Professional Documents
Culture Documents
2.1 Introduction
A vast majority of the Asian countries has yet to tap the existing cogeneration potential to the
maximum. Considering the rapid industrial growth in many parts of the region, one would
expect many more new process industries and commercial buildings to be added to the
existing stock within a short span of time. These investments can be even better managed if
the concept of cogeneration is well understood by the developers and investors. The end-
users will have greater choices and more alternatives, in addition to having enhanced scope
for decision making and professionalism. At the same time, the power utilities can have
access to low cost and reliable excess energy produced in some areas faced with chronic
deficit of power supply in the past.
There is also a potential for cogeneration development based on privately funded projects in
close cooperation with potential end-users/customers and power companies. Owners of
existing as well as new industries and commercial buildings will benefit from these schemes
by having access to low-cost and more reliable energy supplies. Moreover, it will help them to
conserve their capital that would otherwise have been required for on-site energy facilities; the
saved resources and capital can be ploughed into their core business for improving their profit
margin and competitiveness.
It is encouraging to note that there are already a large number of cogeneration plants which
have been commissioned in some Asian countries in the last decade or so. The following
sections are aimed at providing sample examples of initiatives already undertaken in the
directions highlighted above. Each of the examples briefly covers the situation that led the
decision-makers to opt for cogeneration and the various benefits accrued from the project.
Reliable power is essential for commercial viability of petrochemical industries. A small power
interruption does not only result in substantial production loss but can also jeopardize the
safety aspects of the plant. Thus, factories located in areas that are exposed to unreliable
power supply are obliged to have their captive power plants to ensure reliability of operation.
Faced with the situation of deficient power supply, one such gas cracking complex in India
decided to install a cogeneration plant to obtain reliable power at a reduced cost.1
The power demand of the plant was of the order of 50 MW, and the total process steam
requirement was found to be 93 tons/hour. For analyzing the cogeneration option, the power
requirement was hiked to 65 MW, to include the provision for future expansion. The cost of
having a contract demand of 17.6 MVA with the utility had to be considered for assuring
continuous operation in case of the stoppage of the cogeneration plant. This would assure
1
A.K. Sood, “Commercial role of cogeneration in petrochemical industry”, Paper presented at the
Cogeneration Asia ’97 Conference, AIC Conferences, Singapore, 25-26 November 1997.
68 Part II: Cogeneration experiences in Asia and elsewhere
undisturbed operation of several power consumers in the plant during any unexpected tripping
by drawing power automatically as and when required up to the extent of 17.6 MVA.
Considering longer outage of the cogeneration plant during major overhauls or during the
recommended inspections, it was decided to include an additional captive power generation
capacity of 20 MW to guarantee power supply without depending on the public utility grid.
Similarly, to avoid the problem of steam shortage during the outage of heat recovery steam
generators, an additional boiler was included as a spare unit. This would also take care of the
start-up constraint of the gas cracker plant when greater amount of steam was required than
during normal operating conditions. Lean gas was considered as the sole fuel for operating
the cogeneration unit. The results of the economic analysis, considering the prevailing costs
of equipment, fuel, O&M, manpower, etc., are summarized in Table 2.1. The cogeneration
case has a clear edge over the existing case as it helps to reduce the energy bill by 36 per
cent and improves the reliability of the production process.
Existing Situation:
Process steam from conventional boiler and power purchase from utility grid
Description Annual Cost
(US$/year)
Investment: 3,780.00
Boilers (2 x 136 tons/hour of steam)
Operating & Maintenance Costs:
Electricity purchased from the grid (50 MW) 40,832.00
Fuel gas (6,626 tons/hour) 4,529.00
Other utilities 2,479.00
Maintenance & Chemicals 315.00
Manpower 336.00
Total Costs (existing situation) 52,271.00
Steam cost (US$/ton) 15.37
Power cost (US$/MWh) 102.08
Cogeneration Case:
Power and heat from the cogeneration plant, minimum demand contract with utility grid
Investment: 18,267.00
Boilers (3 x 136 tons/hour of steam)
Gas turbine generators (3 x 20.7 MW)
Steam turbine generator (25 MW)
Operating & Maintenance Costs:
Demand contract with the grid (17.6 MVA) 754.00
Fuel gas (15.148 tons/hour) 10,355.00
Other utilities 1,862.00
Maintenance & Chemicals 1,720.00
Manpower 504.00
Total Costs (cogeneration case) 33,462.00
Steam cost (US$/ton) 12.30
Power cost (US$/MWh) 51.64
Examples of cogeneration projects implemented in Asia 69
Atmosphere
FD Fan
Air G
GT-1
HRSG -1
HSD/Gas Atmosphere Atmosphere
FD Fan
Air
Gas/LSHS/HSD/PG
Air G
GT-2
HRSG-2
Atmosphere
HSD/Gas
FD Fan
Air
Gas/LSHS/HSD/PG
Air G
GT-3
HRSG-3
HSD/Gas
SVH
Gas/LSHS/HSD/PG
G STG PRDS SH
PRDS
A 25 MW capacity steam turbine generator was selected with the option for extracting
medium pressure steam at 19 bar and low pressure steam at 3.5 bar. The condenser was
designed for generating up to 20 MW of power without any steam extraction. The heat
recovery steam generators (HRSG) have the option for auxiliary firing with multi-fuel option.
High-speed diesel is used as a start-up fuel and the lean gas is supplied as the main fuel with
low sulphur heavy stock as the alternate liquid fuel. By-products available from the gas
cracking unit such as pyrolysis gasoline and off gas can also be fired. In order to allow the
HRSG to operate as a conventional boiler when the associated gas turbine was not operating,
a forced draft fan for supplying combustion air is installed with suitable dampers and safety
protections so that the boiler can run without exhaust from the gas turbine. This change over
scheme was well designed and tested and works satisfactorily at present.
In order to maximize the heat extraction from the exhaust gases after economizer and to
increase the overall efficiency of the HRSG, a separate low-pressure water coil was installed
in exhaust gas path. Such an arrangement allowed to generate hot water which, when
flashed, gives low-pressure steam that is used for deaeration of boiler feed water. This
feature helps to reduce the steam demand for the deaerator by 4 ton/hour.
Encouraged by the Thai Government policy on industrial cogeneration and sale of excess
electricity to the utility grid, a synthetic fibre manufacturing industry decided to explore the
opportunity for cogeneration. The factory was particularly susceptible to any unintended
shutdown due to power interruption while led to high restarting costs. In addition, the factory
had a generating capacity to meet only 15 per cent of its demand and the existing diesel
generators were over 20 years old and were expensive to maintain. A techno-economic
feasibility study was first undertaken to identify the best cogeneration scheme in line with the
Government’s newly announced power buy-back option.2
- two boilers producing steam at 60 bar, each with a generating capacity of 7 tons/hour,
- two others operating at 12 bar and generating 15 tons of steam per hour each.
Heavy fuel oil used as fuel in the boiler was purchased at a price of US$ 0.12/litre.
2
P. Srisovanna, “Case study of cogeneration in textile sector”, ESCAP South-East Asia Sub-regional
Seminar on Promotion of Energy Efficiency and Pollution Control through Cogeneration, Hanoi, 10-11
November 1998.
Examples of cogeneration projects implemented in Asia 71
The total electricity demand of the factory was 59,000 MWh/year, with an average demand of
around 6.7 MW. The actual demand varied between a minimum of 5.9 MW and a maximum of
8.9 MW. About 1 MW of electricity representing 15 per cent of the total demand was self-
generated, using more than 20 years old diesel generators.
Four alternatives were considered during the feasibility study and compared with the existing
situation: (1) Back pressure steam turbine, (2) Gas turbine, (3) Combined cycle, (4) Diesel
engine. In all cases, the criteria set was to meet the peak steam demand of the factory, i.e.,
17 tons/hour.
Moreover, the unavailability of a suitable standard turbine will lead to high installation cost and
will be more difficult to operate in practice. Considering 40 per cent of custom duty and tax,
the investment was calculated as US$ 7,500/kW. The annual maintenance cost was
estimated as 3 per cent of the investment, i.e., US$ 180,000/year.
Steam: 12 bar/237 o C
Water: 70 oC Steam to Process
1.23 t/h (0.99 MW)
11.5 t/h, 12 bar/237 oC
(0.94 MW) 6 t/h (4.84 MW)
56 bar/380 oC
5.5 t/h (4.79 MW)
Figure 2.2 Steam turbine cogeneration option for the textile mill
160 oC 56 bar/271 º C
5.5 t/h,
(4.26 kW)
H
Fuel RS
16.7 MW G
Air
Exhaust
18.8 kg/s 12 bar/188 º C
545 o C 6 t/h,
4700 kW Supplementary (4.64 kW)
Firing
Fuel: 200 kW
G C T Steam
56 bar/271 º C
1.05 t/h,
(0.81 kW)
Water: 70 oC
11.5 t/hr
(0.94 MW)
Water
120 º C
12.55 t/h (1.76 kW)
Figure 2.3 Gas turbine cogeneration option for the textile mill
The investment, including the custom duty and tax, amounted to US$ 1,617/kW. The annual
maintenance cost was taken as 2.5 per cent of the total investment, i.e., US$ 190,000.
The main drawback of this option was the high price of diesel oil required in the gas turbine
that led to a long payback period. The cost of diesel oil is US$ 0.19/litre as compared with
US$ 0.12 /litre for heavy fuel oil. Moreover, the former has a lower heating value as compared
with the latter (36 MJ/litre versus 39.1 MJ/litre).
As in the previous case, the main disadvantage of this system is the need for diesel as fuel,
which has a much higher cost when compared with heavy fuel oil.
100 bar/450 º C
12.5 t/h (11.26 kW)
HRSG
Fuel
800 kW
21.6 MW
Air
Exhaust ST G
G
36.2 kg/s
456 o C
6000 kW Steam to
Process
12 bar/237
120 º C 6 t/h (4.84 kW)
12.5 t/h
(1.75 kW)
Water: 70 oC 56 bar/380 º C
11.5 t/hr 5.5 t/h (4.79 kW)
(0.94 MW)
2 × 6350 Exhaust
450 o C
kW
DIESEL
Air Cooler
G ENGINE
12 bar/188 º C
6 t/h,
(4.64 kW)
Water
70 oC
11.5 t/hr
Steam
Cooling Water (0.94 MW)
Water: 110 Co 56 bar/271º C
5.5 MW 0.43 t/h,
11.5 t/hr
(1.47 MW) (0.34 kW)
Water
130 º C
11.93 t/h (1.81 kW)
Figure 2.5 Diesel engine cogeneration option for the textile mill
74 Part II: Cogeneration experiences in Asia and elsewhere
Table 2.2 Comparison of the cogeneration options retained for the textile mill
On the basis of the analysis and in order to minimize the investment, the factory decided to
purchase a new diesel generator of 5 MW capacity and operate it along with the existing
generator to meet all the low-pressure steam demand of the factory. The existing high-
pressure boiler met the demand for high-pressure steam.
Cogeneration is widely used in paper mills around the world. Steam generated is used at
different pressures and temperatures for cooking of chips in digesters in the pulping process
and for drying of paper in paper machines. In addition, some amount of steam is used for
concentration of black liquor in multiple effect evaporators.
A small paper mill in India with an installed capacity to produce 60 tons of writing, printing and
duplex quality paper per day, uses agro-industrial residue based cogeneration to meet all the
process energy requirements. Waste paper is mainly used as the raw material and a small
quantity of pulp is produced from bagasse, the residue from the cane sugar mills.
Frequent power cuts, lasting for as much as 25-30 per cent of the year, forced the factory
management to look for an alternative economic source of power than the stand-by diesel
generator. Coinciding with the plan to increase the production capacity to 100 tons of paper
per day, a study was conducted to assess the viability of cogeneration. With the expansion
plan of the factory, the process steam demand was estimated as 13 tons/hour and the power
demand was expected to increase to 2,700 kW.
3
M.M. Patel and P. R. Raheja, “Case study presentation on cogen project and benefits at South India
Paper Mills”, paper presented at the CII Energy Summit ’96, Chennai, 11-14 September 1996.
Examples of cogeneration projects implemented in Asia 75
1. Use of low pressure boilers for process steam only , and no power generation on site;
2. Use of a high pressure boiler and a back pressure turbine to meet 30-40 per cent of the
power demand;
3. Use of a high pressure boiler of a higher capacity, a back pressure turbine and an
additional condensing turbine, or a single extraction-condensing turbine to meet 60-70 per
cent of the power demand;
4. The same as (2), but all the power needs of the factory are met in this option.
As there was a need to acquire a new boiler, this option considered the option of generating
steam at 42 bar and 440°C. The steam could be supplied to a back pressure turbine to
generate around 30-40 per cent of the power demand of the factory, and the steam leaving
the turbine at a pressure of 4 Bar can be sent to fulfil process heating needs.
The initial investment as well as the operating cost of this system was found to be lower than
a diesel engine. The fuel used in the boiler is cheap and available in abundance. Moreover,
only the incremental cost of fuel required generating the same quantity of steam at higher
pressure and temperature was considered, which is only 20 per cent higher. The cost of
power generation worked out to be 36 per cent lower than that with the diesel generator.
From the practical side, a smaller size would mean the use of inefficient single stage turbine
and low voltage generator. This may lead to large imbalance in the system due to variations in
the process steam and power demands. The system balance can be achieved only by
operating the system at low plant load factor, thereby compromising the overall efficiency and
productivity of the factory.
Though the initial investment becomes higher due to the higher boiler capacity and larger
turbine and generator, condenser, etc., it can be justified by the higher efficiency and plant
load factor. Moreover, the cost of additional fuel will be marginal. The power generated would
be adequate to handle all the critical loads whereas the non-critical loads can draw power
from the grid. Thus the plant productivity will no longer be affected by the utility power outages.
It is expected that when the mill capacity is increased to 100 tons/day of paper, the same
cogeneration plant will operate with 20 tons/hour of inlet steam to provide 12-13 tons of
process steam per hour at 4 bar and generate around 2,700 kW of power.
A desuperheater was added near the paper machine to reduce about 100°C of superheat of
the process steam extracted from the turbine. Compared with the earlier process line
pressure of 7-8 bar, the present system operates at 5 bar pressure, thus the steam
consumption is reduced and the power output from the turbo-generator is increased per ton of
steam. In order to extract the maximum benefit from the cogeneration system and to make
Examples of cogeneration projects implemented in Asia 77
the system more flexible and cost effective, the turbo-generator is run in parallel with the utility
grid.
The palm oil industry is one of the major energy consumers of energy. This industry also
generates vast amount of biomass such as mesocarp fibre, shell, empty bunches, fronds,
trunks and palm oil mill effluent, which can be used as the main source of fuel for
cogeneration with a capability to meet all the electricity needs of the factory. A crude oil and
palm kernel producing plant in Malaysia decided to install a cogeneration plant to meet all its
energy requirements, thus improving the efficiency, competitiveness, reliability, flexibility and
ease of operation.4
The crude palm oil consisting of a mixture of palm oil (35-45 per cent), water (45-55 per cent)
and fibrous materials is sent to clarification tank which is maintained at about 90°C to
enhance oil separation. The skimmed clarified oil is then passed through a high-speed
centrifuge and vacuum dryer. With the introduction of a cogeneration plant, excess thermal
energy and electricity are used in a kernel crushing plant. Both palm oil and palm kernel oil are
sold to palm oil refineries and oleochemical factories for further processing.
During steady plant operation, almost 5 tons/hour of palm shell was available with two
different moisture contents, 8.3 per cent and 16 per cent respectively. Likewise, 11.55
tons/hour of palm fibre was discarded with two different moisture contents, 19.25 per cent
and 30 per cent respectively. These residues were previously burned off in oversized and
inefficient boilers in order to overcome the waste disposal problem.
A water tube boiler is installed with a capacity to generate 35 tons of steam at 23 bar. The fuel
supply and combustion rate is controlled as a function of the airflow rate, by manual or
automatic adjustment of the fuel conveyor. Steam from the boiler is passed through a back
pressure turbine to generate 1,200 kW of electricity, meeting all the electricity needs of the
factory as well as the worker’s residential quarters. The steam leaving at 3 Bar is used as the
process heat for sterilizer, digester, crude oil tank, clarification, oil storage tank, kernel dryers
and other applications (see Figure 2.6).
4
L. Low, “Investing in cogeneration for efficiency, competitiveness, reliability and ease of operation at
Kilang Sawit United Bell”, Paper presented at the Cogeneration Asia ’97 Conference, AIC Conferences,
Singapore, 25-26 November 1997.
78 Part II: Cogeneration experiences in Asia and elsewhere
P. Shell
1,200 kW
BOILER Turbine #1 Power Supply to Mill
P. Fiber
Supply to other
Turbine #2
integrated activities to
(Future) harness excess energy
Back to Pressure
Receiver Distributor
Hot Water
for Boiler
The total investment cost of the cogeneration plant amounted to US$ 523,000 and the annual
cost savings expected from the self-generated electricity is estimated as US$ 243,700. The
factory expects to recover the investment within 3 years after the commissioning of the
cogeneration plant.
Encouraged by the results, the company plans to achieve a ‘zero waste’ level in the factory.
There is a plan to fully exploit the excess energy by generating up to 2.5 MW of electricity and
integrating the operation of downstream activities such as the kernel crushing plant and
medium density fibreboard project.
The Thai Government policy of initiating and decentralizing economic development has led to
the successful creation of several industrial complexes away from the capital. These
industrial complexes require considerable amount of reliable power and process steam. Many
industries inside these complexes are excellent customers of large-sized cogeneration
plants. One such 300 MW gas-fired cogeneration power plant was launched in Map Ta Phut
Industrial Estate as early as in 1994.5
5
Y. Le Scraigne, “The first IPP project developed in Thailand – The Map Ta Phut cogeneration plant”,
Paper presented at the 1994 Cogeneration Conference, AIC Conferences, Bangkok, 20-21 June 1994.
Examples of cogeneration projects implemented in Asia 79
Stack
8.8%, 34.3 MW
Fuel: 100%
11.7%: 3×15.1 MW H Water
R
88.3%: 3×114.6 MW S
Air 61
.3 238.7 64.2%
Comb. % MW 3 ×83.5 MW
HP Steam:
6.8%: 26.3 MW
C T G MP Steam:
13.9%: 53.8 MW
The cogeneration plant assures electricity, steam and demineralized water supply to several
petrochemical and downstream industries. Customers have signed long-term contracts to
take or pay for a minimum off-take quantity of steam. The steam price has three components:
capacity, energy and transportation. Steam is supplied to the customers with an availability
guarantee. A part of the electricity generated is sold to the customers whose price has
capacity and energy components, the remaining amount is sold to the utility grid according to
the tariff set for small power producers.
80 Part II: Cogeneration experiences in Asia and elsewhere
Natural gas is used as the main fuel for which a long-term agreement has been signed with
the Petroleum Authority of Thailand. Distillate oil can be used as a back-up fuel.
In line with the incentive policies of the Board of Investment, certain privileges were granted to
this project, such as:
- corporate income tax exemption for 8 years, and further reduction of 50 per cent for 5
more years;
- double deduction from taxable income of electricity, water and transport costs for 10 years
from the date of first sales;
- deduction from net profit of the costs of installation or construction of the project’s
infrastructure facilities;
- low capital cost: approximately three-fourth that of a conventional power plant of the same
output;
- short gestation period: two-third of the power available with gas turbines within 12 to 15
months, and remaining one-third is available with steam turbine within 18 to 20 months;
- low operating and maintenance costs; competitive operating costs and higher availability,
particularly in comparison with coal fired thermal steam power plants;
- higher efficiency: electrical efficiency of 45.14 per cent in combined cycle mode, and
global efficiency of almost 70 per cent in cogeneration mode;
- flexibility of operation: ensured by the modularity of the plant, gas turbine exhaust by-pass,
steam turbine by-pass system, and the option of auxiliary firing on HRSG which allows
some decoupling between power and steam generation.
The gas turbines are installed outdoor. The unit is capable of being operated at full load within
16 minutes. Each unit consists of the following components:
The gas turbine consists of a 17-stage compressor, combustion system with 10 individual
combustors, a 3-stage turbine, air systems, lube oil system common to gas turbine and
generator, cooling water, and fuel systems. It is equipped with a steam injection skid for NO x
emission, acoustical enclosure for noise reduction, silencing equipment on inlet and exhaust
ducts, and a CO2 fire protection system.
The HRSG is of simple and proven design. It has a low thermal inertia to allow fast start-up
and rapid load swings, high resistance to thermal shocks, low exhaust gas pressure drop,
high heat recovery, and high reliability and maintainability.
The electric utility plays an important role by purchasing surplus electricity, thus providing
stable and additional revenue to the project. Also, back-up electricity is provided from the grid,
ensuring that availability targets of the industrial users can be achieved.
The Government has demonstrated a clear policy for privatization of power generation along
with accompanying regulations and incentives.
The equipment suppliers provided necessary confidence and guarantees to the lenders and
guarantors on the following:
- project investment cost control, by accepting the construction of the plant for a fixed and
firm price;
- completion on time, by accepting liquidated damages, for failures to meet targeted
completion date;
- plant performance in terms of availability and reliability, by accepting liquidated damages
for failure to meet targeted figures.
In addition, there was the advantage of reduced interest during construction due to
progressive investment and short gestation time, and the ability to generate income after only
a year of signing the contract when the plant started operating in open cycle.
The debt-equity ratio of the project was 3:1. During the financing arrangement, maximum
flexibility in the choice of currency and the type of interest rates were offered to the
developers. The subsidized loan included a 10-year loan term from the commissioning date of
the project. Local financing could be made available to cover other investment costs.