Cogeneration A high impact solution for reducing carbon
Cogeneration: A high impact solution for reducing carbon emissions in Georgia
Cogeneration (CHP) Implies the co-production of electricity and useful heat, for the use in industrial or commercial facilities and for heating and cooling purposes. • Located where both electricity and thermal energy are needed and can be placed at individual facilities or be a utility resource or district energy. • Reduces emissions by displacing the consumption of fossil fuels that would otherwise have been used. • System configuration • Topping cycle CHP • Bottoming cycle (Waste heat to Power) • Technologies: gas turbines, reciprocating engines, fuel cells, microturbines and boiler/steam turbines. • Overall efficiency of 65%-75% (U. S. DOE) • 41 CHP facilities in GA (installed capacity of 1. 44 GW) Source: Energy News Network, 2017 1
Potential for Carbon Reduction Estimation Georgia has 5, 110 MW of technical potential at 9, 374 sites. 835 MW = “achievable”. Methodology: • Achievable potential is defined as a percentage of industrial technical potential, by size. • Assumes a capacity factor of 75%. Installed capacity % of technical potential Industry Chemicals Textiles Paper Food Processing Lumber and Wood Subtotal Others Total 50 -500 k. W 10% Achievable total capacity (MW) 260 210 174 66 49 758 76 835 0. 5 - 1 MW 10% 1 - 5 MW 20% Achievable net generation (GWh) 1, 705 1, 382 1, 140 435 321 4, 983 501 5, 484 5 - 20 MW 30% > 20 MW 50% Achievable emissions reduction (t. CO 2) 661, 564 536, 403 442, 338 168, 695 124, 383 1, 933, 383 194, 427 2, 127, 809 2
Drawdown potential in Georgia in 2030 Baseline = Emissions from electricity generation in GA in 2020 are estimated to be 49 Mt. CO 2; GT-NEMS forecasts that these will rise to 53 Mt. CO 2 in 2030. Achievable Potential = Reduction of 2. 13 Mt. CO 2 in 2030, with the installation of a total of 835 MW of CHP nameplate capacity; favorable NPV of $380 M in 2030. Technical Potential = Reduction of 13. 02 Mt. CO 2 in 2030, with a total of 5, 107 MW nameplate installed capacity (adding 33, 600 GWh of low-carbon electricity). 1 Mt. CO 2 e solution in 2030 = sixteen 25 MW CHP plants generating electricity with waste heat from industrial processes. +Diverse energy supply +Grid Resilience +Less air pollution -High upfront cost +Local jobs and local taxes +Public health benefits 3
Private Benefits Exceed Private Costs – Achievable Potential Assumptions • Installed and O&M costs were estimated with the costs that correspond to the prime mover. • Thermal energy was estimated using the P/H ratio that corresponds to the prime mover. Installed capacity (MW) Net generation (MWh/year) Capital investment ($2017) O&M costs ($2017/year) Fuel input - natural gas (MMBtu/MWh) Fuel cost - natural gas ($/MBtu) Percent natural gas Thermal energy (MBtu) Steam price ($/MBtu) Avoided cost of electricity (¢/k. Wh) Discount Rate (%) Financing Interest Rate (%) Lifetime (years) Financing Term (years) PV Private Costs Results $5, 539 M Avg. per t. CO 2 removed = $2, 603 Steam Turbine 277 1, 822, 387 189, 723, 080 11, 728, 764 54. 4 5 30% 852 10 8 7. 00% 4. 38% 25 20 PV Private Benefits $5, 918 M Avg. per t CO 2 removed = $2, 781 Reciprocating Engine/Gas Turbine 557 3, 661, 658 970, 504, 800 45, 127, 490 11. 5 5 90% 200 10 8 7. 00% 4. 38% 25 20 NPV $380 M Avg. per t CO 2 removed = $178 4
Social Benefits are Also Significant Avoided Damages from Pollution Job Creation Low estimate High estimate (0. 34 FTE/GWh) (0. 44 FTE/GWh) Achievable potential (FTE/year) Technical potential (FTE/year) 1, 865 2, 413 11, 409 14, 764 4
Stakeholder Analysis of Cogeneration Chemical, textiles, pulp and paper and food Rewards Georgia PSC, Economic Development Authorities, USDA, DOE, Sustainability & Resilience Offices, Local Planning and Zoning Departments Host Industries Businesses, Distributors and Manufacturers of the CHP Equipment Cities and Counties Non-Governmental Entities Individuals and Communities Social Equity and Justice Advocates State and Federal Agencies Utilities Potential Champions Environmental nonprofits and community/grassroots groups Fossil Fuels Interest Groups Risks 5
Solar Farms & Interactions with Community Solar other solutions Demand Response • CHP can enhance demandresponse by generating onsite electricity during the local utility’s peak hours. Solar Farms & Community Solar • • CHP and other dispatchable generation can complement variable renewables such as solar. CHP competes with other low -carbon technologies to decarbonize the electric grid. Landfill Methane • Landfill methane can be used to generate electricity with a CHP system 6
Challenges and Promising Approaches Challenges • Inadequate state and federal policies • Unfavorable “spark spread”: low electricity prices and high natural gas prices • High upfront costs Promising Approaches • Enact a clean energy portfolio standard for utilities in Georgia • Increase federal investment tax credit to 30% and remove the 50 MW limit • Address inadequate value proposition for utilities • Expedite local permitting 7
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