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Examples of cogeneration projects implemented in Asia 67

CHAPTER 2: E XAMPLES OF COGENERATION PROJECTS IMPLEMENTED IN


ASIA

2.1 Introduction

A vast majority of the Asian countries has yet to tap the existing cogeneration potential to the
maximum. Considering the rapid industrial growth in many parts of the region, one would
expect many more new process industries and commercial buildings to be added to the
existing stock within a short span of time. These investments can be even better managed if
the concept of cogeneration is well understood by the developers and investors. The end-
users will have greater choices and more alternatives, in addition to having enhanced scope
for decision making and professionalism. At the same time, the power utilities can have
access to low cost and reliable excess energy produced in some areas faced with chronic
deficit of power supply in the past.

There is also a potential for cogeneration development based on privately funded projects in
close cooperation with potential end-users/customers and power companies. Owners of
existing as well as new industries and commercial buildings will benefit from these schemes
by having access to low-cost and more reliable energy supplies. Moreover, it will help them to
conserve their capital that would otherwise have been required for on-site energy facilities; the
saved resources and capital can be ploughed into their core business for improving their profit
margin and competitiveness.

It is encouraging to note that there are already a large number of cogeneration plants which
have been commissioned in some Asian countries in the last decade or so. The following
sections are aimed at providing sample examples of initiatives already undertaken in the
directions highlighted above. Each of the examples briefly covers the situation that led the
decision-makers to opt for cogeneration and the various benefits accrued from the project.

2.2 Cogeneration in Petrochemical Industry

Reliable power is essential for commercial viability of petrochemical industries. A small power
interruption does not only result in substantial production loss but can also jeopardize the
safety aspects of the plant. Thus, factories located in areas that are exposed to unreliable
power supply are obliged to have their captive power plants to ensure reliability of operation.
Faced with the situation of deficient power supply, one such gas cracking complex in India
decided to install a cogeneration plant to obtain reliable power at a reduced cost.1

2.2.1 Assessing the economic benefits of cogeneration


A preliminary study was conducted to establish the economic merits of the cogeneration
system in comparison with the existing situation where the conventional boilers supplied
process steam and power was purchased from the utility grid.

The power demand of the plant was of the order of 50 MW, and the total process steam
requirement was found to be 93 tons/hour. For analyzing the cogeneration option, the power
requirement was hiked to 65 MW, to include the provision for future expansion. The cost of
having a contract demand of 17.6 MVA with the utility had to be considered for assuring
continuous operation in case of the stoppage of the cogeneration plant. This would assure

1
A.K. Sood, “Commercial role of cogeneration in petrochemical industry”, Paper presented at the
Cogeneration Asia ’97 Conference, AIC Conferences, Singapore, 25-26 November 1997.
68 Part II: Cogeneration experiences in Asia and elsewhere

undisturbed operation of several power consumers in the plant during any unexpected tripping
by drawing power automatically as and when required up to the extent of 17.6 MVA.

Considering longer outage of the cogeneration plant during major overhauls or during the
recommended inspections, it was decided to include an additional captive power generation
capacity of 20 MW to guarantee power supply without depending on the public utility grid.
Similarly, to avoid the problem of steam shortage during the outage of heat recovery steam
generators, an additional boiler was included as a spare unit. This would also take care of the
start-up constraint of the gas cracker plant when greater amount of steam was required than
during normal operating conditions. Lean gas was considered as the sole fuel for operating
the cogeneration unit. The results of the economic analysis, considering the prevailing costs
of equipment, fuel, O&M, manpower, etc., are summarized in Table 2.1. The cogeneration
case has a clear edge over the existing case as it helps to reduce the energy bill by 36 per
cent and improves the reliability of the production process.

Table 2.1 Economic analysis of cogeneration in the gas cracker complex

Existing Situation:
Process steam from conventional boiler and power purchase from utility grid
Description Annual Cost
(US$/year)
Investment: 3,780.00
Boilers (2 x 136 tons/hour of steam)
Operating & Maintenance Costs:
Electricity purchased from the grid (50 MW) 40,832.00
Fuel gas (6,626 tons/hour) 4,529.00
Other utilities 2,479.00
Maintenance & Chemicals 315.00
Manpower 336.00
Total Costs (existing situation) 52,271.00
Steam cost (US$/ton) 15.37
Power cost (US$/MWh) 102.08
Cogeneration Case:
Power and heat from the cogeneration plant, minimum demand contract with utility grid
Investment: 18,267.00
Boilers (3 x 136 tons/hour of steam)
Gas turbine generators (3 x 20.7 MW)
Steam turbine generator (25 MW)
Operating & Maintenance Costs:
Demand contract with the grid (17.6 MVA) 754.00
Fuel gas (15.148 tons/hour) 10,355.00
Other utilities 1,862.00
Maintenance & Chemicals 1,720.00
Manpower 504.00
Total Costs (cogeneration case) 33,462.00
Steam cost (US$/ton) 12.30
Power cost (US$/MWh) 51.64
Examples of cogeneration projects implemented in Asia 69

Estimated Savings with the Cogeneration Case


Annual cost with the existing case 52,271.00
Annual cost with the cogeneration case 33,462.00
Net annual saving 18,809.00
Percentage annual saving 36 per cent

Based on the preliminary analysis, further optimization studies were conducted by


considering nine different cases involving different capacities and numbers of major
equipment. The most optimum scheme retained for actual implementation is shown in Figure
2.1. It consists of 3 gas turbines (including one spare), each with an ISO rating of 25 MW; a
double-extraction condensing steam turbine for producing medium and low pressure steam;
and 3 heat recovery steam generators (including one spare), each with a capacity to generate
136 ton of steam per hour at 105 Bar and 510°C.

Atmosphere
FD Fan

Air G
GT-1

HRSG -1
HSD/Gas Atmosphere Atmosphere
FD Fan
Air
Gas/LSHS/HSD/PG

Air G
GT-2

HRSG-2
Atmosphere
HSD/Gas
FD Fan
Air
Gas/LSHS/HSD/PG

Air G
GT-3

HRSG-3
HSD/Gas

SVH
Gas/LSHS/HSD/PG

G STG PRDS SH
PRDS

C SVH: 108 bar


SH: 42 bar
To deaerator
SM: 19 bar
SM SL: 3.5 bar
SL SVH
PRDS to process
plant

Figure 2.1 Cogeneration scheme implemented at the petrochemical complex


70 Part II: Cogeneration experiences in Asia and elsewhere

2.2.2 Details of the cogeneration system


The gas turbines with an ISO rating of 25 MW are capable of producing 20.7 MW at the site.
Since the gas supplier could not guarantee lean gas supply, dual fuel configuration (lean gas
as well as high-speed diesel) was specified for the gas turbines. This was further altered to
allow simultaneous firing of liquid and gas in such a manner that the gas gets a preference
and the liquid fuel meets the balance requirement.

A 25 MW capacity steam turbine generator was selected with the option for extracting
medium pressure steam at 19 bar and low pressure steam at 3.5 bar. The condenser was
designed for generating up to 20 MW of power without any steam extraction. The heat
recovery steam generators (HRSG) have the option for auxiliary firing with multi-fuel option.
High-speed diesel is used as a start-up fuel and the lean gas is supplied as the main fuel with
low sulphur heavy stock as the alternate liquid fuel. By-products available from the gas
cracking unit such as pyrolysis gasoline and off gas can also be fired. In order to allow the
HRSG to operate as a conventional boiler when the associated gas turbine was not operating,
a forced draft fan for supplying combustion air is installed with suitable dampers and safety
protections so that the boiler can run without exhaust from the gas turbine. This change over
scheme was well designed and tested and works satisfactorily at present.

In order to maximize the heat extraction from the exhaust gases after economizer and to
increase the overall efficiency of the HRSG, a separate low-pressure water coil was installed
in exhaust gas path. Such an arrangement allowed to generate hot water which, when
flashed, gives low-pressure steam that is used for deaeration of boiler feed water. This
feature helps to reduce the steam demand for the deaerator by 4 ton/hour.

2.3 Cogeneration in a Textile Mill

Encouraged by the Thai Government policy on industrial cogeneration and sale of excess
electricity to the utility grid, a synthetic fibre manufacturing industry decided to explore the
opportunity for cogeneration. The factory was particularly susceptible to any unintended
shutdown due to power interruption while led to high restarting costs. In addition, the factory
had a generating capacity to meet only 15 per cent of its demand and the existing diesel
generators were over 20 years old and were expensive to maintain. A techno-economic
feasibility study was first undertaken to identify the best cogeneration scheme in line with the
Government’s newly announced power buy-back option.2

2.3.1 Existing energy situation of the factory


The production processes in the factory required steam at two different pressures, 56 bar and
12 bar, respectively. The total demand of steam was 101,120 tons of steam per annum,
giving an average of about 11.5 ton/hour, though the maximum and minimum demands were
of the order of 17 and 9 tons/hour, respectively. To meet these demands, 4 boilers were
employed with the following capacities:

- two boilers producing steam at 60 bar, each with a generating capacity of 7 tons/hour,

- two others operating at 12 bar and generating 15 tons of steam per hour each.

Heavy fuel oil used as fuel in the boiler was purchased at a price of US$ 0.12/litre.

2
P. Srisovanna, “Case study of cogeneration in textile sector”, ESCAP South-East Asia Sub-regional
Seminar on Promotion of Energy Efficiency and Pollution Control through Cogeneration, Hanoi, 10-11
November 1998.
Examples of cogeneration projects implemented in Asia 71

The total electricity demand of the factory was 59,000 MWh/year, with an average demand of
around 6.7 MW. The actual demand varied between a minimum of 5.9 MW and a maximum of
8.9 MW. About 1 MW of electricity representing 15 per cent of the total demand was self-
generated, using more than 20 years old diesel generators.

Four alternatives were considered during the feasibility study and compared with the existing
situation: (1) Back pressure steam turbine, (2) Gas turbine, (3) Combined cycle, (4) Diesel
engine. In all cases, the criteria set was to meet the peak steam demand of the factory, i.e.,
17 tons/hour.

2.3.2 Option 1: back pressure steam turbine


The proposed option is schematically shown in Figure 2.2. This option was found to be not
attractive due to the need for extracting steam at two different pressures. The varying demand
of steam at these pressures will lead to quite unfavourable steam turbine operation. In steam
matching option, the net output would be only 0.8 MW, which is less than the current standby
needs.

Moreover, the unavailability of a suitable standard turbine will lead to high installation cost and
will be more difficult to operate in practice. Considering 40 per cent of custom duty and tax,
the investment was calculated as US$ 7,500/kW. The annual maintenance cost was
estimated as 3 per cent of the investment, i.e., US$ 180,000/year.

Steam: 100 bar/450 oC


12.73 t/h (11.47 MW)
Electricity
Fuel 800 kW
10.6 MW Boiler
ST G
η= 90%
130 c C, 12.73 t/h, (1.93 MW)

Steam: 12 bar/237 o C
Water: 70 oC Steam to Process
1.23 t/h (0.99 MW)
11.5 t/h, 12 bar/237 oC
(0.94 MW) 6 t/h (4.84 MW)

56 bar/380 oC
5.5 t/h (4.79 MW)

Figure 2.2 Steam turbine cogeneration option for the textile mill

2.3.3 Option 2: gas turbine


The schematic diagram of this option is shown in Figure 2.3. The system included a diesel
fired gas turbine with heat recovery steam boiler and an option for auxiliary firing to meet the
varying steam demands. A boiler bypass would allow the gas turbine to run at full load, and
the auxiliary firing option with heavy fuel oil will let the boiler run at full load even when the gas
turbine is shut down. The net output of the alternator would be 4.7 MW, and assuming a 90
per cent availability factor, the cogeneration plant was capable of providing 58 per cent of the
power needs of the factory, the rest being purchased from the utility grid.
72 Part II: Cogeneration experiences in Asia and elsewhere

160 oC 56 bar/271 º C
5.5 t/h,
(4.26 kW)
H
Fuel RS
16.7 MW G
Air
Exhaust
18.8 kg/s 12 bar/188 º C
545 o C 6 t/h,
4700 kW Supplementary (4.64 kW)
Firing
Fuel: 200 kW
G C T Steam
56 bar/271 º C
1.05 t/h,
(0.81 kW)

Water: 70 oC
11.5 t/hr
(0.94 MW)
Water
120 º C
12.55 t/h (1.76 kW)

Figure 2.3 Gas turbine cogeneration option for the textile mill

The investment, including the custom duty and tax, amounted to US$ 1,617/kW. The annual
maintenance cost was taken as 2.5 per cent of the total investment, i.e., US$ 190,000.

The main drawback of this option was the high price of diesel oil required in the gas turbine
that led to a long payback period. The cost of diesel oil is US$ 0.19/litre as compared with
US$ 0.12 /litre for heavy fuel oil. Moreover, the former has a lower heating value as compared
with the latter (36 MJ/litre versus 39.1 MJ/litre).

2.3.4 Option 3: combined cycle


As can be seen in the schematic diagram of this option in Figure 2.4, this is a combination of
the first two options. As a result, the combined power generation from the gas turbine and
steam turbine reaches 6.8 MW. This allows the plant to be self-sufficient during 93 per cent of
the year. The investment cost, including taxes, was computed as US$ 2,000/kW and the
annual maintenance cost was taken as 2.5 per cent of the investment.

As in the previous case, the main disadvantage of this system is the need for diesel as fuel,
which has a much higher cost when compared with heavy fuel oil.

2.3.5 Option 4: diesel engine


This configuration consists of a diesel engine with heat recovery steam boiler with auxiliary
fuel firing option, as shown in Figure 2.5. The investment cost, including taxes, was estimated
to be US$ 1,500/kW. This option provided the best economic result for the factory. Though the
possibility of using 2 diesel engines for generating more power and selling to the utility grid
was explored and led to higher economic returns, the factory management was interested in
this alternative.
Examples of cogeneration projects implemented in Asia 73

100 bar/450 º C
12.5 t/h (11.26 kW)

HRSG
Fuel
800 kW
21.6 MW
Air
Exhaust ST G
G
36.2 kg/s
456 o C
6000 kW Steam to
Process

1.0 t/h (0.81 MW)


G
G C GT Water
C
o
12 bar/237 º C

12 bar/237
120 º C 6 t/h (4.84 kW)
12.5 t/h
(1.75 kW)
Water: 70 oC 56 bar/380 º C
11.5 t/hr 5.5 t/h (4.79 kW)
(0.94 MW)

Figure 2.4 Combined cycle option for the textile mill

Fuel 170 oC 56 bar/271 º C


31.0 MW 5.5 t/h,
(4.26 kW)
To Process
HRSG

2 × 6350 Exhaust
450 o C
kW
DIESEL
Air Cooler
G ENGINE
12 bar/188 º C
6 t/h,
(4.64 kW)
Water
70 oC
11.5 t/hr
Steam
Cooling Water (0.94 MW)
Water: 110 Co 56 bar/271º C
5.5 MW 0.43 t/h,
11.5 t/hr
(1.47 MW) (0.34 kW)

Water
130 º C
11.93 t/h (1.81 kW)

Figure 2.5 Diesel engine cogeneration option for the textile mill
74 Part II: Cogeneration experiences in Asia and elsewhere

2.3.6 Comparison of the different options


Table 2.2 summarizes the results of the analysis of the 4 options considered. As it can be
seen from the payback periods calculated, the diesel engine option has a clear edge over the
others. The results could however have been quite different had natural gas been available at
the site at a reasonable price.

Table 2.2 Comparison of the cogeneration options retained for the textile mill

Alt. Technical Power Percentage Investment + 40 Main Payback


Option Output Demand Met Per Cent Taxes Fuel Period
(MW) ( per cent) (106 US$) (Year)
1 Steam turbine 0.8 10 6.0 HFO 20
2 Gas turbine 4.7 60 7.6 Diesel 20
3 Combined cycle 6.8 80 13.6 Diesel 20
4A Diesel engine 12.7 160 12.6 HFO 6
4B Diesel engine 8.7 120 10.4 HFO 6
4C Diesel engine 6.4 80 9.6 HFO 6

On the basis of the analysis and in order to minimize the investment, the factory decided to
purchase a new diesel generator of 5 MW capacity and operate it along with the existing
generator to meet all the low-pressure steam demand of the factory. The existing high-
pressure boiler met the demand for high-pressure steam.

2.4 Cogeneration in a Paper Mill3

Cogeneration is widely used in paper mills around the world. Steam generated is used at
different pressures and temperatures for cooking of chips in digesters in the pulping process
and for drying of paper in paper machines. In addition, some amount of steam is used for
concentration of black liquor in multiple effect evaporators.

A small paper mill in India with an installed capacity to produce 60 tons of writing, printing and
duplex quality paper per day, uses agro-industrial residue based cogeneration to meet all the
process energy requirements. Waste paper is mainly used as the raw material and a small
quantity of pulp is produced from bagasse, the residue from the cane sugar mills.

2.4.1 Existing energy supply facility


Steam demand of about 7 tons/hour at 4 bar is met by two boilers, each with a capacity to
produce 6-7 tons of steam per hour, using coffee and rice husk as fuel. The utility grid met
electricity demand of about 2,500 kVA. During power interruptions, a stand-by diesel generator
set with an installed capacity of 1,525 kVA was used to take care of the essential power
needs.

Frequent power cuts, lasting for as much as 25-30 per cent of the year, forced the factory
management to look for an alternative economic source of power than the stand-by diesel
generator. Coinciding with the plan to increase the production capacity to 100 tons of paper
per day, a study was conducted to assess the viability of cogeneration. With the expansion
plan of the factory, the process steam demand was estimated as 13 tons/hour and the power
demand was expected to increase to 2,700 kW.

3
M.M. Patel and P. R. Raheja, “Case study presentation on cogen project and benefits at South India
Paper Mills”, paper presented at the CII Energy Summit ’96, Chennai, 11-14 September 1996.
Examples of cogeneration projects implemented in Asia 75

2.4.2 Economic evaluation of cogeneration options


Four different options were considered for comparing with the present case, as follows:

1. Use of low pressure boilers for process steam only , and no power generation on site;

2. Use of a high pressure boiler and a back pressure turbine to meet 30-40 per cent of the
power demand;

3. Use of a high pressure boiler of a higher capacity, a back pressure turbine and an
additional condensing turbine, or a single extraction-condensing turbine to meet 60-70 per
cent of the power demand;

4. The same as (2), but all the power needs of the factory are met in this option.

2.4.3 No power generation


To meet the increased steam demand of digesters and for availing stand-by capacity, it was
proposed in this case to replace an old boiler by a new fluidized bed combustion boiler having
a capacity to produce 10 tons of dry saturated steam per hour at 10.5 bar. Entire power
requirement was to be met by the purchase of power from the utility grid, the diesel generator
continuing to provide the back up in case of power outages.

2.4.4 30-40 per cent power generation


The erratic power supply of the utility makes it absolutely necessary to have at least a
capacity to self-generate 30-40 per cent of the power need (600-700 kW) to avoid production
losses. Though a diesel generator is available, the power generated from this unit is quite
expensive and the maintenance cost of this unit is expected to mount with time.

As there was a need to acquire a new boiler, this option considered the option of generating
steam at 42 bar and 440°C. The steam could be supplied to a back pressure turbine to
generate around 30-40 per cent of the power demand of the factory, and the steam leaving
the turbine at a pressure of 4 Bar can be sent to fulfil process heating needs.

The initial investment as well as the operating cost of this system was found to be lower than
a diesel engine. The fuel used in the boiler is cheap and available in abundance. Moreover,
only the incremental cost of fuel required generating the same quantity of steam at higher
pressure and temperature was considered, which is only 20 per cent higher. The cost of
power generation worked out to be 36 per cent lower than that with the diesel generator.

From the practical side, a smaller size would mean the use of inefficient single stage turbine
and low voltage generator. This may lead to large imbalance in the system due to variations in
the process steam and power demands. The system balance can be achieved only by
operating the system at low plant load factor, thereby compromising the overall efficiency and
productivity of the factory.

2.4.5 60-70 per cent of power generation


At this level of power generation, higher productivity can be guaranteed with practically no
production losses. Installation of a higher capacity (14 tons/hour) and higher pressure (42 bar
and 445°C) boiler was considered. As much as 6-7 tons/hour of steam could be used in the
back pressure turbine and match the process steam demand. The remaining high-pressure
steam can be sent to a condensing turbine for additional power generation. The latter will also
assure to absorb the fluctuations in the process steam demand, without affecting the power
output adversely. Further, the use of a single multistage backpressure cum condensing
turbine will assure increased power output and higher system efficiency.
76 Part II: Cogeneration experiences in Asia and elsewhere

Though the initial investment becomes higher due to the higher boiler capacity and larger
turbine and generator, condenser, etc., it can be justified by the higher efficiency and plant
load factor. Moreover, the cost of additional fuel will be marginal. The power generated would
be adequate to handle all the critical loads whereas the non-critical loads can draw power
from the grid. Thus the plant productivity will no longer be affected by the utility power outages.

2.4.6 Full power generation


As there was a need to include installation and management of the fuel and ash handling
system, cooling water circuit for the condenser, and power interfacing and distribution, one
more alternative was included to further increase the boiler and turbine capacities to meet all
the heat and power needs of the factory. Though the investment required was higher, power
generation cost became much lower compared with that of the utility or the diesel generator,
mainly due to the low fuel cost. In addition, the option to avail full depreciation of the
investment in the first year made the economic viability of the project particularly attractive.
Hence the factory management retained this last option. The details of the economic
calculations for this alternative are summarized in Table 2.3.

Table 2.3 Technical and economic parameters of the cogeneration facility

Description Units Values


Power plant capacity kW 2,000.00
Cogeneration plant power consumption kW 350.00
Net power output for the factory kW 1,650.00
Working hours Hours/year 8,760.00
Plant load factor per cent per annum 0.80
Annual electricity generation 106 kWh 11.56
Annual fuel (rice husk) consumption tons/year 30,000.00
Annual fuel use for process steam tons/year 12,000.00
Annual net fuel supply for cogeneration alone tons/year 18,000.00
Investment on the cogeneration facility 103 US$ 2,000.00
Cost of electrical modernization 103 US$ 286.00
Price of electricity purchased US¢/kWh 9.43
Avoided cost of electricity generated 103 US$/year 1,090.00
Cost of fuel US$/ton 22.86
3
Cost of fuel for cogeneration 10 US$/year 411.00
Operation and maintenance costs 103 US$/year 114.00
Annual cost saving 103 US$/year 565.00
Gross payback period Year 4.00

It is expected that when the mill capacity is increased to 100 tons/day of paper, the same
cogeneration plant will operate with 20 tons/hour of inlet steam to provide 12-13 tons of
process steam per hour at 4 bar and generate around 2,700 kW of power.

A desuperheater was added near the paper machine to reduce about 100°C of superheat of
the process steam extracted from the turbine. Compared with the earlier process line
pressure of 7-8 bar, the present system operates at 5 bar pressure, thus the steam
consumption is reduced and the power output from the turbo-generator is increased per ton of
steam. In order to extract the maximum benefit from the cogeneration system and to make
Examples of cogeneration projects implemented in Asia 77

the system more flexible and cost effective, the turbo-generator is run in parallel with the utility
grid.

2.5 Cogeneration in a Palm Oil Mill

The palm oil industry is one of the major energy consumers of energy. This industry also
generates vast amount of biomass such as mesocarp fibre, shell, empty bunches, fronds,
trunks and palm oil mill effluent, which can be used as the main source of fuel for
cogeneration with a capability to meet all the electricity needs of the factory. A crude oil and
palm kernel producing plant in Malaysia decided to install a cogeneration plant to meet all its
energy requirements, thus improving the efficiency, competitiveness, reliability, flexibility and
ease of operation.4

2.5.1 Production process of the factory


The ripe palm fruit bunches are subjected to steam-heat treatment for a period between 75 to
90 minutes in a horizontal sterilizer where saturated steam at 3 bar and 140°C is used as the
heat medium. These are then fed to a rotary drum stripper to separate the fruits from the
bunches and the fruits are sent to a digester. Digestion involves mashing of fruits under
steam heated conditions using direct live steam injection. Twin screw presses are used to
press out the crude oil from the digested mash under high pressure.

The crude palm oil consisting of a mixture of palm oil (35-45 per cent), water (45-55 per cent)
and fibrous materials is sent to clarification tank which is maintained at about 90°C to
enhance oil separation. The skimmed clarified oil is then passed through a high-speed
centrifuge and vacuum dryer. With the introduction of a cogeneration plant, excess thermal
energy and electricity are used in a kernel crushing plant. Both palm oil and palm kernel oil are
sold to palm oil refineries and oleochemical factories for further processing.

During steady plant operation, almost 5 tons/hour of palm shell was available with two
different moisture contents, 8.3 per cent and 16 per cent respectively. Likewise, 11.55
tons/hour of palm fibre was discarded with two different moisture contents, 19.25 per cent
and 30 per cent respectively. These residues were previously burned off in oversized and
inefficient boilers in order to overcome the waste disposal problem.

2.5.2 Technology adopted for cogeneration


The cogeneration system adopted to reduce the overall energy bill by simultaneous
generation of heat and power. A backpressure steam turbine system was adopted as the
simplest configuration for achieving the highest efficiency and maximum economy.

A water tube boiler is installed with a capacity to generate 35 tons of steam at 23 bar. The fuel
supply and combustion rate is controlled as a function of the airflow rate, by manual or
automatic adjustment of the fuel conveyor. Steam from the boiler is passed through a back
pressure turbine to generate 1,200 kW of electricity, meeting all the electricity needs of the
factory as well as the worker’s residential quarters. The steam leaving at 3 Bar is used as the
process heat for sterilizer, digester, crude oil tank, clarification, oil storage tank, kernel dryers
and other applications (see Figure 2.6).

4
L. Low, “Investing in cogeneration for efficiency, competitiveness, reliability and ease of operation at
Kilang Sawit United Bell”, Paper presented at the Cogeneration Asia ’97 Conference, AIC Conferences,
Singapore, 25-26 November 1997.
78 Part II: Cogeneration experiences in Asia and elsewhere

350 psig Exhaust: 45 psig (3 bar)

P. Shell
1,200 kW
BOILER Turbine #1 Power Supply to Mill
P. Fiber

Supply to other
Turbine #2
integrated activities to
(Future) harness excess energy

Back to Pressure
Receiver Distributor

Hot Water
for Boiler

Crude Oil Clarification Oil Storage Kernel


Sterilizer Digester
Tank (Oil Room) Tank Dryer

Figure 2.6 Steam turbine cogeneration in the palm oil mill

The total investment cost of the cogeneration plant amounted to US$ 523,000 and the annual
cost savings expected from the self-generated electricity is estimated as US$ 243,700. The
factory expects to recover the investment within 3 years after the commissioning of the
cogeneration plant.

Encouraged by the results, the company plans to achieve a ‘zero waste’ level in the factory.
There is a plan to fully exploit the excess energy by generating up to 2.5 MW of electricity and
integrating the operation of downstream activities such as the kernel crushing plant and
medium density fibreboard project.

2.6 Cogeneration in an Industrial Estate

The Thai Government policy of initiating and decentralizing economic development has led to
the successful creation of several industrial complexes away from the capital. These
industrial complexes require considerable amount of reliable power and process steam. Many
industries inside these complexes are excellent customers of large-sized cogeneration
plants. One such 300 MW gas-fired cogeneration power plant was launched in Map Ta Phut
Industrial Estate as early as in 1994.5

5
Y. Le Scraigne, “The first IPP project developed in Thailand – The Map Ta Phut cogeneration plant”,
Paper presented at the 1994 Cogeneration Conference, AIC Conferences, Bangkok, 20-21 June 1994.
Examples of cogeneration projects implemented in Asia 79

2.6.1 Description of the cogeneration project


The cogeneration project was developed in two identical phases. Taking the environmental
concerns into consideration, natural gas-fired combined cycle cogeneration option was
retained which minimizes the level of exhaust emissions and reduces the cooling water
requirement by half in comparison with a conventional power plant. Each phase included 3
gas turbines (35 MW each), a heat recovery steam generator (HRSG) to recover heat from
the flue gases of the gas turbines, a steam turbine of 50 MW capacity, and the auxiliary
equipment necessary to produce and distribute the generated electricity and steam to
industrial customers and the utility grid (see Figure 2.7 for details). In each phase, 150 MW of
electricity and 145 tons/hour of process steam were generated at two different pressures
required by the industries: 60 tons/hour at 52 bar and 425°C, and 85 tons/hour at 19 bar 250°
C. The high pressure steam is taken directly from the boiler. The medium pressure steam is
bled off the steam turbine, with a back up provided by the high pressure steam supply through
a turbine by-pass fully equipped with a pressure reducing and desuperheating station.

Stack
8.8%, 34.3 MW

Fuel: 100%
11.7%: 3×15.1 MW H Water
R
88.3%: 3×114.6 MW S
Air 61
.3 238.7 64.2%
Comb. % MW 3 ×83.5 MW
HP Steam:
6.8%: 26.3 MW
C T G MP Steam:
13.9%: 53.8 MW

Electricity Cooling Water


27%: 3× 35 MW 12.3%: 47.8 MW 31.2%%: 121.4 MW

Figure 2.7 Combined cycle cogeneration (Phase 1) at the Industrial Estate

The cogeneration plant assures electricity, steam and demineralized water supply to several
petrochemical and downstream industries. Customers have signed long-term contracts to
take or pay for a minimum off-take quantity of steam. The steam price has three components:
capacity, energy and transportation. Steam is supplied to the customers with an availability
guarantee. A part of the electricity generated is sold to the customers whose price has
capacity and energy components, the remaining amount is sold to the utility grid according to
the tariff set for small power producers.
80 Part II: Cogeneration experiences in Asia and elsewhere

Natural gas is used as the main fuel for which a long-term agreement has been signed with
the Petroleum Authority of Thailand. Distillate oil can be used as a back-up fuel.

In line with the incentive policies of the Board of Investment, certain privileges were granted to
this project, such as:

- import duty exemption or reduction on imported machinery;

- corporate income tax exemption for 8 years, and further reduction of 50 per cent for 5
more years;

- double deduction from taxable income of electricity, water and transport costs for 10 years
from the date of first sales;

- deduction from net profit of the costs of installation or construction of the project’s
infrastructure facilities;

- exemption of personal income tax on dividends to shareholders.

2.6.2 Choice of the cogeneration plant


The choice of technology is primarily based on the consideration that both steam and
electricity can be supplied with high efficiency and reliability. During the plant operation, there
is practically no SOx emission and the NO x level is reduced to 50 ppm (with 15 per cent O2)
with steam injection.

The major advantages of this configuration are:

- low capital cost: approximately three-fourth that of a conventional power plant of the same
output;

- short gestation period: two-third of the power available with gas turbines within 12 to 15
months, and remaining one-third is available with steam turbine within 18 to 20 months;

- low operating and maintenance costs; competitive operating costs and higher availability,
particularly in comparison with coal fired thermal steam power plants;

- higher efficiency: electrical efficiency of 45.14 per cent in combined cycle mode, and
global efficiency of almost 70 per cent in cogeneration mode;

- flexibility of operation: ensured by the modularity of the plant, gas turbine exhaust by-pass,
steam turbine by-pass system, and the option of auxiliary firing on HRSG which allows
some decoupling between power and steam generation.

The gas turbines are installed outdoor. The unit is capable of being operated at full load within
16 minutes. Each unit consists of the following components:

- air inlet module with filter, silencer and ducts;


- gas turbine and auxiliary equipment package;
- generator package with load gear, exciter and coolers;
- exhaust module with ducts, bypass stacks, silencer and expansion joints;
- control components with option for local operation;
- medium voltage compartment with circuit breakers and auxiliary transformers.
Examples of cogeneration projects implemented in Asia 81

The gas turbine consists of a 17-stage compressor, combustion system with 10 individual
combustors, a 3-stage turbine, air systems, lube oil system common to gas turbine and
generator, cooling water, and fuel systems. It is equipped with a steam injection skid for NO x
emission, acoustical enclosure for noise reduction, silencing equipment on inlet and exhaust
ducts, and a CO2 fire protection system.

The HRSG is of simple and proven design. It has a low thermal inertia to allow fast start-up
and rapid load swings, high resistance to thermal shocks, low exhaust gas pressure drop,
high heat recovery, and high reliability and maintainability.

2.6.3 Financing of the project


Most of the difficulties encountered in financing large-scale power projects are avoided as the
project is of a reasonable size. The financeability of the project is enhanced by the
commitment and references of the project sponsors as well as the quality of the customers.
The project sponsors have large experience in energy projects. The industrial clients are
mostly very much capital intensive and are able to take long term off-take commitments.

The electric utility plays an important role by purchasing surplus electricity, thus providing
stable and additional revenue to the project. Also, back-up electricity is provided from the grid,
ensuring that availability targets of the industrial users can be achieved.

The Government has demonstrated a clear policy for privatization of power generation along
with accompanying regulations and incentives.

The equipment suppliers provided necessary confidence and guarantees to the lenders and
guarantors on the following:

- project investment cost control, by accepting the construction of the plant for a fixed and
firm price;
- completion on time, by accepting liquidated damages, for failures to meet targeted
completion date;
- plant performance in terms of availability and reliability, by accepting liquidated damages
for failure to meet targeted figures.

In addition, there was the advantage of reduced interest during construction due to
progressive investment and short gestation time, and the ability to generate income after only
a year of signing the contract when the plant started operating in open cycle.

The debt-equity ratio of the project was 3:1. During the financing arrangement, maximum
flexibility in the choice of currency and the type of interest rates were offered to the
developers. The subsidized loan included a 10-year loan term from the commissioning date of
the project. Local financing could be made available to cover other investment costs.