Energy Policy amp Economics Paul Derwin
Course Code Year DT 018 year 1 Module Energy Policy amp EconomicsLecturer Mr Martan Barrett
Student Name Paul DerwinStudent Number D07114349Assignment No 1Submission Date 08122011Word Count 1833
Department Stamp
Where Necessary
Energy Policy amp Economics Paul Derwin
Declaration
I hereby certify that the material which is submitted in this
assignmentproject is entirely my own work and has not been submitted for
any academic assessment other than as part fulfillment of the assessment
procedures for the program Bachelor of Science in Electrical Services and
Energy Management (BSc (Hons)) (DT 018) (United Nations Framework
Convention 2011)
Signature of studenthelliphelliphelliphelliphelliphelliphelliphellip
Datehelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
D07114349 Pageii
Energy Policy amp Economics Paul Derwin
Table of Contents
Declaration ii
Table of Contents iii
List of Figures amp Tables iv
10 Introduction 1
11 Energy Policies 1
12 Policy Structure 2
National Factors 3
Policy objectives amp strategy 3
Policy Outcomes 3
Assessment of outcome 3
13 New Technologies 4
14 Feasibility Evaluation 4
15 Site Data 5
Electrical Load requirement5
Heating Load requirement 5
Oil Prices 6
Monthly running costs for CHP 6
Bord Gais Gas Rates 6
16 CO2 Emissions Reductions 8
17 Comparative Analysis 9
CHP 9
18 Conventional Electricity Generation (Peat or Oil Powered Stations)11
Bibliographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip12
D07114349 Page
Energy Policy amp Economics Paul Derwin
List of Figures amp Tables
Figure 1 Policy Structure 2
Table 1 Bord Gais Electricity Rates 2008 5
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill 5
Table 3 Pay Back Calculation (Euro) 7
Table 4 CHP Greenhouse Gas Impact (SEI) 8
Figure 2 Assessment of NVP of the Project 8
Figure 3 CHP Operation 10
Figure 4 CHP vs Grid Electricity and Boiler Generation 11
D07114349 Page
Energy Policy amp Economics Paul Derwin
10 Introduction
The main purpose of this report is to develop an energy policy and an
economic energy supply strategy for a manufacturing company A
comparative analysis of the present and future technologies will be carried out
and a financial appraisal Other aimrsquos of this assignment is to find a suitable
replacement for electricity being purchased currently by the ESB and the
heating supplied through oil
11 Energy Policies
The Kyoto Protocol requires the significant reduction in Irish emissions of
GHGrsquos or p (PB Power for The Royal Academy of Engineering nd)ay hefty
fines Under the Kyoto Protocol industrialized countries are required to
reduce the emissions of six greenhouse gases (CO2 which is the most
important one methane nitrous oxide hydro fluorocarbons per fluorocarbons
and sulphur hexafluoride) on average by 52 below the 1990 levels during
the first ldquocommitment periodrdquo from 2008 to 2012 A five-year commitment
period was chosen rather than a single target year to smooth out annual
fluctuations in emissions due to uncontrollable factors such as weather
(United Nations Framework Convention 2011)
Key measures published by the National Climate Change Strategy 2007ndash
2012 include production of electricity from renewable sources to increase to
15 by 2010 and 33 by 2020 Biomass to contribute up to 30 of energy
input at peat stations by 2015 and support for Combined Heat and Power
projects Measures for industrial Commercial and Services include building
regulations and building energy rating energy agreements programme bio
heat and CHP programmes and support for eco-efficient technology and
practices (Department of the Environment Heritage and Local Government
2007)
The EU Emissions Trading Scheme came into operation in January 2005 and
under this scheme the C02 emissions of 12000 installations across the EU are
controlled on a cap and trade basis over 100 installations in Ireland are in the
Page1
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Declaration
I hereby certify that the material which is submitted in this
assignmentproject is entirely my own work and has not been submitted for
any academic assessment other than as part fulfillment of the assessment
procedures for the program Bachelor of Science in Electrical Services and
Energy Management (BSc (Hons)) (DT 018) (United Nations Framework
Convention 2011)
Signature of studenthelliphelliphelliphelliphelliphelliphelliphellip
Datehelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
D07114349 Pageii
Energy Policy amp Economics Paul Derwin
Table of Contents
Declaration ii
Table of Contents iii
List of Figures amp Tables iv
10 Introduction 1
11 Energy Policies 1
12 Policy Structure 2
National Factors 3
Policy objectives amp strategy 3
Policy Outcomes 3
Assessment of outcome 3
13 New Technologies 4
14 Feasibility Evaluation 4
15 Site Data 5
Electrical Load requirement5
Heating Load requirement 5
Oil Prices 6
Monthly running costs for CHP 6
Bord Gais Gas Rates 6
16 CO2 Emissions Reductions 8
17 Comparative Analysis 9
CHP 9
18 Conventional Electricity Generation (Peat or Oil Powered Stations)11
Bibliographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip12
D07114349 Page
Energy Policy amp Economics Paul Derwin
List of Figures amp Tables
Figure 1 Policy Structure 2
Table 1 Bord Gais Electricity Rates 2008 5
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill 5
Table 3 Pay Back Calculation (Euro) 7
Table 4 CHP Greenhouse Gas Impact (SEI) 8
Figure 2 Assessment of NVP of the Project 8
Figure 3 CHP Operation 10
Figure 4 CHP vs Grid Electricity and Boiler Generation 11
D07114349 Page
Energy Policy amp Economics Paul Derwin
10 Introduction
The main purpose of this report is to develop an energy policy and an
economic energy supply strategy for a manufacturing company A
comparative analysis of the present and future technologies will be carried out
and a financial appraisal Other aimrsquos of this assignment is to find a suitable
replacement for electricity being purchased currently by the ESB and the
heating supplied through oil
11 Energy Policies
The Kyoto Protocol requires the significant reduction in Irish emissions of
GHGrsquos or p (PB Power for The Royal Academy of Engineering nd)ay hefty
fines Under the Kyoto Protocol industrialized countries are required to
reduce the emissions of six greenhouse gases (CO2 which is the most
important one methane nitrous oxide hydro fluorocarbons per fluorocarbons
and sulphur hexafluoride) on average by 52 below the 1990 levels during
the first ldquocommitment periodrdquo from 2008 to 2012 A five-year commitment
period was chosen rather than a single target year to smooth out annual
fluctuations in emissions due to uncontrollable factors such as weather
(United Nations Framework Convention 2011)
Key measures published by the National Climate Change Strategy 2007ndash
2012 include production of electricity from renewable sources to increase to
15 by 2010 and 33 by 2020 Biomass to contribute up to 30 of energy
input at peat stations by 2015 and support for Combined Heat and Power
projects Measures for industrial Commercial and Services include building
regulations and building energy rating energy agreements programme bio
heat and CHP programmes and support for eco-efficient technology and
practices (Department of the Environment Heritage and Local Government
2007)
The EU Emissions Trading Scheme came into operation in January 2005 and
under this scheme the C02 emissions of 12000 installations across the EU are
controlled on a cap and trade basis over 100 installations in Ireland are in the
Page1
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Table of Contents
Declaration ii
Table of Contents iii
List of Figures amp Tables iv
10 Introduction 1
11 Energy Policies 1
12 Policy Structure 2
National Factors 3
Policy objectives amp strategy 3
Policy Outcomes 3
Assessment of outcome 3
13 New Technologies 4
14 Feasibility Evaluation 4
15 Site Data 5
Electrical Load requirement5
Heating Load requirement 5
Oil Prices 6
Monthly running costs for CHP 6
Bord Gais Gas Rates 6
16 CO2 Emissions Reductions 8
17 Comparative Analysis 9
CHP 9
18 Conventional Electricity Generation (Peat or Oil Powered Stations)11
Bibliographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip12
D07114349 Page
Energy Policy amp Economics Paul Derwin
List of Figures amp Tables
Figure 1 Policy Structure 2
Table 1 Bord Gais Electricity Rates 2008 5
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill 5
Table 3 Pay Back Calculation (Euro) 7
Table 4 CHP Greenhouse Gas Impact (SEI) 8
Figure 2 Assessment of NVP of the Project 8
Figure 3 CHP Operation 10
Figure 4 CHP vs Grid Electricity and Boiler Generation 11
D07114349 Page
Energy Policy amp Economics Paul Derwin
10 Introduction
The main purpose of this report is to develop an energy policy and an
economic energy supply strategy for a manufacturing company A
comparative analysis of the present and future technologies will be carried out
and a financial appraisal Other aimrsquos of this assignment is to find a suitable
replacement for electricity being purchased currently by the ESB and the
heating supplied through oil
11 Energy Policies
The Kyoto Protocol requires the significant reduction in Irish emissions of
GHGrsquos or p (PB Power for The Royal Academy of Engineering nd)ay hefty
fines Under the Kyoto Protocol industrialized countries are required to
reduce the emissions of six greenhouse gases (CO2 which is the most
important one methane nitrous oxide hydro fluorocarbons per fluorocarbons
and sulphur hexafluoride) on average by 52 below the 1990 levels during
the first ldquocommitment periodrdquo from 2008 to 2012 A five-year commitment
period was chosen rather than a single target year to smooth out annual
fluctuations in emissions due to uncontrollable factors such as weather
(United Nations Framework Convention 2011)
Key measures published by the National Climate Change Strategy 2007ndash
2012 include production of electricity from renewable sources to increase to
15 by 2010 and 33 by 2020 Biomass to contribute up to 30 of energy
input at peat stations by 2015 and support for Combined Heat and Power
projects Measures for industrial Commercial and Services include building
regulations and building energy rating energy agreements programme bio
heat and CHP programmes and support for eco-efficient technology and
practices (Department of the Environment Heritage and Local Government
2007)
The EU Emissions Trading Scheme came into operation in January 2005 and
under this scheme the C02 emissions of 12000 installations across the EU are
controlled on a cap and trade basis over 100 installations in Ireland are in the
Page1
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
List of Figures amp Tables
Figure 1 Policy Structure 2
Table 1 Bord Gais Electricity Rates 2008 5
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill 5
Table 3 Pay Back Calculation (Euro) 7
Table 4 CHP Greenhouse Gas Impact (SEI) 8
Figure 2 Assessment of NVP of the Project 8
Figure 3 CHP Operation 10
Figure 4 CHP vs Grid Electricity and Boiler Generation 11
D07114349 Page
Energy Policy amp Economics Paul Derwin
10 Introduction
The main purpose of this report is to develop an energy policy and an
economic energy supply strategy for a manufacturing company A
comparative analysis of the present and future technologies will be carried out
and a financial appraisal Other aimrsquos of this assignment is to find a suitable
replacement for electricity being purchased currently by the ESB and the
heating supplied through oil
11 Energy Policies
The Kyoto Protocol requires the significant reduction in Irish emissions of
GHGrsquos or p (PB Power for The Royal Academy of Engineering nd)ay hefty
fines Under the Kyoto Protocol industrialized countries are required to
reduce the emissions of six greenhouse gases (CO2 which is the most
important one methane nitrous oxide hydro fluorocarbons per fluorocarbons
and sulphur hexafluoride) on average by 52 below the 1990 levels during
the first ldquocommitment periodrdquo from 2008 to 2012 A five-year commitment
period was chosen rather than a single target year to smooth out annual
fluctuations in emissions due to uncontrollable factors such as weather
(United Nations Framework Convention 2011)
Key measures published by the National Climate Change Strategy 2007ndash
2012 include production of electricity from renewable sources to increase to
15 by 2010 and 33 by 2020 Biomass to contribute up to 30 of energy
input at peat stations by 2015 and support for Combined Heat and Power
projects Measures for industrial Commercial and Services include building
regulations and building energy rating energy agreements programme bio
heat and CHP programmes and support for eco-efficient technology and
practices (Department of the Environment Heritage and Local Government
2007)
The EU Emissions Trading Scheme came into operation in January 2005 and
under this scheme the C02 emissions of 12000 installations across the EU are
controlled on a cap and trade basis over 100 installations in Ireland are in the
Page1
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
10 Introduction
The main purpose of this report is to develop an energy policy and an
economic energy supply strategy for a manufacturing company A
comparative analysis of the present and future technologies will be carried out
and a financial appraisal Other aimrsquos of this assignment is to find a suitable
replacement for electricity being purchased currently by the ESB and the
heating supplied through oil
11 Energy Policies
The Kyoto Protocol requires the significant reduction in Irish emissions of
GHGrsquos or p (PB Power for The Royal Academy of Engineering nd)ay hefty
fines Under the Kyoto Protocol industrialized countries are required to
reduce the emissions of six greenhouse gases (CO2 which is the most
important one methane nitrous oxide hydro fluorocarbons per fluorocarbons
and sulphur hexafluoride) on average by 52 below the 1990 levels during
the first ldquocommitment periodrdquo from 2008 to 2012 A five-year commitment
period was chosen rather than a single target year to smooth out annual
fluctuations in emissions due to uncontrollable factors such as weather
(United Nations Framework Convention 2011)
Key measures published by the National Climate Change Strategy 2007ndash
2012 include production of electricity from renewable sources to increase to
15 by 2010 and 33 by 2020 Biomass to contribute up to 30 of energy
input at peat stations by 2015 and support for Combined Heat and Power
projects Measures for industrial Commercial and Services include building
regulations and building energy rating energy agreements programme bio
heat and CHP programmes and support for eco-efficient technology and
practices (Department of the Environment Heritage and Local Government
2007)
The EU Emissions Trading Scheme came into operation in January 2005 and
under this scheme the C02 emissions of 12000 installations across the EU are
controlled on a cap and trade basis over 100 installations in Ireland are in the
Page1
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
scheme
The installation has to monitor its emissions and report the total emissions on
an annual basis
The installation is the required to surrender allowances where one allowance
equals one tonne of CO2 if the installation cannot reduce its emissions during
the course of the year more allowances must be bought or face high penalty
fines This strategy sets out to reduce emissions by 06 million tonnes in the
industrial commercial and services sector out of a total 302 million tonnes by
2012
12 Policy Structure
Figure 1 Policy Structure
Page
Policy Objectives amp
Strategyrsquos
National Factors
Policy
Outcomes
Assessment of
Outcomes
2
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
National Factors
High-energy prices
High running costs
Low profit margins
New governmentEU policies
Policy objectives amp strategy
What would the business like to achieve
A plan for achieving the objectives
Government grants
Achieving a cost effective route of delivering its energy requirements
Policy Outcomes
Economic energy supply for the manufacturing plant
Lower C02 emissions to stop penaltiesfines from EU Emissions
Trading Scheme
Ensuring affordable energy
Being prepared for energy supply disruptions
Assessment of outcome
Feasibility report financial appraisal
Cost benefit analysis
Page3
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
13 New Technologies
The aim of this report is to find an economical replacement to buying
electricity from the ESB and heating supplied through oil for the manufacturing
plan Large scale CHP plant will be assessed to determine whether itrsquos a
viable replacement for purchasing electricity from the ESB and using oil as a
heating fuel The prime mover in large scale CHP will be gas turbine which
drives a generator that produces electricity The cost of electricity generated
by a gas powered CHP plant will be constant throughout the day since gas
tariffs are independent of the time of day so the electricity generated on site
will be cheaper A CHP plant will provide energy cost savings per KWh The
savings result from the ability to generate power and use the heat released at
a cost below the imported power costs from the ESB These savings are
dependent on the prices of fuel which in turn will lead to a viable project but it
must be recognized that the evaluation will require investment in both time
and money
14 Feasibility Evaluation
The manufacturing company in question is in full operation 24 hours a day
seven days a week 365 and days a year The plant has a combined thermal
and electrical energy requirement as follows 1GWhr pa supplied by electricity
purchased by the ESB 90MWhr pa supplied by electricity purchased by the
ESB for the manufacturing plant and office equipment and general services
respectively The thermal requirement is 2GWhr pa all year round and cooling
at 170MWhr pa in the months between May and August
(Note although cooling is just required between May and August The CHP
will be sized on cooling all year round for worst-case scenario along with the
electrical and thermal energy requirement through an absorption chiller)
Page4
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
15 Site Data
Electrical Load requirement
Manufacturing Plant = 1000000KWhr divide365 days = 2740 KWhr
Office equipment and GS = 90000KWhr divide365 days = 245 KWhr
Cooling 170000KWhr divide 120 days = 1415 KWhr
2740 + 245 + 1415 = 4400 KWhr divide 24 hours = 183 factor of 13 to allow for
losses = 240 KW per day
Heating Load requirement
Heating = 2000000KWhr divide 365 days = 5480 KWhr
5480KWhr divide 24 hours = 228 KW factor of 13 to allow for losses = 296 KW
per day
Table 1 Bord Gais Electricity Rates 2008
(Bord Gais) 2008 Rates
Unit per KWh (EuroKWh) 01302
Max Demand Charge (EuroKW) Av 15795
Service Capacity Charge (EuroKVA) Av 19809
Standing Charge (EuroMonth) 150
PSO Levy (EuroKVA Capacity) 0438
Table 2 The Manufacturing Plants Existing Monthly Electrical Bill
Day chargemonth KWh 13200001302 171864Euro
Max demand charge 5001575 788Euro
Service capacity charge 5001975 987Euro
Standing charge 150 Euro
PSO levy 5000438 219Euro
Total 193304Euro
Page5
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Oil Prices
Conversion Factor 1 Litre of Oil = 1083kWh
Cost of Oil = 070 Euro per Litre (DIT 200809)
2000000kWh divide 1083 = 1846722 Litres of Oil is required to heat the
premises for the year at a cost of 070 Euro 1846722 = 1292705 Euro
Monthly running costs for CHP
The Technical specification of the CHP plant is based on the Combined Heat
and Power Installation Case Study in the Rochestown Park Hotel Co Cork
(Board Gais Networks 2008)
CHP Model ENERG 210
345KW Heat Output
240KW Electrical Output
720 Hours Operation monthly
Electrical Output = 240 720 = 172800KWh
Heat Output = 345 720 = 248400KWh
Bord Gais Gas Rates
The gas rates for 2008 is 00281 per KWh of gas (seai 2009)
In generating 240KW of electricity and 345KW of heat the CHP consumes
640KW of gas at 00281 EuroKW 8640 hours 625KW 00281 = 155382
Euro per year
Therefore the CHP will cost 15538200 Euro per year + a maintenance
charge Annual maintenance costs per year costs 4000 Euro
Energy savings increase of 2 per annum
Maintenance increase of 6 per annum
Cost of plant 230000 Euro
Maintenance per annum 4000 Euro
Scrapage of old boiler 20000 Euro
CHP fuel (Gas) costs 15538200 ndash ((Electricity) 2319648 + (Oil) 1292705)
=(Energy Savings) 2058533 Euro
Page6
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Table 3 Pay Back Calculation (Euro)
Year Capital
Costs
Energy
Savings
Maintenance Tax
30
Net After
Tax
DC
F
PV
0 -230000 -230000 1000 -230000
1 2058533 -4000 1452973 893 1297505
2 2099704 -4240 1482513 797 1181563
3 2141697 -44944 1512671 712 1077022
4 20000 2184531 -47641 1543464 636 1181643
Total 2437733
From the data in figure 2 on page 10 it is noted that the project of installing a
more energy efficient plant for meeting the energy needs of the manufacturing
plant is viable Installing a CHP unit is an effective route in achieving its
energy requirement Investing 23000000 euro on a new gas powered CHP
plant the project breaks even after 1 year and 10 months and in year 3 the
project has made savings of over 10000000 euro and it increases above
20000000 euro in year 4
Page7
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Figure 2 Assessment of NVP of the Project
0 1 2 3 4
-300000
-200000
-100000
0
100000
200000
300000
YEAR
NV
P
16 CO2 Emissions Reductions
CHP can be used to achieve environmental targets for the manufacturing
plants emissions reduction The environmental benefits of installing CHP are
significant and the emissions savings are shown below
Table 4 CHP Greenhouse Gas Impact (SEI)
Gas Estimated net reduction in emissions per
kWh of electricity produced (gkWh)
Carbon dioxideCO2 1000
Sulphur dioxideSO2 17
Nitrogen oxide NOX 46
Carbon monoxide CO (3)
Carbon tetroxide CO4 39
Page8
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
17 Comparative Analysis
CHP
CHP is the simultaneous production and utilization of heat and electricity from
the same primary fuel source minimizing the waste of the heat byproduct of
the electricity generating process and converting the heat into hot water or
steam Combined heat and power recovers the heat as well as generates
electricity-providing efficiencies up to 90 CHP can provide a secure and
highly efficient method of generating electricity and heat ldquoDue to utilization of
heat from electricity generation and the avoidance of transmission losses
because electricity is generated on site CHP achieves a significant reduction
in primary energy usage compared with power stations and heat only boilersrdquo
(SEAI 2000) The heat generated by the CHP system can also provide chilled
water using an absorption chiller The absorption process uses a condenser
and evaporator just like vapor compression systems but replaces the motor
and compressor assembly with a thermal fluid compressor to transfer low-
temperature energy to high-temperature heat rejection The absorption cycle
uses thermal energy or waste heat not electricity to create chilled water
CHP Components
All CHP plants consist of standard components such as
The prime mover (engine) to drive the electrical generator an electrical
generator that produces the electricity
A heat recovery system to recover usable heat a cooling system to
dissipate heat rejected from the engine that cannot be recovered
Combustion and ventilation air systems to carry away harmful exhaust
gases away
Control system to maintain safe and efficient operation and finally an
enclosure to achieve physical and environmental protection for the
engine and operators and to reduce noise levels
Page9
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
Figure 3 CHP Operation
The CHP plant operation uses different types of fuel such as natural gas
diesel or oil which powers a reciprocating engine or gas turbine An electrical
generator which produces electricity is connected to the prime mover Heat
from the prime mover is captured and used for heating water for central
heating or for hot water
Cooling needs of the building can be met by using an absorption chiller The
type of prime mover that is used to drive the electrical generator classifies
CHP plant The two most common types used are
Steam turbine this is a common CHP component different types of
fuels are burned in a boiler to produce high-pressure steam that
passes through a steam turbine to produce power
Gas turbine a gas turbine uses large amounts of intake air which is
compressed and then expanded by adding fuel which is ignited The
Page10
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
expanded air rotates the turbine blades similar to a jet engine light oil
or gas can be used as a fuel
The gas turbine drives an electrical generator the exhaust gas goes to
a heat recovery boiler which produces heat and steam (Canadian
Centre for Energy 2002)
18 Grid Electricity and Boiler Generation (Peat or Oil Powered Stations)
Figure 4 CHP vs Grid Electricity and Boiler Generation
From figure 4 above it is noted that CHP reduces primary energy consumption
in comparison to conventional methods involved in the generation of heating
hot water and electricity There are considerable losses of electrical energy
starting from the power plant through the transmission lines transformers and
then into the consumer building anything from 35 to 55 can be expected
According to SEAI ldquoThe full advantage of natural gas-fired CHP technology is
achieved when the production of power and heat is combined For this to be
technically and economically feasible it generally requires a simultaneous
demand for heat and electricity on the premises for a minimum of 14 hours
Page11
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
per day or around 5000 hours per annumrdquo (SEAI 2000) The manufacturing
plant in question with the CHP operating 720 hours per month 24 hours a day
is very much suited to CHP technology In case of breakdown and
maintenance on the CHP plant the manufacturing plant will still be connected
to the grid Surplus electricity will be sold to the electricity grid if required
Schemes for receiving a feed-in tariff for this electricity will be worked on
Bibliography
Board Gais Networks 2008 Rochestown Park Hotel Tri-GenerationCombined
Heat amp Power Installation (CHP) viewed 26 november 2011
lthttpwwwtemptechiepdf4_bg-rochestownpdfgt
Canadian Centre for Energy 2002 Centre for Energy viewed 3 Dec 2011
lt
httpwwwcentreforenergycomAboutEnergyEnergyElectricityGeneration
Overviewasppage=11gt
Commission for energy regulation 2009 viewed 1 november 2011
lthttpceriegt
Department of Communications 2006 CHP in Ireland viewed 28 october
2011
lt
httpwwwseaiieAbout_EnergyEnergy_Policyy_DriversCHP_Policy_Repor
t_18082006pdfgt
Department of the Environment Heritage and Local Government 2007
Ireland National Climate Change Strategy 2007-2012 viewed 13 november
2011
DIT 200809 DIT library energy_policy_and
_economics_semester_1_examinations_200809 viewed 26 november 2011
lthttpDITieLibraryExampapersgt
PB Power for The Royal Academy of Engineering The Cost of Generating
Electricity viewed 26 november 2011
lt
Page12
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
Energy Policy amp Economics Paul Derwin
httpwwwraengorguknewspubblicationslistreportsCost_Generation_Co
mmentartypdfgt
SEAI 2000 A Guide to Combined Heat and Power in Ireland viewed 13
november 2011
lt
httpwwwseaiiePublicationsYour_Business_PublicationsGuide_to_CHP_i
n_Ire_low_pdfgt
SEAI 2002 SEAI Building Energy Rating viewed 1 november 2011
lthttpwwwseaiieYour_BuildingBERgt
SEAI 2002 Sustainable Energy Authority of Ireland strategic plan 2010-2014
viewed 1 november 2011 lthttpSEAIiegt
seai 2009 Electricity amp Gas Pirices in Ireland viewed 5 december 2011
lt
httpwwwseaiiePublicationsStatistics_Publications_Electricity_amp_Gas_Pric
es_in_Irelandpdfgt
United Nations Framework Convention 2011 United Nations Framework
Convention on Climate Change viewed 18 November 2011
lthttpunfcccint2860gt
Page13
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