Cogeneration Systems

When on-site generation or mechanical drive systems provide recovered heat for thermal applications, they are referred to as cogeneration or combined heat and power (CHP) systems. Simple-cycle power production without the use of recovered heat — whether from a central electric-utility plant or from an on-site prime mover — is typically only 25 to 40% thermally efficient. The wasted fuel energy and unnecessary emission of combustion products and heat have a strong negative environmental and economic impact.

In contrast, electric cogeneration systems offer overall thermal efficiencies as high as 80 or even 90%. What turns the relatively inefficient simple-cycle power generation process into the highly efficient cogeneration process is the use of rejected heat in the form of steam, hot water, or heated air for thermal process applications.

Facilities that have year-round electric and thermal energy requirements are good candidates for application of electric cogeneration systems. Applications may range from a few kW packaged units that serve apartment buildings, health clubs, etc., to applications of more than 100 MW. Industrial and manufacturing facilities, refineries, hospitals, prisons, military facilities, hotels, restaurants, universities, district heating/cooling systems, and other commercial and institutional facilities can often capitalize on the high thermal efficiency of applied cogeneration cycles.

In most applications, facilities use electricity producing cogeneration systems to replace a portion of their electric load, while continuing to purchase electricity from the utility grid. Systems are designed for maximum cost-effectiveness by matching the outputs to the baseload requirements of the facility. Both fuel and electric utility systems remain in place to supplement and back up the cogeneration plant. Alternatively, in applications with large thermal loads, facilities may produce excess power for sale as described above.

Currently, on-site electric cogeneration is encouraged by some electric utilities because it helps to relieve electric capacity constraints, eliminates the need to build expensive new central power plants, and reduces utility emissions of regulated pollutants. Moreover, in today's deregulated market environment, many utilities are seeking joint ventures and other financial arrangements with cogenerating facilities.

The electric cogeneration market has become increasingly sophisticated over the past two decades. Experience in markets of all sizes has led to reduced capital costs and construction lead times and increased thermal efficiency and reliability. A focus on the stationary market by the reciprocating engine and gas turbine industry has led to the development of product lines with vastly improved environmental and other performance characteristics. Advances in reciprocating engine and gas turbine emissions control have been dramatic. The continued development of low-emission, high-efficiency dual-fuel engine technology has also contributed greatly to market development.

Packaged systems ranging in size from a few kW to several hundred kW are becoming financially attractive for certain applications. Packaged systems require far less site and system engineering, and smaller systems can often be installed in a few days. While economies of scale, especially capital and maintenance costs, work against the small end of the market, economies of mass production and installation standardization work for it.

Guaranteed service and insurance contracts by manufacturers, vendors, and energy services companies have taken much of the risk out of electric cogeneration investments for host facilities, allowing customers to reap economic benefits without adding responsibilities to in-house staff. While this increases operating costs, it opens the market to many facilities for which taking maintenance and overhaul responsibilities had been a prohibitive factor.

PURPA QF Criteria for Cogeneration

FERC rules implementing PURPA define cogeneration as the combined production of electric power and useful thermal energy by sequential use of energy from one source of fuel. A topping cycle first uses thermal energy to produce electricity and then uses the remaining energy for thermal process. In a bottoming cycle, the process is reversed.

FERC prescribed three criteria that must be met by a qualifying cogenerator. The qualification test includes an ownership standard, an operating standard, and an efficiency standard:

• Ownership standard. The owner of a qualifying cogeneration facility cannot be primarily engaged in the generation or sale of electric power, other than the electric power solely cogenerated. Electric utilities may participate in joint ventures, but may own no more than 50% equity in a QF.

• Operating standard. For topping-cycle cogeneration facilities, the useful thermal energy output of the facility during any calendar year can be no less than 5% of the total energy output, but for bottoming-cycle cogeneration facilities, no operating standard was prescribed.

• Efficiency standard. Efficiency standards for topping cycles are as follows:

— If useful thermal energy is in the range of 5 to 15%, then the sum of the useful electric output plus half of the useful thermal output must be greater than or equal to 42.5% of the total energy input; or

— If useful thermal energy is greater than 15%, then the sum of the useful electric output plus half of the useful thermal output must be greater than or equal to 45% of the total energy input.

Although there is no minimum thermal output required for a bottoming cycle, the annual useful power output must be at least 45% of the energy input from the fuel used for supplementary firing to the thermal energy cycle before it enters the electricity generating cycle. Individual states are allowed to require greater thermal utilization levels. In many cases, higher total efficiency or waste heat utilization levels are required by states to encourage greater overall efficiency.

QF Certification

QF certification can be accomplished by either self-certification or FERC certification:

• To self-certify as a cogenerator, the owner or operator must provide FERC with an application that includes basic information describing the facility, the energy sources, the capacity, and the percentage of ownership.

It must also include sufficient information to ensure that all applicable operating and efficiency standards are met.

• To attain FERC certification, the application must also include a detailed description of the system, the initial date of installation, and a notice for publication in the Federal Register.

Within 90 days of filing an application, FERC will issue an order permitting or denying the applications or setting the matter for hearing. If no order is issued within this period, certification is deemed to be granted. The advantage of self-certification is that it is a faster and easier process. The disadvantage is that the certification status may be less secure since FERC has not firmly endorsed it. As a result, lending institutions may be more reluctant to provide project financing and local utilities might consider challenging the validity of the certification.

Types of Electric Cogeneration Applications

Five very general categories of electric cogeneration applications are outlined below (and summarized in Table 23-1) in order of decreasing size.

1. Cogeneration projects of several hundred MW at large facilities that sell either all or a large percentage of their electric output to an electric utility or other party. These can be facility-owned plants in which the thermal loads support more generation than is required in-house, or third-party-owned systems that sell steam, electricity, and/or other energy products to the host facility. Third-party IPPs are often interested in finding a host for thermal output in order to meet the PURPA QF requirements or to improve project economic performance.

2. Intermediate-to-large industrial, institutional, or commercial facilities in which all, or the majority, of the electric and thermal energy produced is consumed by the facility. Often, the local host facility sells a portion of the electric output through the utility system or purchases a portion of their required power to balance electric and thermal loads. Host facilities may sell steam or chilled water to a neighboring facility and, where allowable, sell electricity to a neighboring facility or more distant facility through retail wheeling. Third-party ownership or some type of performance contracting is common in this category.

Cogenerators in these first two categories often do not meet the FERC QF certification efficiency standards because their electric output exceeds that allowed by the available thermal load. Various types of prime movers are applied in these two categories. When high-pressure steam requirements are very high, gas turbines and steam turbines are commonly applied, either individually or in combined-cycle arrangements.

3. Intermediate and large institutional and commercial facilities with lower thermal loads that purchase a significant part of their electricity from the utility.

Some of these facilities may also export a portion of their on-site generation output for sale at different times of the day. These facilities often select cogeneration systems with a high ratio of electric to thermal output, notably reciprocating engine-driven systems. To be economical, these cogeneration systems must be well matched to the facility's base thermal loads. In some cases, peak-shaving generators that do not use heat recovery are integrated with baseload cogenera-tion units.

4. Small and intermediate facilities with cogeneration units that are small relative to their overall electric load. In these facilities, systems are usually designed strictly around thermal load characteristics. In most cases, system capacity is limited to the baseload thermal energy requirement and electric generation capacity is much lower than the facility's requirements. These facilities import the bulk of their electricity from the utility grid.

5. Small commercial facilities that produce more power than they need in some or all periods and export power under some type of standard offer or net billing arrangement. In some states, regulations are in place that establish set prices for exported electricity from small units, usually 50 to 100 kW Net billing arrangements are sometimes set up so that all power exported simply turns the meter backwards. These cogeneration systems, which are usually packaged units, are operated continuously to match the facility's thermal energy baseload, generally in the form of hot water. During night or weekend periods, the facility's electricity requirements may be extremely low. The ability to automatically export power may allow these units to operate economically during off-peak electric periods, even though the sales value of generated power is low.

Modular Cogeneration Systems

Modular, or packaged, cogeneration systems can be integrated into a central plant or serve individual thermal

Table 23-1 Summary Table of Cogeneration Applications


Characteristics Type 1 Type 2 Type 3 Type 4 Type 5

Table 23-1 Summary Table of Cogeneration Applications


Characteristics Type 1 Type 2 Type 3 Type 4 Type 5

Equipment size


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