Industrial Cogeneration or Combined Heat and Power in
Industrial Cogeneration or Combined Heat and Power in Bangladesh - Technology Zia Haq US Department of Energy Information Administration January, 2004
Introduction n n Combined heat and power technology description, cost n Cost data for illustrative purposes only n Local manufacture and learning can substantially reduce costs Policy environment that has facilitated the growth of CHP in India Potential for CHP in Bangladesh Case studies – Bangladesh, India, Thailand, Indonesia, Malaysia Recommendations for future actions
What is Combined Heat and Power? n n n Sequential generation of two different forms of energy from a single energy source – electrical, thermal Conventional electricity generation efficiency 33%, separate heat and power system 45%, CHP 85% Large and medium industrial CHP systems – “process industries” petroleum refining, pulp and paper, chemicals, capacities > 25 MW, steam generation rates measured in thousands of pounds of steam/hr Small industrial – boilers providing process steam to manufacturing plants, 50 k. W to 25 MW, can repower existing boilers or install new systems Small commercial and institutional – reciprocating engines, small combustion turbines, building electrical and heating/cooling, starting at about 25 k. W, restaurants, large commercial buildings
CHP Technologies (Reciprocating Engine) Technology Typical size Sectors Equipment Reciprocating engine 100 k. W Commercial MAN 80 k. W Reciprocating engine 300 k. W Commercial Cummins QSK 19 G Reciprocating engine 1 MW Commercial Cummins QSV 91 G Reciprocating engine 3 MW Commercial, industrial Caterpillar G 3616 LE Reciprocating engine 5 MW Commercial, industrial Wartsilla 18 V 34 SG
CHP Technologies (Gas Turbines) Technology Typical size Sectors Equipment Gas turbine 1 MW Commercial Solar Saturn 20 Gas turbine 5 MW Commercial, industrial Solar Taurus 60 Gas turbine 10 MW Commercial, industrial Solar Mars 100 Gas turbine 25 MW Industrial GE LM 2500 Gas turbine 40 MW Industrial GE LM 6000
Reciprocating Engine Based CHP Systems n n n Low first cost, easy startup, proven reliability when properly maintained, good load-following characteristics Well-suited for packaged CHP in commercial and light industrial applications of 20 k. W to 5+ MW Ability to produce steam is limited due to waste heat being rejected in jacket water at low temperatures Jacket water generally suitable for production of hot water Good for food and manufacturing industries that do not require high pressure steam but use large quantities of wash water and low pressure steam Other systems – high pressure boilers, steam turbines, combined cycle systems
Gas Turbine or Combustion Turbine Based CHP Systems n n n Produces high quality heat that can be used to generate steam for additional power (combined cycle) or on-site steam use Can burn natural gas, diesel, or be dual-fuel capable Low maintenance cost Good for > 5 MW applications Industrially sized CHP plant is a complex process with many inter-related subsystems Construction for larger sizes can take over 2 years
Benefits of CHP Systems n n n n n Lower fuel consumption and lower electricity costs leading to reduced operating costs Boilers, turbines and other components are available in the region Bangladesh, India, Thailand, Malaysia Increases reliability of industry reduces the impact of energy supply disruptions Small size, rural location, can reduce transmission and distribution system losses by 8 -10% Financial burden can be shared by industry and utilities Can improve the quality of power supply for local utility Can delay the need for peak demand driven capacity expansion Diversification of energy supply Reduced dependence on imported sources of energy
Comparison of CHP Technologies I Property Reciprocating engine Steam turbine Combustion turbine Combined cycle Electric efficiency (LHV) 25 -45% 15 -25% 25 -40% 40 -50% Size (MW) 0. 05 -5 Any 1 -100 25 -300 Footprint (sqft/k. W) 0. 2 -0. 3 <0. 1 0. 02 -0. 6 Installed cost ($/k. W) 800 -1, 500 800 -1, 000 700 -900 600 -800 O&M cost ($/k. Wh) 0. 007 -0. 015 0. 004 0. 002 -0. 008 Availability 92 -97% Near 100% 90 -98% Hours of operation between overhauls 24, 000 – 60, 000 >50, 000 30, 000 – 50, 000
Comparison of CHP Technologies II Property Reciprocating engine Steam turbine Combustion turbine Combined cycle Start-up time 10 sec 1 hr – 1 day 10 min – 1 hr Fuel pressure (psi) 1 – 45 Not applicable 120 – 500 may require compressor Fuels Natural gas, biogas, propane All Natural gas, biogas, propane, distillate oil Noise Moderate to high (requires building enclosure) Moderate (enclosure supplied with unit) NOx emissions (lb/MWh) 2. 2 – 28 1. 8 0. 3 – 4. 0 Uses for heat recovery Hot water, LP steam, district heating LP-HP steam, district heating Direct heat, hot water, LP-HP steam, district heating CHP thermal output (Btu/k. Wh) 1, 000 – 5, 000 – 25, 000 3, 400 – 12, 000 – 8, 000 Useable temperature (F) 300 – 500 Not applicable 500 – 1, 100
Cost and Performance of Reciprocating Engine CHP Systems 100 k. W 300 k. W 1 MW 3 MW 5 MW Installed cost, power only (year 2003 $/k. W) 1, 050 800 700 680 Total installed cost, CHP (year 2003 $/k. W) 1, 350 1, 160 940 935 890 Heat rate (Btu/k. Wh), HHV 11, 375 10, 967 10, 035 9, 746 9, 213 Overall CHP efficiency 79% 77% 76% 75% Engine speed (rpm) 1, 800 1, 200 900 720 Total heat recovery (MMBtu/hr) 0. 56 1. 5 4. 2 11. 1 18. 1 Power to heat ratio 0. 61 0. 68 0. 81 0. 92 0. 95
Capital and O&M Cost for Reciprocating Engine CHP Systems (Year 2003 $) 100 k. W 300 k. W 1 MW 3 MW 5 MW Engine generator cost ($/k. W) 500 350 370 440 450 Heat recovery ($/k. W) Inc 180 90 65 40 Electric interconnect ($/k. W) 250 100 75 65 Total equipment ($/k. W) 750 680 565 580 555 Labor and materials ($/k. W) 413 306 240 220 210 Project and construction mgmt ($/k. W) 75 70 56 58 55 Engineering and fees ($/k. W) 75 70 56 48 44 Project contingency ($/k. W) 38 34 28 28 28 Total installed cost ($/k. W) 1, 350 1, 160 940 935 890 Non-fuel O&M ($/k. Wh) 0. 018 0. 013 0. 009 0. 0085 0. 008
Cost and Performance of Combustion Turbine CHP Systems 1 MW 5 MW 10 MW 25 MW 40 MW Installed cost, power only (year 2003 $/k. W) 1, 400 780 705 660 590 Total installed cost, CHP (year 2003 $/k. W) 1, 910 1, 024 930 800 702 Heat rate (Btu/k. Wh), HHV 15, 580 12, 590 11, 765 9, 945 9, 220 Overall CHP efficiency 68% 69% 71% 73% 74% Turbine exhaust temp (F) 950 915 950 854 CHP heat output (MMBtu/hr) 7. 1 26. 6 49. 6 89. 9 128. 5 Power to heat ratio 0. 48 0. 64 0. 69 0. 89 0. 99
Capital and O&M Cost for Combustion Turbine CHP Systems (Year 2003 $) 1 MW 5 MW 10 MW 25 MW 40 MW Gas turbine package cost ($/k. W) 660 380 370 365 340 Heat recovery ($/k. W) 245 100 75 45 35 Fuel gas compressor ($/k. W) 120 65 65 50 50 Water treatment ($/k. W) 25 20 14 9 5 Controls/interconnect ($/k. W) 125 65 50 42 32 Total equipment ($/k. W) 1, 175 630 574 511 462 Labor and materials ($/k. W) 476 255 232 184 148 Project and construction mgmt ($/k. W) 118 63 57 51 46 Engineering and fees ($/k. W) 82 44 36 28 23 Project contingency ($/k. W) 59 32 29 26 23 Total installed cost ($/k. W) 1, 909 1, 024 929 800 702 Non-fuel O&M ($/k. Wh) 0. 01 0. 006 0. 005 0. 004
Reciprocating Engine O&M Requirements § § Routine maintenance includes replacement of engine oil, coolant, and spark plugs Oil analysis is done to monitor engine wear Top end overhaul is recommended between 12, 00015, 000 hours of operation that entails cylinder head and turbocharger rebuild Major overhaul performed after 24, 000 -30, 000 hours of operation and involves piston/cylinder replacement, crankshaft inspection, bearings and seals
Gas Turbine O&M Requirements § § Routine maintenance includes on-line running maintenance, predictive maintenance, plotting trends Inspections include on-site hot gas path borescope inspections, nondestructive component testing using dye penetrant and magnetic particle techniques to ensure integrity of components Overhaul is complete inspection and rebuild of components to restore gas turbine to original or upgraded performance standards Maintenance costs can vary depending on quality and diligence of preventative maintenance program and operating conditions § Cycling – gas turbines can be cycled but maintenance costs can triple for gas turbine § § cycled every hour versus gas turbine that is operated for intervals of 1, 000 hours or more Over capacity operation – significant operation over rated capacity will dramatically increase number of hot path inspections and overhauls Liquid fuels – extended operation on liquid fuels will result in higher than average overhaul intervals
Application Issues § § Industrial sector § § § Most favorable application in pulp and paper, chemicals and petroleum refining industries Construction lead times for larger systems can be 2 years or more Cogeneration for fertilizer, process plants, refineries, tea industry Commercial sector § § Typical applications at: colleges/universities, government buildings, hospitals Disadvantages of commercial sector CHP applications § On average commercial sites smaller than industrial sites, technologies for smaller applications more § § § expensive and less efficient than larger systems Commercial establishments operate fewer hours per year and have lower load factors, providing fewer hours of operation in which to pay back their higher capital cost Unlike the majority of industrial sites that can absorb the entire thermal output of CHP systems 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
Criteria for Selecting CHP Technology n n n n Amount of power needed Duty cycle Space constraints Thermal needs Emission regulations Fuel availability Utility prices and interconnection issues
When Should Cogeneration Be Considered? n n n When it makes economic sense to the industry n Is the cost of electricity supplied by the utility greater than the cost of electricity from the cogeneration system? n Is the utility not able to provide reliable power causing inconvenience or loss of production to the industry? n Is the power quality inferior? When there are gains to be made from efficiency improvements First step is a walk-through analysis to give payback estimate Second step is a detailed feasibility analysis – many consulting firms, energy service companies, or can be done by industry Many publications and analysis tools available
HUDCO Sanctioned Bagasse-based Cogeneration Project Capital Costs in India Project/borrowing organization Installed capacity/Surplus capacity (MW) Total project cost of installed capacity (Rs/k. W) Total project cost of installed capacity ($/k. W) Ryatar Niyamit, Mudhol 12. 3/7. 7 20, 280 414 Vasant Dada, Sangli 12. 5/6. 9 32, 040 654 Mysore Sugars, Mandya 28/19. 2 27, 270 556 Jeypore Sugars, Chagallu 16. 3/9. 4 16, 610 339 Kukkuwada, Karnataka 24/15. 1 33, 990 694 Bellad, Karnataka 14/9. 2 28, 210 576 Chikkodi, Karnataka 20/14. 8 27, 800 567 * Assuming Rupees 49 = 1 US$
Status of Industrial Cogeneration in India Industry Potential (MW) Sugar 5, 200 Distilleries 2, 900 Rice mills State Sugarcane cogen capacity (MW) Tamil Nadu 98 1, 000 Karnataka 61. 6 Fertilizers 1, 000 Andhra Pradesh 36. 2 Pulp and paper 850 Uttar Pradesh 46. 5 Others 4, 250 Others 30. 5 Total 15, 000 Total 272. 8
Problems Faced by CHP Projects in India n n n Stand-alone plants are meeting emergency or captive requirements of industry Back-up supply from the utility is required in most cases Installed capacity is far below of estimated potential in India Significant work and experience has been obtained Problems with the State Electricity Boards n n Delay in construction of transmission lines Synchronization with grid Inconsistent State government policies pertaining to power purchase agreements Bagasse/biomass availability
CHP Study - Bangladesh n n n Based on 1998 BUET-AIT-UNDP study preliminary survey of CHP potential in Bangladesh – 1, 000 MW potential in Bangladesh Some experience with technology meeting 10% of total electrical requirement – fertilizer, sugar, paper, textile spinning Potential sites in industrial sector: pharmaceutical, edible oil, refinery Potential sites in commercial sector: hotel, hospital, cinema hall, How much follow-on and project implementation work has been done since then? How much of the capacity is only stand-by emergency capacity and how much wheeling, banking and buy-back activities are being done between BPDB, REB and CHP sites?
CHP Application in Textile Spinning Mill n n n Largest spinning mill in Bangladesh, established July 92, 24 hours/day, 260 days/year operation 7 Waukesha gas generators (920 k. W each) for total capacity of 6. 4 MW Electrical energy for motors, fans, lights, heaters, other loads Space cooling using 2 waste heat boilers to generate 5 tons/hr steam at 6 bar (5. 9 atm, 87 psia) to drive vapor absorption chillers Low pressure boilers compared to state-of-the-art boilers available in India Chilled water used to cool production section
CHP Application in Sugar Mill I n n n One mill, 3 water tube boilers, 16 tons steam/hr at 14. 7 bar (213 psia, 14. 5 atm) at 246 C Low pressure boilers compared to state-of-the-art boilers available in India Steam turbine used to generate electricity for motor drives, process steam 1 steam turbine during milling season to meet the entire electric demand, 1 standby diesel generator also available and run during emergency Cogeneration facilities operate only during season 150 days/year, can be operated off-season with balancing, modernization, rehabilitation, and expansion (BMRE)
CHP Application in Sugar Mill II n n n Most sugar industries operate low-pressure boilers (15 bar) High-pressure boilers needed to increase efficiency 2, 500 tons crushed/day (TCD) plant can sell 10 MW of excess capacity to grid with high pressure 64 kg/cm 2 (910 psi, 63 bar) boiler Sound technical management needed in sugar mills to maintain high-pressure boilers Existing low-pressure boilers not being maintained properly leading to outages
CHP Application in Paper Mill n n Newsprint mill with steam turbine cogeneration facility Capacity 13. 1 MW, purchases 2. 5 MW from utility grid Furnace oil used in boilers for steam generation Steam at 42 bar (41 atm, 609 psia) 400 C, 3 boilers, 161 tons steam/hr used in 3 back pressure turbines to generate electricity, steam for paper machines, autoclaves
CHP Application in Fertilizer Plant n n One of the largest in Bangladesh, 1. 8 million tons of urea/year Most electricity self-generated with provision for buying from grid 2 boilers with capacities to produce 180 tons steam/hr and 171 tons steam/hr, 60 bar (59 atm, 871 psia), at 510 C Steam used in 2 back pressure steam turbines to generate up to 11 MW of electricity, and used for processing
CHP Potential in Bangladesh I Industry Number of sites Avg. installation potential per site (k. W) Potential (MW) Tea gardens 180 900 162 Sugar (surplus capacity) 15 10, 000 150 Jute 70 1, 500 105 Textile spinning 50 2, 000 100 Hospital 150 500 75 Office complex 150 500 75 Textile processing 50 1, 000 50 Paper recycling 14 3, 000 42 Ceramics 20 1, 500 30 Knitting and hosiery 50 600 30 Tannery 50 600 30 Export processing zone 5 5, 000 25 Hotel 50 500 25 Industrial estate 5 5, 000 25 Soap and chemicals 20 800 16 Food 15 1, 000 15 Housing complex 10 1, 000 10 Cement 10 800 8 Distillery 10 600 6 Total 979
CHP Potential in Bangladesh II n n n n Sugar mill average potential per site may be high since mills are not big in terms of TCD 2, 500 TCD provide an excess of 10 MWe to grid with high pressure boiler according to Indian experience Using this as a guide, potential for sugar industry surplus capacity may be about 80 MW Sugar mills have to upgrade to high pressure boilers to realize the 80 MW potential Sugar mills have to find alternative sources of biomass to augment sugarcane bagasse, extend operation of CHP system, increase profitability Jute industry with closing of Adamjee may have lower potential than indicated in table If jute is approximately halved from 105 to 50, sugar is reduced to 80, the total reduces to 860 MW CHP potential in Bangladesh
Sugar Mills in Bangladesh, 1993 -94 Mill Cane processing capacity (TCD) Existing electricity capacity (MW) Potential electricity capacity (MW)* Operating season (days/year) Panchagar 1, 016 2. 0 4. 1 150 Thakurgaon 1, 524 3. 0 6. 1 148 Shetabganj 1, 250 4. 0 5. 0 114 Shyampur 1, 016 2. 0 4. 1 138 Rangpur 1, 321 2. 6 5. 3 131 Joypurhat 2, 032 2. 5 8. 1 136 Rajshahi 2, 000 3. 5 8. 0 162 Natore 1, 500 4. 0 6. 0 167 North Bengal 1, 500 2. 0 6. 0 166 Kushtia 1, 524 3. 0 6. 1 130 Carew 1, 150 3. 0 4. 6 175 Mobarakganj 1, 500 2. 0 6. 0 156 Faridpur 1, 016 2. 0 4. 1 160 Zeal Bangla 1, 016 2. 0 4. 1 155 Deshbandhu 300 0. 5 1. 2 67 Total * Export potential to grid with installation or retrofit of high-pressure boilers 78. 8
Feasibility Study Revision Needed n n n Feasibility analysis was conducted in 1998 with the following capital cost assumptions: steam turbine US$1, 200/k. We, gas turbine US$1, 000/k. We, reciprocating engines US$900/k. W Taka exchange rate of 48 Taka/US$ These need to be revised, steam turbine, gas turbine costs have come down, further reductions are possible with local manufacture, Indian examples show the potential for cost reductions Feasibility analysis was done for paper mill, vegetable oil refinery, textile spinning mill, textile processing mill, hospital, and hotel Revisions needed for these with updated costs and financial conditions
Summary of Feasibility Study for Bangladesh Study site Hypothetical installed capacity (MW) Hypothetical initial investment (crore Takas) Recycled paper mill 2. 75 11. 88 Vegetable oil refinery 0. 52 2. 2 Textile spinning 2. 35 10. 2 Textile processing 0. 875 3. 7 Hospital 0. 8 3. 56 Hotel 0. 8 3. 56 § All sites used reciprocating engine power match option § Need to be revised § Economics look good but depend on price of natural gas
Wood Waste Fired Boiler in Indonesia Wood complex at Palembang New 35 tonnes/hr boiler • Kurnia Musi Plywood Industried (KMPI) plywood manufacturer with 850 cubic meter of log input/day, Pulau Borang, Palembang, Sumatra, Indonesia • Residues used for 3 boilers for steam generation for use as heat source in mills • Boilers low pressure, inefficient, poor environmental performance • Invested in new high pressure boiler coupled with existing turbo-generator • New boiler fired with wood waste, producing superheated steam at 35 bar g (508 psig), 380 C, coupled to existing 3. 2 MW fully condensing steam turbine • Total cost US$1. 6 million (US$500/k. W), excluding civil works, expected payback over 1 year
Rice Husk Fired Plant in Malaysia • Ban Heng Bee rice mill in Pendang, near Alor Setar in Kedah, Malaysia • Capacity of 10 tonnes paddy/hour produces 2 tonnes rice husk/hour • CHP plant consists of: steam boiler with capacity of 8 tons/hour saturated steam at 32 bar g (464 psig), 450 k. W back pressure turbine, 3 million kcal/hour (11. 9 million Btu/hour) heat exchange system for paddy drying, multicyclone dust collector • Provides power for milling operation, hot water for paddy drying • Equipment costs US$1. 15 million (excluding civil and structural works), additional income could come from sale of ash, payback expected to be 3 years
Malaysia n n n n Palm Energy Sdn. Bhd. to build 9. 8 MW biomass fueled cogeneration plant in Lahat Datu, Sabah, Malaysia Loan by Bank Industri and Teknologi Malaysia Bhd. of 20 million ringgit (~$5. 2 million), 7 year Total plant cost 30 million ringgit (~$7. 9 million, $806/k. W), comparable to US costs Feedstock palm oil waste Power to be supplied to Kwantas Corp. Bhd. , Palm Energy’s parent company Supplying energy to Kwantas Palm Oil refinery Kwantas also considering possibility of selling power to local customers
Mauritius n n n n Latest state of the art CHP plant Belle Vue sugar mills, in operation since March 2000 2 x 140 tons/hour boilers operating at pressure of 82 bar (81 atm, 1, 190 psia) and 525 C 2 x 35 extraction/condensing turbine generators Operation on bagasse during crushing season, operation on coal and bagasse during off-season In-season capacity on bagasse 54 MW No high pressure heater, only low pressure heaters, deaerator, boiler inlet feedwater temperature 125 C
Paper Company in Thailand 600 k. W back pressure turbo-generator • Paper company in Panom Sarakham, 130 km east of Bangkok • 600 k. W single stage back pressure turbine coupled with an existing locallymade rice husk-fired boiler producing steam at 20 bar (290 psi) • System supplies 15 tonnes/hour of process steam at 6 bar and 600 k. W of electricity • Payback period claimed to be less than 4 months
Rice Mill in Thailand • Chia Meng Co. Ltd. , Chakkaraj, Nakorn Ratchasima, Thailand, milling capacity 500 tonnes paddy/day • 2. 5 MW cogeneration plant using rice husk as fuel commissioned in March, 1997, 100 tonnes/day of rice husk input • System includes rice husk storage, conveying, and automatic boiler feed equipment • Exporting power to grid, may reduce export in future due to mill expansion, earning revenue from ash sales to Europe
Thailand - Mitr Kalasin Sugar Plant I n n n n Northeast Thailand, 520 km from Bangkok, owned by Mitr Phol largest sugar producer in Thailand Sugarcane bagasse to power internal loads and supply power to nearby villages Buying other industrial wastes – wood chips, rice husk, bran to produce power for people in 50 km (30 mile) radius of plant One of several dozen small Thai factories that are part of official drive to use waste for electricity Other fuels being promoted by Thai authorities – rice husk, rice bran, paddy hay, wood chips For small power producers (<90 MW), government has pledged to buy unlimited power from waste Mitr Phol supplied 100 million k. Wh of electricity to EGAT in 2001
Thailand - Mitr Kalasin Sugar Plant II n n Project began 9 years ago by using bagasse combustion to produce steam to heat water In 2001 revenues 300 million baht ($6. 93 million) from power sales, equivalent to about 3% of its 10 billion baht revenue from sugar sales Over past 10 years, EGAT has purchased 261 MW from 24 biomass power plants – over half of them powered by bagasse National Energy Policy Office (NEPO) expects that figure to grow to over 700 MW in the next 10 years
Thailand – Second Project by Mitr Phol n n 25 MW, in Dan Chang District, Suphan Bari Cost $43 million ($1, 720/k. W), high, planned to start up in 2004 World Bank grant of $8 million in exchange for carbon credits based on Thai government ratification of the Kyoto Protocol Under Kyoto Protocol’s Clean Development Mechanism (CDM), the World Bank Prototype Fund is offering $3/tonne of greenhouse gas saved over a 10 year period
Manufacturers n n n Over 250 component manufacturers About 50 system integrators Most have presence on the web Many have local offices in South Asia Significant Indian experience with sugarcane bagasse cogeneration should be exploited by Bangladesh Experience with CHP in Thailand, Indonesia, Malaysia, is also valuable in designing projects for Bangladesh
Conclusions n n n Significant potential in Bangladesh The hurdles are: institutional structure, policies, energy pricing and tariff, investment and financing Strong institutional barriers Lack of awareness Study needs to be updated to assess cogeneration potential (energy demand patterns, plant size, power-to -heat ratio, access to natural gas) Discussions are necessary between PDB and energy users to explore the CHP option
Recommendations for Follow-up Actions n n n n Regulatory measures needed for sale of electricity to grid or third party, backup power from grid Electricity and gas company partnerships with industries to invest, guarantee O&M, share costs Exploration of alternative financing such as third-party participation, leasing, soft loans Extension of financial incentives: faster depreciation, soft loans, tax benefits Demonstration projects Education and outreach Survey and pre-feasibility study on CHP
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