15th epconf 5-14-2013 sj final

GAS COMBINED HEAT & POWER:GAS COMBINED HEAT & POWER: A SILVER BULLET FOR BOILER MACT

Suresh Jambunathan, Director of Business Development,

Recycled Energy Development LLCRecycled Energy Development, LLCCell# 630-335-4544

May 14, 2013y ,Donald E. Stephens Convention Center

Rosemont, IL

EP13, Track 9, Session 9A

RED | the new green Slide # 1 www.recycled-energy.com

Recent Boiler MACT influenced headlines


Boiler MACT made simple

Emissions control rules for “major source” coal, oil, biomass and process gas boilers

Finalized by US EPA on Dec. 20, 2012. • Impacts > 500 coal units, >800 oil units and > 400 biomass units• 3-to-4 year compliance window from publication of final rule

Stringent limits for • Mercury (Hg)• Filterable Particulate Matter (PM)• Hydrochloric Acid (HCl)

Gas CHP is the most economical option.

Implementation is notdiffi lt b t i • Hydrochloric Acid (HCl)

• Carbon Monoxide (CO)

Compliance likely uneconomic for older coal and oil boilers. Options include• Spend on pollution control equipment

difficult, but requires careful planning

Spend on pollution control equipment• Convert boiler to burn natural gas• Invest in a gas Combined Heat and Power (CHP) system

Gas CHP implementation requires utility engagement via power buyback programsGas CHP implementation requires utility engagement via power buyback programs.

Utilities (Regulated and deregulated ) must recognize that their future is tied to the future of their customers, many of whom may just close shop under the weight of MACT compliance


An example site affected by industrial Boiler MACT150 psig

STG 10 MWRating

150 psig

30 psig

Steam250 K h

Process steam load

7 MW

Vintage stoker boiler

Rating300 Kpph600 psig

600 psig250 Kpph 7 MW

Condenser

ESP 600 F

ή~75%

FSF~ 1,600 Btu/lb

Coal 400 MMBtu/Hr

Flue GasCleaned Flue GasBag House FD

or

Stack

CondenserA “classic” CHP system.

Economical when coal i i d

Does this look like your coal boiler operations?

St k t 30 t 70 ld ή 75% d FSF 1 6 MMBt /Klb

ue G sBag Housefan

Stackwas inexpensive and pollution control was “not my problem”

Stoker system, 30-to-70 years old; ή ~75% and FSF~1.6 MMBtu/Klb

Burns costly compliance coal, steam load (250 Kpph) and 95% (8,322 hrs/yr) operations

Hi h f l O&M t ($3 t $4 illi / )High non-fuel O&M costs ($3-to-$4 million/year)

Minimal pollution control - ESP or BH only. Monitor SOx, NOx, PM, Hg, HCl and CO

B t o ha e a VALUABLE air permit


STG = Steam turbine Generator; ESP = Electro-Static Precipitator, FSF = Fuel-to-Steam Factor

But, you have a VALUABLE air permit

Selected Boiler MACT pollution control equipment

Boiler Air

ESP

or

Your system today controls PM. Less effective for Hg. Ineffective for HCl, NOx, SOx

Boiler Air heater

Bag House

FD fan Stack

or

SCR ESP

Standard Boiler MACT compliance

CapEx requiredO E i d

Option #1: Control PM, HCl. Less effective for Hg. Controls NOx, SOx

Boiler Air heater

Bag House

Wet FGDFD

fan StackSNCR

or or

OpEx increasedEfficiency decreased .Increase your delivered cost of steam

But…..

You keep your SCR ESP

Option #2: Control PM, HCl, Hg. Controls NOx. Less effective for SOx

air permit Boiler Air heater

Bag House

FD fan StackSNCR

or orSDA

CO control via combustion system improvements; i.e. more CapExRED | the new green Slide # 5 www.recycled-energy.com

Natural gas Combined Heat and Power (CHP) is a f d t ll i lt tifundamentally superior alternative

150 psig

50 psigProcess

Clean stack gas

Steam 250 Kpph

HRSG*

300 Kpph900 psig900 F

STG 10 MWRating900 psig

steam load

Power to Nat. gas to

CHP reduces delivered steam cost and increases reliability of delivered steam and

Gas Turbine45 MW

Nat. gas

Power to utility, 8 MW

Power to utility42 MW

Nat. gas to duct fire

power

This pollution control system Option #3:

• Reliably satisfy process steam load ~ 250 Kpph and 8 322 hours/yearyrequires a new air permit

Reliably satisfy process steam load ~ 250 Kpph and 8,322 hours/year

•Compared to a boiler MACT compliance case (Options #1 or #2), gas fired CHP (Option #3)• Reduces O&M• Reduces specific emissionsReduces specific emissions• Increases system efficiency Plus….

• Generates power (50 MW ~ 412,000 MWh/yr) and revenue as a valuable by-product

* HRSG = Heat Recovery Steam Generator


Is there a fuel switch risk? gas availability

Shale gas fracking has unlocked huge domestic gas supply


Is there a fuel switch risk? gas production

US gas production has increased dramatically.

Several LNG export j t i th l iprojects in the planning

stage


Is there a fuel switch risk? Gas versus coal price

2010 to 2012Currently, “burner-tip” price of coal and gas are essentially the same.

2010 to 2012

You can buy a 3-year gas strip for just over $4/MMBtu todayy

1950 to 2012


Gas CHP is a Boiler MACT pollution control device

80

90

100

Filterable PM stack emissions, tons/yr

30

40

50

60

70

Emission reductions

PM 77%

HCl 100%

0

10

20

30

Current system Blr. MACT limit GT-CHP

140

HCl stack emissions, tons/yr50

Hg stack emissions, lbs/yr

HCl 100%

Hg 100%

80

100

120

25

30

35

40

45

20

40

60

5

10

15

20

25


0Current system Blr. MACT limit GT-CHP


Gas CHP reduces other emissions

600

700

NOx stack emissions, tons/yr

300

400

500

0

100

200

Current system Blr. MACT limit GT-CHP

Emission reductions.

NOx: 91%

SOx 99% Current system Blr. MACT limit GT CHP

4,500

SOx stack emissions, tons/yr

SOx 99%

2,500

3,000

3,500

4,000

,

500

1,000

1,500

2,000

,



Economic snapshot: operating assumptions

VintageStokerBoilerή ~75%

Process steam loadFuel (coal)

OpEx

Steam 250 Kpph

Pollution

GasCHPSystemή ~ 80%

Process steam load

Steam 250 Kpph

Fuel (gas)

OpEx Po erFSF~1,600

Control Equipment

FSF~2,275OpEx Elec. utility

(Grid)

Power 50 MW

Parameter Unit Spend on Pollution Control Equipment

Invest in Gas CHP system

Process steam Klb/hrKlb/year

2502 080 500

2502 080 500

Power sold to utility, thus maintaining thermal host as utility customer.

Klb/year 2,080,500 2,080,500

Power sold MWMWh/year

---

50412,000

Requires utility engagement and a mind-set that views long-term survival of

Grid Power price* $/MWh $60

Coal Gas

$/MMBtu$/MMBtu

$4.0-

-$5.0

gthermal host as key to utility’s own business.

Gas $/MMBtu $5.0


*CHP power sold to utility per a gas indexed Power Purchase Agreement (PPA)FSF = Fuel-to-Steam Factor. Btu of fuel in per lb of steam out

Economic snapshot: operating results & steam cost

VintageStokerBoilerή ~75%

Process steam loadFuel (coal)

OpEx

Steam 250 Kpph

Pollution

GasCHPSystemή ~ 80%

Process steam load

Steam 250 Kpph

Fuel (gas)

OpEx Po er

P t U it Spend on Pollution Invest in Diff

FSF~1,600Control Equipment

FSF~2,275OpEx Elec. utility

(Grid)

Power 50 MW

Value created by Power significantly offsets cost of steam.

R i ili

Parameter Unit pControl Equipment or Gas CHP Difference

Fuel (coal or gas) $/Klb $6.4 $11.4 ($5.0)O&M $/Klb $1.4 $1.3 $0.1 Requires utility

engagement and a mind-set that views long-term survival of thermal host as key to

O& $/ b $ . $ .3 $0.*Power credit $/Klb $0.0 ($11.9) $11.9

Delivered steam cost $/Klb $7.8 $0.8 $7.0 y

utility’s own business.

CHP operating value created $MM/yr $14.5

N t i i l th ti i d d dNet savings is lower than operating savings and depends on • Capital for either approach – depends on scope• Weighted average cost of capital • Investment term.


*CHP power sold to utility per a gas indexed Power Purchase Agreement (PPA)FSF = Fuel-to-Steam Factor. Btu of fuel in per lb of steam out

Economic sensitivity: cost of gas versus coal

$16.0

CHP Operating Savings at points below Net Zero Line

$12.0

$14.0H

HV

What is your view of the long term relative price of coal versus gas?

$8.0

$10.0

s, $

/MM

Btu

, H

$4.0

$6.0

Del

iver

ed g

as

Current Operating savings ~$14.5 million

$0.0

$2.0

$2.0 $3.0 $4.0 $5.0 $6.0 $7.0

D

Delivered coal, $/MMBtu, HHVNet savings is lower than operating savings and depends on

• Capital for either approach – depends on scope• Weighted average cost of capital


Weighted average cost of capital • Investment term.

Gas CHP benefits

Benefit to Gridl id bili i l di f d d d li lLocal grid stability including power factor support and reduced line loss

Balance variable power from wind and solar, thus speed renewable energy deploymentDefer or avoid investment in

Remote central generation plantsRemote central generation plantsTransmission & Distribution infrastructure

Benefit to the thermal hostBenefit to the thermal hostReduced cost of steam and increased steam supply reliabilityMore reliable power supply

Benefit to societyReduced pollution and lower greenhouse gas emissionsNet reduced energy costs increases productivity


Hurdles facing natural gas CHP

Inertia and unfamiliarityStandard compliance solutions seen as “tried and true”Standard compliance solutions seen as tried and true

Energy Policy Act, 2005Hurts ability of regulated utilities to secure certain cost recovery for long-term Power Purchase Agreements (PPA) with CHP plants Makes CHP plant financing difficultAgreements (PPA) with CHP plants. Makes CHP plant financing difficult

Air permitMACT pollution control regulations allow retaining current air permit. CHP reduces pollution yet requires a new permitCHP reduces pollution, yet requires a new permit

Standby & exit chargesImposed by some utilities before allowing CHP systems to interconnect with the grid.

Upfront investmentGas CHP investment often significantly higher than cost of standard compliance solutions.


Questions?

Suresh [email protected]| (630) 335-4544


APPENDIX

Boiler MACT limits - Federal Questions, vol 78 #21, Jan 31, 2013Boiler MACT limits Federal Questions, vol 78 #21, Jan 31, 2013


APPENDIX


15th epconf 5-14-2013 sj final

Documents

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industrial boiler mact

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