An Introduction to MicroCogeneration
COGEN Europe Briefing 8 25.01.99
FOREWORD: COGEN Europe is receiving an increasing number of information requests on the socalled ‘micro-cogeneration1. In support of these requests COGEN Europe has decided to produce this briefing with the support of Sigma Elektroteknisk. Its aim is to define this new concept, identify the obstacles to its use, help to create the new market and analyse the environmental advantages of the technology. It is focused mainly on cogeneration up to 20 kWe, with no real lower limit. A more comprehensive market study will follow within the next year. The technology is now very close to the market and may become available in the next two years. A number of members of COGEN Europe are close to bringing products to the market place, these include: Sigma Elektroteknisk, BG Technology, Ecopower and Gasunie. They are based on the use of gas engines, Stirling engines and fuel cells. European companies seem to have taken the lead in this field but non-European manufacturers are also active, notably from Japan, New Zealand and the USA. This technique is a new scale in power production and should not be regarded as a threat for other more conventional forms of cogeneration, but as a complimentary system. It brings important environmental benefits which will help meet Kyoto commitments. This short briefing will address the following issues: ! ! ! ! ! ! What is micro cogeneration? Why now? The operation of the system Target market Current activity and status Strategic implications
WHAT IS MICRO-COGENERATION? The simultaneous production of heat and power at a small-scale is already a well known technique. Cogeneration is one of the main ways to bring about «decentralised», embedded or localised power production i.e. production close to the point of use, minimalising transport losses and enhancing energy-efficiency. Small-scale cogeneration is generally applied under 1 MWe when it is used in buildings such as multi residential dwellings, leisure centres, hotels, greenhouses, hospitals, etc. An interesting feature of these decentralised systems is that they are extremely simple to install and very flexible. They are often delivered ‘turn-key’, in sound-proof containers, of a reasonable size and the only operations needed are water, electricity and fuel connections. They can be based on engines or more recently on micro-turbines.
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Also known as micro-CHP.
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This kind of system is common in The Netherlands (over 2500 schemes), in Germany (around 1600, where they are better known as ‘BHKWs2’) and in the UK (1200 schemes). As small and localised as they can be they are usually above 20 kWe and therefore still not sized for the smallest applications such as providing just a few houses – not to mention a single house - with heat and power.
EVOLUTION OF POWER PRODUCTION
PLANT PRIMARY ENERGY CONVERSION EFFICIENCY TRANSMISSION LOSS USEFUL ENERGY 40% 10% CENTRAL POWER GAS / OIL COAL NUCLEAR 50%
DISTRICT HEATING +CHP
GAS / OIL COAL
80%
5%
75%
SMALL SCALE CHP
GAS / OIL
90%
88% 2%
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MICRO CHP
?
?
GAS / OIL 95% 0% 95%
Courtesy of Sigma elektroteknisk Note: the efficiencies quoted are based on net calorific value of the fuel and are illustrative as they vary according to local circumstances.
Therefore in recent years a few manufacturers have asked their R&D departments to go even further and work on ‘Mini’ and ‘Micro-cogeneration’ systems, i.e. below 20 kWe. Important feature: just as with their bigger equivalents, these systems are also based on the heat demand in order to maximize their environmental benefits. Within the micro-cogeneration category, one can differentiate between domestic cogeneration and non-domestic cogeneration. The first sub-category being 3 kWe or below is effectively designed to suit the needs of a household whereas the second can be used in bigger dwellings (apartment blocks, small hotels) or small facilities (swimming-pools).
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«BlockHeizKraftWerke » or compact cogeneration units.
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It is sometimes referred to as ‘Mini cogeneration’. Due to lower running hours the economics of domestic cogeneration are quite different from commercial mini/micro cogeneration but both should be thermally led. As a result, their economics are critically dependent on low capital cost and sale of exported electricity. WHY NOW? There are 3 main reasons why now is the right moment for micro-cogeneration. First, simultaneously as new commercial possibilities arise, the liberalisation of energy markets provides radical changes to the thinking about energy production. Second, and this deserves more explanation, environmental pressures, in particular to minimise CO2 emissions are mounting. And third, as the other sections of the brochure show, the technology is becoming available. Commercial possibilities in liberalised energy markets A report by the UK’s Department of Environment, Transport and the Regions3 has indicated technical potential for small scale (5-20 kWe) engines is 3000 MWe on a total of 270 000 sites in the UK market. This does not take account of the microcogeneration market which focuses on domestic dwellings. Again looking at the UK market which may be as big as 10 million units technically or some 25-30GWe. With the opening of the markets, energy distribution and supply companies will use micro cogeneration as a way to gain new customers or keep previously captive customers. It is important that energy companies try to anticipate or at least accompany the development of this new technology as they can gain from it as much as the consumers. The electricity demand is rising all over Europe and they will have to undertake expensive grid reinforcement unless they implement decentralised solutions such as micro cogeneration. Environmental pressures The more decentralised the energy production becomes, the lower transport losses will be. The energy saving potential of decentralisation is high since the European Commission estimates transmission and distribution losses to amount to an average of 6% of the electricity transported in the EU and in some countries this is much higher. Also the losses of supplying electricity to domestic consumers is higher than the average losses as it is at the lowest voltage levels. The negative environmental impact of high voltage lines, both in terms of visual amenity and public concerns over electromagnetic radiation, is resulting in it being increasingly difficult to reinforce or replace the transmission systems of the EU. Several studies have shown that decentralised cogeneration is a real alternative to the expensive and disruptive creation or reinforcement of these high voltage lines4. Above all, the climate change debate which culminated in the Kyoto Protocol has proven to be an important incentive for the development of cogeneration as it is one
3 Future Practice Report no. 32, Drummond Hislop, ESD under contract to ETSU on behalf of EEO of DOE, January 1993 4 INESTENE/BCEOM, Studies on the Ploermel Area and on the PACA Region, 1995
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of the most cost-effective ways to produce energy while reducing greenhouse gases emissions. Cogeneration installations result in CO2 emissions reduction of up to 50% when compared to separate production of heat and electricity. In addition, in many instances homes are too widely spaced to allow use of district heating and ,thus, domestic cogeneration will be the only way of bringing the environmental benefits of cogeneration to these homes. THE OPERATION OF THE SYSTEM Technical requirements As example of the overall functioning of such systems, a system based on the Stirling engine is illustrated below.
Heating control Air Gas
Stirling engine
Frequency / voltage protection
exhausts
HEAT Export/Import of ELECTRICITY Network issues Courtesy Sigma elektroteknisk. The system is installed like a modern heating boiler. kitchens or basements in a fridge-like container, with same volume. Maintenance requirements are quite engine needs to be maintained every 3.500 operating of about every 150.000 to 200.000 km for a car). Network issues Twometer unit
Consumer unit
Electrical Supply to House
It can be put for example in the same noise level and the low: for example the Sachs hours (equivalent to a service
The operation of the system normally implies export of electricity to the grid, the system must be connected to the mains network of the electricity supplier. Transparent and fair arrangements must be found with network operators in order not to jeopardise security of both systems. However, there are no major technical obstacles to connection of micro-cogeneration systems to grids and the issue is more a commercial one since it involves defining buy-back rates for the exported electricity and the potential back-up supplies from the electricity supplier. Such issues are now well known and are common to most cogeneration businesses.
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As with regular cogeneration, the avoided costs of new power stations, grid reinforcement and system losses should be taken into account. The above issues may however materialise quite differently if energy companies become the owners of the micro-cogeneration systems. TARGET MARKET Larger Energy Users and the Public Sector Larger energy users, such as small hotels, large houses, apartment blocks constitute a potential target for mini or micro cogeneration. Most systems are based on one engine but they can also be ‘multi module’ systems based on 2 or 3 engines, making them suitable for larger applications. Opportunities are also numerous in the public sector. Applications can already be found in the military and in other areas where autonomous and reliable power is needed. Replacement for boiler systems? As for bigger installations, micro-systems are adapted to different situations (domestic or commercial cogeneration) and each manufacturer or developer has got his own philosophy: some are operated together with existing boilers whereas others replace old boilers. Manufacturers such as Sigma have chosen the latter path and focus exclusively on the replacement of old boilers in existing dwellings which represent over 80% of all boiler sales in the UK. The typical family house would save over £300 per year. In Germany and The Netherlands savings would be more substantial given the higher energy costs. Other providers wish to cover also the new dwellings market. According to BG, in the UK alone the potential market for domestic cogeneration is considerable with over 12 million homes potentially suitable within the current gas supply area. CURRENT ACTIVITY AND STATUS Several members of COGEN Europe are actively working on micro cogeneration, either still assessing the technology or getting close to commercialisation. In Europe those initiatives known to COGEN Europe include: • • • BG in the UK, Gasunie-WhisperTech (800 We Stirling engine), Gastec and Zantingh in the Netherlands. COGEN Projects has a project to define a marketing approach for microcogeneration using a combination of a stirling engine and a heat pump. It is sponsored by Gasunie, Energie Ned, ECN and the Dutch Government. ENECO, ECN and Energiened have a joint venture called Microcogen for marketing a 1 kWe micro-cogeneration based on the Sunpower stirling engine.
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Sigma Elektroteknisk in Norway is launching a 3kWe unit and expects to be in commercial production in year 2000. Sigma is already involved in an ambitious THERMIE project in the UK, Denmark and Norway. In Switzerland, Ecopower has introduced a 4.5 kWe gas engine based system and in Germany Senertec has developed a 5 kWe Sachs engine. Other companies are entering this market at the moment.
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STRATEGIC IMPLICATIONS There are many implications for the use of this technology. We believe the main ones are: • • Perfectly timed with the Kyoto commitments on reducing CO2 emissions, micro cogeneration is an innovative solution to reduce the emissions cost-effectively. It will be a good test to challenge National Governments’ willingness to open up the markets and enhance harmonisation of energy markets (taxes, price of gas,…). The attitude and support of utilities, which includes fair prices for exported electricity, will play an important role in the realisation of micro cogeneration. On the other hand if the utilities engage themselves actively in ownership and operation of such systems this may open up significant new areas of business for them. We will probably witness the development of service companies to install, own and operate micro cogeneration units. In the new liberalised energy market, COGEN Europe believes that companies offering energy services combining gas and electricity are likely to set the pace in the next decade.
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JOIN OUR INITIATIVE If you wish to take part in the initiative that COGEN Europe is running to assist develop this market or you wish to have further information on Micro-cogeneration contact Erwan Cotard at the number below
COGEN Europe works to promote energy efficiency through the wider use of cogeneration in Europe and currently has over 180 members from 30 countries. For more information, please contact: COGEN Europe - tel. +32 2 772 82 90, fax +32 2 772 50 44, e-mail COGEN_Europe@compuserve.com web site www.cogen.org
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