Combined Heat and Power Combined Heat and Power Opportunities in the Dry Mill Ethanol Opportunities in the Dry Mill Ethanol Industry* Industry* Bruce Hedman Bruce Hedman Energy and Environmental Analysis, Inc Energy and Environmental Analysis, Inc March 18, 2008 March 18, 2008 * Based on work supported by the EPA CHP Partnership * Based on work supported by the EPA CHP Partnership
Drivers for Ethanol Demand • Originally promoted in early 1980s as an octane enhancer and alternative to imported oil – Resulted in a many very small, very inefficient ethanol producers – most shut down • Then used as an oxygenate for compliance with federally mandated programs – Replacement for MTBE (22 states had banned MTBE as of 2006) • Increased value perceived as gasoline prices climb • Demand is poised to increase dramatically as a result of the Renewable Fuels Standard 2
Source: Renewable Fuels Association 6 0 0 2 Historic U.S. Ethanol Production 4 0 0 2 2 0 0 2 0 0 0 2 8 9 9 1 6 0 0 1 3 4 9 9 1 2 9 9 1 0 9 9 1 8 8 9 1 6 8 9 1 4 8 9 1 2 8 9 1 0 8 9 7 6 5 4 3 2 1 0 1 Billions of Gallons
The 2007 Renewable Fuels Standard Requires 36 Billions Gallons of Biofuels Capacity by 2022 40 35 Billions of Gallons 30 25 20 15 10 5 0 6 7 8 0 5 2 0 0 0 1 1 2 0 0 0 0 0 0 2 2 2 2 2 2 4
How Is Ethanol Produced? • Wet Corn Milling (18% in 2006) – Large “chemical” plant – Ethanol is one byproduct • Dry Corn Milling (82% in 2006) – Dedicated ethanol production – Small to medium size range – Fastest growing market segment • Cellulosic Ethanol – Emerging process – Enables wide range of feedstocks 5
Corn Ethanol Capacity Will More than Double by 2015 40 35 30 Billion Gallons 25 20 15 10 5 0 9 0 1 2 3 4 5 6 7 8 9 0 1 2 0 1 1 1 1 1 1 1 1 1 1 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Corn-based Ethanol Cellulosic Biofuels Biodiesel Additional Advanced Biofuels 6 Source: Center for Agricultural and Rural Development, University of Iowa
Source: Renewables Fuel Association 7 Dry Corn Mill Process
Ethanol Plants in North America Source: Center for Agricultural and Rural Development, University of Iowa 8
The Dry Mill Ethanol Industry Today • Over capacity in producing regions • Distribution capacity lags production • Ethanol prices have fallen • Corn prices remain high • Energy prices rising • Some plant closings • Questions about energy efficiency and carbon benefits of fuel ethanol 9
Dry Mill Ethanol Production Costs Admin Other Labor 3 - 4% 5 - 6% 1% Materials 8 - 10% Corn Energy 60 - 70% 15 - 20% Source: USDA’s 2002 Cost of Ethanol 10 Production Survey
CHP (Cogeneration) Is an Excellent Fit for the Ethanol Industry • Energy is the second largest cost of production for dry mill ethanol plants • Electric and steam demands are large and coincident – Typical power demand is 2 to 10 MW – Typical steam use is 40,000 to 250,000 lb/hr • Electric and steam profiles are relatively flat • Operating hours are continuous • Energy costs are rising 11
What Can CHP Offer the Ethanol Plant? • Increased energy efficiency of ethanol production • Energy cost savings from 10 to 25 percent • Reliable electricity and steam generated on site • Hedge against unstable energy costs • Improved competitiveness • Reduced carbon footprint 12
CHP Recaptures Much of that Heat, Increasing Overall Efficiency of Energy Services 13 Source: EEA
Increased Efficiency Results in Reduced 14 Carbon Emissions Source: EEA
CHP Options for Ethanol Plants • Gas Turbine CHP If sized to electricity load, additional steam needed • Gas Turbine/Supplemental Fired CHP Can be sized to meet both steam and electric loads • Boiler/Steam Turbine CHP Short payback, limited electric capacity • Biomass Fueled Least-cost fuel but capital intensive; Tax credit for biomass electricity; Green electricity if sold • Integrated VOC destruction Produce power with steam from thermal oxidizer, incorporate VOC destruction in turbine or boiler systems 15
There Are 12 Ethanol Plants Using CHP Blue Flint Ethanol* Underwood, ND 50 MMGal/y Coal Creek Power Plant Golden Cheese Company of California* Corona, CA 5 MMGal/yr 47 MW Gas Turbine Northeast Missouri Grain LLC* (POET) Macon, MO 45 MMGal/yr 10 MW Gas Turbine U.S. Energy Partners LLC* (White E) Russell, KS 48 MMGal/yr 7.5 MW Gas Turbine Adkins Energy LLC Lena, IL 40 MMGal/yr 5 MW Gas Turbine The Andersons Albion Ethanol LLC Albion, MI 55 MMGal/yr 2 MW TO/Steam Turbine Archer Daniels Midland Peoria, IL 200 MMGal/yr 64 MW Boiler/ST - Gas Turbine Archer Daniels Midland Wallhalla, ND 40 MMGal/yr 2 MW Boiler/Steam Turbine East Kansas Agri-Energy LLC Garnett, KS 35 MMGal/yr 1 MW TO/Steam Turbine Front Range Energy LLC Windsor, CO 40 MMGal/yr 2 MW TO/Steam Turbine Otter Creek Ethanol LLC (POET) Ashton, IA 55 MMGal/yr 7 MW Gas Turbine Prairie Horizon Agri-Energy LLC Phillipsburg, KS 40 MMGal/yr 4 MW TO/Steam Turbine Sterling Ethanol LLC Sterling, CO 42 MMGal/yr 1 MW Boiler/Steam Turbine Subtotal - Partnerships 148 MMGal/yr 64.5 MW Total 695 MMGal/yr 152.5 MW 16
There Are at least 11 CHP Systems Under Construction E Caruso* (Goodland Energy Center) Goodland, KS 20 MMGal/yr Steam from coal power plant Missouri Ethanol* (POET) Laddonia, MO 45 MMGal/yr Gas Turbine Spiritwood Ethanol* Jamestown, ND 100 MMGal/yr Co-located with 50 MW coal power plant Southwest Iowa Renewable Council Bluffs, IA 110 MMGal/yr Steam from MidAmerica Power Energy LLC* Plant Archer Daniels Midland Columbus, NE 275 MMGal/yr Boiler/Steam Turbine Bonanza Energy LLC/Conestoga Garden City, KS 55 MMGal/yr TO/Steam Turbine Central Illinois Energy LLC Canton, IL 37 MMGal/yr Boiler/Steam Turbine Central MN Ethanol Coop Little Falls, MN 21.5 MMGal/yr Gasifier/Steam Turbine Renova Energy Heyburn, ID 15 MMGal/yr Digester/Boiler/Engines Yuma Ethanol Yuma, CO 40 MMGal/yr TO/Steam Turbine Subtotal - Partnerships 275 MMGal/yr Total 718.5 MMGal/yr ~45 MW CHP 17
What is CHP’s Role in Reducing Overall Energy Use and Lowering the Carbon Footprint of the Dry Mill Ethanol Process? 18
Dry Mill Baseline Assumptions State of the Art Operating Assumptions for Dry Mill Ethanol Operating Assumptions Natural Gas Coal/Biomass Plant Capacity, MMgal/yr 50 50 Operating Hours 8600 8600 Boiler Type Packaged Fluidized Bed DDGS 100% 100% Dryer Type Direct Fired Steam VOC Destruction RTO Boiler Electricity Use, kWh/gal 0.75 0.90 Steam Use, lb/gal 17.1 31.4 Dryer Fuel, MMBtu/gal 10,500 NA RTO Fuel, MMBtu/gal 330 NA 19
Dry Mill Energy Consumption Baseline State of the Art Energy Consumption for Dry Mill Ethanol Energy Consumption Natural Gas Coal/Biomass Plant Capacity, MMgal/yr 50 50 Operating Hours 8600 8600 Annual Electric Use, MWh 37,500 45,000 Average Electric Demand, MW 4.4 5.2 Total Plant Fuel Use, Btu/gal 32,300 40,300 Boiler Fuel Use, Btu/gal 21,500 40,300 Steam Use, lbs/hr 100,000 182,000 Annual Steam Use, MMlbs 860 1,570 Annual Boiler Fuel Use, MMBtu 1,075,000 2,015,000 Annual Drier Fuel Use, MMBtu 525,000 0 20
CHP Options Evaluated • Case 1: Natural Gas - Gas Turbine/Supplemental Fired Electric output sized to plant demand • Case 2: Natural Gas – Gas Turbine with Power Export. Thermal output sized to plant demand • Case 3: Natural Gas – Gas Turbine/Steam Turbine with Power Export. Thermal output sized to plant demand, maximum power generation • Case 4/5: Coal/Biomass – High pressure boiler/steam turbine Power output matched to plant demand 21
CHP Options Evaluated • Case 1: Natural Gas - Gas Turbine/Supplemental Fired Electric output sized to plant demand • Case 2: Natural Gas – Gas Turbine with Power Export. Thermal output sized to plant demand • Case 3: Natural Gas – Gas Turbine/Steam Turbine with Power Export. Thermal output sized to plant demand, maximum power generation • Case 4/5: Coal/Biomass – High pressure boiler/steam turbine Power output matched to plant demand 22
CHP Options Evaluated • Case 1: Natural Gas - Gas Turbine/Supplemental Fired Electric output sized to plant demand • Case 2: Natural Gas – Gas Turbine with Power Export. Thermal output sized to plant demand • Case 3: Natural Gas – Gas Turbine/Steam Turbine with Power Export. Thermal output sized to plant demand, maximum power generation • Case 4/5: Coal/Biomass – High pressure boiler/steam turbine Power output matched to plant demand 23
CHP Options Evaluated • Case 1: Natural Gas - Gas Turbine/Supplemental Fired Electric output sized to plant demand • Case 2: Natural Gas – Gas Turbine with Power Export. Thermal output sized to plant demand • Case 3: Natural Gas – Gas Turbine/Steam Turbine with Power Export. Thermal output sized to plant demand, maximum power generation • Case 4/5: Coal/Biomass – High pressure boiler/steam turbine Power output matched to plant demand 24
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