onsite electric-power generation - princeton

Chapter IV

ONSITE ELECTRIC-POWERGENERATION

Chapter IV.—ONSITE ELECTRIC-POWER GENERATION

Page

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .118

Generating Plants . . . . . . . . . . . . . . . . . . . . . . 118Storage Devices. . ......................119SolarCollectors . . . . . . . .................123OtherAspectsofCapitalCost Comparisons 124

Waste-HeatUtilization . . . . . . . . . . . . . . . . . . . . 125OperatingCosts . . . . . . ● . . * . . . . . . . . * . * * . . 129Reliability .*.*.... . . . . . . . . . ..... . . . . . 129Siting Problems. . . . . . . . . . . . . . . . . . . . . . . . . .133MiscellaneousOperatingProbiems ... ......134

LIST OF TABLESTableNo. Page1. 1985 Generation Costs as a Function of

PlantSize. . . . . . . . . ....................1182. lmpacts of Energy Storage on Electric

PowerSystems. . . . . . .................,1233. Load Factors forTypical Buildings . ......1264. OperatingCosts of VariousSystems .. ....130

Table No. Page

5. Engine Requirements for Systems Designedto Provide ReliabilityEquivalent to UtilityPower Reliability. . .....................131

6. Reliability of Onsite Equipment . .........132

LIST OF FIGURES

Figure No. Page

1. Trend in Self-Generation . ...............1152. Data From Steamplant Surveys, 1965-77...1203. Steamplant Survey Results Showing

Average Unavailability Versus Size forPlants Completed During the SurveyPeriod. . . . . . . . . . . . . . . . . . . . . . ..........122

4. Historic and Projected Load Factorsof Utility Generating Facilities . ..........125

5. Components of a District HeatingSystem in Sweden . . . . . . . . . . . . . . . . . . . . . 128

6. Annual Operating Costs Versus EquivalentFull-Power Hours of Operation forBaseload Plants . . . . . . . . . . . . . . . . . . . . . . . 131

7. Space Requirements of Typical Com-bined-Cycle Plants. . . . . . . . . . . . . . . . . . . . . 135

Chapter IV

Onsite Electric-Power Generation

BACKGROUND

While most electricity generated in the United States originates in large,centralized facilities owned and operated by electric utilities, the number ofonsite generating plants has declined steadily and the average size of utilitygenerating plants has steadily increased. Figure IV-1 shows, for example, thatonsite generating equipment represented nearly 30 percent of all U.S.generating capacity in 1920 but only 4.2 percent in 1973. ’ The percentage ofelectricity generated in plants with a capacity greater than 500 MW, however,increased from 40 percent in 1965 to 56 percent in 1974.2

Since many of the benefits and problems of onsite solar equipment areshared by on site generating devices of all types, an examination of the poten-tial market for the solar equipment must determine whether any of theeconomic and institutional circumstances which produced the trend towardcentralization might change during the next two decades. There are tworeasons for undertaking an examination of this rather fundamental issue. Themost obvious is that the ways in which energy is produced and consumedaround the world will need to change dramatically during the next threedecades, if only because reserves of inexpensive oil and natural gas willvanish during this period. These changes will require a reevaluation of alI con-ventional assumptions about energy. Secondly, the prospects for onsitegeneration may be improved by newly developed technologies—especiallysolar energy equipment. The solar resource is inherently distributed andeconomies of scale are often difficult to identify.

There are a number of explanations forthe trend toward centralization:

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Larger equipment tended to be less ex-pensive per unit of installed capacity

Larger plants tended to be more effi-cient in their use of fuel and had lowermaintenance costs per unit output,s ince a re lat ively smal l number oftrained operators could reliably main-tain large generating plants.

Larger plants could be installed in re-mote locations, simplifying siting prob-lems and ensuring that pol lutantswould be released at a distance frompopulated areas.

In recent years, a major advantage oflarge plants was their ability to use coalinstead of oil and gas as a fuel. Thedelivery of coal to a large plant, using adedicated rail facility, could signifi-cantly reduce the effective cost of coalfuel.

115

116 ● Solar Technology to Today’s Energy Needs

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Onsite facilities were frequently unableto compete with “promotional” ratescharged during the periods when util-ities were enjoying declining marginalcosts. Under those circumstances, allutiIity customers benefited from in-creased sales, since average ratesdeclined as utility sales expanded.

Many companies were reluctant to in-vest in onsite equipment because theywere unable to finance a large fractionof the equipment with their own equity,They were forced to turn instead todebt financing, which had the effect ofincreasing company vulnerability dur-ing periods of economic hardship, Thismeant that greater returns were ex-pected of onsite generating equipmentthan were expected of investments inproduct-oriented areas.

There was a fear that a failure of onsiteequipment could have disastrous ef-fects on the operation of a business,and a feeling that the headaches ofelectricity production should be left tothe utilities, whose primary businesswas energy.

Electric utilities have frequently op-posed the installation of onsite gener-ating facilities by industry and haveoften been reluctant to own such equip-ment themselves.

Many onsite facilities have been poorlydesigned and have received inexpertmaintenance, and reports of failureshave frightened prospective investors.

Onsite generating equipment has tend-ed to be of somewhat archaic design.

Federal and industrial research has con-centrated almost exclusively on thedevelopment of improvements in largecentralized equipment rather than insystems optimally designed for onsitegeneration.

Onsite equipment in some installationshas created problems of noise and localpollution, and some owners have en-countered difficulties in expanding gen-erating faciIities.

One of the major objectives of this studyis to determine whether there are or will becircumstances under which the advantagesof onsite energy equipment, particularlysolar energy equipment, can outweigh thisrather impressive set of traditional reasonsfor avoiding onsite equipment. It is in-terest ing to observe that many nat ionswhich have experienced higher fossil fuelprices than the United States make fargreater use of onsite electric power. For ex-ample, 29 percent of the electricity gener-ated in West Germany is produceindustrial plants. 3

Onsite equipment can offer aadvantages:

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Location of equipment “onsite"

d by onsite

number of

g r e a t l yincreases the design opportunities andmakes it easier to match energy equip-ment to speci f ic onsi te energy de-mands. In particular, it should make iteasier to use the thermal output ofsolar collectors and the heat rejectedby electric generating systems which istypically discarded (often at some en-vironmental cost) and wasted by cen-tral generating facilities. There is a con-siderable amount of overlap betweenequipment being developed for energyconservation and onsite generating de-vices, and onsite designs are usuallymost successful when integrated into acoherent plan encompassing both ener-gy demand and supply.

The basic solar energy resource is avail-able onsite whether it is captured ornot. Integrating the equipment into thewails or roof of a building or into thelandscape around a building can re-duce the land which must be uniquelyassigned to solar energy. Onsite genera-tion of energy can reduce the cost oftransporting energy and reduce thelosses and environmental problems

3 R Sukhula, et al (Thermo-Electron Corp ), AStudy of Inplant Electric Power Generation in theChemical, Petroleum Refining, and Paper and Pulp in-dustries, june 1976, pp 1-4

Ch. IV Onsite E/ectric-Power Generation ● 117

associated with transmission. (The ex-tent of these savings can be difficult tocompute, and this topic is treated withgreater care in chapter V.)

Ž Onsite equipment can reduce invest-ment risks, because it can be con-structed rapidly and additional unitscan be installed quickly to meet unex-pected changes in demand.

● Onsite equipment can be made as effi-cient as centralized equipment, even ifno attempt is made to use thermalenergy exhausted by generating de-vices, If this heat is applied usefully,overall efficiencies as high as 85 per -cent are possible.

● High-efficiency energy use, possiblewith combined electric and thermalgeneration, can result in a reduction ofpolluting emissions produced by onsitedevices burning conventional fuels.

Ž Onsite equipment can be manufac-tured, installed, and maintained with-out major changes in the way energy-related equipment has been handled inthe past. It would not require novel ap-proaches to financing, new types ofbusinesses, major new categories oflabor skills, or major participation bythe Government.

In addition, there may be social, strategic,or political reasons for trying to reverse thetrend toward increasing centralization ofenergy production in the United Stateswhich have no direct connection with theeconomic merits of the case. Some of theseissues are discussed in chapter VI 1.

In assessing the relative merits of largeand small equipment, it is necessary tojudge both as a part of an integrated energysystem. Reviewing the performance of unitsoperating in isolation can be very mislead-ing.

In particular, it is necessary to distinguishbetween the advantages enjoyed by large

energy systems, which result from econ-omies of scale in individual devices, fromthe advantages resulting from the fact thatthe large systems meet a demand relativelyfree of the sharp demand peaks which char-acterize individual energy customers. Thesmooth demand results from combiningmany customers into a single diverse load,and this advantage could be enjoyed bysmall generating centers able to buy and selIenergy from a large energy transmission anddistribution system.

Since the primary objective of improvingan energy system is to reduce the net pricepaid for energy by all consumers, it isnecessary to try to show how each compo-nent will affect the overall price of meet-ing real fluctuating demands for energythroughout the year. This clearly is not asimple undertaking, particularly since somany changes can be expected in the wayenergy will be generated and used duringthe next few decades. Many new technol-ogies wilI undoubtedly emerge in gener-ating, storage equipment of all sizes, and inthe technology of energy transport.

Energy can be transmitted in electrical,thermal, or chemical form, for example, andstored as mechanical, thermal, or chemicalpotential energy Energy can be generatedat a central facility and sent for storage inonsite units (it is common in Europe, for ex-ample, to store electricity which wilI be usedfor space heating in the form of heatedbricks), and energy generated locally couldbe sent to a central facility for storage

optimizing the combination of onslte andcentral energy devices will be difficult b e -

cause of the many variables and uncertain-ties, but the outcome of this analysis canprofoundly affect perceptions about therelative value of different types of equip-ment and it can affect the designs chosenfor onsite systems These issues are treatedin more detaiI in the next chapter


CAPITAL COSTS

The only satisfactory technique for com-paring the cost of onsite and centralizedpower generation is to undertake the de-tailed comparison of life-cycle costs of in-tegrated systems which is undertaken indetail in volume 11. It is interesting to notice,however, that there frequently is no clearcorrelation between the size and the unitcost of generating and storage components.Comparisons between different sizes ofequipment based on the same basic design

can be misleading; it is important to com-pare the costs and performance of devicesselected to perform optimally at the sizerange selected.

GENERATING PLANTS

Table IV-I indicates that the initial costsof onsite generating equipment may actual-ly be less than the cost of larger pIants perunit of generating capacity.

Table IV-1 .—1985 Generation Costs as a Function of Plant Size (1975 dollars)

Ch. IV Onsite Electric-Power Generation ● 119

Review of Electrical Wor/d’s Steam Sta-t ion Cost Surveys for the past 22 years ’showed that, from 1965 to 1975, there wasno significant decline in capital costs ofsteam plants of all types as their size in-creased. Figure IV-2 shows costs per unit ofgenerating capacity as a function of plantsize for steam plants completed from 1965to 1977 Only the 1977 survey gives any in-cl inat ion of economies of scale, and thelimited number of plants in that summarycompared to previous surveys makes it verydif f icul t to conclude that e c o n o m i e s O fscale may again be valid.

Another trend determined in this review isthat unavailability frequently increases assize increases, resulting in higher effectivecapital costs (figure IV-3). It should be notedthat the stations reviewed in these surveysare new, and the availability problems mayresult in part f rom breaking in the newplants

While small units manufactured in smallnumbers may be substantially more expen-sive per unit output than large systems, thecost of small systems can be substantiallyreduced using mass production techniquesunsuitable for larger devices. Moreover, in-vestments in large generating faciI i t ies areso substantial that very conservative designpractices must be used. SmalIer systems per-mit greater experimentation, and, in manycases, innovations can be introduced intothe market more rapidly, Conservative de-sign practices, however, play a large role indetermining which device will be selectedfor mass production

STORAGE DEVICES

It is difficult to generalize about theeconomies of scale of storage since the

‘ Ioth through 19th Steam Stat Ion Cost Survey,E/ectrfca/ World, Oct 7, 1957, p 115, Oct 5, 1959, p71, Oct 2, 1961, p 69, oct 7, 1963, p 75, Oct 18,1965, p 103, Oct 16, 1967, p 99, NOV 3, 1969, p 41,Nov 1, 1971, p 39, NOV 1, 1973, p 39, NOV 15, 1975,p 51

value of storage is a strong function of thecost of transporting energy and the strategyof i ts use Many types of storage are con-s t ruc ted f rom moduIar un i ts and do notshow strong economies of scale.

In most cases, low-temperature thermalenergy can be stored much less expensivelyin large systems than in smalI storage tanks,This is because the ratio of the surface arearequired for a vessel containing a heatedfluid to the volume of the fluid stored de-creases as the volume increases. A low ratiomeans that less material will be required forthe storage vessel and that the area overwhich heat can be lost to the environmentper unit of energy stored is reduced.

In some very large systems, no insulationwilI be required other than dry earth. The ad-vantage of large-scale storage of hot waterwould be increased significantly if tech-niques for storing hot water in aquifers canbe developed. Taking advantage of this op-portunity requires a piping network capableof delivering fIuids to the central point.

S y s t e m s f o r s t o r i n g e n e r g y a t h i g htemperatures (e.g., above 300 OC/5720 F) typ-ically consist of a large number of relativelysmall modules, and large devices do notshow economies of scale. In many cases, thestorage must be located close to the sitewhere the energy will eventually be used.For example, electricity can be “stored” inbricks, heated to high temperature, whichare used to provide space heating for build-ings during periods when electric rates arehigh. Such devices must be located in thebuildings they serve.

No clear pattern of cost emerges fordevices capable of storing energy at in-termediate temperatures.

Most of the techniques which have beenproposed for storing electricity in mechan-ical form (in hydroelectric facilities, for ex-ample) are only feasible in relatively largeunits, although it may be possible to use thenumerous small dams which already existaround the country for small amounts ofstorage. Battery systems now available for

Ch. IV Onsite .E/ectric-Power Generation ● 121

I


storing large amounts of electricity for uti l-ities are more economical in relatively largeuni ts (severa l megawat t hours) , a l thougheconomies of scale disappear long beforec a p a c i t i e s e q u i v a l e n t t o t h o s e o f l a r g ehydroelectric storage facilities are reached.

In the future, however, it may be possibleto develop low-cost batteries for whichthere is no particular advantage in designingunits larger than a few hundred kilowatthours. This cannot be said for most othertypes of chemical storage systems. Large-scale storage of hydrogen or other gasses,for example, can probably be best accom-plished in large underground chambers.

The economies of scale of storage devicesis discussed in detail in chapter Xl.

Onsite or regional storage facilities alsooffer a number of other advantages whichare not directly reflected in initial costs ofthe systems. Table IV-2 summar izes thebenef i ts o f cent ra l ized and decentra l izedenergy storage devices identified in an ex-am i nation of alternative techniques for stor-ing electricity for utiIity use.

SOLAR COLLECTORS

Since most types of solar collectors con-sist of arrays of individual devices with in-dividual areas less than 30 square meters(m’), there is no clear economy of scale formost types of coIIector arrays. An optimumsize for a heliostat central receiver systemwill probably be established as the costs ofthese systems are better understood, but it isnot clear whether a large penalty will haveto be paid if the system is not at the opti-mum size. Similarly, a system which requirespiping to connect a series of distributedthermal collectors will probably have an op-timum size since these plumbing costs willbecome large for large systems.

Pond collectors and several other special-ized collector designs may also show someeconomies of scale up to 2,000 to 3,000 m2,but again, the penalty for building a smallersystem may not be large. Much more mustbe known about the economics of collectordevices before confident statements can bemade in this area.

Table lV-2.— Impacts of Energy Storage on Electric Power Systems

Impacts Economic benefits*

Central Improved baseload capacity factor Low-cost charging energyenergy Conservation of oil, natural gas Reduced fuel costsstorage Reduction of spinning reserve capital cost credit ($20-40/kvv)

Higher reliability/reduced reserve margin Capital cost credit (to be determined)More efficient load folowing Capital cost credit (to be determined)

Dispersed All of the above, plus: All of the above, plus:energy 1.storage

2.3.

4.

5.6.

Deferral of new transmission and Capital cost credit ($50-100/kW)distribution linesDeferral of substation reinforcement Capita l cost credit ($30-60/kW)Misc. (transmission and distribution Capital cost credit ($10-20/kW)loss, volt-ampere reactive control,short circuit)Increased security of supply/reduced Capital cost credit (to be determined)reserveRapid installation (factory built) Reduced interest during constructionModular/incremental capacity growth High capacity factor of storage

“Probable ranges; actual benefits dapaod on specific condhons in incfrvidual power systems.

SOURCE: F. R. Kalhammer, /rnpacrs of Energy Efficiency on E/ecfrk Power Systems, American Nuclear Society Meeting, SanFrancisco, November 1975.


OTHER ASPECTS OFCAPITAL COST COMPARISONS

The cost of equipment purchased for aIargeplant will always reflect the advantageof discounts resulting from large purchases.These savings occur because the manufac-turer’s marketing costs and other overheadcosts are lower for large sales than for anumber of small purchases. Larger systemsmay also benefit because there is no need toperform detailed engineering for each in-stallation, as may be the case for some on-site energy systems.

Taking advantage of the ability to best in-tegrate an onsite generating system with theclimate and demand pattern at each sitecould, however, add to the engineering cost.Contractor overhead charges tend to beslightly higher for smaller systems. General-izations are difficult, however, since it maybe possible to develop standardized designsfor small systems.

Ease of rapid construction of small gener-ating and storage facilities reduces the in-terest paid during construction —chargeswhich represent about 18 percent of the costof new electric-generating plants capable ofgenerating 1,000 MWe. 5 Rapid constructionalso means that the effects of infIation areeasier to assess. Inflation occurring duringthe construction of a 1,000 MWe generatingplant which wouId come online in 1983 is ex-pected to represent about 30 percent of thetotal value of the plant.6

Short construction times can also providemuch greater flexibiIity in meeting newdemands.

This advantage is particularly significantwhen rapid fluctuations in the growth of de-mand make predictions difficult. Plantswhich require only a month to construct re-quire predictions to be accurate only amonth into the future. Moreover, a mistakein forecasting is far less costly if the invest-ment is limited. The economic benefits of

5 L$ ASH- 1.? JO Revised

‘ Ibid

large plants which require many years toconstruct depend heavily on the accuracy ofdemand predictions covering periods of adecade or more. Utilities can react to unex-pectedly low demand by delaying or defer-ring plant construction, but this process canbe costly–with the cost depending on theamount of capital invested before the defer-ral. Forecasting mistakes can mean plants inoperation which are badly underutilized, yetinaccuracies are inevitable given uncertain-ty about the future of energy supplies, costs,and demands.

In the period 1973-75, demand did not riseas rapidly as expected. Demand has fallenfar below the predictions and, as a result,many utilities had far more capacity avail-able than they could profitably employ. Thedisastrous effect of inaccurate predictionson the growth of electrical demand madeduring this period was reflected in thedecline in load factors and a rise in grosspeak margins (see figure IV-4). Both featuresindicate a serious underutilization of in-stalled capacity, Utility commissions in-creased rates to permit these companies toremain solvent (although in many cases theut i l i t ies argued that these rul ings st i l lpreclude profitable operations).

Load factors for small systems (defined tobe the peak output potential of the gener-ating system divided by the annual averageoutput) vary widely because of the erraticnature of onsite energy demands. Whilemany large industries operate at virtuallyfull capacity throughout the day (and thushave relatively constant electric and ther-mal demands), small industrial plants, com-mercial buildings, and residences can havevery uneven demands.

The irregular demands lead to relativelypoor utilization of the generating equip-ment. The problem usually diminishes as thesize of the total demand increases sincelarge loads typically are an aggregation of anumber of small loads. Unless the smallloads all change in unison, peak individualdemands will not all occur at the same timeand the ratio of peak to average demand

Ch. IV Onsite E/ectric-Power Generation ● 125

Figure lV-4.— Historic and Projected Load Factors of Utility Generating Facilities

L

I

Gross peak margin = ( installed capacity) - (peak demand)

I(peak demand)

IIII

SOURCE 26th Annual Electr ical Industry Forecast, ’ E/eclr/cal

wilI be less (This can be seen by noticingthat the load factors shown in table IV-3 in-crease with the size of the buiIdings served. )Since the improvement is greatest when thelargest possible number of loads are con-nected, utility load factors are almost al-

Wor/d, September 15, 1975, p 46

WASTE-HEAT

One major advantage of onsite genera-tion of electric power is that an opportunityis provided for making use of thermaI ener-gy usually wasted by central electric-gener-

ways higher than onsite load factors, It is im-portant to notice that this advantage is at-tributable to the size of the grid intercon-nection and not to the size of individualgenerating facilities.

UTILIZATION

ating facilities. From 60 to 80 percent of theenergy consumed by conventional gener-ating equipment is lost into the atmosphereor nearby bodies of water, causing thermal


22 2267 67

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26.5

25.5

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NOTE: The characteristics assumed for the buildings and heating and coolingequipment used by the buildings are described in detail tn chapter IV of volume ILIn computing the ioad factors for industry, it was assumed that the facilityoperated at 70 percent of peek capacity during active shifts and tttat the Dlant wasshut entirely for 2 weeks d“uring the year.

pollution in areas close to these plants. Ap-proximately 17 percent of the energy con-sumed in the United States in 1972 waswasted in this way and estimates show thatthis fraction will rise to 25 percent by 1985,when the United States is expected to bemore heaviIy dependent on electricity. 7

At the same time, enormous amounts ofsteam are generated for space conditioningand industrial processes. These applicationsare inefficient uses of the fuel consumed

7 ERDA-48, Vol 1, appendix B

because the end requirement is generally fora much lower grade of heat than the fuel uti-lized is capable of providing. The heat ex-h a u s t e d b y e Iectric-generation primemovers can be used for many commercialand industrial applications to produce anoverall efficiency of energy use in the rangeof 70 to 85 percent. The implementation ofthis technology could both reduce demandsfor fuel and the demand for new capital inthe electric utility industry. (Both com-modities are in short supply. ) It has beenestimated that if large-scale industries gen-

Ch. IV Onsite E/ectric-Power Generation . 127

erated al I of their own electric-power re-quirements by 1985 and served their proc-ess-heat requirements with waste heat,where possible, the Nation would save 1,45Quads* per year 8

Systems which make use of this “wasteheat” are conventionally called “total ener-gy” or ‘‘ cogeneration” systems. A typicalsystem is shown in figure IV-5. Equipmentfor total energy plants has been availablefor many years, but use of such systems hasdeclined In 1972, only about 0.2 to O 3 per-cent of the U. S electric- generating capacitymade use of waste heat. g This decline hasresulted both from an overalI reduction inonsite power and from the fact that electricsales have been more profitable than steamsaIes 10 The use of large, remotely located,electric-generating plants has, of course,made thermal distribution unfeasible inmany cases. Total energy systems are stillwidely used in Europe and the Soviet Union.

There is an enormous demand for thermalenergy in forms which are available fromtotal-energy systems In 1973, for example,nearly 14 percent of the energy consumed i nthe United States went into space heating,and 23 percent into industrial processheat. 11

Analysis of the economic attractivenessof both solar and nonsolar total-energysystems depends on whether the overaII costsavings (e.g. , the amount by which the sav-ings i n electricity or fossil-fuel costs exceedthe cost of owning and operating heat-recovery units) will result in an acceptable

“ Energy I ndu~trlal Center Studv, op cit , pp 6, 7

‘ P R A( henb~ck and J B Cobel, $~te ArM/ysIs forthe Application of Total Energy .$}~tern~ to HousingDPLe)opmentj, pre>ented dt the 7th I nter$oclety E ner-gy Convention E nglneerlng conference, San EIIego,

~al[t , Sept 25-29, 1972, p 5

‘“ Energy Industrial Center Study, op clt , p 21

) 1 M H Ross and R H Wllllarns, A $se~~~ng the Po-tential for Fuel Conservation, The I n$tltute for Publ ICPo] I( y Alternatives, Sta te Unlverjlty of New York ,Al bdny, N Y , July 1, 1975, p 19

rate of return to an investor, I n both cases,the issue depends crucially on the balancebetween thermal and electrical loads.

Total energy is not commonly used inresidential applications because of the largedaily and seasonal variation in thermalloads, In spring and fall, for example, thereis a far smaller demand for thermal energythan during the winter and summer months.In the high-rise apartment studied in thisassessment, for example, the ratio betweenenergy required for electr ici ty and theenergy required for heating and hot watervaried from 0.21 in January, when theheating load was maximum, to 1.5 duringthe spring and fall, when the primary re-quirement for thermal energy was hot water.Only about 5 percent of the 550 total energyplants operating in the United States in 1972were installed in residences. The Depart-ment of Housing and Urban Development(HUD) is, however, conducting a large fieldexperiment (MI US) with a total energysystem serving a mixture of residential struc-tures and commercial facilities.

Total energy or cogeneration systems areIikely to be relatively more attractive in siteswhere there is a consistent demand for heat.Buildings such as laundries, hospitals, andthe food, paper, refining, and chemical in-dustries are prime candidates. Most of thelarge factories can be expected to operateon a three-shift schedule, permitting max-imum utilization of the generating facilities,Many of the industries described use elec-tricity in ratios amenable to cogenerationand can use steam at temperatures whichcan be conveniently supplied with cogenera -tion systems. The precise demands ofbuildings and industries of various types arediscussed in greater detail in the section on“model building and industrial loads. ”

Some care should be exercised in usin g

the ratios which are developed for contem-porary buildings and industries, since thet h e r m a l a n d e l e c t r i c a l d e m a n d s c o u l dchange dramaticalIy as the resuIt of conser-vation techniques and new technologies.Widespread use of electric automobiles, for


Figure lV-5.—Components of a District Heating System in Sweden

Fossil boileror

solar heater2 Waste heat mains I

4 Units in individual homes,

(4) Consumer serviceunit for private house

(5) Large substationin a school

SOURCES Figures (1) (2), (4). and (5) from “Dlstr{cl Heating” Teknlska Verken I Llnkop[ng AB [Sweden) Figure (3) from Margen, P H (Manager EnergyTechnology Dlvislon, AB Atomenergl, Studsvlk R&D center, Sweden), ‘“The Future Trend for Dlstr{ct Heating, ” page 68, presenteci at theSwedish Symposium on Combined Dlstrlct Heating and Power Generation Feb 2528, 1974


example, wouId increase the ratio of electric and heat recovery units could reduce ther-

to thermal demand in residential buildings, mal demands,

OPERATING COSTS

C o n c e r n s a b o u t o p e r a t i n g c o s t s h a v ebeen a major barrier to onsite equipment inthe past, and badly designed systems havebeen plagued by expensive maintenance.Reliable data about the cost of operatingsmalI systems designed for continuous-pow-er output are extremely difficult to obtainbecause of the smalI number of installationsin most of this size range. A summary of in-formation from a variety of sources is shownin table IV-4.

The greatest variation in the data occursin the small size ranges, where some of thenumbers are based on estimates made bydesigners, some represent attempts to oper-ate systems designed for “backup power”operation in a continuous operation mode,and some are averages of widely varyingoperating experience. For example, the mili-tary standard for generator sets shows anengine Iife of 2,500 hours for 15 kW unitsand 4,000 hours for 100 to 200 kW units. 2

Daimler-Benz reports up to 20,000 hours ofengine life for its 10 kW engine.13 Operatingcost wilI depend strongly on the installation,the skill of the operators, and the systemdesign. In most cases, it will be extremelyd i f f i cu l t t o p red i c t ope ra t i ng cos t s un t i lsome experience has been obtained with theparticular application.

There is considerable variation in oper-ating costs of larger powerplants (see figureIV-6), and it is difficult to choose a singlenumber for comparative purposes. This isparticularly true for nuclear plants, whereexperiences vary greatly and statistics onlong-term operating costs are cliff i cult to ob-tain. It is interesting to note, however, thatover half of the operating expenses of coal-fired plants are due to the cost of operatingthe boilers. Presumably, these costs wouldbe eliminated in a solar system that did notrely on fossil backup, although the cost ofmaintaining the collectors would probablycompensate for this savings.

RELIABILITY

Concerns about reliability have been amajor impediment to onsite power genera-tion. Onsite installations can, in principle,be made as reliable as utility power—ormore reliable if enough redundant units arepurchased or great care is taken in designand manufacture. In fact, redundant onsitepower systems are occasionalIy used to pro-vide realiable power when utility power is

“ Mllltary Standard, E Iectrlc Power Engine Cener-ator set, Family Characterlstlc Data Sheets, M/l- Std-633 A(MO), Oct 8, 1965 (Data provided OTA by theAerospace Corporation )

not sufficiently reliable. Achieving highreliability with redundancy is, of course, ex-pensive (see table IV-5). It is possible,however, that a simple, mass-produced heatengine could be designed to operate withthe reliability of a household refrigerator(which is a simple heat engine operating i nreverse). Designers working on a variety ofdifferent onsite systems feel that this is not

‘ ‘ Mercede~-Benz Diesel and Gas Turbine Catalog,Vo l 36 (Data provided to OTA by the Aero$pace C o r -

poration )

130 ● Solar Technology to Todav’$ Energy Needs

Table IV-4. —Operating Costs of Various Systems

operating andmaintenance

Design type cost (c/kWh) reference

A. Small systems (5-50 kW)—gas turbine 1.25 1— diesel engine 0.4-2.4 2— Stirling engine 0.74 3—free-piston Ericsson 0.10 4— air-conditioners 2-4 5

B. Intermediate systems (50-1,000 kWe)—gas turbine 0.1-0.3 6—gas turbine 0.25-0.4 7—diesel engine 0.23 8—diesel engine 0.27-0.55 9—diesel engine 0.4 10

— gas engine 0.2-0.4 11

C. Larger systems (1 MW and larger)— large diesel plants 0.33 14— new coal-fired turbines 0.12 13

— new nuclear plants 0.3 13

Notes for Table IV-4.

1. International Harvester, Sofar Oivrsion, private communication, Marti 1976.

2. wm2,~-10.~hwm&~w~auis (astimatebasedcm combination ofdatafrom Allis Chalmers, Oatroit Oiesel,and Dalmler-Benz) assummg 30 percent of mlt!al cost ($400/kW) IS revested m each overhaul,

3. A% Program Review; ‘Qwrtparafive Assessment of Orbital and Terrestrial Central Power Systems”’ (Interim report), March1976, p. 31. (Assumes a 15.year hfe and 1 man-how every 3 months.)

4. Est!mate by Glen Benson of Energy Research and Generation Corp., private communlcatlon, November 1976.(Assumes 1 mart-hour per year for,mamtenance.)

5. wonmaintenancecontractson2-tonairconditionerswf'tich areassumecf tooperateatpeak load--2 .000hoursperyear.Su&I contracts are sofd by Seam for $60-$120/year (depending on the age of the system). It is assumed that an aw-condi!tonlng cycle, operating m reverse as a heat engine, IS 17.percent efflctent,

6. MIUS T~nofogy Evaluation: “Prime Movers ORNL-HUO-MIIJS.1 l,”’ April 1974, p. 14.

7. Internahonal Harvester, Solar DivisIort, private commumcatlon, May 1976.

8. LXesel Engmeermg Handbook, 1966( inflated by 6 percent for 10 years)

9. “MIUS Prime Movers,” OP. CII., p. 21.

IO, Assumes 30 percent of capital cost (assumed to be $300/kW) IS Invested for each 30,000 hours of operation.

Il. “MlUS,” Op. Clf., P. 14.

12. ‘<Statistics d Privately owned Electric IJtilifies in the United States,” 1974, FPC, pp. 36, 37, and 21.

13. VOth Annual Sfeam Station Cost Survey,” E/ectr/ca/ Worfd, November 15, 1977, p. 46.

14. Morgan, Dean T. and Jerry P. Daws, “High Efficiency Decentralized Electrical Power Generation Utlllzlng DteselEngines Coupled with Organic Working Fluld Ranklne-Cycle Engines Operahng on Diesel Reject Heat,” 1974,pages 5-45, (Assuming a 60 percent load factor.)

Figure IV-6. —Annual Operating Costs Versus Equivalent Full-PowerHours of Operation for Baseload Plants

(6) insurance(Fuel cost excluded)

●

●

Table IV-5. — Engine Requirements for SystemsDesigned to Provide Reliability

Equivalent to Utility Power Reliability

(Approximately 5 hours of outage per year, includingfailures in generating, transmission, and distribution

equipment)

Fraction ofNumber of peak load which Reliabilityengines in can be met required of Relative

system by each engine each engine cost’

132 Ž Solar Technology to Today’s Energy Needs

ample, have a “mean time between failures”of about 500 hours, 4 Diesels and gas tur-bines, in the range of 50 kW to 1 MWe, how-ever, average 1.2 years between failures.15 16

Gas turbines typically operate 20,000 hours(2.3 years) without overhauls, even in in-stalIations where they must operate unat-tended, and 40,000 hours between failureshave been experienced on some systems. ”prototype Stirling engines have operated10,000 hours without failures in bench test-i n g .18 Free piston Ericsson-cycle devices, ifdesigned properly, should be able to operatewith very high reliability because of their in-herent simplicity, the small number of mov-ing parts, and the fact that no seals aroundrotating shafts are required. The reliabilityof diesel equipment depends on whether thesystem has been designed for continuous

‘ 4 M/US Techno logy .E valuation: Prime Mo~ers,OR NL-HUD-MIUS-ll, April 1974, pp 57-60

“ Ibid

“ M Gamze “A Critical Look at Total EnergySystems and Equipment, ” Proceedings, the 7th AnnualI ECEC C o n f e r e n c e , San D iego , Callf , Sept 2 5 - 2 9 ,1972, p 1266

17 Robin Mac Kay, “Generat ing Power at High Eftl-clency, ” Power, June 1975, p. 87

‘“ R C Ullrich (North American Philips Corpora-tion), private communlcatlon, October 1976

operation and on the revolutions-per-minute(r/rein) of the device. Low r/rein systemswhich are designed for continuous opera-tion can typically require one relatively in-expensive overhaul, costing about 10 per-cent of the initial investment each 10,000operating hours, and a major overhaul cost-ing 20 percent of the investment each 20,000operating hours. Almost all reliable datadeals with systems larger than 50 to 200 kWeand Iittle data exists for very smalI systems.

Standards for reliability cannot be meas-ured in any systematic way. Requirementswill differ from customer to customer. Someindustries, for example, would face cata-strophic losses if they lost power for an ex-tended period (say several hours), whileresidential customers might not be willing topay a premium for extremely high reliability.One of the disadvantages of providingpower from a centralized utility grid is thatall customers must pay for a high systemreliability whether they need it or not. On-site generation would permit much greaterflexibility in this regard.

Utilities currently try to maintain enoughcapacity to ensure that failure of the gener-ating plant will curtail power for no more


than 2.4 hours per year. (This is a typicalworking figure, but standards vary. SouthernCalifornia Edison Company, for example,uses a standard of 1 hour in 20 years )19 I thas been argued, however, that this standardfor generating reliability is too high, andthat the last few hundredths of a percent ofreliabiIity are enormously expensive, 20 par-ticularly since the transmission and distribu-tion system is usually less reliable than thegenerating plant The effect may not applyto all utilities, however, and optimal expan-sion plans may welI result in maintainingvery high reliabilities in some instances.

Analysis of the requirements of differenttypes of customers in this regard is almostnonexistent It is difficuIt to anticipate howmuch different customers wouId be wiIlingto pay for reliability If they were given achoice The costs of providing high-relia-bility service could be reduced, for example,if the customers were wi I I Ing to accept low-er reliabilities during predictable periods —such as during peak-demand hours — or dur-ing maintenance cycles

The requ i rement fo r p rov id ing h ighreliabiIity with onsite equipment can be re-laxed considerably if the utility grid can beused to provide complete ‘‘backup’ whenfailures occur or when systems are disassem-bled for routine maintenance The impact ofproviding this backup power on utility costsis a complex issue and cannot be treated indetail in this paper

It is clear, however, that a small number

of customers requiring backup would nothave a major impact on utility operation,and that a large number of customers withsmall backup requirements wouId not posea problem since failures would be distrib-uted at random, Some correlat ion withpeak-demand periods could be expected(Solar outages due to variations in sunlightwouId, of course, be correlated, but failureof equipment should be similar to othertypes of onsite failures, ) A small number ofvery large users wouId, however, pose aserious problem if they depended on util-ities for complete backup. I n such cases,provision would have to be made for drasticreduction of onsite demands whenever theonsite generating equipment failed. Thepresence of electric storage, either onsite orin the utility grid, could do much to alleviatethe problems of unanticipated equipmentfailure

I t seems, therefore, that onsite equipmentcan provide any desired level of reliability Ifa premium is paid, if the utility is used toprovide backup power, or if the optimisticexpectations of system designers are real-ized, Existing equipment can provide a veryhigh level of reliability without redundancy,although the exacting standards of utilitypower cannot be matched, The seriousnessof this f a i I u re wou Id have to be judged o n acase-by-case basis, Unfortunately, there islittle operational experience for most prom-ising onsite equipment, and basic long-termconcerns are unlikely to be finalIy resolvedbefore an adequate base of experience withthese systems has been developed


variety of local and nationally based groupshave legal standing orders to contest sitingplants and rulings.

Most small plants would be required to gothrough many of the procedural steps re-quired of the larger plants, and less effortmay be required to justify the installation ofa single large plant in a remote area than tojustify several small facilities in areas wherelocal protest would be Iikely to develop. Onthe other hand, the onsite generating equip-ment might face far fewer objections thanthe large sites for a variety of reasons:

● Each plant would be relatively small,and the impact on the local environ-ment would usualIy be sIight.

● I n the case of cogenerat ion and totalenergy systems, energy would be re-quired onsite for heating and industrialapplications, even if no electricity weregenerated onsite, and thus the incre-

mental impact of equipment and emis-sions traceable to electric generationwou Id be small,

It could be plausibly argued, in mostcases, that the impacts of alternativesto onsite generating facilities would bemore severe than those imposed by theon site design.

Onsite facilities would not require amajor dislocation of populations, noconstruction camps would be required,no new roads or new waterways wouldbe necessary, etc.

Large solar-electric systems, which re-quire large amounts of land in a single areafor collectors, could also face serious sitingproblems. Smaller onsite solar systems,which could be integrated into the buildingsor immediate region being served with solarenergy, wouId undoubtedly face far fewerobjections,

MISCELLANEOUS OPERATING PROBLEMS

A major constraint to onsite power gener-ation has been the reluctance of owners andmanagers of companies other than utiIitiesto accept the burden of owning and oper-ating complex electrical generating facil-ities; there has been great apprehensionabout maintenance costs, reliabilities, per-sonnel requirements, and other technicaluncertainties.

Operators of most commercially avail-able generating equipment require extensivetraining, and in many jurisdictions, localcodes set specific standards. For example,the District of Columbia requires operatorsof high-pressure steam systems, capable ofgenerating more than 55 kW of thermalpower (equivalent to about 15 kW of elec-tric power) to hold a “second-class steamengineer’s Iicense. ” Obtaining such a licenserequires 3 years of experience with steam-plants having pressures greater than 15 psiand passing a special examination.21

T h u s , q u a l i f i e d opera tors are diff icult to

find and they command high salaries. Sev-eral steam-system owners have indicatedfear about their vulnerability to losing achief engineer with unique experience.

Equipment has also been a problem; themarket for onsite equipment is so small thatlittle new design work has been done, Ex-isting onsite generating instalIations arenearly all “one-of-a-kind” designs; they areoften installed by engineers who do nothave much experience in the area, and theyfrequently use equipment in ways not origi-nally contemplated by the manufacturer. Asa result, performance has often been disap-point ing.22

21 “Operation and Maintenance of Boilers andE nglnes and Licensing of Steam E nglneers, ” District ofCo/urnbIa Register, Washington, D C

“ Maur ice G Gamze, “A Critical Look at TotalEnergy Systems and Equipment, ” Proceedings, the i’thA n n u a l IECEC Con fe rence , San D iego , Callf , Sept25-29, 1972, p 1266

devices eliminates one of the major im-pediments to conventional onsite e q u i p -ment — their use of relatively expensive Iiq-uid and gaseous fuels Table IV-1 indicatedthat fuel costs dominate the cost of pro-viding power from smalI generating equip-ment even at current fuel prices I n m a n ycases, however, it may be attractive to try toprovide backup for a solar-powered facilityby burning a fuel during periods when solarenergy sources are not available. It may bepossible to develop boilers for small devicescompatible with coal, waste products, andother “biomass” fuels The development offluidized-bed boilers of various sizes may beparticularly attractive for such an applica-tion. The development of such systemswould, of course, also increase the attrac-tiveness of onsite generating devices oper-ating entirely from energy sources otherthan direct solar energy

Figure IV-7. —Space Requirements of Typical Combined-Cycle Plants

onsite electric-power generation - princeton

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