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FREE ELECTRICITY

Making the most of a CHP System Design

Presented to the World Energy Engineering Congress


Atlanta, GA
November 12, 2003

Sean Casten
Chief Executive Officer
161 Industrial Blvd.
Turners Falls, MA 01376
www.turbosteam.com

Creating Value from Steam Pressure


The economics of all power generators are based on a few very
simple calculations:
• What is my fuel cost?
• What is my electricity value?
• How much spread do I need to cover O&M, capital recovery &
profit?

• When one considers real-world, location-specific fuel and


electric rates, it becomes apparent that even with a very modest
3 c/kWh spark spread, the market for power-only generation is
nearly non-existent (see next)
– This forces DG designers to add ancillary value to their system
designs.
30 – 40% efficient generation isn’t enough!
Breakeven Efficiency Required to Deliver 3 c/kWh Spark Spread
Commercial Rates
Efficiency based on local Gas &

140%
120%
Electric Rates

100%
80%

60%
40%
20%
0%

Breakeven Efficiency Required to Deliver 3 c/kWh Spark Spread


Industrial Rates
Efficiency based on local Gas &

140%
120%
Electric Rates

100%
80%
60%
40%
20%
0%
So how do you make the economics of DG work?

1. Only target states with attractive spark-spreads


– No surprise that most DG installers market heavily into CA, NY, MA, NJ

2. Chase higher value power


– “Premium power” market is real, but limited

3. Chase lower-cost fuel


– Wood-waste, coal, landfill gas all present more favorable economics – but
are much harder than gas to site or permit

4. Chase efficiency
– CHP systems recover “free heat” to realize added value, bump efficiency
up.
However, while CHP is typically understood to take a “power-
first” approach to generate free heat…

Electricity Free Heat

Fuel Heat
Power
Recovery
Generator
Device
Waste Heat

Without Heat Recovery

Cost of Power
Generation

With Heat Recovery

Fuel Cost
…there are many opportunities to take an inverse, “heat-first”
approach to generate free electricity.

Useful Heat Free Electricity

Fuel Power
Heat
Recovery
Generator
Device
Waste Heat

Without Power Recovery

Cost of Heat
Generation

With Power Recovery

Electric Cost
Properly designing “heat-first” CHP is a near-exact inversion
of “power-first” approaches.

• “Power-first” design: prime mover + heat recovery


 Recovered thermal energy displaces boiler fuel, reducing the
delivered cost of electricity.
 Focus is electricity with steam as a byproduct
 Usually designed to maximize power output, then recover as much
heat as is economically feasible.

• “Heat first” designs: steam boiler + power recovery


 Recovered electricity displaces purchased electricity, reducing the
cost of steam.
 Focus is on thermal with electricity as a byproduct
 Usually designed to maximize thermal output, then recover as
much electricity as is economically feasible.
One flavor of “heat first CHP”: typical steam plant design

High pressure steam process load

Medium pressure steam process load


Boiler Header
H.P. steam

Feed water
Fuel Pressure
Reducing
Valve (PRV) Low pressure steam process load

PRV
Turbine-generators deliver the same pressure drop as a PRV –
but produce useful electricity in the process.

Low Pressure steam out

High Pressure steam in

Electricity

Note that this generator is sized to the thermal rather than


electric load (thus “heat-first”)
Turbosteam has installed 164 systems worldwide following this
approach.

Non-U.S.
• 17 countries
>10,000 kW • 63 installations
5001 – 10000 kW • 35,900 kW
1001 – 5000 kW
501 – 1000 kW
1 – 500 kW
A closer look at heat-first economics.
“All-In Cost of Generated Heat”

Cost of delivered thermal energy before power recovery

Cost of delivered boiler fuel

Cost of delivered
thermal energy
after power
recovery

Retail Electricity Rate


Note 1: At all electricity rates, the cost of
steam is reduced

Note 2: In many cases, the cost of steam


is reduced to less than the cost of fuel for
steam generation!
Where note 2 applies, plants develop substantial downstream flexibility, since
steam-driven equipment – e.g., dryers, chillers, etc. – becomes more cost-effective
than direct-fueled alternatives.
The opportunity for heat-first CHP is entirely a function of a
given facility’s thermal load.

• Recover electric power from existing pressure reduction


stations
 Sized to downstream thermal load
 Maximize value by increasing thermal loads or pressure drop
• Create pressure reduction opportunities in existing steam
networks
 Increase boiler pressures – design and/or operating
 Reduce steam utilization pressure (often possible due to existing
safety factors)
• Convert mismatches in thermal generation and
consumption into electricity
 Condense steam generated in waste-disposal boilers (sawdust
boilers, thermal oxidizers, etc.)
 Recover steam energy from existing vents
Sample installation: Brattleboro Kiln Dry (Vermont)

• Largest custom-lumber dryer in New England


• Startup: 1989
• Sawdust-fired boiler converts millwaste into
steam which is used to heat on-site lumber
kilns
• PRV replacement
• Turbosteam system generates 380 kW,
reduces steam costs by $1.75/Mlb, reduces
CO2 emissions by 570 tons/year
• 35% Project ROA
Sample installation: Morning Star Packing Company
(California)

• Tomato processor – produces 40% of tomato paste used in U.S.


during 3 month operating season
• Startup: 1995 (2 systems), 1999 (3rd system)
• High pressure boilers produce steam for tomato cookers
• PRV replacement + boiler pressure increase
• Turbosteam systems generate 3,000 kW, reduces steam costs by
$2.50/Mlb, reduces CO2 emissions by 2,700 tons/year.
• Plant completely insulated from CA power crisis in 2000
• >60% Project ROA
Implications

Power-first CHP Heat-first CHP

Cheap power generator


Cheap steam boiler
No need for fuel train, exhaust
Capital Costs No need for fuel train, exhaust
treatment, cooling tower, etc.
treatment, etc.
$300 – 1000/kW installed

Free heat Free Electricity


Operating Costs
(very minor O&M) (very minor O&M)

Environmental Zero-emission heat Zero-emission Electricity

Environmental performance of a solar panel


Bottom Line Capital costs of a reciprocating engine
Maintenance costs less than a gas turbine
So what is heat-first CHP?

The only distributed generation technology that is


proven to be economically and environmentally
beneficial on every corner of the globe.

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