Transcript Turning Down the Heat - Recycled Energy Development

The CEO Coalition
Sustainable Technologies, Practices, & Public Policies
Recycled Energy
Cost Effective Sustainable Energy
Thomas R. Casten
Chairman & CEO
Primary Energy
Conventional Energy Thinking
 Economics says multiple actors in a free market
drive industry towards economic optimization,
given available technology.
 Energy beliefs assume electric industry is near
optimum with today’s technology, even though
power industry is not a free market.
 Since excess fossil use is harming planet,
 A sustainable energy future requires
development and deployment of new technology.
Summary of Presentation
 Question optimization of power industry

Power industry has made sub-optimal choices
over the past 30 years, hurting industry
 Describe analysis of optimal way to meet US
electric load growth

Local generation, using proven technologies,
improves every key outcome by avoiding T&D
costs and losses, and enabling energy recycling
 Explain and compare recycled energy to
other clean energy
 Suggest political thrust for CEO Coalition
Definitions
 DISTRIBUTED GENERATION or DG: Any electric
generation near users, including all fuels,
technologies, and sizes up to 1,000 MW
 T&D: High, medium and low voltage wires,
transformers, capacitors, inductors and
substations used to transmit power
 WADE: World Alliance for Decentralized Energy, a
not-for-profit organization seeking to change the
way the world makes power to minimize fossil
fuel use, emissions and power costs
World Energy Situation

Growing energy demand is driving up
fossil fuel prices



132 nations increased energy use faster than
USA last decade, including China and India
“Hubbert’s Peak” analysis says world oil
production will peak in the 2003 to 2005, then
decline
Oil purchases are a massive wealth transfer,
propping up dictators, religious zealots, and
those supporting global terrorism
Fossil Use is Changing Climate
 Increasing atmospheric CO2 is warming the
globe, causing:



Increased frequency and severity of storms
Glacier and ice pack melting, thermal
expansion of ocean raising sea levels that
threaten low countries and many shore cities.
More rapid species extinction & disease spread
 Failure to recycle energy, and over reliance
on central generation adds needless costs
and CO2 emissions, worldwide.
ELECTRIC VS. GAS
 Many gas-fired electric
units are shut down today
because of gas prices
 But if gas prices fall, these
units (22% of total US gas
usage) will dispatch,
driving demand and gas
prices back up.
 This provides a floor under
gas prices of 150% of #6 oil
price
US Power Industry History
US Energy Generation Efficiency Curve
100%
90%
Power Industry
80%
Efficiency
Potential
Efficiency
70%
60%
50%
Recovered
Heat
40%
30%
20%
U.S. Average Electric Only
10%
0%
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
Conventional Central Generation
Pollution
67% Total
Waste
Line Losses
9%
Fuel
100%
33%
delivered
electricity
Power Plant
T&D and
Transformers
Generation:
$890 / kW
Transmission:
$1,380 / kW
End user: .91 kW:
$2,494 / kW
Combined Heat and Power
(CHP)
Pollution
10% Waste Heat, no T&D loss
Electricity
Fuel
100%
CHP Plants
90%
Steam
Chilled
Water
(At or near thermal users)
Transmission
Generation:
End users: .98 kW
$138/kW (10% Cap) $1,365/kW
$1,200/kW
$1,242
DG vs. CG: ($310)
$932
Central Generation Problems Ahead
 US T&D is inadequate, power quality is poor and
declining, and massive T&D expenditures will
increase power prices but not fix power quality
 SO2 and mercury cleanup will increase coal
power costs, forcing some coal plant closures,
but:

Gas is on the margin, at even higher energy costs
 Industry will pay a major share of rising power
costs, unless it embraces DG
Advances Enable Distributed use
of Central Generation Technology
 Coal combustion has improved, now very clean

Fluid bed technologies available only in industrial
sizes, perfect for DG
 Combustion turbines are the most efficient
natural gas technology today, come in all sizes


Aircraft derivative, mass-produced turbines are the
most efficient, reversing economies of scale
Emissions reduced by up to 99% vs. 1980 technology
 There is no economic reason to burn gas in
central electric plants
Has US Power Industry Made
Optimal Decisions?
 We analyzed major power generation
technologies over 1973-2002 period

Assumed that new central generation needs
100% new T&D, new DG needs 10% new
T&D wires.
 We assumed cost of capital for CG was
8%, but that DG would require 12%
 We then calculated future retail price per
kWh needed for each technology in each
year, given then current data.
Long Run US Marginal Costs/ MWh
Average Retail
Oil / Gas Rankine
Central SCGT
Central CCGT
Central Coal
Cogen SCGT
Cogen CCGT
Cogen Coal
Recycled Energy (pressure drop)
2004 $/MWh
Recycled Energy (thermal recovery)
180
160
140
120
100
80
60
40
20
0
Central Generation
Distributed Generation
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000
US Utility Additions of Electric Generating
Capacity by Technology 1973 - 2002
Nuclear
Coal
Oil & Gas
Hydro
Pumped Storage
CCGT
SCGT
Other
Other Distributed Generation
Generation Built (MW)
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Year
7374
75- 7776 78
79- 8180 82
83- 8584 86
87- 89- 9188 90 92
93- 9594 96
97- 9998 00
0102
Spread of 435,000 MW Built by US Electric
Utilities 1973 - 2002
Distributed Generation
Central Generation
Central
Generation
99%
Distributed
Generation
1%
US IPP Additions of Electric Generating Capacity
by Technology 1973 - 2002
Coal
Hydro
Wind
Oil & Gas
CCGT
SCGT
Other
Other DG
Generation Built (MW)
80000
70000
60000
50000
40000
30000
20000
10000
0
73- 75- 77- 79- 81- 83- 85- 87- 89- 91- 93- 95- 97- 99- 01Year 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02
Spread of 175,000 MW Built by US IPPs
1973 - 2002
Distributed Generation
Central Generation
Distributed
Generation
34%
Central
Generation
66%
DG, Using Conventional
Technology, Saves 40% versus
Central Generation
World Alliance for Decentralized
Energy (WADE) built a model to find
optimal way to meet US load growth
WADE Model Description
 Database built for all generation choices
 Model calculates capital, fuel cost, T&D
losses emissions, and other costs to meet
20 year load growth with CG or DG


Central generation scenarios assume mix of
electric-only plants
DG scenarios include good CHP (4,000 Btu
heat recovery per kWh electric,) industrial
recycled energy, and renewable DG
US Results, CG versus DG, for
Next 20 years (Billion Dollars)
Item
All CG
All DG Savings %
Saved
Capacity + T&D
$831
$504
$326
39%
Power Cost
$145
$92
$53
36%
Tons NOx
288
122
166
58%
Tons SO2
333
19
314
94%
MM Tonnes CO2
776
394
381
49%
CG for 2020 US Load Growth
Pollution
67% Total
Waste
Line Losses
9%
Fuel
100%
33%
delivered
electricity
Power Plant
Generation:
$860 / kW
370 GW
Transmission:
$1,380 / kW
370 GW
$320 billion
$511 billion
T&D and
Transformers
Totals:
$2,495 / kW
333 GW
$831 billion
DG for US 2020 Load Growth
Pollution
10% Waste Heat, no T&D loss
Electricity
Fuel
100%
CHP Plants
90%
Steam
Chilled
Water
(At or near thermal users)
Generation:
$1,200/kW
377 GW
Cost: $452 billion
Transmission:
$1380/kW
37.7 GW (10% Cap.)
$52 billion
DG vs. CG: ($132 billion) $459 billion
Totals:
$1,338/kW
377 GW
$504 billion
$327 billion
Central Generation Paradigm
Blinds Society to Cheapest,
Cleanest Option:
Recycling Industrial Energy
What Energy Can Be Recycled?
 Fuel and electricity is typically used once, with all
waste discarded
 Power plants burn fuel and then discard 2/3’s as
heat

Local combined heat and power generation (CHP)
recycles normally wasted heat (Topping cycle)
 Industry transforms raw materials to finished
goods and then vents heat, pressure, & waste
fuels

Recycle industrial waste energy to heat & power
without extra fuel or pollution. (Bottoming cycle)
Recycled Energy (At user sites)
No Added Pollution
10% Waste Heat
25%
Electricity
Waste Energy
100%
65%
Steam
Steam Generator
BP Turbine
Generator
Capital costs similar to other CHP or DG plants
ENERGY RECYCLING
 Energy costs are going
to stay high
 One way to stem the
tide of outsourcing is
to radically reduce total
energy costs by
recycling energy
ENERGY RECYCLING
 Most US facilities
were built in the age
of cheap energy and
do not recycle
 Today, with double
and triple gas prices
and no relief in sight,
US manufacturers
must learn to recycle
to stay competitive
ENTROPY
WASTE
HEAT
PROCESS
HEAT
INPUT
 Many typical industrial
processes use “once
through” heat
 Fuel used
indiscriminately for low
and high temperature
requirements
ENTROPY
WASTE
HEAT
PROCESS
HEAT
INPUT
 Imagine the energy
that could be saved
if this heat was
recycled
 Recycle higher
temperature
exhausts to provide
or preheat lower
temperature
processes
Recycled Energy Case Study:
Primary Energy
 We invested $360 million in six projects to
recycle blast furnace gas and coke oven
exhaust in four steel plants.

440 MW electric and 460 MW steam capacity.
 Return on assets exceeds 15%
 Steel mills save over $100 million per year
and avoid significant air pollution
 Reduced CO2 equals uptake of one million
acres of new trees.
90 MW Recycled from Coke Production
Chicago in Background
US Industrial Recycling Potential
 Recycled energy could supply 45 to 92
Gigawatts of fuel-free capacity – 13% of US peak
 Recycled energy is as clean as renewable
energy – no incremental fuel or emissions, but:



Capital costs are $500 to 1,500/kW, only 12% to 40% of
solar and wind generation,
90% load factors versus 14-40% for solar & wind
Recycled energy is both clean and economic option
for new power generation.
 EIA shows only 2.2 Gigawatts operating
Recycled Energy Potential versus 20
Year US Load
Growth, GW
Gigawatts,
Slice 3,
309 gigawatts of
new generation
required
Recycled
Potential, 92
GW
Other Sources,
217 GW
Clean Energy Comparisons
Solar, Wind, and Recycled Energy
All are equally clean.
Compare the economics.
Worldwide Solar PV vs. Recycled Energy
Worldwide 4 Recycled
solar PV
Energy projects
Installed Capacity, MW
650
400
Annual Load Factor
14%
90%
GWh per year
797
3,154
Capital Cost, Millions
$5,200
$300
Tonnes CO2 saved/yr
Incremental fossil fuel
Capital/tonne CO2 saved
Capital Amort. / kWh
571,000
2,259,000
0
0
$456
$7
83.2 cents 1.3 cents
New Wind Power vs. Recycled Energy
Equivalent 4 Recycled
wind
Energy projects
Installed Capacity, MW
900
400
Annual Load Factor
40%
90%
GWh per year
3,154
3,154
Capital Cost, Millions
$2,600
$300
Tonnes CO2 saved/yr
Incremental fossil fuel
Capital/tonne CO2 saved
Capital Amort. / kWh
2,259,000
2,259,000
0
0
$58
$7
11.1 cents 1.3 cents
Capital Cost of Clean Energy
$ / Tonne CO2
500
450
400
350
300
250
200
150
100
50
0
Solar PV
Wind
Recycled Energy
Cents / kWh for Clean Energy
Cents / kWh
90
80
70
60
50
40
30
20
10
0
Solar PV
Wind
Recycled Energy
Renewable Portfolio Standards
Ignore Recycled Energy
 17 States mandate clean generation, but largely
ignore low-cost efficiency and recycling:


RPS standards that ignore energy recycling will raise
power prices
Only Nevada, South Dakota and North Dakota allow
recycled energy to compete with renewables
 Pennsylvania considering Advanced Energy
Portfolio Standard that includes recycled energy
 Industry should demand inclusion of recycled
energy in all State and Federal RPS mandates,
and recycle energy to avoid cost increases,
lessen environmental footprint
Typical Recycling Opportunities
 Convert steam pressure drop to power






Raise steam pressure to increase power
Generate power from pressure let down with
topping turbines
Use small gas turbines for dryer pre-heat
Recover steam from thermal oxidizers
Digest bio-waste, burn gas
Generate remaining thermal process load
with on-site CHP
Typical Steam Plant Design
High pressure steam process load
Medium pressure steam process load
Boiler
H.P. steam
Header
Feed water
Fuel
Pressure
Reducing
Valve (PRV)
PRV
Low pressure steam
process load
Turbine-generators Recycle Electricity
from Pressure Drop
Low Pressure steam out
High Pressure steam in
Electricity out
Note that this generator is sized to the thermal
rather than electric load, thus “heat-first” CHP
The Coming DG Revolution
 First-mover countries are embracing recycled
energy, including India and China


Energy recycling requires on-site generation
Third-party energy partners speed process
 US energy efficiency is low, based on cheap
energy, but we now pay world prices for fuel
 US industry largely ignored energy regulations,
gave up a seat at the table. To correct, lobby to:


Add recycled energy to all RPS standards
Remove barriers to efficiency, including
interconnection rules, backup, boiler manning laws,
output based emission regulations
What Is At Stake?
 A sustainable future with rising standards
of living
 US competitive position with trading
partners
 Long term impacts from today’s generation
and T&D investment decisions
 Global leadership
Final Thoughts
 If this analysis is correct, the global
consequences of clinging to the “central
generation paradigm” are not nice
 If we challenge the current worldview, we can
achieve a more sustainable future with:

lower cost energy,

less pollution, and

higher standards of living.
 The CEO Coalition can speed change towards an
affordable and sustainable energy system.
Thank you for listening!