Transcript Document

TOWARDS THE BIOREFINERY
Recycling Energy Waste in Dry Mills to Generate
Electricity and Enhance Plant Profitability
Presented to the Fuel Ethanol Workshop and Tradeshow
Madison, WI
June 24, 2004
Sean Casten
Chief Executive Officer
161 Industrial Blvd.
Turners Falls, MA 01376
www.turbosteam.com
Creating Value from Steam Pressure
The biorefinery
• The economics of petroleum refining are contingent on a broad
product slate to hedge market risk against volatile feedstock
prices
– Gasoline, kerosene, carbon black, organic chemicals, etc.
• The economics of wet mills are contingent on a broad product
slate to hedge market risk against volatile feedstock prices
– Ethanol, animal feeds, corn syrup, ascorbic acid, etc.
• What does this suggest about the future of dry mills that limit
their product slate to ethanol and (sometimes) DDGs?
– Wouldn’t you like to have a hedge against the “crunch” imposed by
low ethanol prices and high corn prices?
The best short-term opportunities for product diversification
lie in upgrading waste to higher value products.
•
Economic theory says $20 bills are never on the ground –
experience says otherwise
•
Conventional dry mill design leaves $ on the table by failing to
convert energy waste into high-value electricity.
•
•
•
•
•
Potential to generate zero or near-zero-cost electricity in most
mills.
Reduce mill operating costs / boost mill profitability
Can be used to enhance reliability of mill electric supply
Turns pollution control technology into revenue-generation
technology
Reduces environmental impact of mill operations (eligible for $support from CO2 offsets in some cases).
Understanding 75% of US power generation in 30 seconds or
less…
The Rankine Power Plant
Fuel
(Coal, oil, nuclear,
gas, etc.)
Boiler
High
Pressure
Water
Steam Turbine
Generator
Electricity to
Grid
High
Pressure
Steam
Low
Pressure
Steam
Low
Pressure
Water
Heat to
atmosphere
Cooling Tower
Pump
Understanding dry mill energy plants in 30 seconds or less…
Ethanol Dry Mill Energy Plant
VOCs
+
Gas
High
Pressure
Water
Therma
l
Oxidize
r/
Boiler
Low
Pressure
Water
Boiler Pump
Pressure
Reduction
Valve
High
Pressure
Steam
Low
Pressure
Steam
Evaporators +
Other LP loads
Heat to
process
The opportunity
Steam Turbine
Generator
VOCs
+
Gas
Therma
l
Oxidize
r/
Boiler
Electricity to
Plant Bus
Isolation
Valve
Evaporators +
Other LP loads
Boiler Pump
Isolation
Valve
Heat to
process
Several non-intuitive benefits of this approach.
•
The presence of the LP steam load makes this generation ~ 3X as
efficient as the central power it displaces.
•
•
•
•
Since 75% of the power plant is already built, the capital costs per kW
installed are much less than central stations, despite the relative
diseconomies of scale.
•
•
•
Average Rankine plant converts only 33% of fuel into useful energy –
2/3rds goes to cooling tower.
Use of heat in mill eliminates this efficiency penalty
Ensures that marginal generation cost is always less than utility kWh.
1,000 MW Rankine plant typical capital costs ~ $1 billion ($1,000/kW)
1 MW steam turbine generator integrated into existing dry mill typical
capital costs ~ $500,000 ($500/kW)
Similar logic applies to non-fuel operating costs
•
•
Rankine power plant typical O&M costs ~ 1 c/kWh
Long term Turbosteam service contract on 1 MW unit ~ 0.1 c/kWh
Other design possibilities
•
If TO produces more thermal energy than is needed in process, can
make economic sense to reduce pressure of some or all steam further
in a condensing turbine-generator to make more lbs/kW
Condensing (C) Configuration
HP Steam
Electricity
LLP Steam to
condenser
Backpressure/Condensing (BP+C) Configuration
HP Steam
LP Steam
to process
Electricity
LLP Steam to
condenser
•
Value can be enhanced by boosting boiler pressure and/or reducing
process pressure to increase kW production per lb of steam. (Often
possible without modifying existing equipment simply by easing back
on operating pressure margins built into existing designs)
•
Generator can be designed to provide ancillary benefits in addition to
kWh savings (e.g., enhanced reliability)
•
Can displace need for backup generation in plant capital outlay
Turbosteam has installed 102 systems in the U.S., and 167
worldwide since 1986.
Non-U.S.
>10,000 kW
5001 – 10000 kW
1001 – 5000 kW
501 – 1000 kW
1 – 500 kW
• 17 countries
• 66 installations
• 36,488 kW
The size of the opportunity going “down the PRV” is a
substantial fraction of the total plant load in most dry mills.
Technical Potential in Mill with 350 psig TO
4,000
Power Gen Opportunity (kW)
Power Gen Opportunity (kW)
Technical Potential in Mill with 150 psig TO
15 psig process
30 psig process
50 psig process
3,500
3,000
2,500
2,000
1,500
1,000
500
0
0
20
40
60
80
Steam Flow (1000 lbs/hr)
100
120
4,000
15 psig process
30 psig process
50 psig process
3,500
3,000
2,500
2,000
1,500
1,000
500
0
0
20
40
60
80
Steam Flow (1000 lbs/hr)
100
120
By displacing purchased power, these systems increase
operating profits by 0.5 – 4.0 c/gallon.
Net increase in operating
profits (c/gal)
Economic Potential in 40 MMGal/yr Mill
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1 MW Gen
2 MW Gen
3 MW Gen
2.0
4.0
6.0
8.0
Retail Electric Rate (c/kWh)
10.0
Further, the expanded product slate makes mill operations less
dependent on price fluctuations in any single commodity.
Conventional Dry Mill*
1 bushel
Corn
2.63
gallons
Ethanol
Dry Mill With Energy
Recycling
1 bushel
Corn
17.87
lbs
DDGs
46,930 Btu
Natural Gas
1.07 kWh
Electricity
2.63
gallons
Ethanol
17.87
lbs
DDGs
46,930 Btu
Natural Gas
.5 kWh
Electricity
.57 kWh
Electricity
* Source: Grabaowski, Dr. Michael S., “Fossil Energy Use in the Manufacture of Corn Ethanol”, Prepared for National Corn Growers
Association, August 2002. On the web at: http://www.ncga.com/ethanol/pdfs/energy_balance_report_final_R1.PDF
These conversion ratios and historic feedstock prices show the
dramatic value that a few c/gallon can have on operating profits.
Production cost, $/gallon
Energy Input Contribution to Ethanol Production
Price
$1.80
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Electric Contribution
NG Contribution
1996
1997
1998
1999
Year
Sources:
Reductions in
feedstock costs
fall straight to
bottom line.
Corn Contribution
2000
2001
2002
2 c/gallon red’n
in 40 MMGal
plant = $800,000
increase in
profits
(comparable to
$1.10 red’n in
natural gas
price)
Corn – Illinois Average Farm Price http://www.farmdoc.uiuc.edu/manage/pricehistory/PriceHistory.asp
Natural Gas – U.S. DOE/EIA Average U.S. Industrial Price
Electricity – U.S. DOE/EIA, Average US Retail Price
Ethanol – Minnesota Development Authority, http://www.mda.state.mn.us/ethanol/economicimpact.pdf
A final observation on system design: the key to a successful
project is to customize equipment for specific site objectives.
Example: Midwest Steel Mill (Now in design stage)
PRV reduces 900 psig steam down to 150 psig for plant-wide distribution
350
820
800
o
760
740
200
720
150
700
680
100
Steam Flow
660
Steam Temperature
12/1/2003
11/1/2003
10/1/2003
9/1/2003
8/1/2003
7/1/2003
6/1/2003
5/1/2003
4/1/2003
3/1/2003
640
2/1/2003
50
Inlet Steam Temp,
250
1/1/2003
Steam Flow, mlbs/hr
780
F
300
Design for Peak flow?
• 11.9 MW rated power
• 43.3 million kWh/yr
• $1.4 million annual savings
• 3 year simple payback
Design for baseload?
• 2.4 MW rated power
• 21.0 million kWh/yr
• $672 K annual savings
• 2.7 year simple payback
Our approach is to identify and design to customer-specific
financial objectives.
1.Identify Design with Most Rapid
Capital Recovery
• Below this flow, incremental gains in
turndown efficiency are offset by
sacrificed peak power and higher $/kW
costs
• 180,000 lbs/hr design flow
• 6.5 MW rated power output
• $1.44 million/year annual savings
• 2.2 year simple payback (46% ROA)
2. Identify Design with Highest Annual
Energy Cost Savings
• Above this flow, incremental gains in
peak power production are offset by
sacrificed low-end efficiency
• 275,000 lbs/hr design flow
• 10 MW rated power output
• $1.59 million/year annual savings
• 2.5 year simple payback (40% ROA)
15-year ROA
These points bound the financial opportunity, but do not
identify the optimum financial design.
50%
45%
6.5 MW
40%
$1.44 million/year savings
10 MW
35%
$1.59 million/year savings
30%
25%
20%
15%
Gross ROA
10%
Marginal ROA
5%
0%
150
200
250
Design Steam Flow (mlbs/hr)
Optimal system is
designed here to
balance desires for
rapid capital
recovery, high
annual cash
generation AND
effective use of free
cash.
300
The final design selected is customized for to balance
technical, financial and operational constraints.
Final Design
• 7.8 MW
• 216,000 lbs/hr design flow
• 900 psig / 825 inlet  150 psig exhaust
Financial
Performance
• 45.6 million kWh/year generation
• $1.5 million/year annual energy savings
• 45% gross ROA
• 21% marginal ROA
Key points
• Good CHP plants are necessarily custom-designed
• Optimum design must factor in variable thermal loads, energy
rates, financial objectives, turndown curves and subcomponentvendors product limitations / “sweet spots”
• Designing strictly for a payback or cash generation runs the risk
of leaving money on the table OR making poor use of final
capital dollars.
• Similar logic applies to “power-first” CHP plants.
• Find a partner who has the ability to help you work through
these design constraints.
So is there an opportunity in your mill?
Typical Values
Extreme Values
Target Financial Return
<2 years simple payback
from energy savings
Above-market returns
and/or
Non-financial drivers
Inlet Steam Pressure
>150 psig
15 psig
Pressure drop across
turbine-generator
>100 psig
15 psig
Steam flow
>10,000 lbs/hr
2,500 lbs/hr
Annual steam load
factor
>6 months/year
3 months/year
Local electricity rate
>4 c/kWh
>1.7 c/kWh