Embed Size (px)
Citation preview
North Carolina Legislative Commission
On Global Climate ChangeDecember 11, 2006
Recycling Energy: Profitable Climate Change
Mitigation by
Tom CastenAlliance for Clean Technology
Founder, former CEO Trigen & Primary Energy
Commission MissionCommission Mission Reach consensus on what NC can do to Reach consensus on what NC can do to
alleviate or prepare for the effects of alleviate or prepare for the effects of climate changeclimate change
Solicit ideas from expertsSolicit ideas from experts
Take advantage of economic Take advantage of economic opportunitiesopportunities
Actions taken will shape the direction of Actions taken will shape the direction of NC economy for decadesNC economy for decades
Presentation SummaryPresentation Summary The central generation of electricity is not The central generation of electricity is not
optimaloptimal The better option – local generation that The better option – local generation that
recycles energy waste – faces regulatory recycles energy waste – faces regulatory barriers, is denied benefits it creates barriers, is denied benefits it creates
The Alliance for Clean Technology (ACT) The Alliance for Clean Technology (ACT) proposes a suite of policies to encourage proposes a suite of policies to encourage ‘clean technology’‘clean technology’
ACT believes governments can profitably ACT believes governments can profitably mitigate climate change with a ‘blue box’ mitigate climate change with a ‘blue box’ energy policy – recycling waste energyenergy policy – recycling waste energy
Introducing the Alliance for Introducing the Alliance for Clean Technology (ACT)Clean Technology (ACT)
ACT is new, a coalition of local power ACT is new, a coalition of local power developers, WWF, Greenpeace, Sierra Club, developers, WWF, Greenpeace, Sierra Club, Suzuki Foundation, unions, and gas and electric Suzuki Foundation, unions, and gas and electric distribution utilitiesdistribution utilities
Mission is polices that induce deployment of Mission is polices that induce deployment of clean technologyclean technology to profitably reduce to profitably reduce greenhouse gas emissionsgreenhouse gas emissions
These policies will reduce pollution, improve These policies will reduce pollution, improve industrial competitiveness, preserve good jobs industrial competitiveness, preserve good jobs and lower societal heat and power costsand lower societal heat and power costs
An Inconvenient TruthAn Inconvenient Truth Al Gore describes global warming as an Al Gore describes global warming as an
‘Inconvenient Truth’ – a reality that we would ‘Inconvenient Truth’ – a reality that we would rather not face. rather not face.
Why inconvenient?Why inconvenient? Conventional wisdom assumes energy conversion Conventional wisdom assumes energy conversion
is optimal; thus mitigating climate change will is optimal; thus mitigating climate change will increase energy costsincrease energy costs
Why wrong?Why wrong? The energy system is not optimalThe energy system is not optimal Electric generation efficiency peaked in 1960, Electric generation efficiency peaked in 1960,
creates 38% of US GHGcreates 38% of US GHG
Conventional Central ApproachConventional Central Approach1960 Data (& 2003 Data)1960 Data (& 2003 Data)
Pollution
Fuel
100 units
Power Plant
=
67 units Waste Energy
33 units Electricity
End User
Waste HeatTransmission Line Losses
3 units (7.5%)
US Electric Efficiency,1900-2005
0%
5%
10%
15%
20%
25%
30%
35%
Year
% E
ffic
ienc
y
Primary Efficiency, Delivered Electricity Final Efficiency raw energy to useful work
45 Years with no efficiency gains
We Have Better Electric We Have Better Electric Generation OptionsGeneration Options
Local generation can recycle energy Local generation can recycle energy to reduce costs and pollutionto reduce costs and pollution
ACT’s ‘Convenient Truth’ ACT’s ‘Convenient Truth’ Energy Recycling Eases All ProblemsEnergy Recycling Eases All Problems
Recycling industrial waste energy could Recycling industrial waste energy could produce 20% of US electricity, fuel freeproduce 20% of US electricity, fuel free
Combining heat and power generation Combining heat and power generation (CHP) produces electricity with half the (CHP) produces electricity with half the fossil fuel of conventional central fossil fuel of conventional central generationgeneration
Recycling waste energy will improve US Recycling waste energy will improve US competitive positioncompetitive position
What is Recycled Energy?What is Recycled Energy?
Recycled energy is useful energy Recycled energy is useful energy derived from:derived from: Exhaust heat from Exhaust heat from power generationpower generation or or
industrial processesindustrial processes Tail gas that would otherwise be flaredTail gas that would otherwise be flared Pressure drop in steam or any gas Pressure drop in steam or any gas
Promoting energy recycling is a ‘blue Promoting energy recycling is a ‘blue box’ energy policy box’ energy policy
Decentralized Generation Option Decentralized Generation Option Combined Heat and PowerCombined Heat and Power
Pollution
Recycle Waste Heat
CHP Plant
End User Site
33 units Waste Energy
=66 units Useful Work 33 units
Electricity
33 units Thermal Energy
Fuel
100 units
Industrial Energy OptionsIndustrial Energy Options
ElectricitySteam
Hot Water
End User Site
Energy Recycling
Plant
Electricity
Process Fuel
Finished Goods
Waste Energy
SavedEnergy Input
Backpressure Turbine-generators Extract Electricity Backpressure Turbine-generators Extract Electricity from Gas/Steam Pressure Dropfrom Gas/Steam Pressure Drop
Low Pressure steam out
Extracted kWh reduces steam price
High Pressure steam in
Potential applications save money at industrial plants, hospitals, universities, and district energy systems and natural gas city gates
Industrial Energy Recycling Industrial Energy Recycling 90 MW Recycled from Coke Production90 MW Recycled from Coke Production
US Electric Efficiency,1900-2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Year
% E
ffic
ien
cy
Primary Efficiency, Delivered Electricity Final Efficiency raw energy to useful work
Local CHP Plants that recycle waste heat
Denmark Electric Efficiency
Energy Recycling Impact on the Energy Recycling Impact on the GridGrid
Local generation reduces grid loading, Local generation reduces grid loading, line losses and need for new T&Dline losses and need for new T&D
Local generation stabilizes voltages and Local generation stabilizes voltages and reduces vulnerability to extreme weather reduces vulnerability to extreme weather and terrorists and terrorists
Only local generation can recycle waste Only local generation can recycle waste energy; it is not economic to recycle energy; it is not economic to recycle waste energy from remote generation waste energy from remote generation plantsplants
What About Economies of What About Economies of Scale?Scale?
Skeptics claim local generation Skeptics claim local generation will raise capital costs will raise capital costs
Economies of Scale?Economies of Scale? Central versus Decentralized Generation Central versus Decentralized Generation
Transmission Transmission & Distribution& Distribution
$1380$1380
$138$138
$1,242$1,242
1000%1000%
GenerationGeneration
Central GenerationCentral Generation $890$890
Local GenerationLocal Generation $1,200$1,200
Savings (Excess) of Savings (Excess) of Central vs. Local Central vs. Local
GenerationGeneration$310$310
Central generation Central generation capital as a % of capital as a % of
local capitallocal capital 74%74%
Total / kW Total / kW of of
GenerationGeneration
$2,270$2,270
$1,338$1,338
$1,068$1,068
213%213%
KW KW required/ required/ kW LoadkW Load
1.441.44
1.071.07
0.370.37
135%135%
Total Total costs/ kW costs/ kW New LoadNew Load
$3,269$3,269
$1,432$1,432
$1,837$1,837
228%228%
Future Generation Options
Existing Coal Fossil Plant - No new T&D
New Coal
New Combined Cycle Gas Turbine
Coal Gassification CCGT
Remote Wind
Coal Gas with CO2 Sequestration
Balanced CHP Recycled Industrial Energy
0
5
10
15
20
-10123
Average Fossil Heat Rate (Units of fossil fuel per unit of delivered electricity)
Cen
ts /
kWh
Renewable Energy Options
Central Generation
Options
No incremental fossil fuel line
Recycled Energy Options
Avg. Industrial Power Price 5.5¢ / kWh
(33% efficiency) (50% efficiency) (100% efficiency) (net fossil savings)
Avg. Retail Power Price 8.1¢ / kWh
Comparative Deployment of Combined Heat Comparative Deployment of Combined Heat and Power in 2004and Power in 2004
0
10
20
30
40
50
60
Denmar
k
Nether
lands
Finlan
d
Russia
Germ
any
Poland
Japa
n
China
Portugal
Canada
Mex
ico
WORLD US UK
Indon
esia
France
Brazil
India
Argentin
aDE
sh
are
as a
% o
f to
tal
po
wer
gen
erat
ion
ACT Target of 30% CHP in US
Instaled Recycled Energy Capacity per capita (millions)
0
50
100
150
200
250
300
350
400
450
500
State
Cap
acit
y (M
W)
North Carolina (22nd in US)
NC Industry Recycling PotentialNC Industry Recycling Potential
SteelSteel Blast furnace gas, exhaust heat, pressure dropBlast furnace gas, exhaust heat, pressure drop
Refineries and chemical factoriesRefineries and chemical factories
Natural gas pumping station exhaustNatural gas pumping station exhaust
Pressure drop at gas delivery pointsPressure drop at gas delivery points
Glass & fiberglass factory exhaust heatGlass & fiberglass factory exhaust heat
Sewage gas, landfill gas, biomass, construction Sewage gas, landfill gas, biomass, construction waste, recycled carpet, otherwaste, recycled carpet, other
All process thermal users, housing complexes, all All process thermal users, housing complexes, all central chilling userscentral chilling users
ACT Definition of Clean ACT Definition of Clean TechnologyTechnology
Over 57% delivered fossil efficiency Over 57% delivered fossil efficiency (versus 33% for US central generation)(versus 33% for US central generation)
GHG emissions less that one unit of GHG emissions less that one unit of coal-equivalent per unit of electricity coal-equivalent per unit of electricity (equal to 100% coal efficiency)(equal to 100% coal efficiency)
No limits on size, technology, fuel, or No limits on size, technology, fuel, or locationlocation
Two Barriers to Clean Technology Two Barriers to Clean Technology Barriers to local generation:Barriers to local generation:
Interconnection costs and hassleInterconnection costs and hassle Standby chargesStandby charges
Many clean technology benefits are not Many clean technology benefits are not available to the facilities that create the available to the facilities that create the benefits:benefits: T&D avoidanceT&D avoidance Line loss avoidanceLine loss avoidance Health and environmental savingsHealth and environmental savings
ACT Proposals to spur Clean ACT Proposals to spur Clean TechnologyTechnology
Require distribution utilities to interconnect Require distribution utilities to interconnect with clean technology plants, add to rate basewith clean technology plants, add to rate base
No standby charges for clean tech facilitiesNo standby charges for clean tech facilities
Permit clean technology as ‘pollution control’Permit clean technology as ‘pollution control’
Statewide standard offer for clean technology Statewide standard offer for clean technology to satisfy expected load growth, no size or time to satisfy expected load growth, no size or time limitslimits
Pay current market wholesale price for power and,Pay current market wholesale price for power and, Pay half of calculated benefits that clean technology Pay half of calculated benefits that clean technology
creates – roughly 4 to 6 cents per kWhcreates – roughly 4 to 6 cents per kWh
Stimulating Recycling of Industrial Stimulating Recycling of Industrial Waste EnergyWaste Energy
State insure risk of industrial shutdownState insure risk of industrial shutdown Provide limited loan guarantees for new Provide limited loan guarantees for new
industrial energy recycling plantsindustrial energy recycling plants Payable only if host ceases to provide Payable only if host ceases to provide
waste energywaste energy Covers risk of industries ceasing Covers risk of industries ceasing
production, creates a virtuous cycleproduction, creates a virtuous cycle Will trigger an industrial boom in NCWill trigger an industrial boom in NC Costs offset with added income taxesCosts offset with added income taxes
Recycled Energy BenefitsRecycled Energy Benefits New InvestmentNew Investment
Job CreationJob Creation
New Revenue Streams for NC IndustryNew Revenue Streams for NC Industry
Improved Industrial CompetitivenessImproved Industrial Competitiveness
Public Sector GainsPublic Sector Gains
Conclusions: A Convenient TruthConclusions: A Convenient TruthEnergy Recycling Solves Multiple ProblemsEnergy Recycling Solves Multiple Problems NC can ‘mine’ industrial waste energy, NC can ‘mine’ industrial waste energy,
create added revenue streams for industrycreate added revenue streams for industry Recycle to provide affordable, clean energyRecycle to provide affordable, clean energy
Requires unconventional, innovative Requires unconventional, innovative governancegovernance Remove barriers to efficiencyRemove barriers to efficiency Pay part of T&D and health savings to Pay part of T&D and health savings to
facilities that create those savingsfacilities that create those savings Treat energy recycling as pollution control Treat energy recycling as pollution control
devices for environmental permits devices for environmental permits
Denmark Changed in Two DecadesDenmark Changed in Two Decades
Source: Danish Energy CenterSource: Danish Energy Center
Thank you
