Cogeneration-Combined Heat and Power (Electricity) Generation
Michael Roarty
Science, Technology, Environment and Resources Group
11 May 1999
Definition
Cogeneration or CHP (combined heat and power) is the simultaneous production
of electricity and heat using a single fuel such as natural gas, although
a variety of fuels can be used (refer to 'Cogeneration capacity by primary
fuel'). The heat produced from the electricity generating process (for
example from the exhaust systems of a gas turbine) is captured and utilised
to produce high and low level steam. The steam can be used as a heat source
for both industrial and domestic purposes and can be used in steam turbines
to generate additional electricity (combined cycle power). Cogeneration
for on-site power and heat is well established overseas, especially in
Scandinavian countries. Its use is gradually increasing in Australia,
although optimistic forecasts of rapid implementation and growth in the
last couple of years have yet to be realised.
Advantages of cogeneration
Cogeneration technology provides greater conversion efficiencies than
traditional generation methods as it harnesses heat that would otherwise
be wasted. This can result in up to more than a doubling of thermal efficiency
or higher heat values (HHV) (see Figure 1). Also, carbon dioxide emissions
can be substantially reduced. Furthermore, the heat by-product is available
for use without the need for the further burning of a primary fuel. Cogeneration
systems predominantly use natural gas, a fuel source which emits less
than half the greenhouse gas, per unit of energy produced than the cleanest
available thermal power station.
Figure 1: Electricity generation efficiencies
Source: Australian Cogeneration Association (ACA)
Figure 1 shows the increasing thermal efficiency from the use of thermal
brown coal to cogeneration and an inverse relationship to carbon dioxide
emissions. At a time when there is increased emphasis on both increased
thermal efficiency and the mitigation of carbon dioxide emissions, electricity
generation by cogeneration appears a logical choice. An additional advantage
of cogeneration is that the plant is usually located near the end user
(termed distributed or embedded generation) and as such no power transmission
losses are suffered. Cogeneration systems compete with electricity provided
from large-scale power stations, remote from electricity consumers and
as such require long distance, high voltage transmission networks (referred
to as centralised systems). It is claimed by the Australian Cogeneration
Association (ACA) that cogeneration systems are more environmentally friendly,
flexible, efficient and can be more cost-effective than traditional systems-especially
when network costs and losses are taken into account.
A major reason that cogeneration systems have not progressed as rapidly
as was forecast is that the price of electricity has declined markedly
since the development of the national electricity market (NEM). Present
prices are believed to be well below long-run generating cost.
Global trends in cogeneration
A survey current at the end of 1996 conducted by the International Cogeneration
Alliance showed that Australia lagged the world in terms of the installed
cogeneration capacity. The Netherlands was the world's leader with installed
generation capacity of 40 per cent of total capacity and was closely followed
by other Scandinavian countries such as Denmark and Finland. Australia
recorded a low 3 per cent of total installed generation capacity. The
Netherlands Government has set a cogeneration target of 50 per cent of
total installed cogeneration capacity by 2000 with a longer-term 70 per
cent target and the European Union has set its sights on increasing capacity
to 30 per cent of the total by 2010.
By the end of 1998, cogeneration installed capacity in Australia had
increased to close to 5 per cent of total capacity. At this date there
were 122 projects operating in Australia with an operating capacity of
2,084 megawatts electricity (MWe). The extent to which increases of cogeneration
capacity occur in Australia is contingent on addressing market hurdles
to the further development of embedded generation, and the recognition
of its significantly lower greenhouse gas emissions.
Cogeneration capacity by primary fuel
Cogeneration capacity by primary fuel type is outlined in Figure 2. Natural
gas accounts for over 50 per cent of primary fuel type.
Figure 2: Cogeneration by fuel type
Source: ACA
Important contributions to fuel type are being made from waste products
such as cane residue (bagasse) in sugar cane growing regions, sludge gas
from sewerage treatment works and methane from either land fill sites
or coal bed methane. Where a cogeneration plant is powered by waste gases,
especially coal bed methane and methane recovered from landfill sites,
then fugitive gases that are naturally escaping into the atmosphere and
act as particularly potent greenhouse gases, are captured and utilised
to drive gas turbines which in turn generate electricity.
New plant installations
During 1998, six new cogeneration plants were commissioned in Australia.
The combined capacity of these projects amounted to 285MWe, a significantly
higher figure than the 221 MWe commissioned in 1997. In addition there
were a further 9 plants under construction with a further 243 MWe of generating
capacity.
Large cogeneration plants that have come on line in recent times are
Sithe Energy's Smithfield plant (1997) in Western Sydney and CU Power
and Boral's Osborne plant (1998) in South Australia.
The Smithfield Energy Facility is a 162 MWe state of the art gas fired
cogeneration plant. It has three General Electric Frame 6 gas turbines
(each 38 MWe) in combined cycle operation and three heat recovery steam
generators producing steam for both sale and to power a 65 MWe steam turbine.
Both high and low pressure steam is sold under long term contract to Visy
Industries (a division of Pratt Industries) who are Australia's largest
manufacturer of cardboard boxes. The energy cost savings attributable
to the cogeneration plant has enabled Visy to increase cardboard box production
to close on 50 per cent. The electricity is sold to Integral Energy on
long term contract.
Osborne is the largest (180 MWe) most modern cogeneration plant in Australia.
A high degree of flexibility has been built into the plant that allows
it to produce steam for both an industrial process and for electricity
production. The electrical efficiency of the plant at 49 per cent is markedly
higher than the 33 per cent that can be achieved from conventional plants
and when the thermal efficiency is factored in from the production of
steam the total efficiency approached 70 per cent. Low-cost steam is supplied
to Penrice Soda Products (the largest producer of soda ash in Australia)
and electricity is sold to ETSA Power under long term contract.
Future trends in electricity generation
The traditional electricity system as we know it may well evolve beyond
recognition as global and national pressures gain momentum to reduce emissions
and a more holistic approach is taken to evaluating power generation,
supply, and the provision of energy services to end users.
In time an increasing proportion of new power will come from a range
of small embedded generators, including cogeneration.
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