Weekly News
26 July 2013
Vitol ventures into physical power assets, buys CHP in Britain Vitol, one of the world's top oil traders, has completed the purchase of its first power plant asset – the 1,240MW gas-fired combined heat and power plant in Immingham, northeast England, in a strategic move to expand its physical portfolio. mminham CHP is a relatively new asset – completed in 2004 and expanded in 2009 – with a high quality management team," Vitol told Gas to Power Journal when asked about the reasons behind the purchase. Following the takeover from Phillip 66 the plant will be renamed VPI Immingham. "The plant is Vitol's only physical power asset so far," the trading house said, without disclosing if it plans to buy any other cogeneration or combined-cycle plants. A plethora of European power producers are currently seeking to seeking to divest gas-fired assets, attracting interest from infrastructure funds or gas suppliers such as Gazprom. Located on the south bank of the river Humber, Imminham CHP is one of the largest co-
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generation plants in Europe, covering 2.5 of UK power demand by generating 1240MW of electricity. It also supplies up to 930 tonnes of steam per hour which is used in nearby oil refineries to help turn crude oil into products, such as gasoline. It is fuelled by natural gas and surplus refinery gas, with liquid fuel as a backup.
Appetite for gas, power assets Like many of its peers, Vitol is investing in physical energy assets including oil fields and refineries in a bid to spread risk and diversify its energy trading business. "An appetite for investment in physical natural gas and power assets has helped Vitol cement its presence in this sector and has led to a number of multi-year transactions," the Geneva-based trading house said.
ITM Power makes hydrogen storage breakthrough with Isle of Wight project As part of a 'smart grid' feasibility study, energy storage company ITM Power has launched an upgrade to its hydrogen-producing HGas electrolyser on the Isle of Wight to allow more solar and wind power to come on the grid safely. Sponsored by the UK government, the study examines how HGas electrolyser units produce hydrogen gas from surplus renewable power that utilities can sell as fuel to natural gas consumers and power plants. TM Power is currently trailing the HGas technology as part of a smart grid consortium, called the EcoIsland Project which was awarded a grant by the Technology Strategy Board, a UK Government agency. ITM power provides the HGas units that do the hy-
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drogen production, as well as storage and refuelling devices; Scottish utility SSE supplies the renewable energy; and Japanese electronics giant Toshiba contributes smart grid computer controls that can activate ITM Powers' hydrogen production units. Other HGas units, supplied by ITM, are also operational at sites at Nottingham and Sheffield.
Improved grid stability mechanism
A hydrogen refuelling station
The hydrogen technology is a way of handling overcapacity from wind power in places where it exceeds the grid's carrying capability. "Wind power generates electricity at times of low demand so the grid is faced with a surplus of energy it can't deal with. That's what is happening in Scotland: utilities have to shut down the wind turbines because there is no demand. continued on page 2
AGENDA POLICY & REGULATION Osborne slashes shale gas tax to spur supply for power generation
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MARKETS Demand for gas down in Japan, world’s no.1 importer 3 RWE to curb costs in power generation arm by €500m per year 4 SPOTLIGHT ON HYDROGEN Japan tests hydrogen electricity storage with CHP in smart grid
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SoftBank, Bloom Energy team up to sell fuel cells in Japan
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TECHNOLOGY & INNOVATION Repsol discloses ways to optimize CHP operations
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MARKETS
26 July 2013
continued from page 1
"What we are doing is, instead of pressing a button and shutting something down you can press a button and make hydrogen fuel," said Charles Purkess, marketing manager for ITM Power. ITM Power's latest improvement to its electrolyser technology reduces amount of time it takes to start-up the hydrogen production at a time when wind turbines begin generating too much energy for the grid, previously a stumbling block for the storage industry. More hydrogen gas is hereby produced from the same amount of electricity, according to ITM power: The amount of hydrogen 16 electrolyser stacks can produce from 1MW has increased from 400 to 446kg/day. "The efficiency is nearing the limits that can be
ITM Power HGas electrolysers
achieved at 77%," Purkess said. ITM Power is the only company that makes the complete HGas electrolyser from the membrane material up to the finished product, he said.
Innovating hydrogen refuelling stations Hydrogen gas produced by HGas electrolysers can be placed on the grid wherever they are needed, at substations or on a more distributed basis, or close to places where people need fuel. Utilities can sell the hydrogen gas produced to consumers using fuel-cell powered cars at power stations along the gas grid, inject it into the gas grid to supply gas grid consumers, and supply gas-fired power plants. Hyundai, Microcab and Riversimple produce such hydrogen-powered cars. ITM power is working at the technological frontier of engineering safe, solid-state hydrogen storage and dispensing stations (refuellers) capable of storing practical amounts of hydrogen,
and also of distributing it for vehicle transport. In the Ecoisland project, ITM power is currently is testing a refuelling system: working to find the right materials to allow hydrogen to be safely stored as a gas, as well as being carried by road for other uses. ITM Power's trial refuellers have planning permission and will begin operating in November 2014.
New carbon-free fuel source for gas-fired power? Increased HGas production may give UK gasfired power plants more incentive to run on 'carbon-free' hydrogen rather than the methanebased natural gas. "It's one of the ways to decarbonise the gas grid because its carbon free; you're making pure hydrogen that has no carbon footprint," Purkess said. Gas-fired turbine producers Alstom and GE already make turbines which can combust hydrogen gas, although this is a relatively new technology. The grid upgrades, required by current UK legislation, may "dramatically increase UK consumer electricity prices", RWE Npower said last week, but hydrogen technology would allow for excess electricity to be turned into gas at she source and stored by remote users, potentially reducing transportation costs.
Flexible renewable units help limit the risk of negative power prices Rapid uptake in flexible renewable energy units in Germany will help reduce the risk of negative power prices and limits the need for fossil plants to provide backup capacity, a study published by the Fraunhofer Institute for Systems and Innovation Research (ISI) found. Gas to Power Journal Publisher Stuart Fryer Editor Anja Karl Tel: +44 (0)207 0173417 anja@gastopowerjournal.com Reporters Cristina Brooks Tel: +44 (0)207 0173402 Advertising Narges Jodeyri Tel: +44 (0)207 2533406 narges@gastopowerjournal.com Events Barbara Canals Tel: +44 (0)207 173410 barbara@gastopowerjournal.com Subscriptions Stephan M. Venter Tel: +44 (0)207 0173407 venter@gastopowerjournal.com Production Vivian Chee Tel: +44 (0) 20 8995 5540 chee@btconnect.com
p to 2,000 MW of remote-controlled renewable energy units are forecast to enter the market, capable to flexibly respond to short-term electricity price signals at days of high solar or wind power supply combined with low demand, ISI analysts forecast. ISI anticipates "a marked increase in the number of units in the direct marketing scheme [of renewable energy]" this year, suggesting this will "significantly reduce the probability of deeply negative prices". In 2012, power prices fell below ₏-50/MWh on 22 occasions – a steep increase compared to four incidents in 2008.
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Attractive for balancing market Remote-controlled renewables will also be attractive for use in the balancing market, reducing the need to keep conventional fossil power plants
operational to balance intermittent supplies, ISI analyst said. Operators of flexible renewable energy sources are also better able to issue production forecasts and are less dependent on earnings from selling electricity under the fixed tariffs of Germany's Renewable Energy Act (EEG). A market premium for renewable energy, introduced in early 2012, is intended to incentivise operators to sell their electricity directly to the market instead of to the power grid at fixed EEG tariffs. About 20 companies have sprung up, offering services to help market renewable energy on behalf of the producers. Together with producer who already directly sell their output at market prices, a total of 70 operators now participate in the direct marketing scheme of renewable energy, according to ISI research.
26 July 2013
GTP Journal
MARKETS
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Demand for gas down in Japan, world’s no.1 importer Japan is on the verge of losing its status as the world’s biggest LNG buyer, as imports of natural gas fell sharply in H1’2013 amid reduced demand from power producers on the eve of a restart of the country’s nuclear reactors. as imports in the first half the year Utilities keen to avoid fell 2.7 percent to 43.4 million high-priced LNG tons, the first half-yearly decline Power producers in Japan are keen to reduce since the nuclear accident more gas demand to avoid paying for high-priced than two years ago, according to the Japanese LNG. Japan paid 6.2 trillion yen for LNG ministry of finance. In contrast, gas imports in imports in the fiscal year 2012, a whopping 2012 surged 11 percent to 87.3 million tons, 75% jump from the fiscal 2010, according after a 12% rise in 2011. to the Institute for Energy Economics in The timing and scale of a nuclear restart Japan (IEEJ). will be crucial for determining the Japan’s Volumes of gas imports have increased to hunger for gas. Utilities had rushed to use gas nearly 87 mtpa, while more expensive unit as a replacement fuel to make up for nuclear prices at $16.65/MMBtu on average made opcapacity. All but two of the country’s 50 reacerators of gas-fired power plants feel the pinch. heat wave in North Asia has tors are currently offline, after they were shutEight out of ten utilities suffered net losses in spurred LNG demand for power down for safety concerns in the wake of the the fiscal year 2012, totalling 1.6 trillion yen, generation amid rising use of air Fukushima nuclear crisis in March 2011. as they were burdened with having to pay high conditioning, with buyers rushLNG prices to run gas-fired power plants to ing to increase gas inventories to cover sumreplace the lost nuclear capacity. mer spot requirements. LNG demand may shrink South Korea, the second largest LNG 10 percent on nuclear restart buyer in Asia, saw average temperatures in Japan’s LNG imports could shrink, or grow, by Abe supports return to nuclear June hit a high of 22.6 degrees Celsius – the 10 percent by 2018 depending on how high nu- Japan's Prime Minister Shinzo Abe, who won a highest level recorded for the month since clear utilisation will be, JP Morgan forecast. majority in the upper house last Sunday, indi1973, according to data from the Korea Analysts estimate it will likely be year-end cated he favours a return to Meteorological Administration. or early 2014 before the first of the reactors is nuclear power in the hope this Japan, Asia's largest LNG buyer, is also restarted and in a “scenario of high nuclear could help curb the rise in elecsuffering from a heat wave while temperature utilisation he forecasts LNG demand will tricity prices. Restarting twenty also soared in China's industrial cities on the shrink 10 percent from 2012’s 86.9m tonnes to six of the country's nuclear Shizo Abe east coast. 78.3m tonnes in 2018.” power stations in 2014 could Prices for August LNG delivery to Asia In a low utilisation scenario, meanwhile, the lower the electricity fuel cost by 1.8 trillion rose 6.8% from July, reaching $15.46/MMBtu bank suggested “demand would remain in a yen ($0.019) and reduce generation costs as higher summer demand in North Asia virtually unbroken uptrend, rising 27 percent by about 2 yen/kWh, according to IEEJ was met with limited spot availability. versus 2012 to 110.4m tonnes by 2032.” estimates.
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Heat wave Asia drives gas demand
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POLICY & REGULATION
Osborne slashes shale gas tax to spur supply for power generation UK Chancellor George Osborne has granted tax breaks to shale gas developers of more than half the amount they pay on profits, in an effort to kick-start shale gas drilling to boost Britain’s domestic gas supply. sborne said he wants to make Britain's new tax regime "the most generous for shale in the world", allowing shale gas producers to pay just 30 percent tax on their profits, compared to the 62 percent usually paid by the oil and gas industry. Shale gas could help keep energy costs down and create jobs, he forecast, pointing to the UK's high domestic energy prices compared with other European countries. His move to introduce tax breaks comes just
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Drilling for shale gas in the UK
weeks after the British Geological Society significantly increased estimates of the country's shale gas reserves to 1,300 trillion cubic feet – enough gas to power the UK for 25 years.
ical and pressing nature of UK energy policies and won't affect gas pricing to help promote peak-load power plant projects," forecast Howard Rogers, Director of the Natural Gas Programme at the Oxford Institute of Energy Studies (OIES).
Gas deemed ‘vital’ to dent Britain's power demand
Shale gas – no ‘easy fix’
Gas-fired power is considered as vital to dent Britain's increasingly volatile peak-load demand and the Government wants utilities to replace aging coal-fired plants with units that run on natural gas. A plethora of projects are on the drawing board, but investors are still holding back as they await greater regulatory clarity on upcoming capacity markets. Shale gas is, however, "no fast and easy solution" to help dent the shortfall of power supply in Britain, critics warn. Considering projected timings and modest production volumes, UK shale gas developments will "in no way change the crit-
The institute expects that plateau production from UK shale gas plays is unlikely to be achieved until 10 to 15 years from present days. Long lead-times required to build material shale gas production make it no 'easy fix' to dent the need for additional gas supply sources of new-build power generation capacity. Rogers warned that the provisionally low added volumes of UK shale gas will not make a "discernible" difference to gas prices, and would be offset if other countries, notably Russia, alter the volumes of gas exported to its European buyers.
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GTP Journal
MARKETS
26 July 2013
RWE to curb costs in power generation arm by €500m per year Germany's second largest utility RWE gears up to save “at least €500m per year” in costs at its power generation unit, in a move aimed at balancing losses incurred from falling wholesale power prices and reduced run-time hours of its fossil power plant fleet. WE confirmed it is currently scrutinising its entire power plant portfolio for potential cost savings, and is not excluding plant closures. “We see high pressure especially for older hard-coal power plants and for gas-fired units,” an RWE spokesman said, referring to negative profits margins burning gas to generate electricity (spark spread) at around €Peter Terium 15/MWH compared with positive margins for coal (dark spread) at around €5/MWh.
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More than 10,000MW “under critical review” – Terium Between 30% and 40%of RWE's fossil power plants will be operating at a loss in the medium-term, according to CEO Peter Terium. More than 10,000MW of gas and coal-fired plants in particular are currently "under critical review," he revealed but cautioned that "any
decisions on plant closures will be made at a later stage". The latest round of cuts might eliminate "several hundred of jobs" and comes in addition to an €1.5bn cost savings programme, dubbed "RWE 2015".
RWE considers job losses, pay cuts
operations across Europe and employs about 18,000 people. "The generation market has significantly changed to our disadvantage. To be able to survive in this environment, our work processes and costs need to be adjusted," said RWE told employees of its power plant unit by email.
Terium told German media the company is also considering cutting jobs of up to 5000 employees and may curb the salary of its staff with the aim of realising the envisaged cost savings. RWE's generation arm bundles power plant
Weak EU power prices to herald more capacity closures – bank With European power prices caught in a downward spiral, utilities like Franco-Belgian GDF Suez or Germany’s EnBW, E.on and RWE will resort to “more capacity closures”, forecasts JP Morgan Cazenove. oad factor compression will be highest for new CCGTs and old hard coal plants, as they are the most expensive on the system unless structural reform of the ETS drives carbon prices up sharply," the investment bank said in a research note. In 2012 the bank estimated hard coal-fired plants run between 43-71% of the time, while old/new combined cycle gas turbine plants (CCGTs) operated merely 1% and 21% of the
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time, respectively. Profit margins for fossil plants are squeezed as growing supply of renewable power, particularly in Germany, has put a lid on peak-load power prices. Some days with high solar power supply can see base-load trading at a premium to peak, while the phenomenon of negative power prices amid excess wind power supply is becoming more common. The 2015 German base-load power contract is currently priced about €5.70/MWh under the
average spot price realise in 2012, which according to the bank "reflects the expected weakness in coal prices, but also continued weakness in electricity demand and build out of renewable capacity". In its analysis, JP Morgan Cazenove suggests the power price required to cover capital costs for old CCGT plants is €237/MWh, while for new plants it is €62/MWh, however the German bellwether Cal 14 contract currently hovers around €37.34/MWh.
26 July 2013
GTP Journal
SPOTLIGHT ON HYDROGEN
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Japan tests hydrogen electricity storage with CHP in smart grid In an effort to curb energy bills, Japan’s Ministry of Economy, Trade and Industry is using Kitakyushu City as a test bed for a hydrogen storage system integrated with controller software, solar panels and industrial CHP (Combined Heat and Power) backup. The City of Yokohama, Toyota City, and Keihanna are also part of the Japan Smart City Portal experiment, which began in 2010 and ends in 2014. n Kitakyushu City, 100kW of distributed solar panels, a 400kW fuel cell, and a small wind power generator were installed, making up 10 percent of local generation capacity. Through a Community Energy Management System (CEMS), excess renewable energy can be converted into hydrogen for storage, and the fuel cells can be activated to supply electricity in the event of rising demand.
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Storing electricity through hydrogen Kitakyushu Smart Community Creation Project joined forces with Japanese hydrogen producer
Solar panels combined with a fuel cell
Iwatani Corporation and component producer Yaskawa Electric Corporation in March. The partners are testing hydrogen storage as a potential improvement on battery storage, which is less compact and can lose energy. To test ways "to optimize the entire distributed power sources on the power grid," a hydrogen and fuel-cell storage process was remotely controlled by a PLC based at the municiHydrogen storage tank pal Kitakyushu Museum of Natural History and Human History in the Higashida Using industrial CHP for backup district, according to Japan Smart PCs supplier Yaskawa Electric Corporation, City Portal. Power Conditioners meanwhile, is hoping to use the results of the (PCSs), commonly used in solar experiment for solving solar power problems applications, control the storage of and use them in a feasibility study, carried out surplus energy generated by at an industrial estate in Thailand. 160kW solar panels installed at the The renewables system in Higashida was museum and a nursing home for integrated with a CHP facility owned by Nipthe elderly. "This is the first time pon Steel and Sumitomo Metal Tobata Works PCSs centrally controlled system (Yawata Steel Works). The steel works' gasfrom a remote location in this fired CHP facility is to supply up to 20,000kW way," project partners said. of electric power.
SoftBank, Bloom Energy team up to sell fuel cells in Japan Japanese telecoms and energy provider SoftBank Group and American fuel cell producer Bloom Energy have formed a 50/50 joint venture, Bloom Energy Japan, to start selling distributed installations for base-load power. Bloom Energy Servers are based on gas-fired solid oxide fuel cell (SOFC) stacks, with a net baseload power output of 200kW. istributed power is a competitive alternative in Japan, amid high prices for centrally-produced electricity based on imported natural gas. The closure of nuclear power plants in Japan in the wake of the Fukushima incident has caused significant power shortages and a double-digit surge of consumer electricity prices, while subsequent imports of electricity and LNG expanded Japan's trade deficit. A restart of some nuclear plants may reverse the imbalance of power supply, but operators are still subject to lengthy safety checks.
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Japanese customers to switch power provider "Empowering customers in Japan to buy electricity on their terms is another significant step on our journey to change the way energy is generated and consumed in the world," said Dr. KR Sridhar, Principal Co-Founder and CEO of Bloom Energy.
The use of Bloom Energy fuel cells complements SoftBank's existing portfolio of renewable energy sources such as solar and wind, it said. Each of Bloom Energy's highercapacity, ES-5700 SOFC servers weighs 19.4 US tons and is approximately 26 feet long and six feet high. They can output 200Kw of electricity and achieve over 50 percent electrical efficiency, when fuelled by natural gas at a rate of 1.32 MMBtu per hour. SOEF fuel cell reach 773 lbs/MW hour on natural gas, but the installations are carbon neutral when running on Servers run constantly, on directed biogas, the operator said. operated in parallel to grid Bloom Energy, founded in 2001, currently Bloom Energy manages the servers supplies energy servers within the United remotely to run continuously, allowing conStates, and its off-grid commercial fuel cells sumers independence from grid costs by operare used at facilities owned by US companies ating in parallel to the grid rather than on it. Walmart, AT&T, Google, eBay, The Coca Cola The servers can run based on natural gas or Company. directed biogas. Nox and Sox, carbon emissions
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TECHNOLOGY & INNOVATION
GTP Journal
26 July 2013
Utilities can increase profits by owning CHPs – ACEEE US electric utilities can reduce their costs, risks and losses by investing in small-scale fast-ramp combined heat and power (CHP) plants “in a piecemeal fashion� at strategic locations to help mitigate supply constraints to the power grid at times of peak demands, suggests Anna Chitum, senior policy analyst at American Council for an Energy-Efficient Economy (ACEEE). ogeneration plants in the US are currently being built by private manufacturers, hospitals, and schools but many such businesses are "unable to do this by themselves" which leaves a potential market for utility ownership, Chitum said in a recent report. Utilities are best positioned to build and profit from cogeneration whether through sole ownership or partnering on an investment with an individual facility. Power producer should, in her view, remain the main investors in CHP plants rather than individual industrial facilities because they have better access to loans for the high capital outlay and can absorb risks more easily. Also, individual facility CHP owners may find it harder to build energy generation expertise.
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Levelized Cost of Energy of Selected Generation Resources
US last year set a goal of 40GW of CHP capacity installed nationally, the CHP capacity began CHP reduces power shortages growing and now stands at 82GW. or overcapacity risks "Well-sited CHP, such as only the utility Decentalised CHP plants, sited near areas of high power demand, can help grid operators al- knows how to provide, has prevented the need for building large-scale new capacity in two releviate system stress at times of peak-load and cent cases, and there is a precedent for considreduces the need to upgrade the grid with costly transformers and line installation, partic- ering CHP systems as a transmission system asset," Chitum said. Cogeneration is also being ularly amid increasing intermittent renewables considered as a source of backup generation power supply. during natural disasters, shielding against netAfter the federal legislation enacted in the work-wide blackouts. In New York, a CHP Representative Scehmatic of CHP Versus Conventional Generation system sited at New York Presbyterian Hospital provided a 7MWequivalent reduction during peaking hours which prevented Con Edison from having to pay for an expensive upgrade to its nearby substation. Alabama Power said, meanwhile, customer-owned CHP had saved it the cost of building 1700 MW of new generation capacity.
Profits from fuel savings, tariffs, exports Utility ownership of CHP plants allows the operators to reap profits from selling surplus CHP power on the grid. Depending on the local regulatory environment, CHP installations may benefit from government subsidies, as they are viewed as environmentally responsible, and can contribute to emissions targets, Chitum suggested. With efficiency levels at 80 percent, CHP outperform the generating efficiency of an average power plant , 36 percent, meaning that more energy is produced from the same amount of natural gas, allowing the owner fuel cost savings. Levellized costs for operating CHP plants are also lower than the most efficient kind of large-scale power plant, Combined Cycle Gas Turbine (CCGT) generation, costing 4 cents per kilowatt hour, which is less than 6 cents per kilowatt hour or less for a CCGT plant. Because policies and practices that discourage exporting CHP from privately-owned facilities, they are often constrained to be no larger than the demand for that site, while there is enormous potential to build CHP to their full capacity.
26 July 2013
GTP Journal
TECHNOLOGY & INNOVATION
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Repsol discloses ways to optimize CHP operations Flexile operation of Repsol’s combined head and power (CHP) stations makes it difficult to optimize production costs. To alleviate uncertainties, the operator developed and installed an online and real-time thermodynamic and economic model, according to Ing. Joao André Coelho, Power Plant & Utilities Plant Manager at Repsol, Sines Portugal and Ing. Pascal Stijns, Power & Energy consultant, at Honeywell Europe, Brussels. he model, made up of 70 independent variables and more than 900 functions or dependent variables, controls operations of three high-pressure boilers and one medium-pressure auxiliary boiler at Repsol’s CHP in Sines. At full operation, the plant produces approximately 600 tons of steam for electricity and heat for a nearby chemical complex.
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Site of Repsol's CHP in Sines, Portugal
The boilers can simultaneously combust six fuels of varying quality, availability and cost. Steam is reduced and distributed via five steam headers within the site via a 35MW back pressure turbine or pressure reducing stations. A 24MW condensing turbine is available to produce extra electricity, when needed. To minimize variable operational cost, the model draws on Mixed Integer Non Linear Programming (MINLP) techniques. Optimal production settings are signed out and provided online to Repsol Sines. Throughout the optimisation, plant operation data is fed into an Excel workbook via Honeywell’s Medex OPC-based add-in. Online values, pricing information, physical properties, etc. are linked to the model. The Solver add-in executes and writes the results into the model tab. From there the values are written to defined SCADA points in the DCS for further display, historization, reporting and alarming via OPC.
Switching to feed-water pump saves costs The modeling found that running the station with a 1MW electrical feed-water pump instead of a turbo pump has delivered cost savings of more than 9 percent. Savings of up to 13 percent can be achieved by running the station with two feed-water streets and the turbo pump, compared to running with one feedwater street and one electrical pump. Comparing a few operation scenarios before
and after the optimizer was Total monthly cost - Power Station/Cracker 100% an eye opener as can be seen in the beneath figure. 86% 100% 78% 76% 74% The vertical axis represents 80% the cost (%) relative to the 60% way to station operated in the past at low loads. 40% The difference in 20% Scenarios 1 and 2 (from 0% left to right) is little in 1 Monoblock, 1 Monoblock, 1 Monoblock, 1 Monoblock, 2 Monoblocks, terms of cost (although a 1 Boiler, 1 Boiler, 1 Boiler & 1 Boiler, 2 Boilers, Flare off Flare off, Flare on 1,5 t/h Flare off & Flare off 2 percent difference repreSteam vents Steam vents Steam vents Steam vents off, BPT off & off, BPT on & off, BPT on & on 35 t/h sents a considerable amount CT on 7 MW CT on 7 MW CT on 7 MW of money on a yearly basis) but has been rejected by Repsol due to environ- ties, etc. are linked to the model. The Solver add-in executes and writes the results into the mental considerations. model tab. From there the values are written to Scenarios 3,4 and 5 are all complying to the defined SCADA points in the DCS for further sustainability targets (no flaring and steam display, historization, reporting and alarming venting) but clearly showing huge differences via OPC. in operating cost of close to 22 percent beA copy of the workbook, without the input tween operating the power station with only and output sheets, is used for offline optimizathe condensing set at a minimum and one tion, enabling the user to run various multi peboiler (scenario 3) compared to scenario 5 i.e. riods (hours, days, weeks, months, years) and running the station as it used to run. analyse “what if” scenarios. In addition, users have been able to justify The objective function of the model repreimprovements and various efficiency improvement projects by changing the layout of the sta- sents the sum of variable and fixed costs, including depreciation, personnel, insurance and tion and comparing it with previous scenarios fixed charges. The user is able to view the imover a certain operational time period (i.e. one pact of various optimization modes, constraints year). and loading, including switching devices on or “Without on- and off-line optimisation applications, based on open systems, fundamental off. The model provides the operating cost of the CHP in actual mode and optimum mode in engineering knowledge and experience, these a real time environment. critical savings would have been disguised and The Honeywell’s Experion PKS distributed remained unnoticed. “Especially in today’s harsh economic envi- control system enables the use of Microsoft tools such as Task Scheduler Excel and Visual ronments, it translates to either profits or Basic to simplify optimization of applications. losses,” Coelh and Stijns concluded. The system combines this with three Microsoft Throughout the optimization, data is read Excel add-ins: the Honeywell Water and Steam from the DCS into an Excel workbook via Honeywell’s Medex OPC-based add-in. Online Physical Properties, the FrontSys Premium Solver and the Microsoft Excel Data values, pricing information, physical properExchange. The pay-back period for Repsol’s investment in the whole application is a couple of months, according to Honeywell. Repsol operates in the businesses of exploration, new energy, chemicals and commercial areas. The petrochemical complex in Sines produces polymers and is Repsol’s largest chemical company in Portugal. Example of an optimisation window
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GTP Journal
PROJECTS & FINANCE
26 July 2013
Emerson keeps the heat on during CHP plant migration
NEWS NUDGES Qatar Petroleum buys 25 percent stake in Greek power plant State-owned Qatar Petroleum International has bought a 25 percent in Heron II, a power plant in Greece, from GEK Terna for $58 million. The acquisition of the share in the Greek plant, is QPI's first international participation in the power production sector. Heron II is a combined-cycle power plant with a capacity of 435MW.
Merkel lobbies EC to delay state aide case Heavy lobbying by the German Chancellor Angel Merkel has led to a postponement of the plans until the end of September – after the general election on 22 September. The EU competition commissioner Joaquin Almunia had initially intended to open a state aid breach investigation of the Renewable Energy Act (EEG) last Wednesday
Receding heat wave in US Northeast reduces gas-topower demand Forecasts of falling temperatures in densely populated US areas are expected to reduce gas demand for power generation as the use of air conditioners decreases. The receding heat wave in the US Northeast made prices of natural gas futures for August delivery edge lower, hovering around $3.72 per million British thermal units on the NYMEX.
American power equipment manufacturer Emerson Process Management has upgraded the Oviation control systems at EnergyWorks’ combined heat and power (CHP) plant in Cartagena, Spain, completing the migration project during a 10-day scheduled outage without interrupting the supply of steam to a neighbouring factory. eedback on the Ovation control systems, first installed in February of last year, showed it helped maximize the plant's availability and an efficiency while the aster system response allows the plant to react more quickly to changes in demand. Iberdrola-owned EnergyWorks Cartagena is a 95MW CHP plant, driven by two GE gas turbines, which supplies heat as steam to a neighbouring plastic production facility, the SABIC polycarbonate manufacturing plant. Iberdrola owns eight combined cycle turbine power plants in Spain. Emerson completed the control system upgrade at Cartagena CHP in two phases to minimize lost revenue to Iberdola and ensure a continuous supply of steam to the plastics factory. The existing control logic was transferred to the new Ovation controllers in advance. During the upgrade, Emerson used package boilers generated the steam to supply the plastics facility, and then reverted steam generation reverted to the CHP plant during the upgrade of the
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package boilers. Afterwards, Emerson it installed the operating software and provided four pairs of redundant Ovation controllers.
Upgrade to more efficient electricity production completed "We needed to use this opportunity to upgrade our systems to enable the plant to continue to provide efficient production. However, this had to be balanced against our obligation to maintain the supply of steam to our customer," said Carlos González Costea, plant manager at EnergyWorks Cartagena. He highlighted the close cooperation between EnergyWorks and Emerson during the upgrade process, particularly prior to the scheduled plant outage, as well as during the execution phase. "The experience and professionalism of both teams enabled them to understand the complexity of this multi-phase project and properly analyse all aspects," he said. "This resulted in an excellent migration whilst maintaining steam production."
PG&E discusses property lease to build 300MW plant in California Pacific Gas and Electric (PG&E) is discussing a potential lease of city property to build a 300 MW power plant in Lodi, California that would store energy in the form of compressed air to be used during peak demand times.
The upgraded Emerson plant in Cartagena, Spain
Industrial Application of Gas Turbines Committee The IAGT Committee Symposium and Conference, October 2013, Banff, Alberta
26 July 2013
GTP Journal
PROJECTS & FINANCE
Alstom wins $480m service contract for GDF Suez power plant in the US
The plant is planned to be activated "sometime in 2020" with a current tentative timeline, according to the operator.
SWB to mothball 250MW of fossil capacity
GDF Suez Energy North America has awarded Alstom a long-term service contract worth $480 million to enhance the flexibility of its power plant fleet in the US. nder the contract, Alstom will provide maintenance services and gas turbine upgrade packages for four GDF Suez gas-fired stations in Texas and Massachusetts, which use fourteen Alstom GT24 gas turbines between them. For the Midlothian and Hays plants in Texas, and Bellingham and Blackstone power plants in Massachusetts, Alstom is responsible for managing the provision of replacement
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GDF Suez’ Bellingham power plant (539MW)
parts, technical field advisors and gas turbine services for their fourteen power generating units over the life of the contract. The first upgrade installation is scheduled for the fall of 2014. The four power stations included in this agreement constitute the largest fleet of Alstom GT24 gas turbines owned by a single customer, and the company has provided service support for the plants since they entered commercial service. Herman Schopman, president and CEO of GDF Suez Energy Generation NA said the
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service contract is meant to facilitate reliability, flexibility, and efficiency of gas turbine operation to drive performance of the company's power generation business.
Switch between GT operating modes Alstom said it will upgrade the gas turbines (GT) to enable switching between operating modes based on electricity market demand without taking the plant offline. The first operating mode package maximizes power output during periods of peak demand, while the second lowers the cost of running and maintaining the gas turbines by increasing the time between service inspections. "This boost in operational flexibility is particularly important in the highlycompetitive Texas electricity market where plants are often called on to rapidly increase and decrease power output," Alstom said. Hans-Peter Meer, Senior Vice President of Alstom's Thermal Services business said the Franco-Swiss turbine manufacturer has invested heavily in advancing its natural gas power generating technologies. "For GDF SUEZ Energy North America, those investments will translate into bottom-line benefits once the GT24 upgraded fleet is performing to the new standard in operational flexibility," he said.
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“The boost in operational flexibility is particularly important in the highly-competitive Texas electricity market where plants are often called on to rapidly increase and decrease power output”
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Stadtwerke Bremen, a municipal utility in northern Germany, has decided to mothball two fossil power plants with a combined capacity of 250MW by the end of the year, due to their "unprofitable operation profile". The decision affects the gas-fired CHP unit 14 of the Bremen-Hastedt plant (120 MW) and the 130 MW hard coal-fired CHP unit 5 of the Bremen-Industriehafen plant, the operator said.
Siemens to supply gas turbines for Yamal LNG power plant Siemens has won contract to supply gas turbines for a plant that will power Yamal LNG – one of Russia's most ambitious gas export projects. The German engineering conglomerate sold six gas-fired power generating turbines, each with a capacity of 47MW, to Tekhnopromexport, a subsidiary of state corporation Rustec, which is building the power plant.
FERC imposes $453m penalties on Barclays' traders for power market manipulation The Federal Energy Regulatory Commission (FERC) has compelled Barclays Bank PLC and four of its traders to pay $453 million in civil penalties for manipulating electric energy prices in California and other western markets between November 2006 and December 2008. In the order, FERC finds Barclays traders built and then flattened substantial monthly physical index positions at four of the then-most liquid trading points in the western United States to manipulate the index price to benefit Barclays' financial swap positions.
RGGI mandates 2.5 percent annual cut in power plant emissions The Regional Greenhouse Gas Initiative (RGGI) program in the northeast of US is mandating a 2.5 percent cut in emissions each year from 2015 to 2020. An auction is scheduled for September where operators of fossil power plants can buy allowances to emit carbon dioxide.
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GTP Journal
PROJECTS & FINANCE
Turkish ECP contractor to build to gas power plants in Turkmenistan July 19 – Turkey's engineering, procurement and construction contractor Çalik Enerji Sanayi ve Ticaret will realise two gas turbine power plant projects in Turkmenistan on behalf of state-run Turkmenenergo. One 252.2 MW plant will be built in the district of Ak Bugdai in Akhal region; a second with capacity of 504.4 MW in the Dervezinsky district of the same region. Construction will start this month and the units will be commissioned in December 2014 and December 2015, respectively.
Gina McCarthy nominated as head of EPA July 18 – Gina McCarthy has been nominated as administrator of the Environmental Protection Agency, after a procedural gridlock of over 130 days, the US Senate confirmed. McCathy will spearhead the EPA at a time when a stalemate in Congress over energy policy has forced the President to resort to regulatory pressure to advance his decarbonisation agenda.
GE Oil & Gas picks London as home for global headquarters July 19 – GE Oil & Gas has selected London as the prime location of its new global headquarters, mainly due to the city's "position as a leading international business and travel hub," said Dan Heintzelman, president and CEO of GE Oil & Gas.
26 July 2013
ABB wins $30m order to expand Iraq’s power grid ABB has won an order worth $30 million from Zagros Energy to build four substations in the Kurdistan region of Iraq, as part of an initiative to strengthen the reliability of the regional power grid. The project is scheduled for completion in 2014. emand for reliable power is growing in Iraq at a rate of 10 to 25 percent per annum, spurred by industrial growth, construction projects and overall economic development. The Kurdish power grid currently supplies around 2,750MW of electricity. More than 90 percent of this capacity is owned and operated by independent power producers. Surging power demand has An ABB substation caused frequent shortages and the (kV) underground cables due to the lack of occasional blackout. Keen to dent shortages, space for overhead lines. Circuit breakers and the Iraqi government aims to air-insulated switchgear, control and protecexpand power generation capacity to tion systems, capacitor banks as well as 4,000 MW in the short-term, while power transformers and other high-voltage fostering the long-term ambition is to reach equipment, will form part of the key product 10,000 MW, which would allow for exports supplies. to neighbouring countries. Once operational, the substations are ABB's substation project will provide the meant to "strengthen the grid, reduce outages Kurdish region with an additional 600 MW o and improve the reliability of power supplies f power supply. The Swiss company will to consumers," said Oleg Aleinikov, Head of design and supply of the substations based ABB's Substations business within the comon GIS technology. The compact footprint pany's Power Systems division. was vital for ABB winning the order, it said, ABB is a global supplier of turnkey air-insince the substations are to be located in the sulated, gas-insulated and hybrid substations center of a city. with voltage levels up to 1,100 kV. Two will be connected with 132 kilovolt
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Wood Group completes $2m contract for plant overhauls Wood Group GTS has completed a maintenance contract worth $2 million for Frame 5 and 6B gas turbines at power stations in Costa Rica and the US. t the US facility, where apparently all parts had to be replaced, the "projected maintenance costs were significant compared to the revenue earned by the peaking plant," Wood Group said. The gas turbine at the plant was scheduled to run fewer than 100 hours per year after the owner chose to change the operating profile of the CCGT from base load to peaking
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duty, serving the reserve power market. At the Costa Rican facility, the parts were repaired rather than replaced, and this made the maintenance cheaper. At both plants, the scope of works included the inspection and repair of hot gas path parts, namely turbine buckets, nozzles, shrouds, transition pieces, crossfire tubes, fuel nozzles, flow sleeves and bearings. Non-destructive testing and machining
allows Wood Group to re-manufacture parts. It also has the capability to repair other components like interconnect shafts, skid ancillaries, turbine disc and rotor assemblies. Wood Group has a pre-existing contract the operators of the US and Costa Rican plants to provide field services, repair components and supply "Advanced Parts Manufacture" parts.
Future events Gas to Power Britain 17th September 2013, Copthorne Tara Kensington, London
Gas to Power Turkey 6-7 November 2013, Ankara
WHO SHOULD ATTEND? This conference is aimed at attendees from utilities and power generation companies, energy policy and regulatory bodies, energy infrastructure project finance, banking and legal firms, and low-carbon and renewable energy companies. Including professionals responsible for: Energy Policy / Regulation Power Generation Power Plant Management Grid Development Business Development Regulatory Economics Corporate Strategy
Project Management and Development Carbon Reduction / CCS Programmes CCGT Technology/Operations/ Maintenance Gas Turbine Manufacture Fleet Management Asset Management and Optimisation Turbine Engineering
Gas Procurement / Origination Gas Supply and Trading Trading Operations Market Development Analysis Project Finance and Investment Sales and Marketing Regulatory Affairs
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