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Finalised - DBAB205397 Doc.ID: Revision: Status: 29 / © Wärtsilä

CHP FROM NATURAL GAS

WAYNE GLOSSOP

BUSINESS DEVELOPMENT MANAGER

WARTSILA SOUTH AFRICA

25 July 2013 1 CHP from NG / Wayne Glossop

CONTENTS

INTRODUCTION; BENEFITS AND DRIVER: Who is Wartsila and what are the benefits and drivers of CHP?

APPLICATIONS AND OPPORTUNITIES: What are the type of projects in NG CHP and where are the opportunities for SA?

TECHNICAL: What are the main types of technology available; how does CHP really work and what are the challenges?

TECHNO-COMMERCIAL: What are the techno-commercial implications for each technology?

CONCLUSION: Actual examples and closing comments


INTRODUCTION; BENEFITS AND

DRIVERS

25 July 2013 3

WHO IS WARTSILA AND WHAT ARE THE BENEFITS AND DRIVERS

OF CHP?

This is Wärtsilä

4 April 2013 Corporate Presentation 4 © Wärtsilä

SHIP

POWER

POWER

PLANTS

SERVICES

• We are a major supplier of flexible baseload

power plants operating on various liquid and

gaseous fuels

• We provide unique, dynamic solutions for

grid stability, reserve, peaking, load

following and intermittent power generation

• Our multi-fuel solutions provide security and

optimal choice of fuel in any conditions

• Our project development and EPC

capability provide customers a choice of

everything from single point of responsibility

to selected services

All applications are supported with tailored lifetime

operation and maintenance services.

POWER PLANTS OFFERING

25 July 2013 CHP from NG 5 © Wärtsilä

Installed base – Wärtsilä Powering the world*

Oil & gas

Flexible baseload

Industrial self-generation

Grid stability & peaking

Europe:

Output: 12,1 GW

Plants: 1793

Engines: 3361

Asia:

Output: 18,7 GW

Plants: 1645

Engines: 3627

Africa & Middle East:

Output: 11,9 GW

Plants: 856

Engines: 2254

* December 2012


Americas:

Output: 11,3 GW

Plants: 395

Engines: 1342

Total: 53,7 GW Plants: 4689

Engines: 10584

Countries: 169

25 July 2013 CHP from NG

SOUTHERN AFRICAN FOOTPRINT

Namibia Office & workshop: engine, propulsion

South Africa Office & workshop: engine, propulsion,

governors and fuel systems

ANGOLA (O&M) 2012

MOZAMBIQUE (O&M) 2012

MADAGASCAR

WZA: 75 employees


BENEFITS OF USING NG FOR CHP

25 July 2013 8 CHP from NG

“The preferred fuel for new CHP plants is natural gas due to its flexibility concerning the heat

to power ratio as well as a better environmental performance compared for instance with

liquid fossil fuels” (http://www.eea.europa.eu)

• Owner Support

• Security of Supply

• Higher overall efficiencies

• Cost savings on thermal

and/or electricity

• Country Objectives Support

• Reduced emissions (CDM)

• Carbon Tax benefits

• IPP encouragement

• Grid Support

• Reduced transmission losses

• Localised grid support

capability

• Increased capacity

http://www.eea.europa.eu/


APPLICATIONS AND OPPORTUNITIES


WHAT ARE THE TYPE OF PROJECTS IN NG CHP AND WHERE ARE

THE OPPORTUNITIES FOR SA?

Most common applications as experienced by Wärtsilä:

CHP APPLICATIONS


INDUSTRY SEGMENT CHP USAGE

Hospitals Trigen; Power Security

Food and Brewery Hot and Chilled water

Airports Trigen; Power (Security)

Data Centres Chilled water; Power (Security)

Munic’s; Towns and Cities District Heating

Cement Power (Security); Steam

Pulp and Paper / Petrochemical All types of steams and hot waters

Campuses and Shopping Centres Trigen; Power Security

Greenhouses Hot water and CO2

Desalination Power (Security); Hot water

NO TWO APPLICATIONS ARE THE SAME!


OPPORTUNITIES IN SOUTH AFRICA - TODAY

• All piped gas comes from Sasol

(through Sasol; Egoli;

Springlights)

• Existing plants:

– 2MW MTN Trigeneration

– 11MW ABSA Energy Project

– 175MW Sasol Plant

• Limited gas supply and capacity

from Mozambique

• Recent gas price regulation

changes from MVP to Max Price

may alter perception of CHP

projects



OPPORTUNITIES IN SOUTH AFRICA - TOMORROW


Source: http://www.petroleumagencysa.com

Major future gas networks to potentially originate from:

•CBM and UCG

•Shale Gas

•West Coast gas fields (Kudu and iBhubesi)

•East Coast gas finds (Temane/Pande expansions;

Rovuma; etc)

•LNG/CNG imports

Challenge is that all the above sources first require

anchor offtakes before implementation of gas

networks (virtual or pipeline) – this takes some

time...

http://www.petroleumagencysa.com/


TECHNICAL


WHAT ARE THE MAIN TYPES OF TECHNOLOGY AVAILABLE; HOW

DOES CHP REALLY WORK AND WHAT ARE THE CHALLENGES?


TWO MAIN TYPES OF TECHNOLOGY



TYPICAL TRIGENERATION WITH ENGINES


Tri-generation case study:

• Two engine plant supplying electricity,

heat and cooling

• The plant is running according to the

customers electricity demand

• Heat from the engines is recovered for

heating purpose during winter and as

heat source for absorption chillers

during summer

• Heat accumulators are able to store

energy during night time when engines

are not operating

• Plant total efficiency: 65 – 85%


ENGINES VS TURBINES

OUTPUTS SOLAR TAURUS GT 70

(Turbine)

20V34SG (Engine)

Plant Fuel Consumption 20,000kWf 20,000kWf

Gross Power at gen term 6,400kWe 8,730kWe

Abs Chilling 10,000kWch 4,100kWch

Compr Chilling ------ 5,900kWch

Chilling Total 10,000kWch 10,000kWch

Compr elec Consumption ------ 1,230kWch

(Cooling Tower for

Chillers)

13,000kWt 17,100kWt

Plant Electrical Output 6,400kWe 7,500kWe

Plant Electrical Efficiency 32% 44%

Plant Total Efficiency 82% 88% (79%)



ENERGY SAN-KEY

25 July 2013 CHP from NG 17

Finalised - DBAB205397 Doc.ID: Revision: Status: 29 / © Wärtsilä CHP from NG

TECHNICAL CHALLENGES FOR CHP PROJECTS

Power & Energy production

in Cities considerations:

• Space constraints?

• Foundation requirements?

• Emissions compliance?

• Noise and vibration levels?

• Site access and

construction?

• Tie into existing facilities

(and age?)?

How do you intend

to run the 50 MWe

CHP-plant?!?

max. / min. / mean

Distribution &

connections to

existing interfaces

?!?

Wow, how many

floors – the exhaust

gases – where?!?

Where do you want

the 50 MWe CHP-

plant located?!?

In basement or.. .

How do you intend

to run the 50 MWe

CHP-plant?!?

max. / min. / mean

Distribution &

connections to

existing interfaces

?!?

Wow, how many

floors – the exhaust

gases – where?!?

Where do you want

the 50 MWe CHP-

plant located?!?

In basement or.. .


TECHNO-COMMERCIAL


WHAT ARE THE TECHNO-COMMERCIAL IMPLICATIONS FOR EACH

TECHNOLOGY?


Market Conditions, Reference Technology, Cost and

Performance Assumptions for COFIT



COFIT FINANCIAL ASSUMPTIONS


All financial parameters mimicked into a CHP financial model


Key Comparisons to note between COFIT and Wartsila...

Description COFIT Wartsila Comment

Technology Turbines Engines -

Construction

Period

4 years 15 months COFIT far too long even

for larger plants

Heat Rate 11926 kJ/kWh 8600 kJ/kWh ~27% drop in heat rate for

engines

EPC Cost 1033 $/kW 1500 $/kW Wartsila capex inline with

norms for small cogen

Fixed O&M 9,46 $/kW/yr 50 $/kW/yr Conservative figures used

Variable O&M 0.0027 $/kWh 0.007 $/kWh

LCOE 0,1768 $/kWh 0,1560 $/kWh ~12% drop in Tariff


DUE TO THE SIGNIFICANTLY HIGHER ELECTRICAL EFFICIENCIES

experienced IN ENGINES, ENGINES TARIFF BEATS TURBINES TARIFF in

applications that dont require hp steam


CONCLUSION


ACTUAL EXAMPLES AND CLOSING COMMENTS


REFERENCE 1


Barajas Airport,

Spain

Engines 6 x Wärtsilä

18V34DF

Total electrical power 33 600 kWe

Total heating output 24 000 kWth

Total absorption chiller

output 18 000 kWch

Total compressor

chiller output 18 000 kWch

Total efficiency 74%


REFERENCE 2


Linate Airport, Italy

Engines 3 x Wärtsilä

18V34SG


Total heating output 17 505 kWth

Total efficiency 80,2%


REFERENCE 3 (CLOSER TO HOME)


Sasolburg, South Africa

Engines 18 x Wärtsilä 20V34SG


Total heating output 64 tph steam


A FEW MORE REFERENCES...

User Country Industry type Plant configuration

Linate Airport Italy Airport 3 x 20V34SG

Barajas Airport Spain Airport 6 x 18V32DF

Detroit Airport United States Airport Metro 3 x 18V34SG

Southampton United Kingdom IPP / Municipality 1 x 18V32DF

AMC Hospital The Netherlands Hospital 3 x 12V32DF

Makuhari Japan IPP 1 x 16V and 1 x 20V34SG

Citigen, London United Kingdom IPP / Municipality 2 x W18V46GD

Sempra USA Medical Research Center 1 x W18V32DF

Alok Industries India Textile Industry 3 x W18V32DF


CONCLUSION

•Wärtsilä is BIG

•CHP from NG has many benefits

•There are many applications but all are unique

•There are opportunities now but the future looks

very bright for South Africa

•2 main technology types (engines and turbines)

•Techno-commercial calculations favour engine

technology over turbines for applications that dont

require HP steam


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