EVALUATION OF COST-EFFECTIVE DISTRIBUTED GENERATION OPTIONS FOR FOOD PROCESSING CENTERS IN THE NORTHWEST U.S. John Thornton Northwest Food Processors Association

Mike Hoffman Pacific Northwest National Laboratory

Agenda

• Context/Background – NWFPA Vision & Goal – Roadmap

• Partners • BPA TI Program • EE Technology Roadmaps • Goals of Project • Selection Process • Findings

Why Focus on Energy? • Vital to core business; directly impacts the

bottom-line • Energy prices are increasing or are volatile • Can be the single-largest uncontrolled

expense • Often accounts for over 90% of GHG emissions • Customers want “Green” and “Sustainable” • Utility incentives and other funding available

NWFPA Energy Vision – January 2009

Enhanced productivity and competitiveness through a sustainable energy efficiency plan

NWFPA Energy Goal – January 2009

Reduce member-wide energy intensity by 25% in 10 years and by 50% in 20 years

Key Points About the Goal • It is industry-wide not plant-specific • It is voluntary • It is a target • It is energy intensity not absolute energy

reductions • It is based on a best guesstimate • It was adopted by the NWFPA Board of

Directors in January 2009

Calculating Energy Intensity Standard Units of Measure:

12/2/2010

Energy Consumed = BTUs • 1 kWh = 3,412 BTUs • 1 Natural gas therm = 100,000 BTUs • 1 Gallon propane = 91,600 BTUs

Production Volume = Pounds • Plants determine conversion rate

BTUs Pound

(BTU = British Thermal Unit)

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Energy Intensity Over the Years

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100% 100% 97% 100% 105% 107% 91%

2008 2007 2006 2009 2010 2011 2012

3% per year reduction in sector-wide Energy Intensity indexed to each company’s 2009 base year.

Data from NWFPA Energy Intensity Baseline / Analysis by CleanFuture

On-track / ahead of 25% in 10 year goal!

Average Intensity:

2029 Savings Potential

2019 Potential—Areas of Action • (12%) Efficiency Improvements:

– Enhanced maintenance and tuning of equipment – Equipment upgrades – Process/equipment controls – New technologies

• (8%) Energy Management: – Goal setting and organizational alignment – Energy policies and plans – Energy champion or teams – Energy monitoring and management system

2019 Potential—Areas of Action

• (3%) Process Improvements – Optimization of production and energy (lean, six-sigma,

EAM) – Improved production technologies – Packaging, storage improvements

• (2%) Distributed Generation – Biomass—food and dairy residues / byproducts – Renewables – Waste heat recovery – CHP

Memorandum of Understanding

• MOU February 2009 • Pledge of support and

commitment to Goal • Signatories:

– NWFPA – US Department of

Energy – Bonneville Power

Administration – National Energy Labs

3rd Step =Partner Support

Utilities

Trade Allies

Food Processors

Government

Research & Educational Institutions

Partners

Bonneville Power Administration Technology Innovation Program • BPA’s research agenda is guided by a process that

identifies the agency’s immediate and future capability gaps and pinpoints technologies with the potential to resolve those business challenges.

• This process includes the development of technology roadmaps, which provide BPA a framework to help plan, coordinate and forecast technology developments so the agency can focus its R&D investments in areas that deliver the most value to the agency and its stakeholders

Technology Roadmap: Purpose

Roadmap for the Food Industry Two industrial-sector product and service areas: • Industrial Food Processing: August 18, 2011

– Heating – Cooling – Mechanical – Infrastructure

• Combined Heat and Power: December 15, 2011

– Production – Resources – Delivery

Project Objectives 1. Identify strategies for increasing the industrial energy efficiency and

energy cost savings of NWFPA plants through the deployment of novel combinations and designs of variable-output CCHP DG, and energy storage.

2. Identify and quantify non-wires solutions to benefit the management of BPA’s grid by leveraging DG and storage at NWFPA plants.

These objectives will be pursued through modeling, simulation and analysis of the plant’s energy demand, economic and environmental benefits and the performance of CCHP DG and energy storage systems.

CHP Definition

• Combined heat and power (CHP) systems, also known as cogeneration, generate electricity and useful thermal energy in a single, integrated system.

• CHP is not a technology, but an approach to applying technologies.

• Heat that is normally wasted in conventional power generation is recovered as useful energy, which avoids the losses that would otherwise be incurred from separate generation of heat and power.

• While the conventional method of producing usable heat and power separately has a typical combined efficiency of 45 percent, CHP systems can operate at levels as high as 80 percent

CCHP Definition

• Combined cooling, heat and power (CCHP) refers to the simultaneous generation of electricity and useful heating and cooling from the combustion of a fuel or a solar heat collector.

• A plant producing electricity, heat and cold is called a tri-generation plant

BPA Technology Innovation Project:

Energy and Cost Optimized Technology Options to Meet Energy Needs of Northwest

Food Processors

Combined Cooling Heating and Power (CCHP) considered

Mike Hoffman - PNNL

John Thornton - NWFPA

14 Jan 2014 100th Annual NW Food Processors Expo and Conference – Portland Oregon

PNNL-SA-100327

Project Driver, History, Description • Feb 2009 - BPA, DOE, Northwest food processors Association signed

MOU to reduce energy use • MOU: To reduce industry-wide energy intensity (energy use per unit of output) by

25% in 10 years and through innovation, new technologies, and new resources, achieve a total of 50% in 20 years.

BPA 2012 Technology Roadmap for Combined Heating and Power (CHP) • Use Combined Cooling Heating and Power (CCHP) for multiple benefits e.g.,

demand response, extending Tier 1 power supply, transmission and distribution congestion reduction, reducing total energy use and reducing emissions.

BPA TI Goal • Identify strategies for increasing the industrial energy efficiency and energy cost

savings of NWFPA plants through the deployment of novel combinations and designs of variable-output CCHP DG, and energy storage.

• Identify and quantify non-wires solutions to benefit the management of BPA’s grid by leveraging DG and storage at NWFPA plants.

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Energy Benefit of CCHP – Increase Efficiency

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CCHP or tri-generation

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BPA CHP Road Map

BPA Food Processing Road Map

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Identify Grid benefits Potential Non-Wires impact (transmission decongestion)

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Project Synopsis

Major planned deliverables: Final report will include simplified spreadsheet-based model that

includes sizing of equipment, environmental and economic factors

Document energy efficiency using combinations of CHP and CCHP DG and energy storage.

Cut Plane Map – DG/CCHP – Identify drivers for implementation

Issues/problems/challenges: Challenge to participation and get high resolution/compilation of data

without money on the line.

NDA requirements process.

Appropriate Technology Availability for CHP integration (dairy plant example - absorption chilling in the 38 to 32°F range versus 44°F and above from conventional absorption chilling).

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Accomplishments Survey of 140+ NWFPA members interested in participation was collected and 40 sites were down selected

2011 annual energy use (including monthly energy use) for electricity and gas was obtained for 67 sites (out of 140+ sites). Production data was also obtained. Sites were down selected based on the amount of energy used and the load shape (found to be in 3 categories – seasonal, constant low, and constant high with reduced energy use in July)

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Monthly Percent of Annual Electric Use for “24/7” Plants

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Monthly Percent of Annual Electric Use for “Peaking” Plants

Plant load curves

Plant load curves

Accomplishments (Cont’d)

Gathered & evaluated detailed energy use data for 20 sites with down select to 3 sites for study (Stage gate 1& 2)

Plants with high seasonal energy use were rejected as these are not good candidates for CHP. Plants that receive steam or hot water from a utility provider were rejected because the payback from installing a CHP system will not be significant. Final down selection to 3 sites was based on interest from the site and availability of energy use data.

Gathering & evaluating detailed energy use data for 3 sites for detailed modeling, such as:

Electrical Energy Use: Refrigeration (Compressors, Condensers, Evaporators); Water Chilling; Processing Equipment; Boilers & Feedwater Pump; Compressed Air; Hydraulic Pumps; Wastewater: Irrigation & Aeration; Lighting; Misc. (Offices, HVAC) Thermal Energy Use: Process steam use; Blanching; Canning; Defrost Water Heating; Sanitation Water Heating; Space Heating; Misc. Plant equipment type / vintage / efficiency. Utility Information.

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Site data - potential 1.54 MW CCHP implementation

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Accomplishments

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CCHP Electrical Output

Plant Electrical Demand

CCHP Electrical Output Not Utilized Electrical Demand Purchased from Utility

Plant Thermal Demand Met by CCHP Heat Extraction

Plant Thermal Demand Met by Gas Purchased from Utility

Spreadsheet Economics

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Barriers to overcome:

Capital cost sensitivity Education of BPA customer utilities and end-users as to the benefits and cost effectiveness of these technologies Maintenance complexity of high tech (Fuel Cell, turbine) Matching CCHP energy output with the plant demand Integrating CCHP supply with the plant system configuration (e.g., how to integrate absorption chiller with ammonia chilling system – found potential solution!) Limited 3rd party expertise/resources for CCHP (http://www1.eere.energy.gov/manufacturing/distributedenergy/)

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Expected Benefits Quantifiable and non-quantifiable potential project benefits: Spread-sheet based models provide the best modeling approach– no suitable

existing modeling engine currently available for this purpose, this is because: Spreadsheet-based analysis makes use of actual measured time series energy use

data available from the plant).

EnergyPlus models are more useful to study thermal behavior and energy use of buildings when influenced by factors such as weather.

Steady load plants with high electric and low gas rates offer best economic performance, because:

The prime mover in CHP uses gas to produce electricity on site and the exhaust heat as well as cooling jacket water heat is recovered to generate steam, hot water and even chilling for use at the plant.

Power quality issues (even sub cycle) could drive energy storage and be economic.

Most economic CCHP implementation option: end of life equipment replacement or retrofits BPA customer’s loads recover and drive Tier 2 rate risk or have the need to reduce demand charges coincident with BPA Peak (end use vs distribution utility vs BPA demand peak).

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Expected Benefits (Cont’d)

Reduces energy costs The energy savings of replacing a traditional system (i.e., a system using boiler based steam and grid-based electricity) with a standard gas turbine-based CHP unit is estimated at 20%-30% (Galitsky et al., 2005).

Reduces risk of electric grid disruptions and enhances energy reliability

Example of Dairy facility costing $18,000 for 3 hour outage (momentary interruption, solution could be energy storage).

Provides stability in the face of uncertain / fluctuating electricity prices Onsite generation reduces the need to purchase electricity from the grid during times of peak charge.

Peak shaving – demand response (future implementation)

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Expected Benefits (Cont’d)

Reduces energy costs and line losses (7% more efficient) Reduces environmental impacts and health effects associated with air pollution from centralized generation (PNW mix includes coal from Montana & Wyoming) Can reduces biomass disposal issues for food processors (potato peels)

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Technology Transfer/Application to BPA

Project’s technology transfer/application plan as appropriate to the project's technology readiness level: conventional CCHP tech is commercial and easily implemented, but will require load growth or incentives for implementation. Novel technology development could drive implementation – absorption chillers that can chill water to 33F (we found an option) Ammonia as a refrigerant has only one early commercial technology designed for CCHP use, alternatives refrigerants are not as efficient

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Q&A

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Mike Hoffman, Senior Energy Analyst – PNNL mike.hoffman@pnnl.gov 503 417-7560 John Thornton, NWFPA Consultant jthornton@nwfpa.org 503-327-2214

Resources

• Northwest CHP Technical Assistance Partnership

• Oregon Department of Energy

Market Opportunity Analysis. Supporting analyses of CHP market opportunities in diverse markets including industrial, federal, institutional, and commercial sectors

Education and Outreach. Providing information on the energy and non-energy benefits and applications of CHP to state and local policy makers, regulators, end users, trade associations, and others.

Technical Assistance. Providing technical assistance to end-users and stakeholders to help them consider CHP, waste heat to power, and/or district energy with CHP in their facility and to help them through the development process from initial CHP screening to installation.

CHP Technical Assistance Partnerships Key Activities

http://eere.energy.gov/manufacturing/distributedenergy/chptaps.html

President’s Executive Order 13624: 40GW of new CHP by 2020

CHP TAPs are critical components of achieving the goal:

◦ Regional CHP experts

◦ Provide fact-based, un-biased information on CHP

• Technologies • Project development • Project financing • Local electric and natural gas interfaces • State best practice policies

◦ Vendor, fuel, and technology neutral

http://eere.energy.gov/manufacturing/distributedenergy/chptaps.html

Screening and Preliminary

Analysis Feasibility Analysis Investment Grade

Analysis

Procurement, Operations,

Maintenance, Commissioning

Uses available site information. Estimate: savings, Installation costs, simple paybacks, equipment sizing and type.

Quick screening questions with spreadsheet payback calculator.

3rd Party review of Engineering Analysis. Review equipment sizing and choices.

Review specifications and bids, Limited operational analysis

CHP TAP Technical Development Assistance

Oregon Department of Energy

• CHP Program – Supporting CHP since 1980 (tax credits) – Current Activity

• Energy Incentives Program (EIP) • Statewide Resource Analysis • CHP barrier analysis • Utility program development • Sector action plans (food processors, forest products)

Oregon Department of Energy

• Energy Incentive Program (EIP) – EIP tax credit allocation is divided by project type – Eligible for conservation credit of 35% of eligible

project cost • CHP projects

– One solicitation has been released and awarded – Four projects supported - two wastewater, one industrial

plant, and one biofuel plant – A 2014 solicitation is planned, schedule and detail pending

Oregon Department of Energy

• CHP Program contacts – Matt Krumenauer – 503-378-6043 – Marty Stipe – 503-378-4926

• Energy Incentive Program (EIP) – Maureen Bock – 503-934-4004 web site - http://www.oregon.gov/energy/BUSINESS/Incentives/Pages/EIP-Conservation.aspx

Questions

Contacts

John Thornton, NWFPA Consultant jthornton@nwfpa.org 503-327-2214 Pam Barrow, NWFPA Energy Director pbarrow@nwfpa.org 503-327-2205 Website: http://www.nwfpa.org