The "H" in "CHP"
The description “combined heat and power” (CHP) is used to describe the process of obtaining electricity and useful heat from a common fuel source. In years past, this process was called cogeneration, a term most engineers are familiar with. Whether it is called CHP, cogeneration, or trigeneration (heating, cooling, and electric production), the concept offers remarkable promise for energy efficiency in a world that wants to lower costs, reduce dependence on fossil fuels, and cut greenhouse gas emissions. This article reviews the benefits of CHP, describes common uses for the “H” that is available after generating power, and provides direction for developers seeking to optimize CHP systems.
The benefit of CHP is simply explained as getting more useful energy from each unit of fuel burned. As an example, a typical condensing cycle electric plant converts 34% of the BTU value of its fuel into BTUs of electricity. The remaining 66% of the energy in the fuel is lost in the combustion process or discharged as low-grade waste heat to the atmosphere. CHP designers, however, recognize that all BTUs do not have the same value. High-temperature BTUs have high value since they can make electricity to turn motors, produce lighting for homes and offices, and power our many electronic necessities. Medium-temperature BTUs have value when made into industrial steam. By contrast, low-temperature heat rejected to a river or the ocean has little economic value. The challenge is to balance the thermodynamic cycle to produce more useful and higher value BTUs. By sacrificing some of the electric production in the familiar boiler-turbine-condenser cycle, a medium temperature, more valuable energy stream can be created to produce industrial steam, heating in a district heating network, or can be turned into chilled water for central cooling. Low-grade waste heat that was previously thrown away is used to displace fuel burned at industries and homes for steam, heating, and cooling.
Depending on the quality of the fuel used, many cycle variations that cascade heat streams are possible. For instance, natural gas can be burned in a combustion turbine to produce electricity. The high-temperature waste heat can then be used in a boiler to make steam for industrial processes, or it can make additional electricity. Ultimately, the lowest-temperature exhaust can be used for heating and cooling in nearby offices and homes. At least three beneficial uses are derived from the original fuel burned. In another application, waste heat from a high-temperature process, such as an industrial furnace, could be used to make electricity with an organic Rankine cycle engine. Designers have already demonstrated how waste heat from a combustion turbine making electricity can be used to directly fire a cement kiln. It is possible to see that variations on the CHP theme are limited only by creativity.
Lower-quality fuels, like coal, are usually burned in boilers to produce steam, which is expanded through a turbine to make electricity. The thermodynamic cycle can be tuned to allow some steam to be extracted from the turbine at a pressure sufficient for industrial processes. Steam turbines can also be designed for exhaust pressure suitable for medium-low temperature uses like building heating. Combinations of electric production, steam extraction, and low-pressure steam exhaust can be optimized for every situation. Fuel utilizations as high as 80% can be achieved through this process by recognizing that the energy released as fuel is burned can be used for multiple applications at the same time.
If CHP is so efficient, why aren’t all electric plants CHP plants? Here are a few of the common answers to that question. Siting of an electric power plant, particularly a very large plant, is much easier to accomplish when it is located away from homes and businesses. As a result, many power plants are located miles away from industries that could use their steam or from the homes and businesses that could benefit from a district heating system. At the beginning of the 20th century, many power plants were located in city downtowns and their waste heat was used for district heating. As electric demand grew, utilities found that large condensing cycle power plants located away from cities provided electricity at reasonable rates. This was especially true where fuels like coal were inexpensive and environmental concern negligible. Ownership of energy supply and energy using facilities and lack of cooperation are other issues that prevent CHP from becoming a reality. The fact that industrial plants are owned by investors who have different concerns from the investors in electric utilities prevents a spirit of cooperation that would allow CHP plants to be part of industrial energy planning. Likewise, owners of electric generating plants are unlikely to invest in CHP unless they can count on industrial customers using and paying for all of the steam they provide.
|Credit: Cascade Energy
State regulatory policies do not encourage CHP as the primary thermodynamic cycle. Utilities are allowed to pass through fuel costs without regard to optimum fuel efficiency. Utilities are also allowed to construct new power plants without justifying the type of thermodynamic cycle used. Even where obvious opportunities for CHP exist, there is no obligation for an electric utility to construct a CHP plant to service electric and thermal needs. Finally, the technical challenges of matching electrical and thermal loads must be addressed for a CHP plant to be successful. Problems can arise from the physical size of CHP plants, finding a use for the large amount of waste heat available from electric generation and the time of day that electrical and thermal loads peak. Technical issues can be dealt with successfully, but there must be a willingness to pursue solutions that have win-win outcomes for all parties.
Historically, the first CHP systems were constructed to serve industrial processes. One hundred years ago, most of the electricity generated was from CHP plants. Even today the majority of CHP applications are industrial in nature. It is easy to visualize a facility where electricity is produced alongside a paper mill, brewery, or other large steam consuming industries. In the early 20th century, the electric industry was not sufficiently developed to support the needs of large buildings and manufacturing complexes; so much of the electricity was generated onsite, making it attractive to use waste heat for processes. In 2008, only 8% of electricity in this country was generated by the CHP process.
The Public Utilities Regulatory Policy Act (PURPA) laws of 1978 encouraged development of CHP plants by private investors. While looked at with skepticism by utilities, many plants were constructed which made electricity and produced a minimal (by statute) amount of process steam. These plants were typically built in close proximity to an industrial process, which could take the required amount of steam for qualification under the federal regulations. In the 1990’s, electricity deregulation took precedent over PURPA, and incentives for CHP were abandoned or watered down significantly. Deregulation was intended to drive down costs by the private market. Regulated utilities divested themselves of electric generation assets, and private industry responded with independent power production (IPP plants) usually burning natural gas and optimizing the thermodynamic cycle for electric production, especially at peak electric demand times. While CHP played a role in some of these plants, it was not a driving force. In the last two years, the volatility of fuel prices, uncertainty of electric rates, and a down economy have significantly lessened private investor interest in large CHP projects. Even so, the technical basis of combined heat and power is sound, and the economics of life cycle costs should interest cost-conscious investors in the long term.
Unlike solar and wind energy developments, today’s CHP projects must largely stand on their own merit. This means that a project must recoup its capital costs in the free market using commercial electric prices, real-world thermal energy value, and paying for fuel at market rates. Very few federal incentives are available as is the case for solar and wind projects. In fact, CHP projects receive the least government support of any alternative energy technology that could reduce greenhouse gas emissions.
It is easy to understand why large CHP projects costing hundreds of millions of dollars are not being pursued. The uncertainty of the economy, coupled with wildly fluctuating fuel prices, make investments in large CHP projects too risky. The bulk of recent CHP interest focuses on moderate sized projects, sited at industrial plants or large institutions. Projects in the 2- to 10-MW size may provide thermal steam production of 5,000–30,000 pounds per hour and be within the financial grasp of the client served. Many uncertainties are removed when both electric and thermal energy are used onsite and the fuel burned is only incrementally greater than what would be necessary for conventional industrial production. The greatest value from electricity and steam production is available when a system displaces electricity purchased at retail rates and steam produced from on-site boiler facilities.
Interest in small CHP systems based on microturbines and engine-generators continues to remain high in all parts of the United States. These projects range in size from a few kilowatts to enough to power a commercial office building or hotel. While still in their infancy, these systems offer promise to displace retail electricity and, at the same time, reduce fuel use for heating, cooling, and domestic water needs. Attractiveness is enhanced by manageable first cost and the belief that retail electric and fuel prices will continue to increase, thus supporting the initial capital investment.
Across all sectors of energy users, there seems to be a universal interest in self-generation of electricity. This desire may be encouraged by the visibility of the electric grid. The grid, after all, is a convenient source of electricity available at standard voltages and in almost limitless quantity. Hundreds of power plants are connected to the grid, so it is only natural to assume that anyone could produce electricity locally and then export it on the grid to other energy users. The complexities of this arrangement are well beyond this article, but the simplicity of the idea encourages energy entrepreneurs. One enduring reality remains—it is difficult for small-scale electricity production to compete favorably with the economics of large central station electric generators operated by the nation’s electric utilities. CHP can help overcome the economies of scale by making electricity and other useful forms of energy from a single fuel source, maximizing efficiency. The useful energy commonly produced is steam, hot water, or chilled water. The production of electricity, heating energy, and cooling energy is called trigeneration.
CHP systems can more than double fuel use efficiencies by using the same fuel source to provide both electricity and useful heat products. Efficiencies over 80% are achievable with good engineering application. As any system designer knows, the challenge is to match the equipment with required electrical and thermal demands. Rarely do electrical and thermal requirements coincide and provisions must be made to meet both the peak electrical and peak thermal load requirements. Many times this requires less efficient operation or purchasing electricity from the grid and firing conventional boilers for steam or hot water requirements. Many techniques exist for solving the load balancing problem, however, one of the most common is to size equipment so that the waste thermal energy follows the thermal load requirements. At times, this leaves the electric demand unsatisfied and additional electricity must be purchased or generated at significantly reduced efficiencies. At other times, excess electricity is generated, which can be exported to the electric grid.
One attractive scenario is to size equipment to generate electricity to meet all electrical requirements. If the generation is operated at full load all the time, there will be electricity available to export to the grid. In this case, thermal energy from the CHP system might not match local thermal requirements. It would be ideal to have a thermal grid available where extra heat could be exported for use by other connected customers or where heat could be purchased as well.
The technology of district heating and cooling can be thought of as a thermal grid. District heating systems have existed in numerous major US cities since the start of the 20th century. An entrepreneur named Birdsill Holly is credited with construction of the first district steam system in upstate New York around 1877. In the United States, the technology is applied in city districts or where groups of institutional buildings can benefit from reduced costs to a single owner of multiple buildings. Many colleges and universities use central heating and cooling systems.
Denmark, Sweden, Russia, and continental European countries use district heating on a scale much, much larger than the US. It is not uncommon to have many thousands of customers connected to a central heating system that is fed with waste heat from power plants, industrial processes, municipal garbage incineration, and, even, waste heat extracted by heat pumps from sewer systems. Customers for these systems include everything from industrial plants to single-family residences. The economics of generating electricity, fuel costs, and government regulations have contributed to the growth of the district heating industry in Europe.
In the US, a modern example of a community district energy system is the St. Paul, MN, district heating and cooling system, which supplies hot water for heating, chilled water for cooling buildings, and generates electricity. The system is fueled by coal and natural gas to fire boilers and a combined heat and power system that burns urban waste wood. Customers of this system have benefited from stable energy costs for over 25 years, while purchasers of natural gas have felt like they were on a roller coaster. Proponents of CHP in this country would be wise to recognize the benefits of having large thermal networks available to deliver heating and cooling to customers when it is needed and act as a purchaser of thermal energy from CHP plants optimized to meet electrical loads throughout a community.
The economic uncertainties faced by distributed energy today may encourage the CHP developer to step away from the familiar industrial model of electricity production with process steam and venture into the nearby community to be a developer of a thermal network. While construction of underground piping networks may not be as glamorous as constructing high-tech machinery that connects to the utility’s highly visible electric grid, it can be essential to achieving the efficiencies promised by CHP. Many situations exist in industrial parks, college campuses, or growing hospitals that lend themselves to developing a local thermal network coupled to a CHP electric plant. Utility engineers are familiar with the technologies required, and operating engineers aided by the latest control systems can optimize electric and thermal production to achieve excellent fuel use efficiency at reduced costs and lower greenhouse gas emissions. The technology of modern central heating and cooling systems is straightforward and proven over five decades.
The developer of CHP and thermal services must understand the needs and costs associated with heating and cooling in order to prepare a proforma, which predicts operational requirements and revenue to the CHP venture. Whether the project is a new development or a retrofit connecting existing buildings, the process involves several steps. First, the fuel sources used by customers must be identified, quantified and priced. This is best done on a BTU basis at the burner tip of the customer’s boiler. When a customer purchases fuel, it is burned and converted to useful energy such as steam or hot water. Conversion efficiencies may range from 65–75% and rarely climb higher than that unless the boiler equipment is highly utilized. The customer’s true cost of thermal energy also includes capital amortization, maintenance costs, operator cost, and insurance, in addition to the fuel consumed. Thus, heat delivered from a thermal network should have a higher value than the displaced fuel cost alone. The thermal system developer must maximize the value of thermal energy delivered by helping the thermal customer realize the benefits of not having to pay maintenance and operating costs. Also, by insuring reliability, the customer can retire boiler equipment and utilize staff for other tasks.
Once the market price for thermal energy delivered to nearby customers is determined, the cost of installing piping to deliver the thermal energy must be determined and amortization costs subtracted from the thermal sales. The result is the amount of income that can be realized from the thermal side of the CHP project. Discounts are usually given in early stages of project development, so long-term revenue estimates should account for thermal prices approaching alternatives once the system matures.
Readers will be interested to learn that the US Department of Energy and the Department of Housing and Urban Development investigated numerous district energy projects throughout the country in the 1980s. Many institutional arrangements were investigated for developing thermal networks. These included private ownership, cooperative associations, and municipal government arrangements which operate like water and sewer systems. European systems mainly use the municipal ownership model which results in the lowest cost to consumers.
CHP, coupled with local district energy networks, offers significant promise to increase efficiency, reduce costs, and lower greenhouse gas emissions. The concept, while technically proven, requires development with a long-term outlook. The process of developing a CHP power plant and a local thermal distribution network offers the greatest promise for long-term success and achieving benefits on a community scale. Development requires an understanding of the thermal needs of customers, quantification of the value of thermal energy, and construction of a CHP plant and piping network that delivers energy in a cost-effective, reliable manner. Once operational, the combined heat and power generation plant and thermal network will deliver both economic and environmental benefits for the long term.
Author's Bio: David W. Wade, P.E., is vice-president of Centratherm Inc.