Topic last reviewed: November 2022

Sectors: Downstream, Upstream

Category: Power and heat generation

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Combined heat and power (CHP), also called cogeneration, involves the use of a heat engine or power system to simultaneously generate electricity and useful heat. CHP is not a single technology but an integrated energy system that can be modified depending on the energy end use. An example of utilizing the waste heat is to heat a hot oil system such that this heat can be transferred to other processes within the facility. By recovering waste heat, the cogeneration of heat and power typically achieves effective electrical efficiencies of 50% to 70% [Reference 1] – a significant improvement over the average 33% efficiency of simple-cycle power plants.

Effective electric efficiency is calculated by dividing the CHP net electric output by the additional fuel the CHP system consumes over and above what would have been used by a boiler to produce the thermal output of the CHP system.

The CHP system consumes around 20–40% less fuel for the amount of electricity produced by an open-cycle gas turbine and the amount of heat produced by a stand-alone boiler or a hot oil system.

Technology description

Simplified examples of the system configurations are shown in Figures 1 and 2. In addition, there are many other configurations possible, e.g., an extraction condensing turbine for power generation or a mechanical drive for a compressor, with steam extraction to provide heat to the process, etc.

Figure 1 and Figure 2 can be referenced at the Combined Heat and Power Partnership web pages of the US Environmental Protection Agency [Reference 2].

Gas turbines or reciprocating engines with heat recovery unit

In Figure 1, reciprocating engine and gas turbine CHP systems combust fuel to generate electricity, and then use a heat recovery unit to capture waste heat from the combustion system’s exhaust stream.

This heat is converted into useful thermal energy in the form of steam, hot water, or other heating medium fluid. CHP can include gas turbines or gas/diesel engines.

However, gas turbines are more common for large CHP applications requiring significant amounts of electricity/driving power and heat simultaneously.

CHP captures some of the waste heat for heating purposes instead of releasing the heat with the flue gas from the power generation system. The waste heat from the exhaust gas from conventional gasturbines can be utilized for heating or generation of electrical power by using steam turbines. See the topic Combined-Cycle Gas Turbines for more information on utilizing the heat for generation of electrical power. For all facilities, both onshore and offshore, it is important to analyse the need for power together with the need for heat throughout the process – see the Pinch Analysis Info Sheet.

In most installations/plants (both onshore and offshore), there is often a demand for thermal energy. Normally, the gas turbine exhaust is utilized as heat – a solution which is both energy efficient and economical if the required heat demand matches well with the recovered waste heat. If the required heat demand is low, it may be difficult to utilize all the heat that it is possible to recover. Alternatively, it may be more energy efficient to utilize the high-temperature exhaust gas to produce extra power (e.g. combined cycle) than to use it for process heating. However though, it may add capital cost to use the exhaust gas for new power production rather than to use it for providing heat.

A holistic analysis is required to assess the optimum choice. Combining heat and power (heat integration) can provide up to 90% (or more) of the heat requirements for offshore installations when energy is recovered from the gas turbine exhaust and other hot process streams. The need for heating will vary for different installations and plants over time. In new plants, the waste heat from power generation is normally utilized, resulting in lower overall energy requirements from fuel combustion (as the waste heat recovery reduces the need for external heat supply beyond the fuel that is already consumed by the gas turbine) and, thus, generally lower emissions. A gas turbine with an electric equivalent capacity of 30 MW (offshore example) equipped with a waste heat recovery unit (WHRU) can supply a heating capacity of 35 MW.

Further, WHRUs can also be installed on existing turbines to recover waste heat, potentially reducing or eliminating the need for electric, gas-fired, or oil-fired heaters and boilers, thus significantly reducing the overall energy used for heating.

Boiler with steam turbine

Unlike gas turbine and reciprocating engine CHP systems in which heat is a by-product of power generation, Figure 2 depicts a CHP system in which steam turbines normally generate electricity as a by-product of heat (steam). Steam is generated at higher pressures to make use of efficient steam generation and equally efficient enthalpy extraction from steam in steam turbines to generate power. However, steam is needed at relatively low pressures when used for heat input to processes. In the oil and gas industry (upstream), steam turbines are less common than gas turbines or reciprocating engines with heat recovery units. Steam turbine plants typically exist in heavy industries in which high- temperature furnaces are used.

A waste heat recovery boiler recaptures waste heat from a manufacturing heating process, and the waste heat is used to produce steam that drives a steam turbine to produce electricity. Since fuel is burned first in the production process, no extra fuel is required to produce electricity. Alternatively, if no waste heat is available in the facility, a fuel-fired boiler can be used to produce the high-pressure steam required to drive a steam turbine for electricity generation and provide steam for heating needs. It is important to analyse the need for power, the coincident need for heat, and the heat flow through the industrial process (See the Pinch Analysis Info Sheet).

CHP integrates electricity and heat generation to improve the overall efficiency of the facility. A range of configurations have been employed across many industries and optimal design and operation depend on the electricity and heat requirements.

Technology maturity

Commercially available?Yes
Offshore viability: Yes
Brownfield retrofit?:
Yes
Years experience in the industry:
30+
Years experience in oil and gas industry:
30+

Key metrics

Range of application: Process units with power and heating demand
Efficiency: 50–70% effective electrical efficiency
60–80% total system CHP efficiency
Guideline capital costs:USD 5–200+ million, depending on size of plant
Energy key performance indicators
Total system efficiency
Effective electrical efficiency
Guideline operational costs
Less fuel is used, saving operational costs and reducing greenhouse gas (GHG) emissions
Typical scope of work description:
For new plants, both onshore and offshore, it is important to analyse the need for power, the need for heat, and the heat flow through the industrial process. Based on these analyses, an optimal solution for minimizing energy costs can be chosen.

For existing plants with electric, oil-fired, or gas-fired heaters, the energy consumption from these heaters should be analysed. Process, mechanical, and electrical engineers can then make plans to replace or retrofit the older direct-fired heaters with WHRUs on the existing turbine or engine exhaust. Such modifications may be costly in some plants, and an analysis of the capital cost for modification, operational cost savings from using less energy/fuel, and reduced GHG emissions should then be evaluated before the decision to replace old heaters can be taken.

Decision drivers

TechnicalFootprint: size, weight, area required for brownfield integration; waste heat transport, piping, tie-ins, shutdown, structural
OperationalTraining of operators, operational complexity, reliability, maintainability
CommercialSaving energy and fuel cost
EnvironmentalCogeneration’s higher efficiencies increase energy efficiency, increased energyefficiency reduces fuel consumption, and reduced fuel consumption reduces air emissions of GHGs, nitrogen oxides, sulphur dioxide, mercury, and particulate matter

Alternative technologies

Electricity generation

  • Open-cycle gas turbines
  • Renewable power sources (wind, solar photovoltaics, etc.)

Heat generation

  • Heaters (fired, electrical, etc.)
  • Solar thermal

Combination

  • Combined cycle
  • Organic Rankine cycle

Operational issues/risks

As CHP is a system solution integrating heat and electricity generation, the range of operating scenarios needs to be understood and included in the design. Additional operating flexibility may require added scope (equipment) to be included and increased costs or limited efficiency benefits. Refer to the Open-Cycle Gas Turbines topic for gas turbine operational issues.

Industrial case studies

The following case studies include an offshore brownfield retrofit of CHP, an offshore greenfield evaluation of CHP, an onshore brownfield evaluation of CHP, and CHP implementation at a petrochemical facility. All case studies show the historical costs at the time the project or study was done, and should be generalized.

Case study 1: Natural gas platform in Southeast Asia

Basic data and pricing premises

On-stream factor:8500 hours/year
Fuel source:natural gas
Fuel cost:
USD 8.0 $/ M BTU lower heating value
Emission cost:
USD 25.0 $/ tonnes carbon dioxide (t CO2 )
Fuel emission factor:
0.059 t CO2 / mega BTU lower heating value

Base case (situation before)

An existing offshore production platform in Southeast Asia with two 10 MW gas turbine generators installed for power generation and heat input to process equipment supplied by natural gas fired heaters.

Average load of the gas turbine generators:9.5 megawatts electric (MWe)
Average fuel demand of the gas turbine generators:29.6 megawatts thermal (MWth)
Gas turbine exhaust temperature:
470°C
Fired heater duty:
not stated
Fired heater fuel demand:
not stated

Intervention/modification

Installation of WHRUs at the back end of the gas turbine generators in a CHP configuration to recover waste heat to a heat transfer medium, distribute recovered heat to process equipment, and make operation of the current fired heaters obsolete.

Equipment cost for new WHRUs:USD 1.5 million
Installed cost, including distribution infrastructure:USD 5.0 million

Optimized case (situation after)

Average load and average fuel demand of the gas turbine generators in the situation after remain equal to the situation before. Operation of the fired heaters was made obsolete. Fuel savings were estimated based on the following:

WHRU exhaust temperature:110°C
Available thermal duty from WHRU:15.7 MWth
Fired heater efficiency:80%

Fuel savings and carbon dioxide emission reductions

Fuel gas savings are back-calculated from WHRU duty and assumed fired heater efficiency.

Fuel gas savings:570,000 mega BTU/year
4.56 M$/y

CO2 emission reduction is calculated from fuel gas savings.

CO2 emission reduction:33.6 kilo tonnes /year
0.84 M$/year

Economics

Fuel gas savings are back-calculated from WHRU duty and assumed fired heater efficiency. Simple pay-out time is derived from required capex and benefits from fuel gas savings, both including and excluding cost of CO2 emissions.

Simple pay-out (including CO2 emission cost):0.9 y
Simple pay-out time (excluding CO2 emission cost):1.1 years

Case study 1: Natural gas platform in Southeast Asia

Basic data and pricing premises

On-stream factor:8500 hours/year
Fuel source:natural gas
Fuel cost:
USD 8.0 $/ M BTU lower heating value
Emission cost:
USD 25.0 $/ tonnes carbon dioxide (t CO2 )
Fuel emission factor:
0.059 t CO2 / mega BTU lower heating value

Base case (situation before)

An existing offshore production platform in Southeast Asia with two 10 MW gas turbine generators installed for power generation and heat input to process equipment supplied by natural gas fired heaters.

Average load of the gas turbine generators:9.5 megawatts electric (MWe)
Average fuel demand of the gas turbine generators:29.6 megawatts thermal (MWth)
Gas turbine exhaust temperature:
470°C
Fired heater duty:
not stated
Fired heater fuel demand:
not stated

Intervention/modification

Installation of WHRUs at the back end of the gas turbine generators in a CHP configuration to recover waste heat to a heat transfer medium, distribute recovered heat to process equipment, and make operation of the current fired heaters obsolete.

Equipment cost for new WHRUs:USD 1.5 million
Installed cost, including distribution infrastructure:USD 5.0 million

Optimized case (situation after)

Average load and average fuel demand of the gas turbine generators in the situation after remain equal to the situation before. Operation of the fired heaters was made obsolete. Fuel savings were estimated based on the following:

WHRU exhaust temperature:110°C
Available thermal duty from WHRU:15.7 MWth
Fired heater efficiency:80%

Fuel savings and carbon dioxide emission reductions

Fuel gas savings are back-calculated from WHRU duty and assumed fired heater efficiency.

Fuel gas savings:570,000 mega BTU/year
4.56 M$/y

CO2 emission reduction is calculated from fuel gas savings.

CO2 emission reduction:33.6 kilo tonnes /year
0.84 M$/year

Economics

Fuel gas savings are back-calculated from WHRU duty and assumed fired heater efficiency. Simple pay-out time is derived from required capex and benefits from fuel gas savings, both including and excluding cost of CO2 emissions.

Simple pay-out (including CO2 emission cost):0.9 y
Simple pay-out time (excluding CO2 emission cost):1.1 years

Case study 3: Natural gas treatment and compression plant, Latin America

Basic data and pricing premises

On-stream factor:8500 hours/year
Fuel source:natural gas
Fuel cost:1.5 $/M BTU LHV
Emission cost:USD 25.0 $/ t CO2
Fuel emission factor:0.066 t CO2 / mega BTU LHV

Base case (situation before)

An existing onshore gas treatment and compression plant with two 25 MW gas-turbine-driven centrifugal compressors and heat input to process equipment supplied by natural gas fired heaters.

Average gas turbine power absorbed (at coupling):25.7 MWe
Average fuel demand of the gas turbine:90.5 MWth
Gas turbine exhaust temperature:478°C
Fired heater duty:15.8 MWth
Fired heater fuel demand:17.8 MWth

Intervention/modification

Installation of two WHRUs at the back end of the two gas-turbine-driven compressors in a CHP configuration to recover waste heat to a heat transfer medium, distribute recovered heat to process equipment, and avoid installation and operation of two fired heaters.

Equipment cost for new WHRUs (each):1.4 M$
Installed cost for 2 WHRU, including infrastructure:6.2 M$

Optimized case (situation after)

Average power and average fuel demand of the gas-turbine-driven compressors in the situation after remain equal to the situation before. Operation of the fired heaters was made obsolete. Fuel savings were estimated based on the following:

WHRU exhaust temperature:313°C
Available thermal duty from WHRU:15.8 MWth
Fired heater efficiency:88%

Fuel savings and carbon dioxide emission reductions

Fuel gas savings are back-calculated from WHRU duty and assumed fired heater efficiency.

Fuel gas savings per WHRU:503,832 mega BTU/year
0.78 M$/y

CO2 emission reduction is calculated from fuel gas savings.

CO2 emission reduction per WHRU:30.7 kilo tonnes /year
0.77 M$/y

Economics

Simple pay-out time is derived from required capex and benefits from fuel gas savings, both including and excluding cost of CO2 emissions.

Simple pay-out (including CO2 emission cost):2.0 years
Simple pay-out time (excluding CO2 emission cost):4.1 years

Basic data and pricing premises

On-stream factor:8500 hours/year
Fuel source:natural gas
Fuel cost:not stated
Emission cost:not stated
Fuel emission factor:2350 kg CO2 / tonne of oil equivalent (toe)

Base case (situation before)

An existing polymer plant, with seven steam boilers whose maximum steam production is 3 × 12 tonnes/hour, 1 × 20 tonnes/hour, 1 × 25 tonnes/hour, and 1 × 40 tonnes/hour.

Fired heater duty:not stated
Fired heater fuel demand:not stated

Intervention/modification

Installation of CHP with a 15 MW gas turbine to replace 3 × 12 tonnes/hour boilers.

Capex (equipment cost for cogeneration, installed cost, including distribution infrastructure):EUR 16 million

Cogeneration reduces the operational costs of steam and electricity.

Baseload (gas turbine):14.7 MWe – 28 tonnes/hour (steam from gas turbine only)
Post firing (heat recovery steam generator):28–59.6 tonnes/hour (with additional firing)
Fresh air mode possible

Optimized case (situation after)

Cogeneration heat overall efficiency:84.55% at full load
77.28% at baseload

Fuel savings and carbon dioxide emission reductions

Primary fuel gas savings (electricity and steam)>11 ktoe/year
CO2 emission reduction:27 kilo tonnes / year

Economics

Economics based (including Green certificate rule)

Global CO2 emission savings compared with a combined- cycle gas turbine with 55% efficiency:12,300 t CO2

Electricity cost savings corresponding to 14 MWe power.

Simple pay-out time (including. CO2 emission / green certificates):5.5 years

References

  1. https://www.epa.gov/chp/methods-calculating-chp-efficiency (Accessed 27 July 2022).
  2. http://www.epa.gov/chp (Accessed 27 July 2022).

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