2. Implement Combined Heat and Power in the Electric Sector 2. Implement Combined Heat and Power in the Electric Sector 1. Profile through heat, largely in the condensation of steam.1 CHP captures much of this waste heat as useful thermal output, ne strategy for reducing carbon dioxide substituting for heat that would have been produced 2 (CO2) emissions is to capture the waste heat separately. Whereas generating electricity and thermal from electric generating units (EGUs) as a energy separately might have an overall efficiency ranging secondary output to serve other purposes, from 40 to 55 percent, CHP applications can achieve Otypically central heating and cooling or industrial processes system efficiencies of 60 to 80 percent (Figure 2-1). These in neighboring facilities. As described in the context efficiency gains are accompanied by fuel savings that make of boiler optimization in Chapter 1, heat losses can be CHP a cost-effective and commercially available solution for recovered from the flue gases or cooling system to improve reducing CO2 emissions. CHP both improves businesses’ plant efficiency (see Table 1-2). In addition to using waste bottom lines and delivers system-wide benefits like reduced heat to preheat boiler feedwater and meet other operational air pollution, improved grid reliability, and avoided electric thermal requirements, plants can also capture and pipe losses on transmission and distribution networks. With heat locally to satisfy other co-located demand for thermal CHP currently accounting for 8 percent of US generating energy. Combined heat and power (CHP), also known as capacity and 12 percent of electricity,3 it is regarded as a 4 cogeneration, is the term used to describe this variety of widely underutilized opportunity for emissions reductions. technology configurations that sequentially generates both The US Department of Energy (DOE) has estimated that electric and useful thermal output from a single fuel source. increasing CHP to 20 percent of electric power capacity Generating only electricity, the average US coal-fired by 2030 would reduce CO2 emissions by more than 800 power plant has a conversion efficiency of 33 percent, million metric tons per year.5 which means that two-thirds of the energy input is lost However, because the benefits of CHP accrue economy- wide and not just in the electric power sector, adequately 1 US Energy Information Administration. (2012). Electric CHP can also be regarded as underutilized on the basis that Power Annual Report, Table 8.1. Average Operating Heat Rate cost-effective investment opportunities are widely available. for Selected Energy Sources. Available at: http://www.eia.gov/ Assessments of economic feasibility are discussed below, electricity/annual/html/epa_08_01.html but estimates typically range between 40 and 50 gigawatts of potential. See: European Environment Agency. (2012, 2 Note that because the heat needs to be extracted at a higher April). Combined Heat and Power Assessment: ENER 020. temperature and pressure than the large thermal loss in the Available at: http://www.eea.europa.eu/data-and-maps/ condensers, recovering this heat from a power plant typically indicators/combined-heat-and-power-chp-1/combined-heat- results in losses in power capacity. This is discussed in and-power-chp-2; McKinsey & Company. (2009). Unlocking greater detail below. Energy Efficiency in the US Economy. Available at: http://www. 3 Total US CHP capacity was 83 gigawatts in 2014. ICF mckinsey.com/client_service/electric_power_and_natural_ International for the US DOE and Oak Ridge National gas/latest_thinking/unlocking_energy_efficiency_in_the_ Laboratory. (2014, March). CHP Installation Database. us_economy; US DOE. (2008, December 1). Combined Heat Available at: http://www.eea-inc.com/chpdata/ and Power: Effective Energy Solutions for a Sustainable Future. Available at: http://www.energy.gov/sites/prod/files/2013/11/ 4 CHP can be said to be underutilized in the US market f4/chp_report_12-08.pdf in comparison to high penetration rates in Europe. For example, CHP accounts for over 45 percent of electricity in 5 US DOE, at supra footnote 4. Denmark and over 30 percent in the Netherlands (2009). 2-1 Implementing EPA’s Clean Power Plan: A Menu of Options accounting for them poses challenges. Modifying Figure 2-1 a generating unit to optimize for electric and thermal output, for example, improves overall Comparison of Separate and Combined Heat 6 energy utilization, but could result in an increase and Power Efficiencies and 2CO Emissions in the facility’s direct emissions and an increase in Conventional Combined Heat & Power Generation 5 MW Natural Gas emissions per unit of electric output. Therefore, Combustion Turbine although the technology is mature and although the Power Station Fuel 91 Units Fuel emissions reduction potential is large, tapping that 30 potential requires specialized accounting conventions Power Plant Electricity Units Electricity Electricity and other carefully constructed regulatory, legal, EFFICIENCY: Combined 147 Units Fuel 33% Heat & 100 Units Fuel and financial approaches that look at the total useful EFFICIENCY: Power 80% (CHP) energy output of CHP (electric and thermal) and that 45 56 Units Fuel Units look at impacts beyond the source of emissions. Boiler Heat Heat Boiler Fuel Steam Proposed federal regulations for greenhouse gas (GHG) emissions under sections 111(b) and 111(d) of the Clean Air Act are structured to create broad 51% ... Overall Efficiency ... 75% exemptions for CHP facilities. They affect only a portion of the existing CHP units in the power sector, Conventional Combined Heat & Power Generation 5 MW Natural Gas larger units designed to deliver electricity to the grid Combustion Turbine Emissions (criteria provided in Section 2). For those units that Power Station Fuel are affected, the rules stipulate an accounting method (US Fossil Mix) 32 kTons Power Plant Electricity 35,000 Electricity that grants credit for a facility’s useful thermal output MWh and avoided line losses as a means of rewarding the EFFICIENCY: Combined 33% Heat & CHP Fuel (Gas) environmental benefits of CHP (see Section 4). For Power EFFICIENCY: other affected EGUs, the viability of retrofitting for 80% (CHP) Boiler Fuel (Gas) 179,130 CHP would be contingent on site-specific factors, Boiler Heat Heat MMBtu such as plant equipment, local demand for thermal Emissions Emissions energy, fuel costs, market conditions, and so on, 13 kTons 23 kTons but retrofitting would also allow an EGU to claim 45 k tons/yr ... Total Emissions ... 23k tons/yr the thermal and avoided line loss credits to improve its CO2 emissions rate toward compliance. Alternatively, in which a steam turbine, gas turbine, or reciprocating retrofitting could provide an opportunity for a unit to engine has the primary purpose of generating electricity. qualify for exemption. States could also use the energy Heat is then captured, usually as steam, and directed to efficiency or clean energy building blocks of the US nearby facilities, where it can be used to meet co-located Environmental Protection Agency’s (EPA) Best System of demand for central heating or manufacturing processes. Emission Reduction framework to incorporate CHP as a This chapter discusses topping-cycle CHP applications at GHG abatement strategy, especially those installations that central station EGUs as a means of reducing the carbon are exempt from EPA rules, both in and outside the power intensity of the electric power sector. Alternatively, CHP can sector. be distributed across the electric grid at individual facilities, There are two basic types of CHP: topping and bottoming where energy users such as institutional, commercial, and systems. In a “bottoming-cycle” configuration, also known manufacturing facilities have both power and heating or as waste heat to power, the primary function is to combust fuel to provide thermal input to an industrial process, such as in a steel mill, cement kiln, or refinery. Waste heat 6 US EPA. (2014, August). CHP Partnership. Available at: is then recovered from the hot process exhaust for power http://www.epa.gov/chp/. A power plant efficiency of 33 generation, usually through a heat recovery boiler that percent (higher heating value) denotes an average delivered efficiency based on 2009 data from eGRID for all fossil fuel makes high pressure steam to drive a turbine generator. power plants (35.6 percent), plus 7 percent transmission and More common is a “topping-cycle” system, a configuration distribution losses. 2-2 2. Implement Combined Heat and Power in the Electric Sector Table 2-1 Summary of CHP Technologies for Large-Scale Applications7 Overall Efficiency Installed, 2014 CHP System Available (Higher Heating (Capacity/ Type Advantages Disadvantages Sizes Value) Sites)8 Gas High reliability Requires high pressure gas or 500 kW to 66% to 71% 64%/16% Turbine Low emissions in-house gas compressor 300 MW High-grade heat available Poor efficiency at low loading Less cooling required Output falls as ambient temperature rises Steam High overall efficiency Slow startup 50 kW to Near 80% 32%/17% Turbine Any type of fuel can be used Low power-to-heat ratio 300+ MW Ability to meet more than one site heat grade requirement Long working life and high reliability Power to heat ratio can be kW - kilowatt varied within a range MW-megawatt Figure 2-2 Existing US CHP Technology by Capacity and Site Number9 Capacity by Technology Sites by Technology Waste Heat Recovery: 2% Fuel Cell: 4% Boiler/Steam Turbine: 31% Microturbine: 8% Other: 1% Other: 0% Boiler/Steam Turbine: 17% Reciprocating Waste Heat Recovery: 1% Combined- Cycle: 53% Engine: 53% Reciprocating Engine: 3% Combustion Turbine: 12% Combined-Cycle: 5% Combustion Turbine: 10% cooling requirements. Potential applications of this kind are 7 US EPA CHP Partnership. (2015, March). Catalog of CHP more abundant than for large centralized CHP generating Technologies. Tables II & III. Available at: http://www.epa.gov/ units, and are considered a specific type of distributed chp/documents/catalog_chptech_full.pdf.