MEC 2012 Advanced Techniques to Reduce Energy Consumption Within Your Facility…Best Practices & Case Studies in

Combined Heat and Power Generation Systems Lowering Your Costs & Protecting the Environment

Kelly Tisdale, CEM, LEED APThe Brewer-Garrett Company

September 25th, 2012

Utica Shale Natural Gas Pricing Long Term Gas Pricing Opportunities

◦Co-Generation Micro-Turbine Internal Combustion Combustion Turbine Standby Charges

◦Natural Gas Vehicles ….Solar ….Wind

◦Environmental Impact vs. Electricity LED

AGENDA

12,000 – 20,000 shale wells in Ohio

Utica Shale Gas Drilling• 40% of Ohio sits above the Utica Shale gas deposit (see

graphic)• Located approximately one (1) mile beneath the Earth’s

surface• Extraction techniques called shale fractures or “fracing”

have been in use for over 60 years but are controversial • Gas and petroleum resources are estimated to be viable for

50 to 100 years at current consumption rates• Significant economic opportunities for Ohio …• Can provide energy independence and security for the U.S.• Gas is the least carbon intensive (CO2 emissions) of fossil

fuels used to generate electricity (coal, oil, natural gas)

Drill site = approximately 650 acres + approx. 1M sq. 650 acres at $5k per = $3.25M (mineral rights) Royalty = 18% Potential Annual Royalty at 5000 MCF per day at $4 =

$1,310,000+ Annually May offer attractive long term gas contract due to flat

constant load (micro turbines) Climate Neutrality may be selling point to Districts or

Municipalities Environmental Issues

Utica Drilling/Land Potential

Boom for Ohio◦ 200,000 jobs

Steel, Trucking, Service, Construction Stable Long Term Gas

◦ 10 year Contract at $5MCF Environmental Impact

◦ Gas vs. Coal 430 vs. 1150 CO2 Cogeneration means Boiler produces “0” emissions

Opportunities◦ Micro turbines◦ Cogeneration◦ Service◦ Natural Gas Vehicles

Manufacturing Expansion

Market Changes

Average Natural Gas PricesLast Month 3.2Last Year . . . . . . . . . . . . . . . . . . . . 4.0Last 5 Years 5.6Last 10 Years . . . . . . . . . . . . . . . . ... 5.8Last 20 Years 4.4

Cogeneration Micro turbines up to .5MW

◦ Usually 65kW increments◦ Natural Gas Fired…◦ Recuperators◦ Capstone

Gas engine .3 to 5MW◦ Diesel or Natural Gas◦ Waukesha, Caterpillar

Turbines 3MW plus◦ Solar – Saturn, Taurus, Mercury, Mars, Titan

Gas Micro-Turbines• Combine energy conservation/efficiencies with on

site production of electricity (co-generation)• Local production and local consumption significantly

reduces transportation and distribution costs• Installation of high efficiency gas microturbines to

produce on-site electricity and reduce GHG emissions

AbsorbersTriGeneration

CoGeneration >.3MW<5MW

Co-Gen 3MW +

FinancialAt $5 per MCF gas $.08 per kWh

Payback may be as little as 3 to 4 years Requires Cogeneration mode 100% heat utilization

Micro-Turbine 200kW Unit Cost = $390,000 ($1950/kW) 8,000 hours 1,600,000 kWh = $128,000 4,143 mmBtu = $20,715 Purchased Gas = 16,480 mmBtu = $82,400 Net Savings = $66,315 Simple Payback = 5.88 years Maintenance = $15,000/year Simple Payback with Maintenance = 7.6 years

Natural Gas / Internal Combustion 375 kW Unit Cost = $588,000 ($1568/kW) 8,000 hours 3,000,000 kWh = $240,000 9,800 mmBtu = $48,999 Purchased Gas = 28,355 mmBtu = $141,776 Net Savings = $147,223 Simple Payback = 3.99 years Annual Maintenance = $28,000 Payback with Maintenance = 4.9

Turbine 4,600 kW Unit Cost = $9,600,000 ($2087/kW) 8,000 hours 36,800,000 kWh = $2,944,000 204,422 mmBtu = $1,022,112 Purchased Gas = 326,158 mmBtu = $1,630,792 Net Savings = $2,335,320 Simple Payback = 4.11 years Annual Maintenance = $345,000 Simple Payback with Maintenance = 4.82 years

Long Term Gas Contracts◦ Currently 5 years◦ Expect longer soon◦ Ability to negotiate with Well Driller

Constant Load is Best for Driller Utilizing own natural resource

Heat Load◦ Process Loads◦ Terminal Reheats◦ Domestic Hot Water◦ Swimming Pools◦ Absorbers

Requirements

Most often sized for only a portion of electric load… 65kW, or some multiple of, is the most common size

Best installation will be sized to use 100% of heat

Payback w/o heat load is closer to 10 years◦ Other reasons for install could be high 9s reliability

All installations will significantly reduce emissions

Currently no standby costs

Installation

Greenhouse Gases are Cut in Half

Micro Turbine - 500 tons CO2 Internal Combustion – 1,140 tons CO2 Combustion Turbine – 19,288 tons CO2

Emissions

These costs were once prohibitive Essentially charged you a standby fee that

was almost equivalent to electric rate as if you had actually used their electric

Currently most traditional utilities say they have no standby rate◦ They expect you to negotiate with your electric

wholesaler◦ They want to remain a “wires only”

New Companies such as EnerNOC may view Cogeneration as a negotiating opportunity

Standby Costs

Any waste reclaim producing energy◦ Other than process primarily used for electrical

production Market Based Currently projected trade is $.02/kWh

annually CHP does qualify as Ohio Energy Efficiency

Targets (currently trade at $.05/kWh (one time payment)

Renewable Energy Credits

Any waste reclaim producing energy◦ Other than process primarily used for electrical

production Market Based Currently projected trade is $.02/kWh

annually CHP does qualify as Ohio Energy Efficiency

Targets (currently trade at $.05/kWh (one time payment) but not as renewable

Renewable Energy Credits

A good payback under right conditions-gets better with electric rate increases

Helps when negotiating long term gas contracts

Potential negotiating leverage with Well Driller Reduces emissions and Carbon Footprint

◦ Could be a benefit to rally support from public Could help with electrical reliability The future will have many types of

Cogeneration Potential at virtually any Customer

Summary

Table II: Summary of CHP Technologies CHP system Advantages Disadvantages Available

sizes Gas turbine High reliability.

Low emissions. High grade heat available. No cooling required.

Require high pressure gas or in- house gas compressor. Poor efficiency at low loading. Output falls as ambient temperature rises.

500 kW to 250 MW

Microturbine Small number of moving parts. Compact size and light weight. Low emissions. No cooling required.

High costs. Relatively low mechanical efficiency. Limited to lower temperature cogeneration applications.

30 kW to 250 kW

Spark ignition (SI) reciprocating engine

High power efficiency with part- load operational flexibility. Fast start-up. Relatively low investment cost. Can be used in island mode and have good load following capability. Can be overhauled on site with normal operators. Operate on low-pressure gas.

High maintenance costs. Limited to lower temperature cogeneration applications. Relatively high air emissions. Must be cooled even if recovered heat is not used. High levels of low frequency noise.

< 5 MW in DG applications

Compression ignition (CI) reciprocating engine (dual fuel pilot ignition)

High speed (1,200 RPM) ≤4MW Low speed (102-514 RPM) 4-75 MW

Steam turbine High overall efficiency. Any type of fuel may be used. Ability to meet more than one site heat grade requirement. Long working life and high reliability. Power to heat ratio can be varied.

Slow start up. Low power to heat ratio.

50 kW to 250 MW

Fuel Cells Low emissions and low noise. High efficiency over load range. Modular design.

High costs. Low durability and power density. Fuels requiring processing unless pure hydrogen is used.

5 kW to 2 MW

Table III: Summary Table of Typical Cost and Performance Characteristics by CHP Technology* Technology Steam Turbine1 Recip. Engine Gas Turbine Microturbine Fuel Cell Power efficiency (HHV) 15-38% 22-40% 22-36% 18-27% 30-63% Overall efficiency (HHV) 80% 70-80% 70-75% 65-75% 55-80% Effective electrical efficiency 75% 70-80% 50-70% 50-70% 55-80% Typical capacity (MWe) 0.5-250 0..01-5 0.5-250 0.03-0.25 0.005-2 Typical power to heat ratio 0.1-0.3 0.5-1 0.5-2 0.4-0.7 1-2 Part-load ok ok poor ok good CHP Installed costs ($/kWe)

430-1,100

1,100-2,200 970-1,300

(5-40 MW)

2,400-3,000

5,000-6,500

O&M costs ($/kWhe) <0.005 0.009-0.022 0.004-0.011 0.012-0.025 0.032-0.038 Availability near 100% 92-97% 90-98% 90-98% >95% Hours to overhauls >50,000 25,000-50,000 25,000-50,000 20,000-40,000 32,000-64,000 Start-up time 1 hr - 1 day 10 sec 10 min - 1 hr 60 sec 3 hrs - 2 days

Fuel pressure (psig)

n/a

1-45 100-500 (compressor)

50-80 (compressor)

0.5-45

Fuels

all

natural gas, biogas, propane,

landfill gas

natural gas, biogas, propane,

oil

natural gas, biogas, propane,

oil

hydrogen, natural gas, propane,

methanol Noise high high moderate moderate low

Uses for thermal output

LP-HP steam hot water, LP steam

heat, hot water, LP-HP steam

heat, hot water, LP steam

hot water, LP-HP steam

Power Density (kW/m2) >100 35-50 20-500 5-70 5-20 NOx ( lb/MMBtu) (not including SCR)

Gas 0.1-.2 Wood 0.2-.5 Coal 0.3-1.2

0.013 rich burn 3- way cat.

0.17 lean burn

0.036-0.05

0.015-0.036

0.0025-.0040

lb/MWhTotalOutput (not including SCR)

Gas 0.4-0.8 Wood 0.9-1.4 Coal 1.2-5.0.

0.06 rich burn 3- way cat.

0.8 lean burn

0.17-0.25

0.08-0.20

0.011-0.016

* Data are illustrative values for typically available systems; All costs are in 2007$ 1For steam turbine, not entire boiler package

Natural Gas Vehicles 1% of todays U.S. vehicle fleet is Natural Gas Greenhouse gas emissions can be reduced 25% to

30% Smog / hydrocarbon emissions can be reduced 70% One diesel truck conversion equivalent to 325 cars

off road Infrastructure of Natural Gas exists – 1.5 Million

miles of pipe in the U.S. U.S. - only 1.3% of worlds NGV Vehicle cost +$4,000 Fuel price is a 5th of gasoline (at

4$ gal. and 4$mcf it is a 7th)

Market Changes◦ Will soon be retrofitting all are lighting retrofits

again◦ Timeline may put it approximately two to three

years before standard output of a 2x4 fixture or compatible lamp will exceed 130 lumens per watt and cost falls within Performance Contracting parameters

◦ $60 Billion in retrofit◦ Manufacturers already beginning to thin

New Technologies

Questions / Discussion