EnergyBiz - November/December 2007 - (Page 52)

» GuIDe&souRCeBook boosting the Heat rate A proVEn tool by ChriS lArSEn eleCtrIC utIlItIes IN the uNIted States today are coming under increasing public pressure to reduce all emissions including carbon dioxide prior to the development and availability of advanced new carbon control technologies. A new project sponsored by the Electric Power Research Institute is helping utilities to use a method of reducing CO2 emissions that is available now, and without enormous investment. The project, called production cost optimization, is assisting utilities to re-institute effective heat rate improvement programs. Heat rate improvement is commercially proven and is the most cost-effective and immediately available control process for lowering CO2 on the margin. For example, a 1 percent heat rate reduction at a typical 500-megawatt coal-fired power plant operating at 90 percent capacity factor and firing bituminous coal corresponds to an equivalent 1 percent reduction in CO2 emissions, or about 40,000 tons a year, which could equate to significant savings if there were a cost or tax on CO2. Even assuming the eventual implementation of carbon capture and storage technologies, optimizing the heat rate will still make sense as a first line of CO2 reduction and would be a complementary activity with other control options. In addition to the CO2 reduction, optimizing heat rate brings significant fuel cost savings. In the example above, and assuming a fuel cost of $2 per million British thermal units (mBtu), the plant also would realize $700,000 a year in fuel savings for the same 1 percent heat rate improvement. Heat rate reductions will also result in decreases in other pollutants such as nitrogen oxides, sulfur dioxide, and mercury, which can help plants meet other compliance requirements. It needs to be appreciated that, even for a constant pounds per MBtu of pollutant emitted, an improvement in heat rate will result in fewer Btus fired, and consequentially, fewer total pounds of a given pollutant produced. Another advantage is that, under deregulation, as utilities dispatch plants within a fleet, heat rate improvement can earn plants a better position on the dispatch list. With all these potential benefits, why aren’t utilities financing heat rate improvement programs? First, some basic definitions. Heat rate is commonly defined as a measure of the amount of thermal energy needed to generate a given amount of electric energy. In another sense, heat rates are the “gallons per mile,” or fuel consumption, rates for specific levels of thermal plant output. For each power plant, heat rate depends on the plant’s design, its operating conditions, and its level of electric power output. In most utility fleets today, initial improvement in heat rates can be achieved not with deployment of new technology (GUEST OPINION) but rather with a re-commitment to best operating practices. Several disincentives have acted to steer power companies away from supporting heat rate reduction activities. The current economic environment has placed an increasing emphasis on plant availability over heat rate. More importantly, the implementation of postcombustion environmental controls reduce the plant efficiency from the original design. New source review considerations may also yield a reluctance chris Larsen PHoto courtEsy of EPri to pursue the more capital-intensive improvements that may entail significant redesign of plant components – condensers, cooling towers and turbine generators, for example. EPRI is attempting to overcome these obstacles by asking utilities participating in a special project to commit to achieving a minimum of 1 percent heat rate improvement at one operating unit. EPRI provides an independent, third-party assessment of heat rate issues at the selected unit and includes a ranking of the potential benefits and their costs, which can be provided to utility management to justify the investment. A key goal of the project will be to develop definitive guidelines for power plant operators on heat rate improvement strategies. The project begins with a nominal one-week performance appraisal on-site, coordinated by EPRI and using a team of heat rate experts. The team conducts a benchmark analysis by assessing both steam- and fire-side parameters and looking at turbine efficiency, cycle isolation, and boiler performance. Average heat rate at full and partial loads is calculated, using either the existing performance monitor or data downloaded from the plant’s distributed control system. Based on this analysis and extensive interviews with knowledgeable plant personnel, the team subsequently recommends a minimum of five prioritized improvements, along with estimated costs and projected heat rate savings for each recommendation. Initially the focus is on operational changes – improvements in plant practices that may be considered low-hanging fruit. However, the recommendations also may take the form of capital investments. In all cases, the objective is sustainable heat rate improvements. The host site is asked to commit to the necessary resources to support one or more of these recommendations to achieve the 1 percent goal. Once the improvements are made, the team returns to the site to verify the resulting heat rate reductions. The long-term goal is a sustainable heat rate program that maintains the improvements and continues to identify additional sources of heat rate reduction. To date, 10 utilities have committed to participate in the project, and seven site appraisals have been conducted. One conclusion already reached is that as utilities calculate the cost of electricity, they increasingly will need to assess the impact of future fuel price increases and the potential cost of carbon. Utilities sponsoring heat rate improvement projects have taken a positive step toward cutting their fuel usage and reducing their CO2 emissions. Chris Larsen is vice president of EPRI’s generation sector. 52 E n E rgyB i z November/December 2007

Table of Contents Feed for the Digital Edition of EnergyBiz - November/December 2007

EnergyBiz - November/December 2007 Contents Continental Grid Vision Needed Readers’ Views and Opinions Next for National Grid Clearing the Air The Need for Nuclear Energy Trade Status Report The Innovators California On The Leading Edge FERC Sparks Change Getting Coal Right Leadership in Times of Turmoil Innovation Delivers Return A Tale of Two IPOs LNGs Bright Prospects Generation Techologies The Age of Superconductors Leaders with Vision Get Ready for Plug-in Hybrids Betting on Batteries Cost of Decarbonizing Nuclear Helmsman – A chat with Dale Klein, Chairman of the U.S. Nuclear Regulatory Commission Global Energy Snapshot; Low-Income Energy Help; IT Spending Robust; The Greening of State Regulators; Generating Support Simplifying Offshore Wind Regs Chasing Construction Costs Energy Agency Sets New Course Deregulation Means Higher Rates Go-To Staffer Nightmare in Manhatten

EnergyBiz - November/December 2007

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