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A Model for Internalization of Environmental Effects for Different Cogeneration Technologies

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A Model for Internalization of Environmental Effects for Different Cogeneration Technologies 2nd WSEAS/IASME International Conference on ENERGY PLANNING, ENERGY SAVING, ENVIRONMENTAL EDUCATION (EPESE'08) Corfu, Greece, October 26-28, 2008 A model for internalization of environmental effects for different cogeneration technologies ROXANA PATRASCU AND EDUARD MINCIUC Faculty of Power Engineering University Politehnica of Bucharest Splaiul Independentei 313, Bucharest, Postal Code 060032 ROMANIA Abstract: - Economic quantification of environmental effects should be found in the energy price. European research studies underline the main characteristics of environmental taxes, which comparing to other taxes, lead to improved energy and economic efficiencies. This is due to that fact that environmental taxes stimulate utilization of clean and renewable energy sources as well as clean energy production technologies. The article presents a model for internalization of environmental aspects for different cogeneration technologies: steam turbine, gas turbine and internal combustion engine. The model is validated using a cogeneration plant at an industrial company. A special importance for establishing the model has been paid to the hypotheses needed to economically quantify the environmental effects. Using the proposed model there has been established that environmental taxes has great influence on energy prices and on establishing the optimal technical solution for cogeneration plant. Key-Words: - energy, environment, cogeneration, eco-taxes, pollutants 1 Introduction Presently, there are the following types of taxes that The technical and economic efficiency of are used: cogeneration technologies that use fossil fuels Energy tax – a quantitative tax applied to should include the effects of environmental taxes. energy consumption; The environmental impact of different cogeneration Different pollutant tax (CO2, SO2, NOx, etc.) technologies using fossil fuels are quantified by – qualitative tax, that can really lead to some different criteria that cannot be used in an economic changes. The most used is the carbon tax; analysis. Therefore, there is a need for Mixed tax (pollutant / energy) – includes internalization of environmental effects into a the quantitative and qualitative aspects. complex technical and economic model. In order to internalize different environmental In the energy production sector the externalizations effects and introduce them into energy price it is are the indirect effects on the environment, such as: important to establish all economic and mine, well and buildings construction needed for environmental hypotheses. cogeneration plant, fuel losses during its The energy production cost includes annual transportation and processing, etc. expenses with fuel. This costs component is affected Generally, the method of introducing the by environmental externalizations directly and environmental costs for analyzing different indirectly. The direct effect is quantified through cogeneration technologies is called internalization quantity of emissions and through carbon tax. The and can be performed using direct or indirect indirect effect is quantified through fuel methods. consumption and through energy tax. The analysis of environmental impact of different Utilization of the mixed tax (carbon / energy) allows cogeneration technologies is very useful as well for including in the energy costs as well quantitative as new plants as for already existing ones in order to qualitative aspects. maximize the pollutant emissions. Presently, the most used eco-tax is the carbon tax. It Eco-taxes are the most adequate solutions for varies from state to state and is now between 3 and internalization of externalizations of environmental 40 €/tCO2. It is estimated that in 2020 this tax will effects. The difficulty of using eco-taxes consists in be around 80 €/tCO2. establishing the bound between the environmental In Europe the following countries have encouraged effects and taxes. utilization of eco-taxes: Norway, Sweden, Finland, ISSN: 1790-5095 25 ISBN: 978-960-474-016-1 2nd WSEAS/IASME International Conference on ENERGY PLANNING, ENERGY SAVING, ENVIRONMENTAL EDUCATION (EPESE'08) Corfu, Greece, October 26-28, 2008 Belgium, and Holland and in the past years France 2.2 Hypotheses and phases of the model and Germany have also promoted and supported this There have been considered the following concept of using eco-taxes. In these countries, hypotheses: besides the CO2 tax, there are also other taxes, such There have been considered only NOx tax. environmental impact of fuel combustion and energy transformation within the cogeneration plant, since the emissions for the extracting and 2 A model for internalization of transportation process can be considered as being environmental effects for different the same for all three solutions; There has been neglected the environmental cogeneration technologies impact of cogeneration plant equipment production because it is much smaller than the impact from operation of cogeneration plant during the entire 2.1 The general objective of the model lifespan; The internalization model can be used in the existing For fuel conversion there have used EU legislative framework that includes different eco- norms for specific emissions for different taxes. cogeneration technologies and different types of The model has analyzed the following cogeneration emissions; technologies: steam turbine (CCG with ST), gas Efficiencies of different equipment within turbine (CCG with GT) and internal combustion the cogeneration plant have been included in the engine (CCG with ICE). For all these technologies global efficiency of the cogeneration plant; there will be analyzed the influence of eco-taxes on The environmental effects of cogeneration the energy production costs. technologies have been considered during the entire A great importance has been made to establishing lifespan, which the same as being considered in the the hypotheses that will allow economic economic analysis; quantification of environmental effects. All cogeneration technologies analyzed in There have been used the following notation in the the paper use as primary fuel natural gas for energy paper: production; Ece – annual generated electricity in cogeneration, The amortization rates are the same for MWh/year; electricity and heat for all equipment for the entire Eel – annual generated electricity in non- lifespan; cogeneration, MWh/year; There has only been considered the Qcg – annual heat produced in cogeneration, qualitative CO2 eco-tax. MWh/year; The main phases of the model are the following: Bcg – annual fuel consumption of cogeneration unit, Establishing the fuel costs with electricity MWh/year; and heat generation, separately for these two types pB – fuel price, $; of energy; Et – total annual electricity produced, MWh/year; Establishing the amortization costs for Qt – total annual heat produced, MWh/year; electricity and heat, separately for these two types of Bv – fuel consumption of peak equipment, energy; MWh/year; Establishing the maintenance and operation qcg – installed heat capacity in cogeneration, MW; costs, separately for these two types of energy Pcg – installed power capacity in cogeneration, MW; electricity and heat; IB – investment in cogeneration unit, $; Establishing the electricity and heat CB – annual fuel costs, $/year; production costs without taking into account the Cmo – annual maintenance and operation costs, eco-taxes; $/year; Establishing the eco-tax costs for electricity Cmov – annual maintenance and operation costs of and heat generation, separately for these two types peak equipment, $/year; of energy; CA – annual expenses with amortization, $/year; Establishing the electricity and heat TCO2 –CO2 tax, $/tCO2; production costs including eco-taxes, separately for CEt– electricity production cost, $/MWh; these two types of energy; CQt – heat production cost, $/MWh. Establishing the relative increase of production costs due to eco-taxes, separately for these two types of energy. ISSN: 1790-5095 26 ISBN: 978-960-474-016-1 2nd WSEAS/IASME International Conference on ENERGY PLANNING, ENERGY SAVING, ENVIRONMENTAL EDUCATION (EPESE'08) Corfu, Greece, October 26-28, 2008 In the next chapters there is presented the proposed iPcg model for calculation of electricity and heat C Ae := (7) production costs for all three cogeneration 20 ⋅ Et technologies considered in the paper. For all three cogeneration technologies there has i⋅ qcg+ I V been performed the same phases for calculation. C Aq := (8) 20 ⋅Q t 2.3 Model for internalization of The specific expense for cogeneration unit: environmental effects for cogeneration plant with gas turbine Cmo cmo := (9) This section presents the steps for all calculus of the qcg+ P cg model for cogeneration plant with gas turbine. The model is similar for other technologies (steam The maintenance and operation costs for electricity turbine and internal combustion engine) with small and heat production: differences. There is calculated the global efficiency of cogeneration plant using equation (1). cmo⋅ p cg + 2⋅ Eel Cmoe := (10) Et (EQcg+ cg ) ηglcg : = (1) Bcg cmo⋅ q cg + Cmov Cmoq := (11) Qt The specific fuel consumption in cogeneration is calculated using equation (2). The costs of eco-taxes for electricity and heat are: 1 Ecg bcg := (2) x := (12) η e glcg EQcg+ cg The specific fuel consumption in non- Qcg cogeneration is calculated by: xq := (13) EQcg+ cg Bel bel := (3) T CO2 Eel C:=() x ⋅ e ⋅ B + e ⋅ B ⋅ (14) Ee e BCO2 cg BCO2 el E t The fuel costs for electricity
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