFC has received significant media coverage due to the large investment the auto industry has made in the technology. Due to their modularity and apparent ease of manufacturing, much has been made of the reformer/PEMFC system for residential DG applications. AFC (Alkaline Fuel Cell) F.T. Bacon in Cambridge, England first demonstrated AFC as a viable power unit during the 1940s and 1950s. It was later developed for NASA, and was used on the Apollo moon mission spacecraft and on the space shuttles. The primary advantages of AFC technology are improved performance, use of non-precious metal electrodes, and the fact that no unusual materials are needed. The primary disadvantage is the tendency to absorb carbon dioxide, converting the alkaline electrolyte to an aqueous carbonate electrolyte that is less conductive. The attractiveness of AFC has declined substantially with the interest and improvements in PEMFC technology. PAFC (Phosphoric Acid Fuel Cell) PAFC is generally considered to be the most established fuel cell technology. The first PAFC DG system was designed and demonstrated in the early 1970s. PAFCs are generally considered commercially available since the early 1990s and are considered to be viable in niche markets. PAFC-based systems have been installed in the U.S., Japan, and Europe, and are commercially
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available in the 200 kW size. When operated at elevated pressures, PAFCs are capable of fuel-toelectricity efficiencies of better than 36%. The technology on which this system is based was developed as the result of a government/industry research, development and demonstration (RD&D) effort starting in the 1970s and continuing through the early 1990s. During the 1990s, over 200 commercial units were manufactured, delivered and operated. The current 200 kW product is reported to have a stack lifetime of over 40,000 hours, units with nearly eight years of operation, and commercially based reliabilities in the 90 to 95% range. The major market barrier has been the initial installed cost that has not yet fallen below the $3,500 to 4,000/kW range. MCFC (Molten Carbonate Fuel Cell) The MCFC has a developmental history that dates back to the early part of the twentieth century. Due to its operating temperature range of 600 to 750 C, the MCFC holds promise in both CHP and DG applications. This type of fuel cell can be built with internal reforming, run at high efficiencies (50% HHV), and is relatively tolerant of fuel impurities. Government/industry RD&D programs during the 1980s and 1990s resulted in several individual pre-prototype system demonstrations. Of these developers, Fuel Cell Energy is approaching an initial stage of market introduction. The primary technical issue with MCFC technologies is the degradation of cell components due to the corrosive nature of the electrolyte operating temperature combination. SOFC (Solid Oxide Fuel Cell) Several SOFC units up to 100 kW in size and based on a concentric tubular design have been built and tested.35 In addition, there are many companies developing planar SOFC designs, which are believed to offer higher power densities and lower costs than the tubular design, but these have yet to achieve the reliability of the tubular design. The SOFC is generally considered to be much less mature in its development compared with the MCFC and PAFC. Despite relative immaturity, the SOFC has several advantages that justify its further development. High efficiency, stability and reliability, and high internal temperatures, distinguish the SOFC from other fuel cell technologies. The SOFC has projected service electric efficiencies of 45 to 60% and higher, for larger combined cycle plants. Efficiencies for smaller SOFC DG units are expected to be in the 50% range. Stability and reliability of the SOFC are high due to an allsolid-state ceramic construction. Test units have operated in excess of 10 years with acceptable performance. The high internal temperatures of the SOFC are both an asset and a liability. As an asset, high temperatures make internal reforming possible. As a liability, these high temperatures add to materials and mechanical design difficulties, which reduces lifetime and increases cost. While SOFC research has been ongoing for 30 years, costs of these stacks are still comparatively high.
4.4.2 Performance
Table 4-6 summarizes performance characteristics for representative developmental natural gas fuel cell CHP systems over the 10 kW to 2 MW size range. This size range covers the majority of the market applications for fuel cell CHP systems.
35
By Siemens/Westinghouse Electric Corp.
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Table 4-6: Fuel Cell CHP - Typical Performance Parameters

Cost and Performance Characteristics36 Fuel Cell Type Nominal Electricity Capacity (kW) Commercial Status 200237 Operating Temperature ( F) Package Cost (2002 $/kW) 38 Total Installed Cost (2002 $/kW) 39 O&M Costs ($/kW) 40 Electric Heat Rate (Btu/kWh)41 Electrical Efficiency (% HHV)42 Fuel Input (MMBtu/hr) CHP Characteristics Heat Avail. >160 F ( MMBtu/hr) Heat Avail. <160 F (MMBtu/hr) Heat Output (MMBtu/hr) Heat Output (kW equivalent) Total CHP Efficiency (%), HHV43 Power/Heat Ratio44 Net Heat Rate (Btu/kWh)45 Effective Electrical Eff (%), HHV
Source: EEA
System 1 PAFC 200 Com'l 400 3,500 4,100 0.029 9,480 36% 1.90 0.37 0.37 0.74 217 75% 0.92 4,860 70.3%
System 2 PEM 10 Demo 150 4,700 5,420 0.033 11,370 30% 0.10 0.00 0.04 0.04 13 68% 0.77 6,370 53.6%
System 3 PEM 200 Demo 150 3,000 3,600 0.023 9,750 35% 2.00 0.00 0.72 0.72 211 72% 0.95 5,250 65.0%
System 4 MCFC 250 Demo 1200 4,350 4,850 0.043 7,930 43% 2.00 0.22 0.22 0.44 128 65% 1.95 5,730 59.5%
System 5 MCFC 2000 Demo 1200 2,400 2,800 0.033 7,420 46% 14.80 1.89 1.67 3.56 1043 70% 1.92 5,200 65.7%
System 6 SOFC 100 Demo 1750 3,000 3,600 0.024 7,580 45% 0.80 0.10 0.09 0.19 56 70% 1.79 5,210 65.6%
36
37
38
39
40
41
42 43 44 45
Data are representative typical values for developmental systems based on available information from fuel cell system developers. Only the PAFC column is representative of a commercial product available in 2002. Developers include but are not limited to UTC Fuel Cells, Toshiba, Ballard Power, Plug Power, Fuel Cell Energy, Siemens-Westinghouse, H-Power, Hydrogenics, Honeywell, Fuji, IHI, Global Thermal, Mitsubishi Heavy Industries and Ztek. Coml = Commercially Available; Demo = Completed multiple demonstrations in field sites with potential customers; Lab = Characteristics observed in laboratory validation testing of complete systems; Exp = Only experimental prototypes have been tested. Packaged Cost includes estimates of typical costs for a CHP compatible system with grid interconnection functionality built into power conditioning subsystem. Total Installed Cost include estimates for packaged cost plus electrical isolation equipment, hot water CHP interconnections, site labor and preparation, construction management, engineering, contingency, and interest during construction. O&M costs are estimated based on service contract nominal rate, consumables, fixed costs, and sinking fund for stack replacement at end of life. All equipment manufacturers quote heat rates in terms of the lower heating value (LHV) of the fuel. On the other hand, the usable energy content of fuels is typically measured on a higher heating value (HHV) basis. In addition, electric utilities measure power plant heat rates in terms of HHV. For natural gas, the average heat content of natural gas is 1,030 Btu/scf on an HHV basis and 930 Btu/scf on an LHV basis or about a 10% difference. Electrical efficiencies are net of parasitic and conversion losses. Total Efficiency = (net electric generated + net heat produced for thermal needs)/total system fuel input Power/Heat Ratio = CHP electrical power output (Btu)/ useful heat output (Btu) Effective Electrical Efficiency = (CHP electric power output)/(Total fuel into CHP system total heat recovered/0.8). Equivalent to 3,412 Btu/kWh/Net Heat Rate and Net Heat Rate = 3412/Effective Elec Eff.
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This group of systems was selected as representing the most likely units to be commercially introduced within the next five years. Each fuel cell technology would ultimately be expected to have applications over a broad range of capacities from under 10 kW to over several MW. Heat rates and efficiencies shown were taken from manufacturers specifications and industry publications or are based on the best available data for developing technologies. Available thermal energy was calculated from estimated overall efficiency for these systems. CHP thermal recovery estimates are based on producing low quality heat for domestic hot water process or space heating needs. This feature is generally acceptable for commercial/institutional applications where it is more common to have hot water thermal loads. The data in the table show that electrical efficiency increases as the operating temperature of the fuel cell increases. Also illustrated is an increase as system size becomes larger. As electrical efficiency increases, the absolute quantity of thermal energy available to produce useful thermal energy decreases per unit of power output, and the ratio of power to heat for the CHP system generally increases. A changing ratio of power to heat impacts project economics and may affect the decisions that customers make in terms of CHP acceptance, sizing, and the desirability of selling power.
4.4.3 Emissions
As the primary power generation process in fuel cell systems does not involve combustion, very few emissions are generated. In fact, the fuel processing subsystem is the only source of emissions. The anode-off gas that typically consists of 8 to 15% hydrogen is combusted in a catalytic or surface burner element to provide heat to the reforming process. The temperature of this very lean combustion can be maintained at less than 1,800 F, which also prevents the formation of oxides of nitrogen (NOx) but is sufficiently high to ensure oxidation of carbon monoxide (CO) and volatile organic compounds (VOCs unburned, non-methane hydrocarbons). Other pollutants such as oxides of sulfur (SOx) are eliminated because they are typically removed in an absorbed bed before the fuel is processed. Fuel cell systems do not require any emissions control devices to meet current and projected regulations.

CHP applications are onsite power generation in combination with the recovery and use of byproduct heat. Although less dependent on effective thermal utilization, the heat available from fuel cell systems generally represents 20 to 50% of the inlet fuel energy. As an example, the PAFC system achieves 36% HHV46 electric efficiency and 72 to 80% overall efficiency, which means that it has a 36% thermal efficiency or power to heat ratio of one. Of the available heat,
46
Lower heating value (LHV) and higher heating value (HHV). Most of the efficiencies quoted in this report are based on higher heating value (HHV), which includes the heat of condensation of the water vapor in the products. In engineering and scientific literature the lower heating value (LHV which does not include the heat of condensation of the water vapor in the products) is often used. The HHV is greater than the LHV by approximately 10% with natural gas as the fuel (i.e., 50% LHV
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25 to 45% is recovered from the stack-cooling loop. The balance of heat is derived from the exhaust gas-cooling loop that serves two functions. The first is condensation of product water, making the system self-sufficient, and the second is the recovery of by-product heat. This tends to limit the application of this heat to domestic hot water applications because the heat is recovered over a range from 140 F to 100 F. System capacities and thermal loads most amenable to PAFC and PEM fuel cell CHP systems are in commercial/institutional buildings with space heating and hot water requirements. The simplest thermal load to supply is hot water. Primary applications for CHP in the commercial/institutional sectors are those building types with relatively high and coincident electric and hot water demand such as colleges and universities, hospitals and nursing homes, and lodging. Office buildings and certain warehousing and mercantile/service applications can be economic applications for the high efficiency fuel cell CHP system because their economics are much less sensitive to heat utilization. Technology development efforts for engine-driven systems targeted at heat activated cooling/refrigeration and thermally regenerated desiccants will also enhance fuel cell CHP applications by increasing the thermal energy loads in certain building types. Use of these advanced technologies in applications such as restaurants, supermarkets and refrigerated warehouses provides a base thermal load that opens these applications to CHP. MCFC and SOFC have a much broader potential for CHP including steam production and direct use of heat in industrial applications.

There are four primary potential sources of usable waste heat from a fuel cell system: exhaust gas including water condensation, stack cooling, anode-off gas combustion, and reformer heat. The PAFC system achieves 36% electric efficiency and 72 to 80% overall efficiency, which means that it has a 36% thermal efficiency or power to heat ratio of one. Of the available heat, 25 to 45% is recovered from the stack-cooling loop that operates at approximately 400 F and can deliver low- to medium-pressure steam. The balance of heat is derived from the exhaust gascooling loop that serves two functions. The first is condensation of product water, thus rendering the system water self-sufficient, and the second is the recovery of by-product heat. Since its primary function is water recovery, the balance of the heat available from the PAFC fuel cell is recoverable with 120 F return and 300 F supply temperatures. This tends to limit the application of this heat to domestic hot water applications. The other aspect to note is that all of the available anode-off gas heat and internal reformer heat is used internally to maximize system efficiency. Heat can generally be recovered in the form of hot water or low-pressure steam (<30 psig), but the quality of heat is very dependent on the type of fuel cell and its operating temperature. The one exception to this is the PEM fuel cell, which operates at temperatures below 200 F, and therefore has only low quality heat. Generally, the heat recovered from fuel cell CHP systems is appropriate for low temperature process needs, space heating and potable water heating. Medium pressure steam (up to about 150 psig) can be generated from the fuel cells high temperature exhaust gas (in the case of SOFC and MCFC technologies), but the primary use of
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this hot exhaust gas is in recuperative heat exchange with the inlet process gases. Like engine and turbine systems, the fuel cell exhaust gas can be used directly for process drying. Any available higher quality heat can be used to drive absorption chillers providing cold water, air conditioning or refrigeration. The high electric efficiency of fuel cell systems tends to imply that this heat is only a small fraction of the inlet fuels heating value, and therefore, the economics of the reduced capacity absorption chiller may impact CHP-cooling economics unless direct-fired chillers are economically feasible and the recovered heat has only a supplemental role.

Fuel cell systems are envisioned to serve a variety of distributed generation applications and markets. Since all fuel cells are in an early stage of development, there is limited experience that can be used to validate those applications considered most competitive for fuel cells in comparison to alternate prime movers such as reciprocating engines and gas turbines. This early stage of development and commercial use causes fuel cells to be higher in capital cost and to have a higher project risk due to unproven durability and reliability. These two characteristics will force introductory fuel cell models into specific markets and applications that are most tolerant of risk due to other market or operational drivers. In DG markets, the primary characteristic driving early market acceptance has been the ability of fuel cell systems to provide premium power and high environmental benefits. Interest has been driven by their ability to achieve high efficiencies over a broad load profile and near-zero emission signatures without additional controls. Most of the 200-plus commercially operational fuel cells have been installed as combined heat and power units to improve overall economics. Potential DG applications for fuel cell systems include combined heat and power (CHP), premium power, remote power, specialty applications, grid support, peaking power and microgrid applications. Today, the most deployed and commercially available fuel cell is a 200 kW PAFC unit47. With over 200 units sold, this fleet has achieved over 4 million operating hours in a variety of distributed generation applications. These range from a New York City police station to a major postal facility in Alaska and a credit card processing system in Nebraska. Located in over 15 countries, this initial commercial fuel cell product has made valuable contributions in introducing the capabilities and features of fuel cells to the distributed generation marketplace.
4.4.7 CHP Potential

Fuel cells can achieve overall efficiencies in the 65 to 85% range. Waste heat is used for domestic hot water applications and space heating. Based on the operating temperature of the fuel cell, some higher quality heat can be recovered, typically up to 50% of the available heat. Medium pressure steam (up to about 150 psig) can be generated from the fuel cells high temperature exhaust gas (in the case of SOFC and MCFC technologies), but the primary use of this hot exhaust gas is in recuperative heat exchange with the inlet process gases. Like engine and turbine systems, the fuel cell exhaust gas can be used directly for process drying. Any
47
Sold by UTC Fuel Cells as the PC25.
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available higher quality heat can be used to drive absorption chillers providing cold water, air conditioning or refrigeration. The high electric efficiency of fuel cell systems tends to imply that this heat is only a small fraction of the inlet fuels heating value.
4.5
Steam Turbines and Rankine Bottoming Cycles
As noted in the previous section steam turbine-based CHP systems make up a notable share of the existing CHP capacity. This section briefly describes technology and application issues related to steam turbines. It does not provide cost and performance data to the level of detail of the previous technology sections. Steam turbines are one of the most versatile and oldest prime mover technologies still in general production used to drive a generator or mechanical machinery. Power generation using steam turbines has been in use for about 100 years, when they replaced reciprocating steam engines due to their higher efficiencies and lower costs. Most of the electricity produced in the United States today is generated by conventional steam turbine power plants. The capacity of steam turbines can range from 50 kW to several hundred MWs for large utility power plants. Steam turbines are widely used for CHP applications in the U.S. and Europe. Unlike gas turbine and reciprocating engine CHP systems where heat is a byproduct of power generation, steam turbines normally generate electricity as a byproduct of heat (steam) generation. A steam turbine is captive to a separate heat source and does not directly convert fuel to electric energy. The energy is transferred from the boiler to the turbine through high pressure steam that in turn powers the turbine and generator. This separation of functions enables steam turbines to operate with an enormous variety of fuels, varying from clean natural gas to solid waste, including all types of coal, wood, wood waste, and agricultural byproducts (sugar cane bagasse, fruit pits and rice hulls). In CHP applications, steam at lower pressure is extracted from the steam turbine and used directly in a process or for district heating, or it can be converted to other forms of thermal energy including hot or chilled water. Steam turbines offer a wide array of designs and complexity to match the desired application and/or performance specifications. Steam turbines for utility service may have several pressure casings and elaborate design features, all designed to maximize the efficiency of the power plant. For industrial applications, steam turbines are generally of simpler single casing design and less complicated for reliability and cost reasons. CHP can be adapted to both utility and industrial steam turbine designs.
4.5.1 Applications
While steam turbines themselves are competitively priced compared to other prime movers, the costs of complete boiler/steam turbine CHP systems are relatively high on a per kW of capacity basis because of their low power to heat ratio; the costs of the boiler, fuel handling and overall steam systems; and the custom nature of most installations. Thus, steam turbines are well suited
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to medium- and large-scale industrial and institutional applications where inexpensive fuels, such as coal, biomass, various solid wastes and byproducts (e.g., wood chips, etc.), refinery residual oil, and refinery off-gases are available. Because of the relatively high cost of the system, including boiler, fuel handling system, condenser, cooling tower, and stack gas cleanup, high annual capacity factors are required to enable a reasonable recovery of invested capital. However, retrofit applications of steam turbines into existing boiler/steam systems can be competitive options for a wide variety of users depending on the pressure and temperature of the steam exiting the boiler, the thermal needs of the site, and the condition of the existing boiler and steam system. In such situations, the decision involves only the added capital cost of the steam turbine, its generator, controls and electrical interconnection, with the balance of plant already in place. Similarly, many facilities that are faced with replacement or upgrades of existing boilers and steam systems often consider the addition of steam turbines, especially if steam requirements are relatively large compared to power needs within the facility. In general, steam turbine applications are driven by balancing lower cost fuel or avoided disposal costs for the waste fuel, with the high capital cost and (hopefully high) annual capacity factor for the steam plant and the combined energy plant-process plant application. For these reasons, steam turbines are not normally direct competitors of gas turbines and reciprocating engines.
4.5.1.2
Industrial CHP Applications
Steam turbine-based CHP systems are primarily used in industrial processes where solid or waste fuels are readily available for boiler use. In CHP applications, steam is extracted from the steam turbine and used directly in a process or for district heating, or it can be converted to other forms of thermal energy including hot water or chilled water. The turbine may drive an electric generator or equipment such as boiler feedwater pumps, process pumps, air compressors and refrigeration chillers. Turbines as industrial drivers are almost always a single casing machine, either single stage or multistage, condensing or non-condensing depending on steam conditions and the value of the steam. Steam turbines can operate at a single speed to drive an electric generator or operate over a speed range to drive a refrigeration compressor. For non-condensing applications, steam is exhausted from the turbine at a pressure and temperature sufficient for the CHP heating application.

4.5.2.1 Basic Process and Components
The thermodynamic cycle for the steam turbine is the Rankine cycle. The cycle is the basis for conventional power generating stations and consists of a heat source (boiler) that converts water to high pressure steam. In the steam cycle, water is first pumped to elevated pressure, which is medium to high pressure depending on the size of the unit and the temperature to which the steam is eventually heated. It is then heated to the boiling temperature corresponding to the pressure, boiled (heated from liquid to vapor), and then most frequently superheated (heated to a
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temperature above that of boiling). The pressurized steam is expanded to lower pressure in a multistage turbine, then exhausted either to a condenser at vacuum conditions or into an intermediate temperature steam distribution system that delivers the steam to the industrial or commercial application. The condensate from the condenser or from the industrial steam utilization system is returned to the feedwater pump for continuation of the cycle. Primary components of a boiler/steam turbine system are shown in Figure 4-10.
Figure 4-10: Components of a Boiler/Steam Turbine System

Steam Turbine
Fuel Power out Boiler
Pump
Process or Condenser
Heat out
The steam turbine itself consists of a stationary set of blades (called nozzles) and a moving set of adjacent blades (called buckets or rotor blades) installed within a casing. The two sets of blades work together such that the steam turns the shaft of the turbine and the connected load. The stationary nozzles accelerate the steam to high velocity by expanding it to lower pressure. A rotating bladed disc changes the direction of the steam flow, thereby creating a force on the blades that, because of the wheeled geometry, manifests itself as torque on the shaft on which the bladed wheel is mounted. The combination of torque and speed is the output power of the turbine. The internal flow passages of a steam turbine are very similar to those of the expansion section of a gas turbine (indeed, gas turbine engineering came directly from steam turbine designs around 100 years ago). The main differences are the different gas density, molecular weight, isentropic expansion coefficient, and to a lesser extent viscosity of the two fluids.
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Compared to reciprocating steam engines of comparable size, steam turbines rotate at much higher rotational speeds. This contributes to their lower cost per unit of power developed. The absence of inlet and exhaust valves that somewhat throttle (reduce pressure without generating power) and other design features enable steam turbines to be more efficient than reciprocating steam engines operating from the steam at the same inlet conditions and exhausting into the same steam exhaust systems. In some steam turbine designs, part of the decrease in pressure and acceleration is accomplished in the blade row. These distinctions are known as impulse and reaction turbine designs, respectively. The competitive merits of these designs are the subject of business competition as both designs have been sold successfully for well over 75 years. The connection between the steam boiler and power generation is the steam and return feedwater lines. Steam systems vary from low pressure used primarily for space heating and food preparation, to medium pressure and temperature used in industrial processes and cogeneration, to high pressure and temperature used in utility power generation. Generally, as the system gets larger the economics favor higher pressures and temperatures with their associated heavier walled boiler tubes and more expensive alloys. In general, utility applications involve raising steam for the exclusive purpose of power generation. Such systems also exhaust the steam from the turbine at the lowest practical pressure through the use of water-cooled condensers. There are some utility turbines that serve a dual use, power generation and steam delivery to district heating systems. Steam is delivered into district heating systems or to neighboring industrial plants at medium to low pressure, and consequently do not have condensers. These plants are actually large cogeneration/CHP plants.
4.5.2.2 Boilers
Steam turbines differ from reciprocating engines and gas turbines in that the fuel is burned in a boiler that is separate from the power generation equipment, the steam turbo-generator. The energy is transferred from the boiler to the turbine by an intermediate medium, steam under pressure. As mentioned previously, this separation of functions enables steam turbines to operate with an enormous variety of fuels. The topic of boiler fuels, their handling, combustion and the cleanup of the effluents of such combustion is a separate and complex issue and is addressed in the fuels and emissions sections of this report. For sizes up to (approximately) 40 MW, horizontal industrial boilers are built in a factory. This enables them to be shipped via rail car, with considerable cost savings and improved quality. The cost and quality of factory labor is usually both lower in cost and greater in quality than field labor. Large shop-assembled boilers are typically capable of firing only gas or distillate oil. Generally, there is inadequate residence time for complete combustion of most solid and residual fuels in such designs. Large, field-erected industrial boilers, firing solid and residual fuels, bear a resemblance to utility boilers except for the actual solid fuel injection systems. Large boilers usually burn pulverized coal, however intermediate and small boilers, burning coal or solid fuel, employ a variety of solids feeders.
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4.5.3 Types of Steam Turbines

The primary type of turbine used for central power generation is the condensing turbine. These power-only utility turbines exhaust directly to condensers that maintain vacuum conditions at the discharge of the turbine. An array of tubes, cooled by river, lake or cooling tower water, condenses the steam into (liquid) water.48 The condenser vacuum is achieved by cooling with the near ambient-temperature water, thus causing condensation of the steam turbine exhaust in the condenser. A small amount of air is known to leak into the system because the condenser operates below atmospheric pressure, therefore, a relatively small compressor is used to remove non-condensable gases from the condenser. Non-condensable gases include both air and a small amount of hydrogen, which is the corrosion byproduct of the water-iron reaction. The condensing turbine process results in maximum power and electrical generation efficiency. l. The power output of condensing turbines is very sensitive to ambient conditions.49 Steam turbines used for CHP can be classified into two main types: non-condensing and extraction.
4.5.3.1 Non-Condensing (Back-pressure) Turbine
The non-condensing turbine (also referred to as a back-pressure turbine) exhausts its entire flow of steam to the industrial process or facility steam mains at conditions close to the process heat requirements, as shown in Figure 4-11.
48
At 80 F, the vapor pressure of water is 0.51 psia, at 100 F it is 0.95 psia, at 120 F it is 1.69 psia and at 140 F Fahrenheit it is 2.89 psia 49 From a reference condition of condensation at 100 Fahrenheit, 6.5% less power is obtained from the inlet steam when the temperature at which the steam is condensed is increased (because of higher temperature ambient conditions) to 115 F. Similarly the power output is increased by 9.5% when the condensing temperature is reduced to 80 Fahrenheit. This illustrates the influence of steam turbine discharge pressure on power output and, consequently, net heat rate (and efficiency.)
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Figure 4-11: Non-Condensing (Back-Pressure) Steam Turbine

High pressure steam
Power Out Turbine
Low pressure steam To process
Usually, the steam sent into the mains is not much above saturation temperature.50 The term back-pressure refers to turbines that exhaust steam at atmospheric pressures and above. The discharge pressure is established by the specific CHP application. 50, 150 and 250 psig are the most typical pressure levels for steam distribution systems. The lower pressures are most often used in small and large district heating systems, and the higher pressures most often used in supplying steam to industrial processes. Industrial processes often include further expansion for mechanical drives, using small steam turbines for driving heavy equipment that is intended to run continuously for very long periods. Significant power generation capability is sacrificed when steam is used at appreciable pressure rather than being expanded to vacuum in a condenser. Discharging steam into a steam distribution system at 150 psig can sacrifice slightly more than half the power that could be generated when the inlet steam conditions are 750 psig and 800 F, typical of small steam turbine systems.
4.5.3.2 Extraction Turbine
The extraction turbine has opening(s) in its casing for extraction of a portion of the steam at some intermediate pressure. The extracted steam may be use for process purposes in a CHP facility, or for feedwater heating as is the case in most utility power plants. The rest of the steam is condensed, as illustrated in Figure 4-12.
50
At 50 psig (65 psia) the condensation temperature is 298 F, at 150 psig (165 psia) the condensation temperature is 366 F, and at 250 psig (265 psia) it is 406 F.
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Figure 4-12: Extraction Steam Turbine
High pressure steam
Power Out Turbine
Medium/low pressure steam To process Condenser
The steam extraction pressure may or may not be automatically regulated depending on the turbine design. Regulated extraction permits more steam to flow through the turbine to generate additional electricity during periods of low thermal demand by the CHP system. In utility type steam turbines, there may be several extraction points, each at a different pressure corresponding to a different temperature at which heat is needed in the thermodynamic cycle. The facilitys specific needs for steam and power over time determine the extent to which steam in an extraction turbine will be extracted for use in the process, or be expanded to vacuum conditions and condensed in a condenser. In large, often complex, industrial plants, additional steam may be admitted (flows into the casing and increases the flow in the steam path) to the steam turbine. Often this happens when multiple boilers are used at different pressure, because of their historical existence. These steam turbines are referred to as admission turbines. At steam extraction and admission locations there are usually steam flow control valves that add to the steam and control system cost. There are numerous mechanical design features that have been created to increase efficiency, provide for operation over a range of conditions, simplify manufacture and repair, and achieve other practical purposes. The long history of steam turbine use has resulted in a large inventory of steam turbine stage designs that can be used to tailor a product for a specific application. For example, the division of steam acceleration and change in direction of flow varies between competing turbine manufacturers under the identification of impulse and reaction designs. Manufacturers tailor clients design requests by varying the flow area in the stages and the extent to which steam is extracted (removed from the flow path between stages) to accommodate the specification of the client.
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When steam is expanded through a very high pressure ratio, as in utility and large industrial steam systems, the steam can begin to condense in the turbine when the temperature of the steam drops below the saturation temperature at that pressure. If water drops were allowed to form in the turbine, blade erosion would occur when the drops impact on the blades. At this point in the expansion the steam is sometimes returned to the boiler and reheated to high temperature and then returned to the turbine for further (safe) expansion. In a few very large, very high pressure, utility steam systems double reheat systems are installed. With these choices the designers of the steam supply system and the steam turbine have the challenge of creating a system design which best delivers the (seasonally varying) power and steam demands. Between power (only) output of a condensing steam turbine and the power and steam combination of a back-pressure steam turbine, essentially any ratio of power to heat output can be supplied to a facility. Back-pressure steam turbines can be obtained with a variety of backpressures controls, further increasing the variability of the power-to-heat ratio.
4.5.4 Steam Turbine Design Characteristics

Custom design: Steam turbines can be designed to match CHP design pressure and temperature requirements. The steam turbine can be designed to maximize electric efficiency while providing the desired thermal output. Steam turbines are capable of operating over a very broad range of steam pressures. Utility steam turbines operate with inlet steam pressures up to 3500 psig and exhaust vacuum conditions as low as one inch of Hg (absolute). Steam turbines can be custom designed to deliver the thermal requirements of the CHP applications through the use of back-pressure or extraction steam at appropriate pressures and temperatures. Steam turbines offer a wide range of fuel flexibility using a variety of fuel sources in the associated boiler or other heat source, including coal, oil, natural gas, wood, and waste products. Steam turbine life is extremely long. There are steam turbines that have been in service for over 50 years. Overhaul intervals are measured in years. When properly operated and maintained (including proper control of boiler water chemistry), steam turbines are extremely reliable. They require controlled thermal transients as the massive casing heats up slowly and differential expansion of the parts must be minimized.
Thermal output:
Fuel flexibility:
Reliability and life:
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Size range:
Steam turbines are available in sizes from under 100 kW to over 250 MW. In the multi-megawatt size range, industrial and utility steam turbine designations merge, with the same turbine (high pressure section) able to serve both industrial and small utility applications. Emissions are dependent upon the fuel used by the boiler or other steam source, the boiler furnace combustion section design and operation, and any built-in and add-on boiler exhaust cleanup systems. The electrical generating efficiency of steam turbine power plants varies from a high of 36% HHV51 for large, electric utility plants designed for the highest practical annual capacity factor, to under 10% HHV for small, simple plants which make electricity as a byproduct of delivering steam to industrial processes or district heating systems for colleges, industrial parks and building complexes. Steam turbine thermodynamic efficiency (isentropic efficiency) refers to the ratio of power actually generated from the turbine to what would be generated by a perfect turbine with no internal losses using steam at the same inlet conditions and discharging to the same downstream pressure. Turbine thermodynamic efficiency is not to be confused with electrical generating efficiency, which is the ratio of net power generated to total fuel input to the cycle. Steam turbine thermodynamic efficiency is a measure of how efficiently the turbine extracts power from the steam itself and is useful in identifying the conditions of the steam as it exhausts from the turbine and in comparing the performance of various steam turbines. Multistage (moderate to high pressure ratio) steam turbines have thermodynamic efficiencies that vary from 65% for very small (under 1,000 kW) units to over 90% for large industrial and utility sized units. Small, single stage steam turbines can have efficiencies as low as 50%. Steam turbine CHP systems are generally characterized by very low power to heat ratios, typically in the 0.05 to 0.2 range. This is because electricity is a byproduct of heat generation, with the
Emissions:
Electrical Efficiency:
CHP System Efficiency:
51
All turbine and engine manufacturers quote heat rates in terms of the lower heating value (LHV) of the fuel. However, the usable energy content of fuels is typically measured on a higher heating value basis (HHV). In addition, electric utilities measure power plant heat rates in terms of HHV. For natural gas, the average heat content of natural gas is 1,030 Btu/scf on an HHV basis and 930 Btu/scf on an LHV basis or about a 10% difference.
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system optimized for steam production. Hence, while steam turbine CHP system electrical efficiency52 may seem very low, it is because the primary objective is to produce large amounts of steam. The effective electrical efficiency53 of steam turbine systems, however, is generally very high, because almost all the energy difference between the high pressure boiler output and the lower pressure turbine output is converted to electricity. This means that total CHP system efficiencies54 are generally very high and approach the boiler efficiency level. Steam boiler efficiencies range from 70 to 85 % HHV depending on boiler type and age, fuel, duty cycle, application, and steam conditions.
4.5.5 Process Steam and Performance Tradeoffs

Heat recovery methods from a steam turbine use back pressure exhaust or extraction steam. However, the term is somewhat misleading, since in the case of steam turbines, it is the steam turbine itself that can be defined as a heat recovery device. The amount and quality of recovered heat is a function of the entering steam conditions and the design of the steam turbine. Exhaust steam from the turbine can be used directly in a process or for district heating. It can also be converted to other forms of thermal energy, including hot or chilled water. Steam discharged or extracted from a steam turbine can be used in a single- or double effect absorption chiller. The steam turbine can also be used as a mechanical drive for a centrifugal chiller.
4.5.6 Performance and Efficiency Enhancements

In industrial steam turbine systems, business conditions determine the requirements and relative values of the electric power and the process steam. Plant system engineers then decide the extent of efficiency enhancing options to incorporate in terms of their incremental effects on performance and plant cost, and select appropriate steam turbine inlet and exhaust conditions. Often the steam turbine is going into a system that already exists and is being modified, so that a number of steam system design parameters are already determined by previous decisions, which exist as system hardware characteristics. As the stack temperature of the boiler exhaust combustion products still contain some heat, tradeoffs are made regarding the extent of investment in heat reclamation equipment for the sake of efficiency improvement. Often the stack exhaust temperature is set at a level where further heat recovery would result in condensation of corrosive chemical species in the stack, with consequential deleterious effects on stack life and safety.
52 53
Net power output / total fuel input into the system. (Steam turbine electric power output)/(Total fuel into boiler (steam to process/boiler efficiency)). 54 Net power and steam generated divided by total fuel input.
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4.5.7 Capital Cost

A steam turbine-based CHP plant is a complex process with many interrelated subsystems that must usually be custom designed. A typical breakdown of installed costs for a steam turbine CHP plant is 25% - boiler, 20% - fuel handling, storage and preparation system, 20% - stack gas cleanup and pollution controls, 15% steam turbine generator, and 20% - field construction and plant engineering. Boiler costs are highly competitive. Typically, the only area in which significant cost reductions can be made when designing a system is in fuel handling/storage/preparation. In a steam turbine cogeneration plant, especially one burning solid fuel such as biomass, the turbine accounts for a much smaller portion of total system installed costs than is the case with internal combustion engines and industrial gas turbines. A typical coal/wood fired boiler costs more than the steam turbine.55 The cost of complete solid fuel cogeneration plants varies with many factors, with fuels handling, pollution control equipment and boiler cost all being major cost items. Because of both the size of such plants and the diverse sources of the components, solid fuel cogeneration plants invariably involve extensive system engineering and field labor during construction. Typical complete plant costs run well over $1,000/kW, with little generalization except that for the same fuel and configuration, costs per kW of capacity generally increase as size decreases. Steam turbine costs exhibit a modest extent of irregularity, as steam turbines are made in sizes with finite steps between the sizes. The cost of the turbine is generally the same for the upper and lower limit of the steam flowing through it, so step-like behavior is sometimes seen in steam turbine prices. Since they come in specific size increments, a steam turbine that is used at the upper end of its range of power capability costs less per kW generated than one that is used at the lower end of its capability. Additionally, raw material cost, local labor rates, delivery times, availability of existing major components and similar business conditions can affect steam turbine pricing. Often steam turbines are sold to fit into an existing plant. In some of these applications, the specifications, mass flow, pressure, temperature, and back-pressure or extraction conditions are not conditions for which there exists a large amount of demand. These somewhat unique machines are more expensive per kilowatt than machines that are in greater demand. Three reasons can be given: 1) a greater amount of custom engineering and manufacturing setup may be required; 2) there is less potential for sales of duplicate or similar units; and 3) there are fewer competitive bidders. The truly competitive products are the off-the-rack type machines, while custom machines are naturally more expensive. Steam turbine prices vary greatly with the extent of competition and related manufacturing volumes for units of desired size, inlet and exit steam conditions, rotational speed and
55
Spiewak and Weiss, loc. Cit., pages 82 and 95. These figures are for a 32.3 MW multi-fuel fired, 1,250 psig, 900 F, 50 psig backpressure steam turbine used in an industrial cogeneration plant
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standardization of construction. Prices are usually quoted for an assembled steam turbineelectrical generator package. The electrical generator can account for 20% to 40% of the assembly. As the steam turbine/electrical generator package is heavy, due in large part to the heavy walled construction of the high pressure turbine casing, it must be mounted carefully on an appropriate pedestal. The installation and connection to the boiler through high pressure-high temperature steam pipes must be performed with engineering and installation expertise. As the high pressure steam pipes typically vary in temperature by 750 F between cold standby/repair status and full power status, care must be taken in installing a means to accommodate the differential expansion accompanying startup and shutdown. Should the turbine have variable extraction, the cost of the extraction valve and control system adds to the installation. Small steam turbines are, to a varying degree, custom produced products rather than standard products. This both adds cost and makes costs more variable. They are manufactured by several international manufacturers in the industrial sizes where demand is appreciable. Business is competitive in these sizes. Small steam turbines, below about 2 MW, have a relatively small market. In these small sizes there is less competition and lower manufacturing volume, so that component costs are not as competitive, the economies of scale in both size and manufacturing volumes disfavor such small sizes, and the fraction of total cost due to system engineering and field construction are high.56 Since steam for a steam turbine is generated in a boiler by combustion and heat transfer, the pressure and temperature of the steam is limited by furnace heat transfer designs, manufacturing considerations, and boiler tube bundle designs. Higher heat fluxes in the boiler enable more compact boiler designs with less boiler tube material. However, higher heat fluxes also result in higher boiler tube temperatures and the need for the use of higher-grade (adequate strength at higher temperature) boiler tube materials. Such engineering economic tradeoffs between temperature (with consequential increases in efficiency) and cost appear throughout the steam plant. In contrast to the temperature limitations on boiler tubes, which are exposed to high temperatures and heat fluxes in the furnace, steam turbine material selection is easier. However, an oftenoverlooked component in the steam power system is the steam (safety) stop valve, which is immediately ahead of the steam turbine and is designed for full load at the temperature and pressure of the steam supply. This safety valve is necessary because if the generator electric load were lost (an occasional occurrence), the turbine would rapidly overspeed and destroy itself. Other accidents are possible, supporting the need for the turbine stop valve, which adds significant cost to the system
56
Data on steam generator costs shows cost increasing with decreasing size, with a 5.25 MW, 900 psig, 850 F, 125 psig backpressure steam turbine/generator costing $285/kw (installed). In that installation the boiler alone, excluding fuel handling and pollution control equipment, cost 150% of the cost of the steam turbine.
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4.5.8 Maintenance
Steam turbines are very rugged units, with operational life often exceeding 50 years. Maintenance is simple, comprised mainly of making sure that all fluids (steam flowing through the turbine and the oil for the bearing) are always clean and at the proper temperature. The oil lubrication system must be clean and at the correct operating temperature and level to maintain proper performance. Other items include inspecting auxiliaries such as lubricating-oil pumps, coolers and oil strainers and checking safety devices such as the operation of over-speed trips. In order to obtain reliable service, steam turbines require long warm-up periods so that there are minimal thermal expansion stress and wear concerns. Steam turbine maintenance costs are quite low, typically less than $0.004 per kWh. Boilers and any associated solid fuel processing and handling equipment that is part of the boiler/steam turbine plant require their own types of maintenance. One maintenance issue with steam turbines is solids carry over from the boiler. These solids deposits on turbine nozzles and other internal parts and degrades turbine efficiency and power output. Some of these are water soluble but others are not. Three methods are employed to remove such deposits: 1) manual removal; 2) cracking off deposits by shutting the turbine off and allowing it to cool; and 3) for water soluble deposits, water washing while the turbine is running.
4.5.9 Fuels
Industrial boilers operate on a wide variety of fuels, including wood, coal, natural gas, oils (including residual oil, the left-over material when the valuable distillates have been separated for sale), municipal solid wastes, and sludges. The fuel handling, storage and preparation equipment needed for solid fuels adds considerably to the cost of an installation. Thus, such fuels are used only when a high annual capacity factor is expected of the facility, or when the solid material has to be disposed of to avoid an environmental or space occupancy problem.
4.5.10
Availability
Steam turbines are generally considered to have 99% plus availability with longer than one year between shutdowns for maintenance and inspections. This high level of availability applies only to the steam turbine, not the boiler or HRSG that is supplying the steam.
4.5.11
Emissions and Control
Emissions associated with a steam turbine are dependent on the source of the steam. Steam turbines can be used with a boiler firing any one or a combination of a large variety of fuel sources, or they can be used with a gas turbine in a combined cycle configuration. Boiler emissions vary depending on fuel type and environmental conditions.
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Boilers emissions include nitrogen oxide (NOx), sulfur oxides (SOx), particulate matter (PM), carbon monoxide (CO), and carbon dioxide (CO2). Recently NOx control has been the primary focus of emission control research and development in boilers. The following provides a description of the most prominent emission control approaches. Combustion control techniques are less costly than post-combustion control methods and are often used on industrial boilers for NOx control. Control of combustion temperature has been the principal focus of combustion process control in boilers. Combustion control requires tradeoffs high temperatures favor complete burn-up of the fuel and low residual hydrocarbons and CO, but promote NOx formation. Very lean combustion dilutes the combustion process and reduces combustion temperatures and NOx formation. However, if the mixture is too lean, incomplete combustion occurs, increasing CO and VOC emissions.
4.5.11.1 Flue Gas Recirculation (FGR)
FGR is one technique for reducing NOx emissions from industrial boilers with inputs below 100 MMBtu/hr. With FGR, a portion of the relatively cool boiler exhaust gases re-enter the combustion process, reducing the flame temperature and associated thermal NOx formation. It is an effective NOx reduction method for firetube and watertube boilers, and many applications can rely solely on FGR to meet environmental standards. External FGR employs a fan to recirculate the flue gases into the flame, with external piping carrying the gases from the stack to the burner. A valve, responding to boiler input, controls the recirculation rate. Induced FGR relies on the combustion air fan for flue gas recirculation. In this scheme, a portion of the gases travel via ductwork or internally to the air fan, where they are premixed with combustion air and introduced into the flame through the burner. Induced FGR in newer designs utilize an integral design that is relatively uncomplicated and reliable. Generally the limit for NOx reduction via FGR is 80% in natural gas-fired boilers and 25% for standard fuel oils.
4.5.11.2 Low Excess Air Firing (LAE)
Boilers are fired with excess air to ensure complete combustion. However, high excess air levels can result in increased NOx formation, because the excess nitrogen and oxygen in the combustion air entering the flame combine to form thermal NOx. Firing with low excess air means limiting the amount of excess air that enters the combustion process, thus limiting the amount of extra nitrogen and oxygen entering the flame. This is accomplished through burner design modification and is optimized through the use of oxygen trim controls. LAE typically results in overall NOx reductions of 5 to 10% when firing with natural gas, and is suitable for most boilers.
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4.5.11.3
Low Nitrogen Fuel Oil
NOx formed by fuel-bound nitrogen can account for 20 to 50% of total NOx levels in oil-fired boiler emissions. The use of low nitrogen fuels in boilers firing distillate oils is one method of reducing NOx emissions. Such fuels can contain up to 20 times less fuel-bound nitrogen than standard No. 2 oil. NOx reductions of up to 70% over NOx emissions from standard No. 2 oils have been achieved in firetube boilers utilizing flue gas recirculation.
4.5.11.4 Burner Modifications
By modifying the design of standard burners to achieve pre-mixed combustion, lower and more uniform flame temperatures, and internal flue gas recirculation, lower overall NOx emissions can be obtained, often at a low cost premium. While most boiler types and sizes can accommodate burner modifications, it is most effective for boilers firing natural gas and distillate fuel oils, with less effectiveness in heavy oil-fired boilers. Also, burner modifications may be complemented with other NOx reduction methods, such as flue gas recirculation, to comply with some of the more stringent environmental regulations. Low NOx burner designs can adversely impact boiler operating parameters such as stability, turndown, capacity, CO levels and efficiency. New burner designs entering the market have been able to eliminate or minimize these adverse impacts.
4.5.11.5 Water/Steam Injection
Injecting water or steam into the flame reduces flame temperature, lowering thermal NOx formation and overall NOx emissions. However, under normal operating conditions, water/steam injection can lower boiler efficiency by 3 to 10%. Also, there is a practical limit to the amount that can be injected without causing condensation-related problems. This method is often employed in conjunction with other NOx control techniques such as burner modifications or flue gas recirculation. When used with natural gas-fired boilers, water/steam injection can result in NOx reduction of up to 80%, with lower reductions achievable in oil-fired boilers.
4.5.11.6 Selective Non-Catalytic Reduction (SNCR) In boiler SNCR, a NOx reducing agent such as ammonia or urea is injected into the boiler exhaust gases at a temperature in the 1,400 to 1,600 F range. The agent breaks down the NOx in the exhaust gases into water and atmospheric nitrogen (N2). While NSCR can reduce boiler NOx emissions by up to 70%, it is very difficult to apply to industrial boilers that modulate or cycle frequently because to perform properly, the agent must be introduced at a specific flue gas temperature. Also, the location of the exhaust gases at the necessary temperature is constantly changing in a cycling boiler. 4.5.11.7 Selective Catalytic Reduction (SCR)
This technology involves the injection of the reducing agent into the boiler exhaust gas in the presence of a catalyst. The catalyst allows the reducing agent to operate at lower exhaust temperatures than NSCR, in the 500 to 1,200 F depending on the type of catalyst. NOx reductions of up to 90% are achievable with SCR. The two agents used commercially are ammonia (NH3 in anhydrous liquid form or aqueous solution) and aqueous urea. Urea
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decomposes in the hot exhaust gas and SCR reactor, releasing ammonia. Approximately 0.9 to 1.0 moles of ammonia is required per mole of NOx at the SCR reactor inlet in order to achieve an 80 to 90% NOx reduction. SCR is however costly to use and can only occasionally be justified on boilers with inputs of less than 100 MMBtu/hr. SCR requires on-site storage of ammonia, a hazardous chemical. In addition, ammonia can slip through the process unreacted, contributing to environmental health concerns.
4.5.12
Organic Rankine Cycle
The Rankine cycle is a thermodynamic cycle used to generate electricity in many power stations. Superheated steam is generated in a boiler, and then expanded in a steam turbine. The turbine drives a generator, to convert the work into electricity. The remaining steam is then condensed and recycled as feedwater to the boiler. Organic substances can be substituted for steam when temperatures are limited to less than 750 degree Fahrenheit. This is called an Organic Rankine Cycle (ORC). ORC can make use of low temperature waste heat to generate electricity. At these low temperatures a steam cycle would be inefficient, due to enormous volumes of low pressure steam, causing very voluminous and costly plants. ORCs can be applied for low temperature waste heat recovery (industry), efficiency improvement in onsite power generation, and recovery of geothermal and solar heat. Several organic compounds have been used in ORCs (e.g. refrigerants, iso-pentane or ammonia) to match the temperature of the available waste heat. Waste heat temperatures can be as low as 150F. The efficiency of an ORC is estimated to be between 10 and 20%, depending on temperature levels. On many sites no suitable use is available for low temperature waste heat, hence upgrading by the use of a heat pump (or transformer) or an ORC are good energy recovery candidates. Figure 4-13 below shows a typical ORC where waste heat (1) evaporates the refrigerant which passes through the turbine producing power (2). The refrigerant is then condensed (3) and pumped back to the waste heat source (4). The system utilizes a closed-loop Rankine cycle using an advanced refrigerant.
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Figure 4-13: Organic Rankine Cycle Courtesy of UT Power
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5. Industrial Processes and Applications to Integrate CHP Systems

This chapter describes the generic industrial applications that can use waste thermal energy. For each generic industrial application, there is a general description, process uses, and details on cogeneration integration. For illustrative purposes, a diagram of each generic process integrated with a microturbine is also included. A more comprehensive analysis is available in the Addendum: Assessment of Replicable Innovative Industrial Cogeneration Applications. See also table 6.1 provide later in this report. Integration into a specific manufacturing facility will always require further site-specific analyses. Ideal cogeneration applications would simply replace or supplement a hot water, steam, or cooling requirement within a plant. Adaptation of cogeneration technologies could be greatly improved as packaged CHP systems are developed that minimize site engineering. For more complex integration schemes, there are several general considerations pertinent to determining how a specific existing operation is altered (from an engineering perspective) when driven or partially supported through cogeneration. Heat transfer rates to the process media are often reduced when using exhaust (the typical heat media from a cogeneration unit) as opposed to a burner-based operation (e.g., a process furnace). Though the quantity of heat energy available from a DG unit is often sufficient to maintain a process operation from an energy balance standpoint, the dynamics (temperature and energy transfer profiles) can be significantly different. This is because high temperature (1500-4000oF), luminous flames induce radiant based heating (rays of energy moving at the speed of light), whereas exhaust energy ranges from 450-1100oF and moves via convection-conduction only. A common remedy is an increase in the heat transfer area (and therefore the equipment size). Batch systems and other operations with non-constant temperature/energy requirements, including fermentation, chemical reactors, and mixing vessels, are often dependent upon dynamic heating systems to accommodate cold start-ups, and varying endo/exo-therms and temperature profiles. These systems require significant engineering for integration of cogeneration schemes. Auxiliary burners, or maintaining the use of existing burner systems, can increase the flexibility and therefore applications of cogeneration systems. If the primary driving force for investing in a CHP unit is the electricity output, then generally the more constant electrical delivery typically results in more constant heat delivery. An alternative scenario might be a row of three burners heating a process vessel, where all three burners are used for the initial heat-up period, and one or two burners are used to maintain temperatures during the processing step. A steady exhaust stream could then replace one or two of the burners while the third burner is maintained for the heat-up period.
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Controls systems for a process operations incorporating a CHP scheme may need to be modified or completely re-engineered. Automated control systems on a typical burner based system will monitor one or more parameters of the process and then adjust fuel/oxidant feeds to the burner accordingly. If a system is heated via exhaust gases from a CHP unit, the control system might need to also monitor a recuperator, a by-pass system, and auxiliary burners.
5.1
Hot Water/Direct Contact Water Heaters
Process hot water often represents the single largest Btu/hr energy requirement for a manufacturer. Development of highly efficient heat exchange concepts for this purpose has resulted in the consideration of direct contact water heating schemes. Fundamentally, by raining water down a packed column, which also is the stack for combustion products (natural gas), near ideal heat transfer is achieved. Exhaust leaves the system cooled to less than 10oF above the cool water inlet, and the water is able to reclaim well above 90% of the exhaust energy. This is shown in schematic form in Figure 5-1.
Figure 5-1: Direct Contact Water Heater System
5.1.1 Process Uses

Industrial facilities are prolific users of hot water. Many factors drive the use of hot water including process needs, sanitary needs, and safety. Hot water is used for: 1. Washing/flushing
Equipment clean-down and sanitizing in food industries (meat, dairy, sugar refining, etc.), pharmaceutical and bio processes.
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Continuous washing operations in raw food preparation (cane/beet sugars, meat, etc.), textiles, wood/paper pulp, removing oils and other excess matter (paint, dust etc.), in metals fabrication and molded plastics industries (auto parts, sheet metal, cans, food/beverage containers, etc.), and in synthetic rubber and fiber manufacturing. Flushing operations for process piping and batch equipment (paint blenders, fermentation vessels, etc.), particularly for operations using the same process lines/equipment to produce slightly varying products (paints, candy slurries, pharmaceuticals, etc.).
2. As a solvent for raw material preparation, leaching, and separations/extractions, and to capture pollutants in emission control operations. Water is typically chosen when these systems handle inorganic solids, acids, polar fluids, and crystalline salts. 3. As a crystallization/fermentation/reaction media in industries producing wine/maltbeverage, dairy, pharmaceutical, and inorganic chemical products. 4. To heat jackets for vessels/operations below ~230oF, including chocolate tempering, crystallizers, and storage vessels/mixers containing viscous materials. It should be noted that hot water generated from direct contact with natural gas derived combustion exhaust has been approved for food manufacturers including dairy, meat plants, and beverages.
5.1.2 Integrating for CHP

To address heat transfer when using exhaust gases for direct contact water heating, either more packing media, or extending the height of the column (or both) may be necessary to maintain normal operation with such retrofit systems. Pressure drop and thus back-pressure imposed on the generating system will be a key design element. Designs to ensure that no process water enters back into the DG units exhaust system are also crucial for practical implementation. Whether direct or indirect water heating is available, many industrial facilities may not have a constant hot water demand. However, two profiles generally describe the demand: normal production demands, and clean-down or full capacity day shifts with part capacity night shifts demands. In the latter case, a bypass-recuperator can be integrated with a variable-flow water tower to switch between profiles.
5.1.3 Currently Available Systems

There are currently two off-the-shelf industrial CHP concepts available in the marketplace to generate hot water. The first concept uses turbine or microturbine exhaust that is routed through an air-to-water heat exchanger to generate hot water. The second concept is a standard reciprocating engine cogeneration system. These systems use liquid-to-water heat exchangers on the water jacket cooling fluid, the lubricating oil system, and sometimes on the aftercoolers. Some of these systems also use an air-to-water heat exchangers on the engine exhaust to generate the hot water.
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Several manufacturers do provide direct-fired contact water heaters that can be readily adopted to exhaust gas hot water generation .
5.2
Indirect Heating of Thermal Fluids
Many operations, requiring energy delivery to a liquid-phase (and/or fluid) stream, require a physical barrier between the fossil combustion products (energy release) and the process stream. The barrier reduces heat transfer efficiency, but is often necessary. This is shown in schematic in Figure 5.2. Traditional systems depend upon heat delivery via heat exchangers, fire-tube schemes (heating coils, or multi-pass fluid heaters) and other methods. Many of these systems use flame-induced, radiant-based heating to rapidly deliver well over 50% of the required energy.
Figure 5-2: Indirect Fluid Heater System
5.2.1 Process Uses

Processes that use high (and/or variable) pressure systems, separation/purification operations, multiphase operations, systems impeded by oxidation (or other possibly reactive/degrading components of combustion), and strictly maintained closed-loop systems are common boundaries to direct heating of process streams. More specific operations and their manufacturing environments include: 1. Purification, recovery, and separations.
Chemicals and refinery distillation towers, reboilers, and flash evaporators for polymer processing, slurry separations/purification, brine treatment, etc.
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2. Pressurized process streams (in chemical reactors, etc.). 3. Processes and products sensitive to oxidation, other reaction-driven degradation, and/or general fouling (in chemical, food, pharmaceutical processing, etc.). 4. Vat or batch systems maintaining a heated fluid (such as paint/dye blenders, food deep fryers, refinery-bottoms storage and subsequent processing, reactor/fermentation vessels, crystallizers, etc.). 5. Thermal fluid, closed-loop-heating systems for processes requiring especially high and smoothly controlled temperature profiles.

Systems requiring high temperatures over large areas such as calcium chloride crystallizers. Pipe line tracing.
o Distillation and reactor feed lines whereby preheating feed components simplifies the energy delivery and/or chemistry complexity of any downstream operation. o Heat tracing viscous material (crude, confectionery, polymer melts, etc.) pipelines to reduce electric-driven pumping rquirements.
Tool heating (including plastics/rubber extruders, molds), paper mill platens and rollers, metal fabrication equipment, laminate setting, and others. General polymer processing. Polymer processing plants may require high temperature (> 400oF) energy delivery to several unit operations because of high pure polymer melting points (maintained for extrusion, molding, etc.), and endothermic and/or equilibrium limited reactions (whereby light byproducts, often water, must be continuously evaporated and removed for effective/efficient reactor output). Polyester and Nylon 6,6 are good examples of major international commodities often utilizing thermal fluids systems throughout their production cycle.

The wide variety of thermal fluid heating applications mentioned above reflects the broad scope in unit operations, engineering techniques, and process chemistries involved in this concept category. For this section, three general interconnection (with cogeneration) systems will be discussed.
Systems not relying on radiant energy delivery.
Systems currently delivering heat to a process fluid via combustion exhaust energy only (or other forced convection media), either through a series of tubes, vessel/pipe jacket, or compact heat exchanger (shell and tube, plate unit, etc.) can be easily adapted to receive cogeneration based thermal energy. Because the majority of a DG units thermal output is in the form of hot exhaust, the key concerns would be matching the temperature, gas volume, and pressure parameters to those experienced prior to cogeneration integration. This may require little or no rebuilding of
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the process heat exchange equipment, but needs to consider the operating tolerance of the DG unit.
Systems relying on radiant (flame induced) energy transfer.
Unless there is little radiant energy transfer contribution (relative to the entire quantity delivered by the process operation) and/or the flame temperatures are low (< 1500oF), even unrecuperated turbine exhaust cannot match the heat transfer characteristics expected in the existing process heat transfer unit. Several combinations may then compete on a cost benefit and space- based analysis. Many systems delivering a majority of the energy via high temperature, flame induced radiation leave a significant amount of the unit volume for flame (radiant rays) space only. If this space were utilized to generate more passes (fluid tubing), thereby increasing the heat transfer area, the operation could be more readily fit by a cogeneration scheme. It may be the case that the original heat transfer unit cannot be properly modified. However, if the feed line to the heater unit is relatively low temperature (70-300oF), a heat exchanger extracting cogeneration energy prior to entering the main heater could result in a sizable turn down of fuel delivery to that unit. Another option would be the use of duct burners to increase the fuel gas temperature to the required levels.
Closed loop, thermal fluid heating systems.
The previous two interconnection categories represent traditional methods of heat transfer to process fluid streams/systems. The second is more common, but also requires a great deal more case by case analysis. Thermal fluid heating systems however, represent a stronger possibility for a more heterogeneous cogeneration-based heat delivery, retrofit and/or interface system. From a cogeneration standpoint, the only concern is maintaining total heat transfer characteristics to the heat transfer fluid on return from the process unit(s). In other words, a 400,000 Btu/hr Dowtherm based operation can use the same heater design regardless of whether the system is heating/controlling a polymer reactor or a paper laminate machine. This would allow for more repetitious cogeneration designs.
5.3
Direct Heating/Drying
Direct heating and drying refers to combustion products mixing directly with the process environment (typically process solids and a forced air stream). Because radiation transfer is rapid, typically at high temperature, and ceases upon reaching a boundary (the outer layer of process matter), it is often undesirable and unnecessary. Therefore, natural and forced convection heat transfer engineering may dominate dryer designs. There are a wide variety of process dryers, kilns, calciners, ovens, etc. that incorporate an even greater range of combinations in forced convection, radiation, and conduction (through the material) heat transfer principles to satisfy the product requirements. In all cases, however, the heat energy supplied to a system must perform the following four tasks: 1. Heat the dryer feed to the light components vaporization temperature. 2. Vaporize and/or free the liquid/byproducts above the solids surface. 3. Heat the solids to the final desired temperature, and for the desired duration of time. 4. Heat the vapor to the final desired temperature.
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This is shown in schematic in Figure 5-3.
Figure 5-3: Direct Heating/Drying System
5.3.1 Process Uses

Numerous factors, including production throughput, local steam, natural gas and electricity prices, emissions restrictions, and equipment cost considerations, often result in similar solids being dried in very different ways. However, common direct drying/heating operations and their typical product/process applications include: 1. Bringing variable water-weight percent feeds to a desired initial processing concentration.
Mined raw materials and/or prepared mixes fed to cement, gypsum, ceramics, and lime processes require crushing, sizing, and drying. Rotary dryers, impact dryers, drum dryers, and others are used to handle large volume, variable composition slurries. Water removal to homogenize process streams for inorganic chemicals manufacture is also common.
2. More complete drying of slurries containing finer solids within certain size/weight specifications is carried out using spray dryers, thin-film dryers, and drum dryers.
Within the Stone, Clay, Glass and Cement manufacturing sector (SIC 32), fine dry powders are desirable for handling, packing, and/or to produce a more consistent product. Specific products include kaolin clay, fluid cracking catalysts and ceramics that may also use this step to introduce property enriching additives/binders to the material.
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Emulsion PVC and PVP polymer processes often employ spray drying to rapidly remove water without degrading product. Milk/dairy powders. Organic and inorganic dry soaps, detergents, dyes and pigments. Metals fabrication and/or scrap metal industries use direct heat to remove volatile impurities (oils, plastics, paints, etc.) and/or to reduce energy demand of central furnace operations. Large kilns, calciners, and ovens (primarily in SIC 32) also benefit from preheated feeds, often containing preheat sections as part of the primary unit (tunnel kilns, etc.). Coke processes may preheat coal feeds to reduce moisture content. Glass and mineral wool industries utilize many preheat techniques to reduce energy demands or increase throughput on central furnaces systems.
3. Pre-heating/drying materials.
4. Drying and heating meant to relieve chemically bound light components and/or otherwise modify solid structure. Rotary kilns, shaft kilns, kettle calciners, flash calciners, brick ovens/houses, tunnel kilns, regenerative kilns, and others are included in this grouping.
Kilns and ovens used for bricks, ceramics, etc. where residence times in hot and dry conditions may last hours to days to obtain desired final qualities in appearance and structure. Kilns and calciners used to produce/process gypsum, plasters, cements, limestone, etc. where energy not only thoroughly removes any remaining water, but also frees intimate impurities, and forces various reactions often resulting in the release of carbon and sulfur oxides. Along with those operations in SIC 32, both the pulp & paper and beet sugar industries use these lime kiln technologies.
5. Drying to remove water (and/or other solvents/chemicals) added, left, or produced during processing.
Starch, stalk and husk dryers, and fruit peel and feed dryers, used in beet and cane sugar manufacturing, grain mill products, and other SIC 20 manufacturing sectors. Convection dryers in textile manufacturing. Veneer and other lumber/wood-furniture dryers. Pulp dryers, coated and tissue paper dryers in SIC 26. Dryers including conveyor and tray dryers used in non & cellulosic fibers (rayon, acrylics, etc.) processing, polymer rubbers manufacture, for pharmaceuticals, and latex.
6. Granulators, fluidized bed systems, rotary dryers, and tower dryers often used for producing finished grains, sugar, and fertilizer.
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Many kilns and calciners depend on high temperature (1000-2000oF) exhaust and radiant heating sections that could not be supplied by cogeneration exhaust alone. However, preheating operations can take advantage of cogeneration. Although many direct preheating systems recover stack gas from onsite furnaces and central calciners/dryers, the gas often requires filtering or other treatment to remove particles, sulfurous gases, and other components that can otherwise deteriorate equipment and cause health concerns. Sites with preheating not derived from cogeneration may see additional turndown (on the primary units fuel feed) without high retrofit costs if the system can handle an extra volume of exhaust (from a cogeneration scheme) and assuming temperature conditions are similar to the existing preheaters hot gas feed. Drying operations at facilities without processing furnaces, (e.g., calciners) could completely supplement a non-radiant based dryer. However, some direct dryers burn cheap fuels (e.g. wood, pulp waste, coal) and so emissions considerations may drive the final decision. In all cases, drying systems can contain a complex array of blowers and fans to promote improved heat transfer and efficiency. Back pressures on the DG unit may require controls and monitoring at each dryer entry point (of hot gases into the system) depending on the design. Note: Typical unit operations literature may define direct drying to include solids receiving energy from any heated gas (combustion products/air mixtures, and hot air only are two of the most common media). This report distinguishes between the two, not because the process solid experiences different heat transfer profiles (it, essentially, does not), but because the integration of the cogeneration equipment is different.
5.4
Indirect Air/Gas Heating
Air heaters or inert gas heaters are commonly considered when products, process operations, or the facility environment are potentially compromised by using direct drying/heating systems. Because issues including plant layout, local regulations, and fuel type affect these considerations, many of the processes in this section and the preceding section are served by both indirect and direct heating. This is shown in schematic in Figure 5-4.
5.4.1 Process Uses

Two general processing categories are considered: 1. Food products cooking, baking, and drying.

Roasters used in coffee and cocoa processing. Baking ovens used for breads, cakes, etc. Toasting and drying systems for cereals.
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Figure 5-4: Indirect Air/Gas Heating System
2. Finish drying and curing systems.

Dryers following painting and or final cleaning operations in furniture and metals fabrication industries (transportation & industrial equipment, beverage cans, etc.). Dryers used in finishing periodicals and newspaper production processes.

Air heaters are often industrial versions of fired furnaces used in HVAC systems. Although many of the operations mentioned above require only modest heat (200-600oF), the heater itself may have radiation-induced hot side temperatures above 1500oF. A new type of heat exchanger may be needed for some applications.
5.5
Absorption Cooling
Refrigeration/freezing refers to a direct process end use in which energy is used to lower the temperature of substances involved in the manufacturing process. Conventional equipment includes industrial chillers and absorption cooling equipment. This is shown in a schematic in Figure 5-5.
5.5.1 Process Uses

Major applications of industrial cooling include: 1. Refrigerated storage of unfrozen foods, 2. Frozen foods,
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Figure 5-5: Absorption Cooling System
3. Refrigeration to change the chemical structure of food, 4. Freeze drying, 5. Industrial process air conditioning, and 6. Refrigeration in the petroleum and chemicals industries (reaction heat removal, gas separations, condensation of gases, separations, solidifications, humidity control, etc.).
5.5.2 Integration for CHP

Absorption cooling systems require a source of heat. For an ammonia-water cooling system, the heat is required to separate the water and ammonia. In conventional absorption systems, this heat is supplied by steam heat exchangers, an electrical heater or a gas fired heater. For CHP systems, this heat can be supplied by using a heat exchanger where clean exhaust gases from a turbine or other type of prime mover is used as a heat source. The heating gases may have to be mixed with air or other gases to maintain desired heating gas temperature. Such a system will reduce or eliminate heat input for the overall system.
5.6
Dehumidification
Desiccant-based dehumidification systems are used extensively for removing moisture from moist air or gases in many industrial applications. Some typical industries where such systems are used include chemical, pharmaceutical, food, semi-conductor manufacturing, and vacuum processing. These systems are also used for climate control applications in commercial buildings.
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Operation of these systems includes a regeneration step where hot air (or other gases) are used to remove moisture from saturated desiccant media. This is shown in a schematic in Figure 5-6.
Figure 5-6: Dehumidification System
5.6.1 Process Uses

Major applications of dehumidification in the manufacturing sector include: 1. Pharmaceutical processing 2. Candy coating 3. Storage and packing 4. Conveying of hygroscopic powders 5. Composite manufacturing 6. Semiconductor manufacturing 7. Printing operations 8. Corrosion prevention 9. Molding operations 10. Drying operations.
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5.6.2 Integration for CHP

In the CHP system, clean exhaust gases will be mixed with ambient air to control the temperature to the desired value. Currently, a variety of heating methods and media are used for supplying hot regenerative air. The heating methods include heating by electricity, steam, or a fuel (usually gas) fired burner. Application of such a scheme may require redesign of the regenerative air system for a retrofit application. For a newer application, such changes can be accounted for during the design phase of the project.
5.7
Exhaust Gas for Combustion Air
Combustion reactions are highly exothermic. However, their reactants (fuel and oxidant) continuously absorb considerable energy to reach proper combustion temperatures. Exhaust gases from a prime mover, particularly from a gas turbine (because of its high oxygen content), provide an excellent preheated oxidant. These gases can be considered as an oxidant source for combustion of fossil fuels used in most heating applications including steam generators or boilers. This is shown in a schematic in Figure 5-7.
Figure 5-7: Exhaust Gas for Combustion Air for a Boiler System
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5.7.1 Processes Uses

Applications for using exhaust gases as an oxidant include: 1. Central boiler systems 2. Waste VOC incineration systems 3. Kilns 4. Calciners 5. Large ovens 6. Large heat treating operations 7. Large furnaces 8. Forging operations 9. Tempering operations 10. Annealing operations 11. Cupolas.
5.7.2 Integration of CHP Systems

Many engineering techniques addressing the principle of preheating the combustion reactant feed (especially the oxidant, because its volume generally dominates the reactant mixture) are in practice. Three categories represent a majority of these techniques: 1. Using the stack exhaust to indirectly (e.g., with a shell and tube exchanger) heat the air/oxidant feed line. 2. Utilizing burner tip techniques that often incorporate ceramics to maintain the final mixing chamber at extremely high temperature, thereby heating the reactants immediately prior to ignition. 3. Using high temperature, high oxygen content, waste-heat streams as a combustion reactant/oxidant (as the DG cogeneration system would offer). In general the CHP-based oxidant system is highly competitive for these options when: 1. The process operation is operated such that its own exhaust is either low in temperature or low in excess oxygen. 2. The process operation uses coal (or other fuels releasing soot and sulfur in the exhaust) as a fuel. In such cases cogeneration offers both a relatively clean preheated feed (so as not to foul the burner equipment) and also reduces the amount of sulfur and particulate released (by reducing the amount of coal needed).
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If a systems burner was initially designed for low temperature air feeds, more heat durable components may be needed to handle a hot oxidant. The difference in oxygen content also needs careful consideration to properly engineer the combustion system.
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6. Site Assessment, Design, and Installation Tips

Gathering site data is a critical phase of a Technical and Economic Feasibility Assessment for a CHP plant. This allows for accurate assessment of savings potential without going through all the rigorous design steps; thus reducing up front costs and still providing the site with an accurate estimate of project costs and potential energy (and energy cost) savings. This section provides guidance on the information and data needed for an adequate site assessment. Data needs can be broken down into the following categories:

Utility Data Site Data Energy Use Information Company-Specific Data Equipment Data
Collection of the most recent and accurate data available plays a key role in the overall feasibility assessment process. The typical assessment process is illustrated in Figure 6-1. Once this data is compiled the typical site assessment process described in this section can be completed.
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Figure 6-1 Feasibility Assessment Process
Utility Data Avoided Energy/Capacity Costs Interconnection Charges Standby Charges CHPCCHP System Data Capital Costs O&M Costs Salvage Value Performance Heat Recovery Company Data
Identify Sizing Options
Fuel Costs Cost of Capital Loads Minimum Thermal Load Criteria Further Investigation Warranted? Stop No Yes
Identify Operating Mode Options
Determine CHP System Conceptual Design
CHP System Costs Capital O&M
Cost Savings or Revenue Generation
Yes Assessment of Financing and Ownership Options
Alternative System Cost Electric Thermal
No
Stop
Obtaining Data
Technical Feasibility Assessment
Economic Feasibility Assessment
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6.1

Utility Data
Obtain copies of utility bills for past two years (both Gas and Electric). This data provides insight into total energy usage and can help build energy use screening profiles. Understand the specific rate tariffs represented on each bill, secure the tariff sheets (usually available on the internet) and verify that all charges match the rate tariff sheet. Demand and energy use profiles. Knowing the demand and energy use profiles determines the size of the CHP plant and the optimal type of power generation equipment that should be assessed (i.e., Turbine, engine, microturbine, fuel cell, etc.) Ascertain customer specific information concerning utility interconnection. Does the customer require parallel grid or stand alone operation. What switchgear is required? Evaluate the impact of purchasing back-up power from the utility. In some cases the backup power is more expensive than adding extra (or redundant) generation capacity. This must be determined prior to developing capital cost estimates.
The following utility information should be collected from the site to be assessed:
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6.2
Site Data
The following information should be gathered form a site being assessed:
Thermal Profile
o Provide a description of the amount and quality of the thermal energy (hot and cold) being used and any daily and seasonal variations.
Backup/Standby Power
o If back-up power is needed, describe the back-up power source (grid, diesel engine, batteries, etc.,) ratings (kilowatts, KVA, amps etc.)
Grid Supply
o Include information such as the size of the service drop (KVA), the type of metering, applicable rate types, and if the service is three-phase. Describe any net metering if installed.
Fuel Supply Description

o Provide a general overview of the fuel used by the facility including that used for generation and/or supplemental heating/cooling.
Hot Water and Steam

o Describe the hot water system(s) and steam system(s) in place.
Vapor Compression Chillers (Type/Size/Manufacturer)

o Describe the chiller system(s) in place.
Absorption Cooling (Type/Size/Manufacturer)

o Describe the absorption cooling system(s) in place.
Desiccant (Type/Size/Manufacturer)
o Describe the desiccant (or enthalpy recovery) system(s) in place.
6.3
Energy Use Data
It is important to understand thermal energy potential before assessing a facility for CHP applications. The following summary data should be kept in mind while at the facility collecting data.
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6.3.1 Hot Water/Direct Contact Water Heaters

Process hot water often represents the single largest Btu/hr energy requirement for a manufacturer. Development of highly efficient heat exchange concepts for this purpose has resulted in the direct contact water heating scheme. Fundamentally, by raining water down a packed column, which also is the stack for combustion products (natural gas), near ideal heat transfer is achieved. Exhaust leaves the system cooled to less than 10F above the cool water inlet, and the water is able to reclaim well above 90% of the exhaust energy.
6.3.2 Indirect Heating of Thermal Fluids

Many operations, requiring energy delivery to a liquid-phase (and/or fluid) stream, require a physical barrier between the fossil burn (energy release) and the process stream. The barrier reduces heat transfer efficiency, but is often necessary. Traditional systems depend upon heat delivery via heat exchangers, fire-tube schemes (heating coils, or multi-pass fluid heaters) and other methods. Many of these systems use flame induced, radiant based heating to rapidly deliver well over 50% of the required energy.
6.3.3 Direct Heating/Drying Direct

Heating and drying refers to combustion products mixing directly with the process environment (typically process solids and a forced air stream). Because radiation transfer is rapid, typically at high temperature, and ceases upon reaching a boundary (the outer layer of process matter), it is often undesirable and unnecessary. Therefore, natural and forced convection heat transfer engineering may dominate dryer design. There are a wide variety of process dryers, kilns, calciners, ovens, etc. that incorporate an even greater range of combinations in forced convection, radiation, and conduction (through the material) heat transfer principles to satisfy the product requirements. In all cases, however, the heat energy supplied to a system must perform the following four tasks:

Heat the dryer feed to the light components vaporization temperature. Vaporize and/or free the liquid/byproducts above the solids surface. Heat the solids to the final desired temperature, and for the desired duration of time. Heat the vapor to the final desired temperature.
6.3.4 Indirect Air/Gas Heating

Air heaters or inert gas heaters are commonly considered when products, process operations, or the facility environment are potentially compromised by using direct drying/heating systems. Because issues including plant layout, local regulations, and fuel type affect these considerations, many of the processes in this section and the preceding section are served by both indirect and direct heating.
6.3.5 Refrigeration/Freezing
This is a direct process end use in which energy is used to lower the temperature of substances involved in the manufacturing process. Conventional equipment includes industrial chillers, engine driven chillers, steam turbine driven chillers and absorption chillers equipment.
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6.3.6 Dehumidification
Desiccant-based dehumidification systems are used extensively for removing moisture from moist air or gases in many industrial applications. Some typical industries where such systems are used include chemical, pharmaceutical, food, semi-conductor manufacturing, and vacuum processing. These systems are also used for climate control applications in commercial buildings. Operation of these systems includes a regeneration step where hot air (or other gases) are used to remove moisture from saturated desiccant media.
6.3.7 Use of Exhaust Gas as an Oxidant (including boiler systems)

Combustion reactions are highly exothermic. However, their reactants (fuel and oxidant) continuously absorb considerable energy to reach proper combustion temperatures. Exhaust gases from a prime mover, particularly from a gas turbine (because of its high oxygen content), provide an excellent preheated oxidant. These gases can be considered as an oxidant source for combustion of fossil fuels used in most heating applications including steam generators or boilers. Table 6-1 presents a summary of thermal uses and their typical application by industrial sector.
6.4
Company-Specific Data
The information obtained concerning how the company currently purchases energy and capitalizes projects is very important to understand. Often times the required Return on Investment (ROI) is crucial to determining whether a CHP project makes economic sense. All companies use different investment decision criteria. Understanding the customers process and investment hurdle rates are important. Methods for evaluating investments are described in the following section. Since the utility data do not always provide complete information on how a customer uses energy, it is important to get the customer to assist the designer in gaining insight into the various energy loads. It is especially important to fully understand how the waste heat from the generation equipment will be used. In many cases the generators will run at part load, thus reducing the amount of waste heat that is available. Determine the most cost-effective approach to delivering the electricity to the customer. Obtaining a one-line drawing of the electric service entering the customer's facility is an easy way to determine size of existing transformers, voltage of service, and type of switchgear already present. Obtain information concerning siting of equipment. Gaining an understanding of the customers requirements for siting the equipment and the relationship between where the generators are located and where the waste heat will be used is critical.
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Table 6-1: Industrial Thermal Energy Use
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Food Tobacco Textiles Apparel Wood Furniture Paper Printing Chemical Petroleum Rubber/Plastics Leather Stone/Clay/Glass Prim Metals Fab Metals Machinery Electronics Transport Measuring Equip Misc,
X X X X X X X X X X X X X X X X X X
X X X X
X X
X X
X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X
6.5
CHP Equipment Data
The first step is to determine the estimated size of the proposed CHP system. This requires a good understanding of the customer's energy use profile. In many cases the required size of the CHP plant will allow the designer to develop multiple options. These options will consider the number of generators and the sizes required. Once the appropriate technology has been identified, specific manufacturer's equipment needs to be selected and reviewed. The appropriate selection depends on the size of the system and the cost of the equipment. It is recommended that quotations from at least two manufacturers should be obtained.
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Exhaust Gas Oxidant (nonboiler) Exhaust Gas Oxidant (boiler) X X X X X X X X X X X X X X X X X X X X X X X
Direct Heating and Drying
Dehumidification
Indirect Air/Gas Heating
Direct Contact Water Heater
Indirect Liquid Heating
SIC Category
Refrigeration Freezing
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6.5.1 Cost Estimate

Developing the appropriate equipment cost data includes the following:
Price of the generator, ancillary equipment, controls, and interconnects.

o The price for all quotations should be based on the same build specification. This is important since manufacturers often use a different specification of standard components. Site specific installation costs may vary and must be considered.
Performance Specification
o The actual performance of the equipment is critical to comparing equipment. All performance data should be developed using comparable conditions and fuel composition. The designer needs to know the full load rating of the generator when the unit is used in a prime power or continuous duty application.
Heat Balance of the Generator Set

o If the generator is going to be part of a CHP system, knowing the heat balance of the engine or turbine is critical.
Service Contract Cost

o The cost of system maintenance will impact the economics of a CHP proposal. It is necessary to get a firm quote for the cost of maintenance and a description of what is covered. Many times the quotations used only cover routine maintenance and the customer is expecting complete coverage (routine, scheduled and unscheduled events).
Determine how the waste heat from the generator set will be used. Determine if the waste heat recovery can always be utilized. Determine the cost of utility interconnect studies and charges. Determine and estimate fuel costs for the life of the project, including back-up utility power to allow sensitivity analyses. Determine the cost of power interruptions on customers operations.
Further Investigation Warranted
Data collection is the first step in the assessment process. Prior to continuing into the Technical Feasibility Phase, the designer must perform a quick check to see if the project makes sense. The data collected should be sufficient to determine if the energy cost savings is enough to justify further investigation. A YES or NO decision should be made before proceeding to the next phase of the assessment.
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6.6
Technical Feasibility Assessment
With a Yes decision, it is time to move into the Technical Feasibility Assessment phase. During this phase the designer will fine-tune the selection of equipment that will be used as part of the cogeneration plant. 1. Identifying Sizing Options and Operating Modes
Since different vendors offer different sizes of equipment, it is time to determine the sizes for each piece of equipment. The size of the generator, engine radiator or cooling tower, heat recovery components, and use of the waste heat must be determined. If the CHP plant will incorporate a cooling option, the size of the absorption chiller must all be determined since this will impact the heat recovery component selection and cooling tower size. In parallel to determining the size of all key equipment, the designer must determine the various operating modes that the system will encounter. It is extremely important to understand the electric load profile on a 24 hour / 7 days a week basis including any start-up variations. It is also important to determine how the customer will use the waste heat from the generator plant. This combination of the electric load profile and how the waste heat will be used is key to sizing the generator plant, determining the number of generators to be used and whether the use of exhaust gas heat recovery is justified. Engineering analysis must include an evaluation of the optimum configuration for both power production and heat recovery operations. For instance, engines are better suited for start-stop operations and generally provide a lower quality heat. Turbines and microturbines perform better in base loaded applications and excess oxygen in the exhaust allows easy adaptation of duct burners and other process heating applications. Two or three units may provide much greater flexibility and reliability than a single unit and may make available for consideration much lower-cost packaged CHP systems (both microturbine and small engine CHP systems are commercially available). The above information will feed into the next step.
2. Develop CHP System Conceptual Design

With final selection of equipment and operating modes known, the designer can begin developing the conceptual system design. The designer should start by obtaining a one-line diagram for the electrical circuit currently in use by the customer. This allows the designer to determine what electrical components are required to interface the generator with the customer circuit. It will also be used to identify the required voltage for the generator or if any additional transformers and switchgear is required. This will be particularly important for those systems that parallel with the utility. After developing the generation portion of the Conceptual System, the designer must determine the most practical use of the waste heat. This decision should have been made during the Technical Feasibility Assessment phase.
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The ability to control and automatic CHP operation has proven to be a very crucial element in most industrial applications. Appropriate designs can improve system economies. Figure 6-2 shows a simplified version of a typical cogeneration plant that uses the generator waste heat to drive a single stage absorption chiller. Even in this simplified design, it is important to know a variety of flows and temperatures.
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Figure 6-2: Sample CHP Conceptual Design
Exhaust Silencer Texhaust Leaving Exhaust Heat Exchanger > 176.7 C T2 Exhaust Heat Exchanger TExhaust
GPM1 , T1 Secondary Loop Heat Exchanger T6 T2a T4 Returning Water Temp equal to 82.2 C
GPM2 , T5
T3a
T2b
T3b Cooling Tower Loop Heat Exchanger T8
Automatic Temperature Control Valves
GPM4a , T7a
T9
T6
GPM4b T7b
GPM3 , T7
Flows and Temperatures that must be determined for all operating modes T1 Leaving Engine Coolant Temperature T2 Leaving Exhaust Heat Exchanger Coolant Temperature T2a Entering Secondary Loop Heat Exchanger Coolant Temperature (Primary Side) T2b Entering Cooling Tower Loop Heat Exchanger Coolant Temperature (Primary Side) T3a Leaving Secondary Loop Heat Exchanger Coolant Temperature (Primary Side) T3b Leaving Cooling Tower Loop Heat Exchanger Coolant Temperature (Primary Side) T4 Entering Engine Coolant Temperature (Should be 82.2 C) T5 Leaving Secondary Loop Heat Exchanger Water Temperature (Secondary Side) and Entering Absorber Generator Water Temperature T6 Leaving Absorber Generator Water Temperature and Entering Secondary Loop Heat Exchanger Water Temperature (Secondary Side) T7a Entering Cooling Tower Loop Heat Exchanger Water Temperature (Secondary Side) T7b Entering Absorber Condenser Water Temperature T8 Leaving Cooling Tower Loop Heat Exchanger Water Temperature (Secondary Side) T9 Leaving Absorber Condenser Water Temperature Texhaust Exhaust Temperature Leaving Engine and Entering Exhaust Heat Exchanger Texhaust Leaving Exhaust Temperature Leaving Exhaust Heat Exchanger (Must be Greater than 176.7 C) GPM1 Engine Coolant Circuit Flow Rate GPM2 Absorber Generator (Secondary Loop) Flow Rate GPM3 Cooling Tower Flow Rate GPM4a Cooling Tower Loop Heat Exchanger Flow Rate GPM4b Absorber Condenser Flow Rate Note: Flow Rates GPM4a and GPM4b equals Flow Rate GPM3
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6.7
Economic Feasibility Assessment
Once the Conceptual System Design is complete, the designer must evaluate the economic potential of the design. During this phase, the designer will continue to fine tune the conceptual design as well as evaluate alternative concepts that could be utilized. The goal of this phase is to gain a full understanding of the energy and ownership economics of the proposed CHP design. 1. Compare Cost Estimates for the proposed CHP System Against Alternative Options.
With the conceptual design for the CHP system complete, the designer can develop a cost estimate for all required equipment. This should include the generator, electric switchgear, all heat exchangers, single stage absorption chiller (if used), pumps, cooling towers, etc. The cost estimate for operation and maintenance should also be developed. In a parallel path to developing the Conceptual System Design, all alternatives that may be applicable need to be developed through the point of developing a cost estimate. Once the cost estimates of all options are complete, the designer can conduct an economic comparison of the various systems. Prior to evaluating financing or ownership options, the designer must analyze the economic benefits of the Conceptual System Design to see if the project still makes sense. At this point, the designer still has not performed the detailed engineering to install the CHP System, but has enough detail to make a final determination of the viability of the project. A YES or NO decision should be made before proceeding. A YES response warrants further discussion with client to determine the best way to capitalize the project. A NO response ends the review of the project
2. Further Investigation Warranted
6.8
Rules of Thumb for CHP Engineering and Installation Costs57
This section covers important rules-of-thumb and a variety of other important information that you need to consider when quickly assessing a project.
6.8.1 Site Feasibility Screening

Consider CHP if:

Purchased electric power cost (kW + kWh) > 6/kWh Operating hours > 3,000 (high peak electric rates) and > 5,000 (rates ~ 6/kWh)
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Adapted from the Wisconsin Cogeneration Short Course
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Thermal loads are greater then 0.50 of the kW load equivalent and coincide with the expected operation of the power generation system Electric utility buy-back Rate > 4/kWh State energy efficiency incentives Defined interconnection standards Output based emissions standards Utility receptive to CHP kW peak. / kW average < 1.40 Thermal peak. /Thermal average < 1.40 Thermal/Power ratio58 (T/P) provides indication of prime mover
o T/P = 3 to 20 consider boilers and steam turbines o T/P = 1 to 10 consider gas turbines and HRSGs o T/P = 0.5 to 1.5 consider reciprocating engines
CHP Equipment Characteristics
6.8.2 General Equipment Costing

Guidelines for equipment costing are shown in Table 6-2.
Table 6-2: Equipment Costing Guidelines Equipment New Oil or Gas Boiler New Coal-Fired Packaged Boiler Back-pressure Steam Turbine Generator Extraction/Condensing Steam Turbine Generator Gas Turbine Generator with Heat Recovery Steam Generator (HRSG) Reciprocating Engine Generator with HRSG Microturbine with heat recovery for hot water Small Reciprocating Engine with heat recovery for hot water Installed Cost (Equipment Only) $25 per lb steam/hr $100 per lb steam/hr excluding scrubbers $300 - $500 / kW excluding boiler $500 to $700 / kW excluding boiler
$400 to $1,500 / kW $800 to $2,000 / kW $1,200 to $2,000/ kW $800-$1,500/ kW
Guidelines for estimating maintenance costs are shown in Table 6-3.
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T/P = Average THERMAL load in 1,000 BTUH /[ Average Electric Load (kW) x 3,412 BTU/kWh]
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Table 6-3: Maintenance Costs (labor and materials) Prime Mover Steam Turbine Gas Turbine Reciprocating Engine - Low speed 120 to 900 rpm (> 10 MW) - Medium speed 900 1,200 rpm (1 10 MW) - High Speed 1,200 to 1,800 rpm (< 1 MW) / kWh (including overhauls) 0.1 to 0.25 0.25 to 0.60
0.70 to 1.00 1.00 to 1.20 1.20 to 1.50
Guidelines for operating costs are shown in Table 6-4.

Table 6-4: Relative Owning and Operating Costs Prime Mover Back Pressure Steam Turbine (excluding boiler) Condensing Steam Turbine (excluding boiler) Gas Turbine Reciprocating Engine
Assumes $3.00 / MMBTU gas price
/ kWh 1.5 to 2.5 5.0 to 7.0 3.0 to 8.0 4.0 to 6.0
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7. Evaluating Economic Viability

There are several ways to evaluate the economic viability of a potential CHP project investment and compare multiple energy investment options. The two most common are payback analysis and life cycle cost (LCC) analysis. Both methods require determining costs, revenues, and savings attributable to the project, costs attributable to a baseline or alternative case, and developing net annual cash flows (pro forma). Key distinctions are that LCC examines the total life of the project while simple payback gives equal weight to all cash flows before the payback date and no weight to any subsequent cash flows.
7.1
Simple Payback Analysis
Companies frequently require that the initial outlay of any project be recoverable within some specified cutoff period of time. This is defined as the payback period. It is calculated by determining the number of years it takes before the cumulative cash flows equal the initial investment. Some consider just a simple payback where no discount rate is applied. Others use a discounted payback that recognizes the time value of money. Discounted payback determines how long the project pays back in terms of present value. In simple terms, simple payback can be defined as: Simple Payback Period (years) = Investment Costs ($)/Annual Savings ($/yr) If a payback rule is utilized, a company has typical cutoff period (e.g., two years) and will not accept projects whose payback takes longer than the cutoff. One of the pitfalls of using a payback rule is that a company will tend to accept too many short-lived projects and too few longer ones despite the fact that they may have positive net present values.
7.2
Life Cycle Cost/Net Present Value Analysis
LCC analysis examines the total costs and revenues during the life of a project and determines the sum of the present values of all cash flows. This is sometimes referred to as a net present value (NPV) or discounted cash flow (DCF) analysis. It depends solely on the forecasted cash flows from the project and the opportunity cost of capital and recognizes the time value of money by applying a discount rate to future cash. Future cash flows are discounted at opportunity cost of capital rate. The opportunity cost of capital is the expected rate of return offered by other assets equivalent in risk to the project(s) being considered. In simple terms LCC can be defined as follows, where PV means present value:
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Net Present Value
PV(Investment costs) + PV(Non-fuel operations and maintenance costs) + PV(Energy costs) + PV(Other costs) + PV(Other revenues)
In the case of a CHP project the present value of energy costs are energy savings relative to the baseline alternative. Only projects with a forecasted positive net present value should be pursued. When comparing multiple mutually exclusive alternatives the project with the higher net present value is the preferred choice. Closely related to net present value is internal rate of return (IRR). The IRR is the discount rate at which the net present value of a project is zero. Some companies use investment rules dependent on IRR. In those cases, only projects with IRR greater than the internal cost of capital are accepted. Whenever the net present value of a project is a smooth declining function of the discount rate, this IRR rule is equivalent to accepting project investments with positive net present value.
7.3
Data Needs of Economic Evaluation
Much of the data and assumptions required to make a reasonable evaluation is gathered in the process of site assessment described in the preceding chapter, past utility bills, quotes from equipment providers and packagers, or public sources on CHP costs and performance. Typical data needs are broken down below.
Determine Electricity and Demand Displaced by CHP
CHP Capacity (kW) Site Annual Peak Demand (kW) Site Annual Electricity Usage including daily and seasonal variations(kWh) CHP Availability (%) Site Electric Load Displaced by CHP (kWh/year) Electricity Sold to Utility (kWh/year) Monthly Peak Demand (kW) Average Monthly Demand Reduction (kW)
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Determine Fuel Thermal Load Displaced by the CHP System
Thermal Heat Recovered (MMBtu/year) Existing Site Boiler Efficiency Site Fuel Displaced by CHP (MMBtu/year) Site Electric Load Displaced by CHP system (kWh/year) Electricity Sold Back to Utility (kWh/year) CHP Electrical Efficiency (% HHV) or Heat Rate (Btu/kWh) Fuel Consumption (MMBtu/year) Electricity Displaced (summer/winter, on/mid/off peak kWh) Displaced Demand (summer/winter kW) Electricity Sell Back (kWh) Ratchet Demand or Stand-by charge ($/kW) Electricity Rates ($/kW and $/kWh) Buy Back Electricity Rate ($/kWh) Displaced Fuel Rate ($/MMBtu) CHP Fuel Consumption Rate ($/MMBtu) Value of Displaced Electricity Electricity Sell Back ($/year) Cost of Fuel ($/year) Forecast future year energy costs (escalation factors are sector and site specific) Genset equipment costs ($/kW) Heat recovery equipment cost ($) Heat recovery utilization equipment cost ($) Controls and Interconnect costs ($) Gas compression equipment if needed ($) Labor and materials ($) Project and construction management ($) Engineering and permitting fees ($)
Determine Fuel Consumed by CHP System
Determine Energy Savings
Determine Total Investment Costs
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Contingency (% of investment costs) Debt to equity ratio Interest rate Internal cost of capital Depreciation schedule Leasing terms if applicable
Determine Financing Options
From this information the forecasted annual cash flows can be calculated. Various tools are available for customers to use to calculate energy costs and savings based on the data described above. They include various spreadsheet and software models developed by the U.S. DOE, Oak Ridge National Laboratory, National Renewable Energy Laboratory, Gas Technology Institute, EPRI, and others.
7.4
Illustrative Example Assessment of CHP Economic Viability
This section will use both simple payback and LCC/NPV methods to evaluate a simple hypothetical CHP project.
7.4.1 Simple Payback

The projected savings and required investment of a potential CHP project are shown in Table 71. To simplify the analysis, only the major costs and savings are shown. They include energy costs (electricity savings and fuel costs), non-fuel operations and maintenance costs, and installation costs. In an actual project evaluation, it is important to capture the savings or revenues from all value streams. Factors that affect savings include retail electric costs (demand and energy charges), ability to sell/export power, other utility costs (standby charges), fuel costs, CHP heat rate (fuel consumption), operations and maintenance costs, hours of operation, load factor, and value heat recovery.
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Table 7-1: Sample Projected Annual CHP Saving

Current Annual Electric Costs Current Annual Fuel Costs Baseline Total Annual Costs Projected Annual Electric Costs Projected Annual Fuel Costs Projected Annual O&M Costs Projected Total Annual Costs Projected Annual Savings Investment Costs Simple Payback $500,000 $260,000 $760,000 $100,000 $310,000 $10,000 $420,000 $340,000 $1,500,000 4.4 years
This project has a simple payback period of 4.4 years. Depending on the customer, this may or may not meet the payback cutoff hurdle.
7.4.2 Life Cycle Costs/Net Present Value

In order to evaluate the net present value of the project the projected annual cash flows for the entire life of the project need to be considered. The projected cash flows of the same project for the ten year life of the project are shown in Figure 7-2. Projections for future electric and fuel prices are assumed. These assumptions are usually based on public information/forecasting models, in-house price forecasting, or historical data. The company considering the project uses a discount rate of 9% to reflect the internal cost of capital.
Table 7-2: Sample CHP Annual Cash Flows ($000)
YEAR 1 Net Electricity Costs1 Net Fuel Costs2 O&M Net Annual Cash Flow Installed Costs Annual Discount Rate 400 (50) (10) 340 (1,500) 9% 2 408 (52) (10) 347 3 416 (53) (10) 353 4 424 (55) (10) 360 5 433 (56) (10) 367 6 442 (58) (10) 374 7 450 (60) (10) 381 8 459 (61) (10) 388 9 469 (63) (10) 395 10 478 (65) (10) 403
1. Includes reduced utility tariff (energy, demand, and standby) and revenue from exported electricity 2. Includes heat recovery credit displacing current gas boiler
Based on the projected cash flows, this project has a net present value of $874,500. This positive value relative to the baseline alternative indicates that it preferable to the current situation and should be pursued.
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7.4.3 Other Considerations

In many cases there are other potential value streams associated with a well-designed CHP that are difficult to quantify in a traditional economic assessment, but should be considered in the investment decision. They include but are not limited to:

Improved reliability of energy service Independence from the grid in the event of an outage Improved productivity of core business processes Potential to shed load in the event of high demand during peak period Potential sale of ancillary services to utility or transmission operator Integration into a larger customer wide environmental compliance strategy
The value of these benefits depends on the characteristics of the customer, energy use patterns, electric utility, and regulatory environment.
7.5
Energy Price Volatility in CHP Applications
Over the last five years, energy price volatility has become the most significant issue facing the natural gas industry and energy companies. Natural gas, electricity, crude oil and oil product markets have all exhibited price volatility over some portion of the period. Price volatility has contributed to a climate of uncertainty for energy companies and investors and a climate of distrust among consumers, regulators and legislators. Energy price volatility creates uncertainty and concern in the minds of consumers and producers, who may delay decisions to purchase appliances and equipment or make investments in new technologies. Such delays may result in lost market opportunities and inefficient long-run resource allocations. This section briefly summarizes the way a potential CHP investor might try to address the risks associated with uncertain and volatile prices.
7.5.1 Sources of Volatility

In an efficient market, prices adjust to correct imbalances of supply and demand. The magnitude of the change in prices is determined by the size of the imbalance and the ability of producers and consumers to respond to relieve the imbalance. This is true in both the short-term and the long-term.
In the short-term, weather affects to a large degree the demand for natural gas and electricity. Because weather conditions can change rapidly and unexpectedly, large and sudden shifts in service demand can occur that create imbalances that must be relieved. In the longer term, prices signal the need to develop new resources, and provide the incentive necessary in a free market to prompt investment in new resources.
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Demand price response differs depending on energy price levels relative to other energy sources. Natural gas demand is much more price elastic when gas prices are competitive with residual fuel oil and/or distillate fuel oil. When gas prices exceed the point at which available dual-fired capacity has switched from natural gas to oil, price elasticity drops, and it takes a significant increase in price to affect a small reduction in demand. When gas prices are below the point at which most dual-fired capacity has switched from oil to natural gas, a large decrease in price would be necessary to stimulate additional demand. Recent years have also produced periods of highly volatile electricity prices. These events were usually caused by unusual weather patterns and limited generating capacity. Furthermore, electricity suppliers rely more heavily on natural gas, especially to supply marginal generators. Thus, during periods of high electricity demand, more and more units demand more natural gas, producing price spikes for both electricity and natural gas. Thus, a CHP user or investor will have to contend with both electricity and natural gas price volatility.
7.5.2 Risks and Hedging Mechanisms

There are a variety of ways to hedge or reduce the risks associated with volatile prices. An investment in a dual-fuel system instead of a single-fuel system can minimize the impact of unpredictable prices. Combustion turbines and microturbines can operate on natural gas or alternate liquid fuels such as diesel, so during periods of high natural gas prices, the turbines can operate with the alternative fuel. However, environmental and other equipment performance characteristics under alternate fuel operation can be worse, restricting the amount of time that the equipment can run this way. Boilers supplying steam turbines can be configured to operate on several alternative fuels, with a wide spectrum of fuels possible. Reciprocating engines must be dedicated to a single fuel, so do not provide the dual-fuel system switching advantage. While fuel cells can operate on reformed natural gas, methanol, landfill gas, and other sources of hydrogen, a different reformer is required to process different fuels. For larger CHP investors, investments on various systems with different fuel sources can also minimize fuel price risks. Another way to hedge risk is to engage in the various financial instruments offered by the market. These include futures contracts, price swaps, options, and forward contracts, all with attendant advantages and disadvantages. Using such instruments requires market intelligence and expertise. For a small CHP investor or for an owner/operator firm whose core competencies do not encompass this type of intelligence or expertise, the need to engage with these financial instruments could easily discourage investment. An ESCO, on the other hand, if it is already in the business of commodity acquisition, would have this type of expertise as part of its core competencies, and thus is expected to engage in these financial instruments. In the case of a small CHP investor or a firm that does not have core competency in futures instruments, the investor can either secure long-term gas and electricity contracts or a contract with an ESCO to operate its energy system. This will insulate their operations from the volatile movements of gas and energy prices. Finally, a CHP plant may itself represent a physical hedge against volatile electricity prices, especially when operated as part of a portfolio of energy management strategies, as illustrated in the following chapter.
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7.5.3 Impacts of Energy Price Volatility

Two of the fastest growing markets for natural gas are DG and CHP. Potential investors in these markets encounter numerous barriers, including interconnection requirements, environmental permitting, zoning and siting restrictions, expensive back-up/standby power rates, high interconnection costs, exit fees and transition charges. Highly volatile energy prices further complicate the situation. As natural gas and electricity price volatility are interrelated, DG and CHP investors must contend with a variety of volatility scenarios. The volatility that the energy market has exhibited in the recent past and may be expected to show in the future could be perceived as increased project risk, rendering financing for CHP projects more difficult to obtain. Because natural gas costs account for the largest portion of the total cost of generating electricity with a CHP system, natural gas price volatility can unduly affect the viability of running a CHP system. While gas price volatility alone does not immediately imply critical risk, when a volatile input price (e.g., natural gas price) is combined with a stable or fixed output price (e.g., electricity price), a firm can face serious uncertainty in its financial operations. In another instance, power generators can wind up in a riskier position if they sell in a market that is competitive and dominated by generation from another fuel source. If their fuel costs increase more than the fuel costs of other types of generation, then it is likely that electricity price (in the spot market) will not completely cover their increased fuel prices, resulting in financial losses. The primary alternative to CHP is centrally-generated electricity. Thus, the effects of gas and electricity price volatility on a CHP user relative to its effects on a central utility are an important consideration when assessing the value of a CHP project. In general, the central utility can generate electricity at a higher fuel efficiency rate than a power-only DG user. This means that assuming capital and O&M costs to be about the same between them, the central utility experiences lower fuel costs per unit of electricity generated. Also, a central utility has a portfolio of generators (fueled by coal, uranium, residual fuel oil, or renewable energy), and thus may have the option of switching to other fuel generators when gas prices become too high. Thus, relatively, the central utility will be less impacted by volatile natural gas prices than a typical CHP user. The relationship between gas and electricity prices and price volatility is complex. Previous studies have attempted to identify statistical correlation with limited success. Nevertheless, energy analysts recognize that natural gas prices necessarily influence electricity prices because they are an important factor in the marginal production of electricity. The likely reason that the statistical approach has shown limited value is that the relationship changes depending upon the generation dispatch conditions. The electricity price in a functioning market is determined by the variable cost of the marginal unit. When there is available generation capacity that is not exclusively gas-fired (e.g., coal, oil, or gas/oil duel-fuel capable capacity) the electricity price is largely independent of the gas price. If the gas price declines to a point where it displaces oil (or under extremely low gas price environments, coal), the units switch. The electricity price, however, does not decline with the gas prices until after the gas units are already being dispatched. When all of the non-gas only capacity is being utilized, the gas fired generator has no alternative59 and will pay essentially any price for gas supply. Moreover, the marginal generator
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In the short-run electricity demand is very inelastic. Therefore, any demand-side response is minimal.
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is able to recover the gas cost because the electricity price rises in lockstep with the variable cost of generation. Customers with large thermal loads that have traditionally used CHP systems, such as the paper, petroleum refining, and chemicals industries, and institutional customers such as hospitals and universities, will almost certainly continue to install and operate CHP equipment, despite volatile gas prices. The savings from cogeneration are substantial enough to warrant the risk posed by volatile prices, which these customers manage by procuring long-term contracts or establishing power-marketing subsidiaries to hedge their risks. Industries that rely in part or whole on byproduct fuels such as wood waste have correspondingly less concern about natural gas prices. Commercial and industrial firms requiring premium power (including data centers, financial institutions, computer and electronic manufacturers) will likely continue to consider CHP systems, as financial losses could be substantial in the event of power quality events such as voltage reductions, and reliability events such as outages. These investors may look to hedge their risk with long-term contracts, or may be able to incorporate all or a portion of the energy price changes into their product prices.
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8. Case Histories
This section of the report provides summary descriptions of a data collection effort at two combined heat and power projects. Complete, comprehensive case studies are provided separately as addendums to this report. The two projects are:

Faith Platings microturbine based-CHP application at a plating facility C&F Packings natural gas engine-based CHP system used in a peak shaving mode at a food processing plant.
Both CHP projects resulted in providing compelling economic advantages to both customers.
8.1
Faith Plating Summary Description
8.1.1 Description
Faith Plating is a family-owned chrome plating company located in Los Angeles, California that has been engaged in automobile and motorcycle parts plating since 1918. Currently, Faith Plating plates over 200 bumpers each day. This makes them one of the largest plating companies of remanufactured bumpers in the world. Photographs of the plant and some of its products are shown in Figures 8-1 and 8-2.
Figure 8-1: Chrome-Plated Bumpers and Exhaust Pipes
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Figure 8-2: Faith Plating Work for 1957 Cadillac
Two energy utilities serve Faith Plating. Southern California Gas Company provides natural gas and Southern California Edison provides electricity, not generated on site by Faith Plating. Because of the dynamic California energy market of the past several years, Faith Plating installed a combined heat and power (CHP) system in August of 2001 to better manage energy costs and improve their own operations. Essential to Faith Platings operation has been the need for a reliable supply of electricity and hot water. Energy costs, both electric and gas, were a large factor in the decision to go forward with the project. Reducing dependency on electricity at a time of high regional price uncertainty and possible interruptions in service made the case for gas-fueled CHP stronger. The CHP system had to be efficient, clean, economic to install, and easily integrated into their operations. The CHP system installed at Faith Plating is comprised of four Capstone micro-turbine units and has a maximum rated output of 120 kW. The plant also needed to replace an aging hot water boiler system that did not meet new environmental emission requirements. A Unifin hot water generator provided with the Capstone system meets the local emission requirements and now supplies the necessary hot water for tank heaters in the plating shop. Figure 8-3 depicts the entire system and the microturbines shown in a photograph in Figure 8-4.
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Figure 8-3: CHP System Schematic
Figure 8-4: Four Capstone 30 kW Microturbines
Another novel feature of this installation is the recovery of some of the remaining heat from the microturbine exhaust for process drying. Turbine exhaust is ducted a significant distance to dry a recyclable precipitate which is a byproduct of the plant operations. Plating operations have been placed under very close scrutiny regarding their discharge to city sewer systems. This is because they generate heavy metal wastes and other contaminants. An important part of Faith Platings operation is wastewater treatment and the prevention of any toxic discharge to the sewer system. Operators add chemicals that cause the heavy metals to precipitate out. The
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precipitate is then squeezed to wring out most of the water and dried to reduce the shipping cost of this recyclable product. Prior to the installation of their CHP system, natural gas was primarily used in a hot water boiler that heated eleven dipping tanks in the plant. Many of these tanks could also be heated with electric immersion heaters. This is schematically depicted in Figure 8-5.
Figure 8-5: Faith Platings Existing Need for Hot Water
For the first six months of operation that were analyzed, this CHP installation saved the customer the equivalent of 380 to 1,680 MM Btu depending on whether or not one assumed partial boiler displacement or replacement of electric immersion heaters. Faith Plating realized from $24,000 to $67,000 in operating savings over the same six months. If the electricity savings of the recyclable precipitate are included, the annual operating savings project to be from $55,500 to $141,300.
8.1.2 Operation and Data Collection

The total maximum electrical output of the CHP system is 120 kW. The turbines are scheduled to operate continuously at 100% capacity from 6:30 pm on Sunday evening until 6:30 am Saturday morning. The CHP system provides a portion of the facility electrical loads and, usually displaces the entire facility thermal load. All of the power is used on site. The largest share of electricity is rectified to direct current and used in the electro-plating process. Waste heat from the microturbines is recovered in a heat exchanger. The recovered thermal energy heats an existing water loop that in turn, heats various plating tanks. The many heated plating tanks make them an excellent opportunity for combined heat and power. The primary thermal requirement is the plating process, which entails heating of the plating tanks with electric immersion heaters or hot water. Prior to the installation of the CHP system, hot water was
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generated in a boiler, and both hot water and electric immersion heaters were used to heat the tanks. Performance of the CHP system was monitored and analyzed for one year beginning in June 2002 and ending in May 2003. Data collected on a minute-by-minute basis included the following:

Fuel Gas Flow Fuel Gas Delivery Pressure Fuel Gas Temperature Ambient Temperature Ambient Humidity Power Generated Exhaust Temperature Water Flowrate Inlet Water Temperature Outlet Water Temperature
8.1.3 Results and Key Data

The overall system performance during the course of the project is shown in Figure 8-6. It illustrates the average and the best performance obtained from the CHP system.
Figure 8-6: CHP System Performance
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During the monitoring period, the aggregate performance of the microturbines was notably below the rated nominal output. In the best case, the energy efficiency of the system was 60.0%. Figure 8-7 illustrates the electric cost savings for the first six month period attributable to the operation of the CHP system if it is assumed that the hot water generated offset boiler natural gas consumption. Figure 8-8 shows the electric cost savings if electric immersion heaters are assumed to have been displaced.
Figure 8-7: CHP System Performance Electric Generating Savings Compared to Boiler Hot Water Heating
$16,000 $14,000 $12,000 $10,000 Monthly $8,000 Electric Costs $6,000 $4,000 $2,000 $0
-J ul Ju 20 l0 A ug 2 Au 2 g - S 00 2 Se ep 2 p - O 002 ct O 2 ct - N 00 2 ov No 2 v - D 00 ec 2 20 02
Generating Savings Electric Bill
Ju n
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Figure 8-8: Electric Cost Savings Assuming the Displacement of Electric Heaters
$25,000 $20,000 $15,000 $10,000 $5,000 $0 Jun - Jul - Aug - Sep - Oct - Nov Jul Aug Sep Oct Nov Dec 2002 2002 2002 2002 2002 2002
Monthly Electric Costs
Generating Savings Electric Bill
Despite its less than expected performance, the CHP system reduced energy usage and resulted in substantial total energy cost reductions. Table 8-1 shows the energy savings at the end of the initial six month evaluation period. The cost savings for this period were normalized and then annualized to be between $55,500 and $143,300 depending on the type of tank heating (boiler or electric immersion heaters) displaced. Table 8-2 shows the expected annual savings.
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Table 8-1: First Six Months Energy Savings
Thermal Energy Offsets Hot Water Boiler Btu Value of Electricity Generated Btu Value of Thermal Energy Offset Fuel Net Energy Savings
Thermal Energy Offsets Electric Immersion Heaters
2,450 MM Btu 2,865 MM Btu (4,933 MM Btu) 382 MM Btu

Table 8-2: Annualized Cost Savings
2,450 MM Btu 4,162 MM Btu (4,933 MM Btu) 1,679 MM Btu
Thermal Energy Displaces Boiler Fuel: Thermal Energy Displaces Electric Heaters
$55,500 $143,300
An added bonus to this project was the fact that the South Coast Air Quality Management District allowed the existing hot water boiler to be placed into a standby status. This means that it is available to maintain the facilitys production should the CHP system be down for any reason. However, Faith Plating saved substantially in not having to retrofit costly emission control equipment on the boiler because of its standby status. A gas meter was placed on the boiler to assure that it is not operated more than had been agreed to with the District. Again, this also increases the payback value of the CHP system at Faith Plating.
8.1.4 Benefits
The project provided the following solutions to Faith Plating:

Annual net cost savings of over $50,000 Projected four-year simple payback on capital investment Reduced grid power purchases up to 60% during peak periods Met current and expected emissions standards, saving a costly retrofit of additional control equipment to an existing boiler system Reduced costs and time to process industrial wastewater
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Plating businesses, as well as other businesses characterized by heated dip tanks are good CHP opportunities due to their requirement for significant amounts of low quality heat. Both microturbines, such as the Capstone product or reciprocating engines can provide low quality heat to such applications. A review of light industrial sites similar to Faith Plating indicates there are approximately 700 similar facilities nationwide. The largest concentration of plating facilities is in California and the industrial upper-Midwest states. California possesses nearly 20% of the facilities. The states of Michigan, Oho, and Illinois each contain approximately 10% of the total distribution.
8.1.5 Recommendations
The project resulted in notable savings and benefits to Faith Plating despite less than optimal performance. Improving and sustaining these benefits requires continual assessment and optimization of the CHP system. The primary lessoned learned from the Faith Plating project pertained primarily to project installation, implementation and operations issues. Faith Plating agrees that their contractor installed the system in a workman like manner. However, the contractor was not sufficiently familiar with the technology inside the boxes that they installed. There were difficulties with the Unifin gas to liquid heat exchanger that were misdiagnosed. There were problems with the microturbines that were beyond the capabilities of the contractors technician. When Capstone finally started sending technicians, the customer noticed that they usually came with computers. The technician provided by the contractor was not similarly equipped. As a result, the contractor, as the first line of service, was often not able to diagnose the turbines problem. As was mentioned before, the control logic of the lead microturbine imposed a load on the entire system of 90 kW. This was a setting made by the contractor under the mistaken impression that the machines should not be made to run at full load. With a machine down, which was often the case, the control logic of the system would then cut the demand by 25%. When this issue was finally recognized by a former Capstone field engineer, the demand was set to 120 kW or more. This added about 10% to the turbines aggregate output. With regard to operations, the turbines are scheduled to operate continuously at 100% capacity from 6:30 pm on Sunday evening until 6:30 am Saturday morning. As a result, of this operating schedule, two opportunities are missed. First, the plant load falls to about 20 kW at 6:30 am on Saturday morning. There would be an opportunity to continue to operate one turbine to meet the weekend load. This would also allow the tanks to be held at a higher temperature over the weekend. Second the plants load is not restored until about 6:30 am Monday. They currently bring the turbines up on Sunday afternoon to pre-heat the dip tanks. The result is that for twelve hours, the plant is generating over 90 kW and using only 20 kW. The balance is being provided to the local electric utility for free. It would be better if one turbine could continuously operate from 6:30 am Saturday until say 3:00 am Monday morning. This would keep the tanks hotter and allow the other turbines to remain off thus reducing the amount of free power provided to the utility. However, to do this operators would have to manually pull three turbines off on Saturday and restart them on Monday or Faith Plating would have to purchase a costly server that will do the same thing automatically. The four microturbines, as configured currently, cannot schedule themselves in this manner.
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Finally, providing preventative and regularly scheduled maintenance is key to optimizing performance. The customer underestimated the attention required to truly optimize performance and subsequent benefits. The microturbines were not maintenance free. However, their operation is for the most part simple and unattended.
8.1.6 Acknowledgements
The Energy Solutions Center (ESC) and its subcontractors would like to acknowledge the support, guidance, and technical assistance provided by the U.S. Department of Energys Distributed Energy Resources Program, Oak Ridge National Laboratories, the members of the ESC Distributed Generation Consortium, Southern California Gas Company, and Faith Plating.
8.2
C&F Packing Summary Description
8.2.1 Description
C&F Packing Co. is a meat packing (sausage) facility located at 515 Park Ave, Lake Villa, IL 60046, which is a suburb of Chicago. NICOR Solutions installed a combined heat and power (CHP) system that can fully supply the electrical loads in the facility, as well as use waste heat from one engine jacket-water system to meet the condensate make-up water thermal load in the facility. Two Waukesha 1,125 kW engine generator units were installed and operation was begun in May of 2002. The units are capable of providing 1,125 kW of continuous output and as much as 1,300 kW for short periods of time (i.e., when emergency power is required). The generators feed 480 Volt, 3 phase, 4 wire loads in the facility electrical system. The electrical system is configured so that the 4,160 Volt loads in the facility (mainly a refrigeration compressor) can also be fed from the 480 Volt generators. Therefore, the entire facility load can be met by the two generators during power outages or by one generator during periods of light demand. The generators are shown in Figure 8-9. The plant generally runs one shift per day five days a week.
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Figure 8-9: One of Two Waukesha 1,125 kW Engine Generator Units
Thermal Recovery Systems
The current thermal recovery hot water system employed at C&F recovers jacket-water heat from one of the engines for preheating city water as make-up water for the condensate return system. The makeup-water flow rate has reached levels as high as 24.4 GPM, with an average use of 7.7 GPM. The peak daily makeup-water use was 19,860 gallons on October 8. Figure 810 shows the engine jacket-water heat recovery heat exchanger and Figure 8-11 presents the as built design covering the jacket-water, steam and hot water systems.
Figure 8-10: Heat Recovery System
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Figure 8-11: Jacket-Water Recovery, Steam and Hot Water Systems
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8.2.2 Operation and Data Collection

The onsite engines were commissioned in the spring of 2002, measurements began June 1, 2002, and data was collected through June 30, 2003. Data trends for the entire plant (utility and generator powers combined) are shown in figure 8-12. Note that any red xs in the figure indicate on-peak electricty imported from the grid.
Figure 8-12: On-Peak Energy Usage 15 Minute Data
On Peak 9:00 AM - 6:00 PM Weekdays
2500 Utility Power (kW) Generator Power (kW)
2000
Power (kW)
1500
1000
500
0 Jun 2002 Jul Aug Sep Oct Nov Dec Jan 2003 Feb Mar Apr May Jun
The onsite generation system operates during the utilitys peak energy periods. One can see from the 15-minute data that there were some brief periods where grid power was required during on-peak times which slightly reduced C&Fs potential energy savings. With the exception of initial startup issues and some minor ongoing control issues the operation of the onsite generators is very satisfactory.
8.2.3 Results and Benefits

Energy savings for the test period were normalized and then annualized to be about $223,648 per year. The five year averaged maintenance cost for the engine-generator system is $42,419 (the basis is a maintenance contract). This yields an expected simple payback for energy savings of 11.7 years, under the test period circumstances. One important financial determination that should be considered when evaluating onsite power is the reliability of the current power supply and the cost of a power interruption requiring plant shutdown and cleaning of the equipment. In the case of C&F, for periods in excess of 30 minutes, this amounts to about $125,000 per incident including lost product. Assuming one
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power outage greater than 30 minutes is avoided each year, the resulting savings, drive the payback period down to 6.9 years.
8.2.4 Additional Considerations:

1. The capital cost of this project is rather high due to the nature of the structure that was built and the switchgear specified for this facility. A 20% reduction in installed cost would yield a 9.4 year simple payback period without a shutdown incident and a 5.5 year payback period assuming one incident per year. 2. Currently natural gas prices are more volatile and are experiencing price spikes. Natural gas prices, which are an unregulated retail commodity, are reacting to short supply faster than retail electric rates which are yet to be unregulated. However, it is expected with time that higher gas rates will also result in higher electrics rates. This will serve to improve the return on CHP systems. In the mean time, expanding heat recovery may be a cost effective means for countering higher natural gas prices. 3. This particular facility is primarily operated for peak-shaving and the CHP system was an added feature. Note higher use of energy recovery is possible; however, one must remember the heating loads must be coincident with engine operation unless thermal storage is utilized. 4. Heat recovery can provide significant energy savings if engineered at the beginning of the project. The important issue to engineer is the hot water and steam loads of the facility that will be coincident with the operation of the on-site power system. This facility does have a significant steam load that matches well with the engine operating schedule. It is recommended that future expansions in plant operation include a costbenefit analysis for adding a steam heat recovery boiler on one or both engine exhausts. This case study confirms the need to examine food processing further in areas of the country where there are high electric prices and where considerable heat recovery can displace boiler gas load. It is further recommended that CHP be the assumed onsite system base-design including the generation and use of steam, hot water, thermal storage, and thermal cooling [absorption chilling and even desiccant dehumidification (where humidity control is critical)].
8.2.5 Acknowledgement:
The Energy Solutions Center (ESC) and its subcontractors would like to acknowledge the support, guidance and technical assistance provided by the U. S. Department of Energys Distributed Energy Resources Program, Oak Ridge National Laboratories, the members of the ESC Distributed Generation Consortium, Nicor and C&F Packing.
Addendum
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Assessment of Replicable Innovative Industrial Cogeneration Applications Faith Plating Case Study C&F Case Study
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Industrial Application Guide For Innovative Combined Heat and Power EEA Energy and Environmental Anaylsis and Exergy Partners Group, Jan'2004

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Industrial Application Guide For Innovative Combined Heat and Power EEA Energy and Environmental Anaylsis and Exergy Partners Group, Jan'2004

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Industrial Application Guide For Innovative Combined Heat and Power

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center

Objectives of Application Manual

Use of Application Manual

2. Combined Heat and Power Basics

2.1.1 Energy Benefits

Com bined Heat and Power

2.1.2 Environmental Benefits

2.8 0.25 1.1 0.25 0.167

5 MW Gas Turbine (9 ppm)

Lbs NOx /MWh

Source: USCHPA, DOE, CEC, AGA, Onsite Energy

Figure 2-3: CO2 Reduction Benefits of CHP

Source: USCHPA, DOE, CEC, AGA, Onsite Energy

2.1.3 Economic Benefits

Figure 2-4: Comparative Retail Economics of CHP

150 MW Simple Cycle DG (5 MW Gas Turbine)

225 MW Combined Cycle CHP (5 MW Gas Turbine) Busbar T& D

225 MW Combined Cycle CHP (5 MW Gas Turbine)

Comparative Retail Economics (c/kWh)

2.1.4 Ancillary Benefits

Energy Solutions Center

Current CHP Installations

Energy Solutions Center

Table 3-3: CHP Size Range vs. Fuel Type

Energy Solutions Center

Table 3-4: CHP Technology Type vs. Size Range

3.1.1 Commercial/Institutional CHP Markets

Energy Solutions Center

Commercial Totals 18 866 30 25 4 Commercial Totals 440.72 3,547.31 110.62 655.28

Energy Solutions Center

Table 3-5: CHP Customer Sector vs. Fuel Type (Continued)

Energy Solutions Center

Table 3-5: CHP Customer Sector vs. Fuel Type (Continued)

Source: EEA, PA Consulting

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center

Figure 3-1: Capacity of Commercial CHP by Type of Commercial Application (MW)

1,200 1,000 800 600 400 200 0

619.3 491.4 378.3 235.4 170.4 164.3 140.9 134.7

96.4 61.4 30.2 14.2 10.7

3.1.2 Industrial CHP Market

Energy Solutions Center

Energy Solutions Center

Figure 3-2: Existing Industrial CHP Capacity - 45,466 MW (2000)

Energy Solutions Center

Energy Solutions Center

Table 3-9: Statewide Industrial CHP Capacity by Prime Mover Technology

Energy Solutions Center

Table 3-9: Statewide Industrial CHP Capacity by Prime Mover Technology

Key: No. of Sites Electric Capacity, MW

Future Market Outlook

3.2.1 Industrial CHP Market Potential

Energy Solutions Center

Energy Solutions Center

Energy Solutions Center