Cogeneration: A user's guide
If there are two phrases we have come to know very well, they are 'environmental awareness' and 'credit crunch'. The world is looking for ways to decrease the emission of CO2 into the atmosphere, without incurring major costs in doing so. By increasing efficiencies up to about 90 per cent using well-established and mature technologies, cogeneration represents the best option for short-term reductions in CO2 emission levels. The ability to maximise revenue streams by taking advantage of price fluctuations in the cost of energy supply, and ensuring the ability to supply power regardless of what is happening on the grid, are powerful incentives to use cogeneration. The collapses of the grid networks in North America and Italy in 2003 were a stark reminder of what can happen if there is over-reliance on the grid network. Cogeneration makes sense economically, environmentally and operationally.
Inspec keywords: cogeneration
Other keywords: cogeneration; short-term reductions
Subjects: Thermal power stations and plants
Cogeneration is an available and proven technology that can be used to go some way towards meeting these needs. Both the US Federal Government and the European Union (EU) have said that they are committed to doubling cogeneration use by 2010. Within Europe, Denmark, Finland and the Netherlands generate over 33 per cent of their electricity needs from cogeneration, while Austria, Germany, Italy, Portugal and Spain generate over 10 percent of their electricity needs from cogeneration. However, the average amount of electricity generated by cogeneration across the EU as a whole is less than 9 per cent, indicating that there is considerable untapped potential in many countries.
Cogeneration systems generate electricity and thermal energy, and sometimes mechanical energy as well, in a single, integrated system. This contrasts with the common practice of generating electricity at a central power station and using on-site heating and cooling equipment to meet non-electric energy requirements. Cogeneration refers to the simultaneous production of heat and electricity at the point of use. The heat may be used directly for heating, producing process steam, cooling or a combination of some or all of these. Cogeneration is a proven technology that has been around for over 100 years. The first commercial power plant in the USA was a cogeneration plant designed and built by Edison in 1882 in New York.
Why would an operator choose to use cogeneration? There are a number of reasons why this option may be considered. These advantages can be summarised under three categories: economic, environmental and security of supply.
Cogeneration systems of varying sizes have been designed and built for many different applications in many different places. Large-scale systems can be installed either on the site of a plant or off-site. Off-site plants have to be located close enough to a steam customer to enable them to cover the cost of a steam pipeline. Industrial or commercial facility owners can operate the plants, or they may be operated by a utility. At present, about 90 percent of cogeneration in the USA is used by industrial manufacturers. Cogeneration systems are also available for small-scale users of electricity. Small-scale packaged or modular systems are being manufactured for commercial and light industrial applications. Modular cogeneration systems are compact and economic to manufacture. These systems range in size from 20 kW to 650 kW and produce electricity and hot water. It is usually best to size the systems to meet the hot water needs of a building. As a result, the best applications are for buildings that have a constant and continual need for hot water or steam, such as hospitals, hotels or restaurants. In these instances, cogeneration plants can be used to ensure a reliable supply of power, heating and hot water/steam, even during interruptions to mains supplies. An example of this is shown in the case study on cogeneration as hospital backup.
The best way to assess the attractiveness of a cogeneration project is to conduct a detailed financial analysis and compare the returns with the market rate for investments in projects presenting similar risks. Well-conceived cogeneration facilities should incorporate technical and economic features that can be optimised to meet both heat and power demands of a specific site. A comprehensive knowledge of the various energy requirements of the site, as well as of the cogeneration plant characteristics, is essential in order to derive an optimal solution. A cogeneration project is the same as any other commercial energy efficiency project that requires high investment, has a relatively long payback period and presents some potential financial risks. Therefore, the steps that would normally be followed in developing a cogeneration facility would be the same as those that are employed for any investment project. Projects will obviously vary from one to another on the basis of who is the project developer, what is the size of the project, who is financing the project and so on.
Prior to any decision to proceed with a cogeneration plant, the potential changes in the site energy requirements must be thoroughly investigated. Energy-saving measures, demand-side management procedures and any changes in processes can not only be cost-effective, but may also affect the type, size and economics of the cogeneration system. The selection of the optimum cogeneration system should be based on criteria that are specified by the investor and the user of the system, considering economic performance, energy efficiency, uninterrupted operation or other performance measures.
Changing energy policies, such as those in Europe, can influence the profitability of cogeneration plants immensely. In Europe, the introduction of the liberalised electricity market resulted in a fall in electricity prices. This had a negative impact on the profitability of cogeneration plants. On the other hand, the depletion of fossil fuels and environmental concerns has shown the importance of developing energy-saving technologies and energy efficiency measures. Cogeneration presents a potential for substantial increased energy efficiency and a major reduction in environmental impacts. It is therefore of strategic importance. The EU, along with many of its member states, considers the production of electricity from cogeneration plants to be a priority area. There are several programmes at the community level that support cogeneration. On the national level, the importance of cogeneration has been translated into legal text in many cases. According to a study that has been carried out by ZREU and CRES, nearly 60 percent of cogeneration experts have expressed a strong interest in learning more about legal and institutional framework conditions. As these change quite often and are sometimes very complex, there is a need for information on this subject.
No technology remains static, especially when that technology is still in the early stages of large-scale deployment in many places around the world. Many countries wish to see a major expansion of cogeneration take place, and such a planned expansion often of an order of magnitude in scale can result in significant developments of the various technologies used in cogeneration plants. This development can: decrease cost; increase reliability; increase efficiency; ease operation and maintenance; extend life; ease installation; improve control; and provide greater interchangeability of parts.
The Whitehall District Heating Scheme (WDHS) was first designed way back in the 1930s to replace the inefficient open coal-fire heating of offices that were used at the seat of the UK Government in London. The installation of boilers began in the 1950s, and the full scheme began operating by 1966. Since then, the central boiler plant has had several upgrades in order to improve its performance and economy. The scheme supplies 23 government buildings through 24 km of distribution pipework that are routed through a complex network of underground tunnels. The buildings that are covered by the scheme includes downing street, the Ministry of Defence, the Foreign and Commonwealth office, the Department for Environment, Food and Rural Affairs, Horse Guards, the Treasury. The Whitehall District Heating Scheme (WDHS) supplies 33.9 GWh per year. Heat losses from the extensive distribution pipework network come to approximately 2 GWh per year, about 6 per cent of the total heat generated. This figure for heating losses is similar to schemes of the same vintage.
