Flexible CHP has a future


Authors: M. Horstink en A.T.M. Schlatmann, Energy Matters

Industrial CHP, especially must run CHPs, experience difficult times with the current low spark spread. With the expectations for a more volatile electricity market, there seems to be little room left for CHPs with a must run character. Consultancy firm Energy Matters has performed a study on the technical and economical possibilities for the flexibilisation of classic industrial CHPs.

(availabble in Dutch only)
(availabble in Dutch only)

In this study, it is assumed that an industrial CHP consists of a gas turbine with a heat recovery steam generator (HRSG), supplying electricity to the grid. It was found that the control behavior of aeroderivative gas turbines is considerably better than the control behavior of the so called heavy duty or land based gas turbines. For instance, an aeroderivative gas turbine can start in 5 to 10 minutes while a heavy duty gas turbine needs 1 to 1.5 hours to startup. Also the required minimum downtime and minimum uptime, as well as the cycle costs are more favorable for aeroderivative gas turbines.

The HRSG is an important factor in the total startup time of a CHP-system. In particular the precondition of a 5-fold purge of the fluegas before the gas turbine is allowed to be started can relatively take much time. Also, the maximum allowable temperature gradient of  thick-walled parts is an important factor in the startup time of a CHP system.

The following (technical) measures have been identified to improve the flexibility of a CHP:

  • Speed up the purge time of the HRSG (for instance with higher rpm of the starter motor) or by skipping the purge process for instance by proving a safe situation with sensors;
  • Using material stress monitoring to be able to start as quick as possible;
  • Use a flue gas valve to keep the HRSG warm during standstill;
  • Use a by-pass stack to avoid the inertia of the HRSG;
  • Supplementary firing in combination with fresh air mode (or use a separate boiler);
  • Steam injection in the gas turbine to provide peaking power for a short period;
  • Install variable inlet guide vanes (IGVs) if not applied yet to improve part load efficiency.
Waste gas boiler converted into cold-air facility (Source: NEM Enery b.v.)
Waste gas boiler converted into cold-air facility (Source: NEM Enery b.v.)

The application of the measures mentioned above should be evaluated in close cooperation with the suppliers of the gas turbine(s) and HRSG(s). The applicability of the measures depend on the available space and the construction method. Often not all measures are applicable. Therefore, it is strongly recommended to perform an assessment together with suppliers to investigate the possible measures for a specific system. For instance the design of the expansion loops in interconnecting piping of a HRSG has influence on the turn-up ratio of a HRSG. The 5-fold purge process of a HRSG was mandatory, but under international regulations it is nowadays possible to start safely without the purging.

To be able to determine the value of flexibility, the gasturbine-exploitation-model of Energy Matters has been used. With this model it is possible to make technical and financial calculations for steam-installations under different deployment strategies and market scenario’s. For each deployment strategy and market scenario, it is computed which installation is the most economic to run. This is done on an hourly basis. Subsequently, dependent on technical (pre)conditions of the installations, it is judged whether the installation can practically be deployed. Based on the operational deployment of installations, the yearly costs can be determined for each particular deployment strategy and market scenario.

Three different market scenarios have been used: a business as usual scenario (BAU – 2014 price levels), a scenario in which the effects of the Dutch sustainability ambitions (SER Energy Agreement) on the energy-market are included (SER EA 2020 – Energy Market Forecast analysis) and recovery of the energy market to the price levels of 2008 (Recovery E-market).

With regard to the economic viability of flexibilisation of CHP the following conclusions can be drawn:

  • Under current market conditions (BAU), existing CHP units supplying electricity to the grid run marginal. Once a (re) investment in a major overhaul of the gas turbine has to be done, the profitability of CHP worsens.
  • Under the scenario SER Energy Agreement the profitability of CHPs operating in baseload improves little, while investing in flexibility of CHP in this scenario yields a profitable business case. The value of flexible power increases in the SER EA scenario considerably.
  • A switch to boiler only operation, in combination with the removal of the CHP, leads to great risks on the energy costs of an industrial site. If the market situation changes to the scenarios SER EA or Recovery E-market the costs of steam generation with a boiler will be considerably higher compared to a flexible CHP.
  • Smaller gas turbines and aeroderivative gas turbines are more flexible than (larger) heavy duty gas turbines. However, also a heavy duty gas turbine can be made flexible which improves the business case considerably.

Investing in a new CHP becomes relevant only with full recovery of electricity prices to a level that covers the full integral cost of natural gas power as was the case in 2008.

Based on these results, the operators are recommended to keep an existing cogeneration in business as long as possible until an overhaul is required. Also, an assessment of suppliers on the possibilities of flexibility is recommended. If flexibilisation is possible but overhaul is needed, it is recommended that the CHP should not be dismantled but mothballed. Then when the market improves at some moment, an overhaul and flexibilisation of the CHP can be carried out. By mothballing the CHP, the future risk of high steam prices is lowered compared to boiler only operation when spark spreads improve.

It is desirable if the Dutch government could provide financial support for investing in flexibilisation of existing cogeneration. This would give CHP operators more confidence in the future of CHP and stimulate the preservation of clean and efficient cogeneration capacity. Also, an adjustment of the grid tariffs would be desirable, so that in case of excess (sustainable) power production the purchase of electricity should be possible without extra costs, so that the hurdle to switch off the CHP and to import electricity is lower.

The challenge for industrial companies will be to reduce the risk of high steam prices. The present steam price is relatively high due to the poor spark spread. The investigation into the technical possibilities and the model simulations show that a flexibilisation of industrial CHP in a market with a growing sustainable power production gives opportunities to reduce costs, especially if CO2 prices rise. Whether operators can wait for recovery of the market is the question. The cost of mothballing a CHP are limited, while a CHP that has been removed will not easily be replaced. These times are exciting for existing industrial cogeneration, and industrial parties will have to carefully consider the different scenarios to make an informed decision about the future of CHP units.

As final part of the study Energy Matters will perform six assessments of industrial CHPs for Dutch companies. Energy Matters is looking for interested industrial parties who wish to gain a (free) assessment on their CHP plant. The assessment includes:

• During an onsite visit a first estimate will be made of the adjustment costs to deploy the gas turbine and heat recovery boiler in a flexible way. It is also indicated which information is necessary to be able to carry out the assessment.

• Hereafter Energy Matters will perform its analysis. Using its gas-turbine-exploitation model, different deployment strategies and market scenarios will be technically and financially analyzed. This analysis is adapted to your situation and takes into account your energy consumption profile, installations, energy tariff structures etc.

• The results of the analysis are processed in a management presentation and will be explained and discussed during a final visit of Energy Matters.

The duration of the assessment is about three weeks, in which there are two site visits of Energy Matters at your company, a kick-off and final meeting. The substantive results of the individual assessments will not be shared with third parties or made public. Generic and anonymous results of the six assessments will be included in a report. Before publication of this report it will be submitted to your company for approval.


For more information about this study or if you are interested in an assessment of your CHP system contact: stijn.schlatmann@energymatters.nl or martin.horstink@energymatters.nl (tel: +31 30 6911844).