District Energy Systems Improve Efficiency and Reduce Carbon Emissions

Although it's not widely publicized, a majority of the energy used to generate electricity is wasted in the form of heat discharged to the environment. For better or worse, that's just the way a typical thermal power plant works.

Fuel, such as coal, biomass, natural gas, or uranium (in the case of nuclear plants), is used to heat water, producing high-temperature and high-pressure steam. The steam is admitted into a turbine, which spins a generator to produce electricity. However, not all of the energy stored in the steam is converted to useful work through the process.

In order for the cycle to continue, the steam exhausted from the turbine must be returned to its liquid form inside a condenser. In a fairly standard arrangement, the condenser is cooled by river, lake, or ocean water. The cooling water from the condenser is often simply released back to its source, and with it, the energy that was transferred inside the condenser.

Waste Not, Want Not

The average U.S. coal-fired power plant is 33% efficient-meaning two-thirds of the input energy is wasted. Other thermal power plants perform similarly. District energy systems offer a way to improve upon that.

"Waste heat has value," said Rob Thornton, president and CEO of the International District Energy Association (IDEA). "Dumping heat into rivers not only is not good policy, it's not good business."

Sometimes called cogeneration or combined-heat-and-power (CHP), district energy facilities capture some of the heat that would otherwise be wasted and use it for space heating, cooling, domestic hot water, and industrial processes. It's not uncommon for efficiencies of more than 80% to be achieved in this way.

Conference Raises Awareness

The IDEA held its 107th Annual Conference and Trade Show in St. Paul, Minn., this week. Yes, you read that correctly, the IDEA began hosting annual get-togethers at about the same time as Henry Ford built the first Model T. (Notably, that was still more than a quarter century after POWER magazine was founded.)

This year there were about 760 attendees from 19 countries at the event. The theme was "Embracing Change" and many of the speakers offered descriptions of change taking place around the world (Figure 1).

1. IDEA 2016 global leaders plenary panel. (From left to right) John Saunders, UK; Lily Riahl, France; Werner Lutsch, Germany; Ahmad Bin Shafar, United Arab Emirates; Bruce Ander, Canada; Yasser Salah Al Jaidah, Qatar; and Eric Ackerman, U.S. Source: POWER/Aaron Larson

"Today, we're not talking about transition, we're talking about transformation. A deeper kind of change," said Eric Ackerman, director of alternative regulation for the Edison Electric Institute (EEI), an association that represents all U.S. investor-owned electric companies. "And not a change that is driven by policy, but a change that is fundamentally driven by new technologies."

Global Perspectives

The change is happening worldwide. John Saunders, investment director for the Heat Networks Delivery Unit of the UK Department of Energy and Climate Change, suggested that society is simply unwilling to accept waste in any form these days. He said that fact is one of the key drivers for resource efficiency improvement measures.

By some accounts, 70% of the power used in the Middle East is consumed by air conditioning. With that in mind, it's not surprising that district cooling systems have really taken off in the United Arab Emirates (UAE). In 2014, Ahmad Bin Shafar, CEO of Emirates Central Cooling Systems Corp. (Empower) suggested that the Dubai district energy system's cooling capacity would reach 1 million tons (a ton of cooling capacity equals 12,000 Btu/hr) within 10 years. As it turns out, he significantly underestimated the pace of growth. Today, there is already more than 1 million tons installed in 66 plant rooms within Dubai's system.

Not all Middle Eastern countries have adopted the district energy model so swiftly, however. Yasser Salah Al Jaidah, CEO of Qatar Cool, suggested that there are several things holding back development in his country. Among the challenges are the lack of a suitable regulatory framework to support district energy systems, which increases risk for developers, low tariff regulations, which makes economic justification of systems difficult, and lack of service standards and codes, which results in an uneven playing field.

"We're in a stage where the wagon is before the camel," Al Jaidah said.

Al Jaidah noted that the Gulf Cooperation Council countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, don't have any advocacy groups promoting the benefits of district cooling. And, he said, talent is lacking-there just aren't a lot of people with experience developing district energy systems in the region.

Werner Lutsch, managing director and CEO of AGFW-a German association that promotes energy efficiency, district heating, cooling, and CHP, said his country's laws have helped cities build CHP plants, but the European Union has questioned competitive aspects of the process.

"Even district heating and CHP is some how seen as a competitive way of generating heat and power, and therefore, they have to look at state-aid rules," said Lutsch. "We were working with the CHP law [for] many years. Companies learned how to deal with this. We got some funds-some money-from the state, which at the moment has stopped."

Getting Utilities Involved

It may seem contrary to a traditional electric generating company's best interests to promote district energy solutions, after all, the more electricity a consumer uses, the more money electric companies earn, and district energy systems use thermal energy to displace electricity. But Lily Riahl, an advisor for Sustainable Energy for All-a district energy accelerator coordinated by the United Nations Environment Programme District Energy in Cities initiative-said Norway offers an example for electric utilities to follow.

Norway was faced with congestion on its power grid. In order to avoid significant investments in infrastructure upgrades, while still addressing the situation, the country turned to district energy solutions.

"Electric utilities in Norway are doing the district heating," Riahl said.

The EEI's Ackerman was receptive to that idea. "We want to participate," he said. "Everyone else is planning how to enhance our system. We need to be at the table too."

During a breakout session on Wednesday, Uwe Schmiemann, power generation marketing and product strategy manager for Solar Turbines Inc., offered the Eight Flags Energy plant as another example of a utility benefiting from CHP. In that case, Florida Public Utilities Co. (FPU) is partnering with Rayonier Performance Fiber in Fernandina Beach, Fla., to develop a CHP system (Figure 2).

2. Cogen in the Sunshine State. The Eight Flags project conducted steam blows in April 2016. The plant is expected to begin commercial operations later this year. Courtesy: Florida Public Utilities Co.

The plant will utilize a Solar Turbines Titan 250 gas turbine with a Rentech heat recovery steam generator to produce 20 MW of electricity and up to 200,000 lb/hr of steam. Rayonier will use the thermal output from the plant while FPU's customers on Amelia Island will benefit from the reduced cost and increased reliability provided by the electricity.

"Overall, it's a win-win situation for the utility, for the factory, as well as for the electrical users," Schmiemann said. "CHP works for customers. It provides customers with a lower tariff rate. It helps promote natural gas use. It reduces carbon emissions by 40%. It can be proactively used by the utilities to install more capacity without increasing the rate to the consumers, which typically was done in the past by the utilities. And, it provides returns for the owners of the plants."

-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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