Heat Transfer What’s the Price of Steam? Realistic steam prices are necessary Rosin SmitH CENTRE FOR PROCESS INTEGRATION, UNIV. OF MANCHESTER PETAR VARBANOV TECHNICAL UNIVERSITY OF BERLIN for the efficient operation of a chemical production site, both to allocate realistic costs to the different businesses on the site and to provide a true economic incentive for energy conservation. the basic problem with the question "What isthe price of steam?” is that itis largely a meaningless question. Unless steam is purchased from a third paty according to some contrat price, steam does not have a cost. Purchased fuel has a cost Purchased power has a cast. Power exported from the site and sold has a value. Water and chemicals purchased for steam sssnertion have costs. Labor and maintenance also have cost. However, steam does not have a direct cost Its simply an inermediary between the primary costs (eg. fuel) and the end users. Yet somehow we need to distribute to the businesses on the site the primary costs that resuit from their use of steam. “To analyze ality system, itis first necessary to develop @ simulation model (1), which can be done using commercially available software. The simulation model should allow part Jad performance of the steam systern components. It should provide a simulation ofthe complete material and energy balance around the steam system, and be capable of predicting the fuel, power genera- tion, water requirements, tc. for any conition ofthe steam sjs- ‘em. The model must take into account the operating constraints around the system, for example with respect to stam slows from. steam generation devices and steam flows through steam turbines nce such a simulation model has been developed, it can be subjected to optimization. The important degrees of free- dom in utility systems are: ‘Multiple steam generation devices. Each seam generation 20.0 fam9350 a] X00 ey Curent. 85.0 ‘Mr 300 Max700 559 solve (1). This is followed by a ‘rigorous simulation after each opt- mization step. The linear optimization is repeated, followed ‘again by rigorous simulation, and so on, until convergence is achieved, This procedure usually requires ao more than four or five iterations to reach convergence (J). Using the optimization model to set steam prices for fixed loads ‘Consider first the ease where the steam heat loads forthe processes on a site are fixed and the objective isto calculate the ost of the steam forthe allocation of cost to the processes and basinesses on the site, Establishing the true steam costs for an existing steam systema requires a model that refleets, as much as possible, the performance of the existing equipment and the constraints in the existing equipment and steam network. The ‘mol should also include the existing steam heating demands forthe various processes, ‘This model should fist be optimized, as previeusly described. “The cost to generate the steam in the uty boilers can be ealoue lated from the optimized model. This will mainly be the cost of| Value, ki/kg, Price $o.0084/Wh | $0.0108%KWn | $0.0152/e4n BO vorr.copmagacineorg uiy2005 CRP Figure 1A typical site utilty system for a CPI facility. fel, but could include other costs as well. Having cafculated the cost of the highest-pressure steam, the model wil also provide the amount of power generated by expansion of the highest-pressure ‘team tothe next-highest pressure. The value of this power can then be subtracted from the cost of gencrating the highestspres- sare steam in the utility boilers to give the cost ofthe next-highest pressure steam, The calculation is repeated for the next lower pressure level, and so on, Thus, the cost of each steam level is the cost of the next highest level minus the value ofthe power gener- aed from the expansion from the next highest level. This model incorporates the performance data and constraints assouiated with ‘an actual system, rather than an idealized model In extreme cases, this approach to costing steam might lead to steam at ow pressure having a negative cost. This can happen if fuel is relatively cheap and power is relatively expensive. This is not a fundamental problem, as it reflects the true economics. ‘The site utility system is benefiting from the availsbility ofa heat sink forthe low-pressure steam. However, it souk be empha sized that ifthe low-pressure steam has a negative cost, this does Ambient Temperature BFW Temperature 110°C Cooling Water Tempersture 25°C Site Power Demand 68.0 MW Minimum Power Import ony. Maximum Power Import 50.0 Mw Minimum Power Export omw: Maximum Power Export 50.0 MW, Power Price $0.05/KWh Cootng Water Price $0,005/KWhFuel 1 ‘Cure: 105.0 ian 1680 Me 30 a pent Fa cure so.5 “siete m0 rise Maceo Bax yo 80.0 unent:40.0 “in's'0 a tn 300 Me 900 09, Mine 1800 TR Vent ae 75.0 in 0 ws a5 LU Curent, 108 0] ‘te 800 isentropic efficieney mode! pre= dicts costs that are to0 low for lowerpressure steam levels, (Of ‘course, the results forthe isentrop- icefficiency model depend on the assumption forthe isentropic eff- cieney) It is also clear that there are significant differenoes between the costs calculated for VHP (101 bar abs) 200 tHe (41 bar abs) | the base case and the optimized 545 cease, Finally, the cost of the low 0.9 estepressure steam is negative tp 115 barabs) | when based either on the isentrop- 569 ic efficiency model or the simula- tion model, The most appropriate LP @barabs) costs are those from the right- 1280 hand column of Table 3, Steam prices Figure 2. Typical site utility system after optimization, ‘not necessaily mean that it is economic fo inerease low-pressure steam consumption significantly. As will be seen later, the cost of steams likely to change as its constimption changes. It should also be noted that variation in electricity costs will change the optimization and therefore the steam costs. For this situation, an average can be taken according to the relative donee tion ofthe costs Example 1: Steam prices for fixed steam loads ‘Consider now the steam prices for the existing uly system Figure 1 when the loads onthe various tearm headers are fixed. ‘The fies in use are summarized in Yale 1 and the site configura tion data ate given in Table 2. There isa demand for very high pressure (VHP) steam from Various processes on the site t0 drive seat turbines on fied drives with condensed exhstust, There are also demands for high-pressure (HP), metum-pressre (MP) and Tow-pressure (LP) steam for process heating. In ackiton, steam is expanded through various seam turbines. Figure 2 shows the same utility sytem after optimization, ‘The stcam cast can now be calculated for te base case al the optimized case. Table 3 presents the costs of the Various steam levels based on the Fuel value of the enthalpy difference between the steam mains, an isentropic ficiency steam turbine model (assuming atypical 85% isentropic efficiency and 95% ‘machine efficiency) and the full simuiation model ‘Table 3 shows thatthe cost model based on the fuel value ofthe enthalpy difference between steam. ‘mains significantly over predicts the prices of Jower-pressure steam levels. On the other hand, the Difference for changing loads Consider now the ease where the steam price needs fo be determined fora change in process heat load, for example for the etofit of a heat exchanger net- ‘work for increased heat recovery. Altematively, a project might involve an increase in heat demand asa result of commission- ing a new plant or expansion of an existing one. ‘The stating point isa mock for the steam system, again ‘optimizing forthe existing steam heating loads. I tight be sus- pected that the steam cost calculated from the mode! forthe existing steam loads can be used to provide steam costs Tor a increase or decrease for a given steam main. Unfortunately this ‘snot the case. The optimum settings forthe steam system change once the loads forthe steam mains change. Constraints on the existing equipment will also be eneountered, ad all of| this needs to be accounted for. Consider again Figure 2 showing the existing site utility sys- tem (2), Suppose that it is possible to maduce the HP sues «demand, This could be done, for example, by improving the heat recovery within the processes that use HP steam, But what is such a steam saving actually worth? The saving. {n steam from the HP mains means that it now does not need to Price Based on Price Based on Price Based| Ideal Steam Turbines | Actual Sleem Turbines (on Enthalpy Base ase_| optimized $7.94 $52 soi $0.85! auy205 34 rrncnperagazie ceHeat Transfer be expanded through steam turbines from the VHP level. This, in tur, means tha there is a surplus of steam at the VAP level ‘The first obvious action to take isto reduce the steam gener- ation in the utility boilers and accept a saving in fuel costs as a result. Unfortunately the saving in fuel costs would also be ‘accompanied by an inerease in power costs. This results from ‘the reduction in the flow of steam through the steam turbines, and additional power would have to be imported (or export power decreased) to compensate Is therefore not so straight forward to determine exactly what the cost benefits associated with a steam saving would be. Another way to deal with the surplis of steam at the VHP Jevel created by a steam saving would be to pass the heat through an alternative path, say to the condensing turbine, This ‘would allow additional power to be generate, witha resulting ‘cost benefit. In a complex utility system, the heat can flow through the utility system through many paths. The flow through different paths will have different cost implications. Jn assessing the true cost benefits associated with a steam satving, the steam and power balance for the site utility system "must be considered, together with the costs of fuel and power (or power credit if power is exported. If steam is being generated, rather than used, then the same basic arguments apply. For example, suppose HP steam was being generated by a process into the HP main in Figure 2. The project to improve the heat recovery in this process might lead to an increase in the HP generation, This leads to a surplus of HP steam, which in tur leads toa sumplus of VHP steam. Then the same arguments apply as to what isthe most efficient way to exploit the surplus of VHP steam, The only way to reconcile the true cost implications of a reduction in steam demand created by an energy reduction proj- ect is to use the optimization techniques described earlier. An ‘optimization model ofthe existing utility system must fist be set up. Starting with the steam load on the main with the most ‘expensive steam, this is gradually reduced and the uly system re-optimized at each setting ofthe steam load, The steam lead can only be reduced tothe point where the flowrate constraints are not violated, ‘The concept of steam marginal cost is used as an indicator in the analysis. Is defined as the change in utility system operat- ing cost for unit change in steam demand for a giver steam ‘natn (change in steam main balance) (3) MP sseue= ACost/ Asse cost and Arisrzue = change in steam flowrate, Ttis important ro emphasize thatthe change in the ope cost is taken between the optimum operation before the steam demand change and the optimiam operation after the steam demanel change forthe current step. ‘A common approach to pricing steam sterts with frst cal culating the cast for the generation of high-pressure steam inthe lity Bolles or heat-recovery steam genera- tors (HSRGs) asscoisted withthe gas turbines, This is usually dominated by the cost of fuel, Other costs include those for auxiiary steam and power required for steam generation, water and treatment chemicals, labor, and so Gn. The cost of the fuel could be used as a frst approxi- mation ofthe cost ofthe high-pressure steam generation. ‘One approach t0 setting the price of lower pressure steam is based on the enthalpy diference between the high- and low-pressure steam. The fuel value ofthe difer ‘ence in enthalpy between two levels is calculated and subtracted from the price of the high-pressure steam. If a mix of fuels is belng used, then a mean fuel cost weighted according to the calorific value of the fuels can be used. Vil this sounds reasonable, ts completely inappro- priate for all but the smallest utility systems, because it does nat recognize the potential forthe high-pressure steam to generate power by expansion in team turbines. Estimating the potential for power generation from steam turbines by expansion between two different steam pres- sures is not dificult. Starting from the highest pressure steam cost, if the pressure ofthe next-Jowest steam level is fied, then the amount of power that can be generated by expansion can be estimated based on an isentropic Approaches to Steam Pri : What Not to Do efficiency model (9). Knowing the amount of power that ccan be extracted allows the value of the power to be estl- ‘mated, and this can be subtracted from the price of the high-pressure utility steam to obtain the price of the lower-pressure steam, This seems to be more logical for ullty systems with power generation in steam turbines. Unfortunately, even this approach has a number of shortcomings. First, it assumes a single steam turbine in ‘each expansion, There will usually be a number of tur- bines between éach two mains. ‘Second, the efficiency of power generation is assumed to be fixed. In practice, the efficiency of steam turbines depends on the load. The load for some turbines can be varied, and for these turbines, the efficiency will vary according to the steam loads in various parts of the sys- tem. Other turbines, perhaps on direct crives, might have their loads (and hence their efficiencies) fixed. Thitd, it does not account for the existing equipment for power generation, either from the point of view ofits, performance, or the constraints within the utility system. ‘Some turbines are larger than others and are likely to be ‘correspondingly more efficient. All turbines ave con- strained to operate between minimum and maximum steam flowrates. Complex turbines involving extraction ‘ induction have constraints on the extraction or induc- ton flowrates. BZ wwwcepmagasnecrg ly 2005 CEPSteam dernand for a given main can inerease as a result of an increase in production rate or decrease in onder to improve the energy efficiency of the site, The same approach can be used to deal with any context ‘The frst step isto optimize the operation ofthe uty system forthe initial seam demands, asin Figures 1 and 2 (3). Next the steaan main withthe highest steam marginal cost for the curent ‘teen demard is identified. The potential for decreasing the demand of this main is then determined by gradually decreasing the demand for that steam, At each step in the reduction, the \whole utility sysem is re-optimized, Ifa constraint on decreased usage (or increased generation) is reached, or the marginal cost forthe steam main chang significantly, the stepwise decrease in the steam demand (or inerease in steam generation) is terminated “The procedure is then repeated forthe steam main with the high- est steam marginal cost for the new conditions until no further decrease in steam usage (oF increased generation) is possible. Example 2: Steam prices for changing steam loads Consider again the utility system in Figures 1 and 2, but now the steam loads on the various steam headers are varied. The ccurent process steam requirements will be examined for poten- til benefits of saving steam, Even fora relatively simple utility system sch as this there are many complex interactions to be explored in order to determine the true economic value of steam saved at ay one of the pressure levels. Figure 3 isa plot of steam marginal price versus the poten- tial steam savings. It features six segments: three for HP steam savings and three MP segments, Saving LP steam has no value, Withineach segment, there are slight marginal price variations, usually forming @ stable rend, resulting from the nonlinearity of the tearm turbine performance. The steps in the curve are IMerginal Price, $4 20 30 40 50 60 70 ‘stoam Savings, vn ° 10 1m Figure 3, Marginal stoam price versus potential steam savings \when process steam loads change. ‘caused when, after optimization, futher saving in steam along some path in the utility system is restricted by a constraint, typi- cally & lower bound on a flowrate, ‘An important point to emphasize is that when the process steam loai changes, the cost ofa given level of steam can ‘change, depending on the sizeof the change in steam load, The ost of stam in this situation not only depends on the costs of fuel and power, but alse on the utility configuration, equipment performance and the constraints within the utility system. Another important point to eraphasize is that Figure 3 does ‘not represent the feasibility of steam saving within the process- cs, The steam savings, as represented in Figure 3, might not be possible as far asthe processes are concemed. Thus, the proce- lure should be interpreted as a kind of “What if?” analysis, ie, ‘what would be the economic consequences of eventual steam savings in processes? Figure 3 demonstrates thet iis, in general, incomect to atrib- ute a single eeonomie value for steam at a given evel. ts value at a given level depends on how much is being consumed, as well fuel cost, power cost, and so on, These marginal prices, togeth- ‘er with the lists on steam saving, provide a strategy for energy ‘conservation on the site without modification tothe utility system, ‘The step changes in the marginal price also provide indications foc potential moxificaions to the utility system, ca Literature Cited 1, Varbanoy, PS, et.al, “Modeling and Optimization of ity Systems? Tras, IGhemB, 82A, pp. 561-78 (2008). 2, Varbanoy,PS, etal, “Top-Lovel Analysis of Site Utlity ‘Systems Tans. [Chem 828, pp. 784-795 2004). 3. Smnith R, “Chemical Progess Design and Integration,” ‘Wiles, Hoboken, Ni (2005). i [ROBIN SMITH ister of te Centre for races intra nthe Seneo ot ‘Chemica Enginetng and Anata Sconce at he Uno Marchester 20. Box; Manchest, Mo 10D, LK Phone: 44 61-200-438% Fx: ‘61296-7439: Ema robnsmithBumist acl). He has exces Insta experence wih Rohm & Haas andl and as @cosutanton ‘brocess integration projects He has pblshed widely nthe el of process Integration and ite author of Cheri Process Design an intepaioe™ {ile He hols bacheors, masters and doctoral degrees in chemical ‘ngieong othe Unik of Bedford inthe UX. He a Flo ofthe Royal ‘Aealemy of Engineering, 2 Flow of he ntti of Chemical Eines In the UXC.amember of AChE, and Chartered Engines n 19, Ne was awarded the chem Harson Mada for hs work an waste mini, PETAR VARBANOV i researcher inthe Dept of Process Dynamics and Operation, Technical Universiy oF Bein Strasse des 17, un 3, KT, aa Bein, Geary: nai: varbanoradynaib.TU Bern de). He has wore nthe fll fener ofcene specilzing in est iteration, SUCHE ~ Bulgarian Academy of Sens, an hs professional itrets Ineluts process modeling and apintzation. He sacuated fromthe Un of Chemica ehrelgy and Metall in Sofi, Bulgari, wih an MScin hericalengaeerng and sed fora PHD in te fl f optimization and ‘symtesi of roa tly ystems the Unk of Manchester, CEP vomncepmaceeneoy May 205 BB