Industrial and Commercial Cogeneration - OTA Archive

298 Pages·1996·6.86 MB·English

Industrial and
Industrial and Commercial Cogeneration
Commercial
February 1983
Cogeneration
NTIS order #PB83-180547
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Library of Congress Catalog Card Number 83-600702
For sale by the Superintendent of Documents,
U.S. Government Printing Office, Washington, D.C. 20402
Foreword
This assessment responds to requests by the House Committees on Banking,
Finance, and Urban Affairs; Energy and Commerce; and Science and Technology for
an evaluation of the economic, regulatory, and institutional barriers to the develop-
ment of cogeneration systems by utilities, industries, and businesses. This report com-
plements a forthcoming OTA analysis of Industrial Energy Use in evaluating the poten-
tial for onsite energy production in industry. The findings also will serve as part of the
material to be used in future OTA assessments of other electricity-generating technol-
ogies.
The report describes the available and promising future cogeneration technologies,
including their likely costs and operating characteristics, and reviews the potential ap-
plications for these technologies in industry, commercial buildings, and rural/agricultural
areas. It also describes the technical requirements for interconnecting cogeneration
systems with the utility grid, and discusses advanced combustion and conversion tech-
nologies (fluidized bed and gasification systems) that will enable cogenerators to use
fuels other than oil and natural gas. The analysis of cogeneration’s market potential
focuses on the competitiveness of cogeneration when compared to investments in con-
servation or in conventional separate thermal and electric energy systems (e.g., an in-
dustrial boiler and a central station utility powerplant). In addition, the report examines
the possible effects of the widespread use of cogeneration systems on utilities and their
ratepayers, and on air quality. Several options for changes in Federal policy in order
to enhance cogeneration’s market potential, to optimize its ability to displace oil and
natural gas, and to mitigate its possible adverse economic and environmental impacts
are discussed.
We are grateful for the assistance of the project advisory panel and the advice of
numerous individuals in utilities, industry, State governments, trade associations, and
universities. Also the contributions of several contractors, who performed background
analyses, are gratefully acknowledged.
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Ill
Industrial and Commercial Cogeneration Advisory PaneI
James J. Stukel, Chairman
University of Illinois
Roger Blobaum Theodore J. Nagel
Roger Blobaum & Associates American Electric Power Service Corp.
William H. Corkran Thomas W. Reddoch
American Public Power Association University of Tennessee
Claire T. Dedrick* Bertram Schwartz
California Land Commission Consolidated Edison Co. of New York
Steven Ferrey Harry M. Trebing
National Consumer Law Center Michigan State University
Todd La Porte Thomas F. Widmer
University of California at Berkeley Thermo Electron Corp.
Evelyn Murphy Robert H. Williams
The Evelyn Murphy Committee Princeton University
* Ex officio. Dr. Dedrick is a member of the OTA Technology Assessment Advisory Council.
iv
OTA Industrial and Commercial Cogeneration Project Staff
Lionel S. Johns, Assistant Director, OTA
Energy, Materials, and International Security Division
Richard E. Rowberg, Energy Program Manager
Jenifer Robison, Project Director
Eric Bazques Steven Plotkin David Strom
Clark Bullard Charles Holland J. Bradford Hollomon*
Research Assistants
Lois Gottlieb George Hoberg Martin Hsia
Administrative Staff
Virginia Chick Marian Grochowski Lillian Quigg Edna Saunders
Contractors and Consultants
Thomas Casten
Decision Focus, Inc.
Energy and Resource Consultants, Inc.
ICF, inc.
Edward Kahn
L. W. Bergman & Co.
William Snyder
OTA Publishing Staff
John C. Holmes, Publishing Officer
John Bergling Kathie S. Boss Debra M. Datcher Joe Henson
Doreen Cullen Donna Young
l
Project Director through July 1980.
Acknowledgments
OTA thanks the following— people who took time to provide information or to review part
or all of the study:
Dwight Abbott Elliot Levine
Aerospace Corp. Argonne National Laboratory
Weible Alley Glenn Lovin
Arkansas Power & Light Co. International Cogeneration Society
Douglas Bell Frederic March
U.S. Environmental Protection Agency Consultant
Ben Blaney Tom Marciniak
U.S. Environmental Protection Agency Argonne National Laboratory
Merrilee Bonney Alan S. Miller
U.S. Environmental Protection Agency Natural Resources Defense Council
Josh Bowen Ralph C. Mitchell, Ill
U.S. Environmental Protection Agency Arkansas Power & Light Co.
Joel P. Brainerd David Morris
New York Public Service Commission Institute for Local Self-Reliance
John Dadiani Dale Pahl
TRW Corp. U.S. Environmental Protection Agency
Douglas C. Dawson Robert Podlasek
Southern California Edison Co. Illinois Commerce Commission
Fred 1. Denny Wilson Pritchett
Edison Electric Institute National Rural Electric Cooperative Association
Richard Donovan Arnold Rosenthal
National Aeronautics and Space Administration Consolidated Edison Co. of New York
Fred Dryer Blair A. Ross
Princeton University American Electric Power Service Corp.
Lowell J. Endahl Barry Saitman
National Rural Electric Cooperative Association California Energy Commission
Peter Freudenthal Fred Sissine
Consolidated Edison Co. of New York Congressional Research Service
Howard Geller Elinor Schwartz
American Council for an Energy Efficient Economy State of California, Washington Office
Marty Gordon Walt Stephenson
Edison Electric Institute U.S. Environmental Protection Agency
Tom Grahame John Williams
U.S. Department of Energy U.S. Department of Energy
J. Steven Herod L. J. Williams
U.S. Department of Energy Electric Power Research Institute
Ronald Johnson R. L. Williams
Aerospace Corp. EBASCO Services Inc.
R. Eric Leber Mike Zimmer
American Public Power Association Cogeneration Coalition, Inc.
Tom Lepley
Arizona Public Service Co.
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Contents
Chapter Page
I. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . $ . . . . . . . . . . . . . . . . . . . . . 3
2. issues and Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3. Context for Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4. Characteristics of the Technologies for Cogeneration . . . . . . . . . . . . . . . . . . . 117
5. lndustrial, Commercial, and Rural Cogeneration Opportunities . . . . . . . . . . . 171
6. impacts of Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
7. Policy Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Appendixes
A. Dispersed Electricity Technology Assessment Model . . . . . . . . . . . . . . . . . . . 283
B. Emissions Balances for Cogeneration Systems . . . . . . . . . . . . . . . . . . . . . . . . . 286
C. Acronyms, Abbreviations, and Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288
index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
vii
Chapter 1
Overview
Contents
Page
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Cogeneration Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Potential for Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Cogeneration Opportunities .. .. ... ... . . . . . . . . . . . . . . . . . . . . . . . . . . 11
industrial Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 11
Commercial Building Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Rural Cogeneration Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Interconnection Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
impacts of Cogeneration . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. .. ... ... ..... . . . . . 15
Effects on Fuel Use..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
impacts on Utility Planning and Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Environmental Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Socioeconomic Impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Oil Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Economic incentives for Cogeneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Utility Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Interconnection Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Air Quality Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Research and Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Chapter 1 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tables
Table No. Page
l. Summary of Cogeneration Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2. lnstalled lndustriaI Cogeneration Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Figures
Figure No. Page
I. Historical Overview of Electricity-Generating Capacity, Consumption, and
Price, 1902-80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Conventional Electrica! and Process Steam Systems Compared With a
Cogeneration System . . . . . . .. .. .. .. .. .. ... ... ...... . . . . . . . . . . . . . . . . . . . . . 7
O
Chapter 1
Overview
INTRODUCTION
A major focus of the current energy debate is Cogeneration is an old and proven practice.
how to meet the future demand for electricity Between the late 1880’s and early 1900’s, oil- and
while reducing the Nation’s dependence on im- gas-fired cogeneration technologies were increas-
ported oil. Conservation in buildings and in- ingly used throughout Europe and the United
dustry, and conversion of utility central station States. In 1900, over 59 percent of total U.S. elec-
capacity to alternate fuels will play a major role tric generating capacity was located at industrial
in reducing oil use in these sectors. But cost- sites (not necessarily cogenerators) (see fig. 1).
effective conservation measures can only go so Because electric utility service during this period
far, and the industrial and commercial sectors was limited in availability, unreliable, unregu-
ultimately will have to seek alternative sources lated, and usually expensive, this onsite genera-
of energy. Moreover, electric utilities may face tion provided a cheaper and more reliable source
financial, environmental, or other constraints on of power. However, as the demand for electric-
the conversion of their existing capacity to fuels ity increased rapidly and reliable electric service
other than oil, or on the construction of new alter- was extended to more and more areas in the early
nate-fueled capacity. 1900’s, as the price of utility-generated electric-
ity declined, and as electric generation became
A wide range of alternate fuels and conversion
a regulated activity, industry gradually began to
technologies have been proposed for the indus-
shift away from generating electric energy onsite.
trial, commercial, and electric utility sectors. One
By 1950, onsite industrial generating capacity ac-
of the most promising commercially available
counted for only about 17 percent of total U.S.
technologies is cogeneration. Cogeneration sys-
capacity, and by 1980 this figure had declined
tems produce both electrical (or mechanical)
to about 3 percent. At the same time, cogenera-
energy and thermal energy from the same pri-
tion’s technical potential (the number of sites with
mary energy source. Cogeneration systems
a thermal load suitable for cogeneration) has
recapture otherwise wasted thermal energy, usu-
been increasing steadily.
ally from a heat engine producing electric power
(i.e., a steam or combustion turbine or diesel en- There has been a resurgence of interest in re-
gine), and use it for applications such as space cent years in cogeneration for industrial sites,
conditioning, industrial process needs, or water commercial buildings, and rural applications. A
heating, or use it as an energy source for another cogenerator could provide enough thermal ener-
system component. This “cascading” of energy gy to meet many types of industrial process
use is what distinguishes cogeneration systems needs, or to supply space heating and cooling
from conventional separate electric and thermal and water heating for a variety of different com-
energy systems (e.g., a powerplant and a low- mercial applications, while supplying significant
pressure boiler), and from simple heat recovery amounts of electricity to the utility grid. Because
strategies. Thus, conventional energy systems cogenerators produce two forms of energy in one
supply either electricity or thermal energy while process, they will provide substantial energy sav-
a cogeneration system produces both. The auto- ings relative to conventional separate electric and
mobile engine is a familiar cogeneration system thermal energy technologies. Because cogener-
as it provides mechanical shaft power to move ators can be built in small unit size (less than 1
the car, produces electric power with the alter- megawatt (MW)) and at relatively low capital cost,
nator to run the electrical system, and uses the they could alleviate many of the current prob-
engine’s otherwise wasted heat to provide com- lems faced by electric utilities, including the dif-
fort conditioning in the winter. ficulty of siting new generating capacity and the
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