Economic and Reliability Optimization for Central Energy Facilities

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F i n a n c i a l C o n s u l t i n g S e r v
i c e s

• Economic and Reliability Optimization for Central
  Energy Facilities

James T. Drews, Presenter POWER-GEN
International Orlando, Florida November 30, 2004
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Two Case Studies

• Large university
• Optimized existing resource utilization
• Metropolitan newspaper
• Self generation upgrade evaluation

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Large University

• Two campus electrical load
• 2 gas turbine cogeneration units (13.6 MW)
• 2 power purchase agreements (46 MW)
• Campus-wide heating requirement
• 5 boilers (225 kpph) 2 HRSGs (48 kpph)
• Campus-wide chilled water system
• 15 electric chillers (23,500 tons)

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Management Model
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Operating Scenarios
Instantaneous Operating Conditions
Chilling (tons) Heating (kpph) Electricity (MW)
Scenario 1 20,000 11 32
Scenario 2 10,000 44 18
Scenario 3 5,000 31 6
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Scenario 1 Hourly Energy Cost
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Scenario 2 Hourly Energy Cost
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Scenario 3 Hourly Energy Cost
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Lessons Learned

• Distinct resource utilization option results in
  lowest energy cost
• Effective modeling will determine lowest energy
  cost options
• Management utilization of resource tool will
  minimize energy costs

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Metropolitan Newspaper

• Approximate 4 MW peak load
• Installed 3 MW gas turbine
• Heat recovery steam generator (17 kpph)
• 3 chillers electric absorption

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Strategic Options Evaluated
Capital Investment Option Cost
Continue self generation with current unit 0
Procure all electric needs from utility 0
Install new 4 MW gas turbine 1.8 M
Install new 5 MW gas turbine 2.4 M
Install supplemental 1.4 MW engine 1.1 M
Install 700 kW turbine in steam cycle 0.7 M
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Hourly Electric Load Profile
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Hourly Chilling Load Profile
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Electricity and Natural Gas Prices
Gas Cost (/MMBtu) Electricity Cost (/MWh)
Base Case 4.00 65.00
Low Electricity High Gas Prices 5.00 45.00
High Electricity Low Gas Prices 3.00 76.00
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Nominal Electric / Gas Rates
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Low Electric / High Gas Rates
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High Electric / Low Gas Rates
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Supply Options Results

• Existing installation most cost effective
• Larger units inefficient given load profile
• Payback 11 years on other viable options
• Potential improvements
• Peak load reduction
• Third-party fuel supply
• Client avoided an undesirable investment

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The Bottom Line

• Hourly load profiling is critical
• Integrated annual hourly energy supply/use model
  must be tailored for client specifics
• Capital investment/supply contracting options
  require detailed load analysis
• Management accountability is critical