Fuels II Energy Value Analysis US Version

Transcript

Slide 1: Fuels II
Welcome to Fuels II – Energy Value Analysis. This is the second course in a two part series. If you have not
already done so, please take Fuels I – Energy Sources and Trends before taking this course.

Slide 2: Welcome
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allow you to navigate through the eLearning experience. Using your browser controls may disrupt the
normal play of the course. Click on attachments to download supplemental information for this course. Click
the Notes tab to read a transcript of the narration.

Slide 3: Objectives
At the completion of this course, you will be able to

List the advantages and implications of alternate fuels and

Evaluate the energy value and cost of fuels

Slide 4: Introduction
As we discussed in part one of this series, understanding fuels is fundamental to energy management,
since trends in production, supply, and demand all affect pricing and availability, with critical effects on
business results. Choosing between alternate fuels requires a sound knowledge of energy values and
conversion calculations.

Slide 5: Alternate Fuels

Let's begin by looking at alternate fuels. An alternate fuel is any fuel that you can use instead of your
primary fuel.

It could be using propane instead of electricity.

It could be using diesel or fuel oil instead of natural gas.

So, why are alternate fuels a useful part of your energy strategy? There are two main reasons.

First, if the supply of the primary fuel is curtailed or interrupted, you can switch to the alternate fuel.

Secondly, having an alternate may give you leverage with the utility company to obtain better rates.

Slide 6: Switching

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The switch-over to an alternate fuel may be triggered in one of two ways:

Periodically – for example a monthly analysis to switch for the coming period.

Ad hoc – where switching is triggered based on a specific event.

Slide 7: Implications
There are a variety of implications.

Environmental and regulatory issues may limit the number of hours that the site can burn an alternate fuel.

Physical issues include storage and delivery of alternate fuels, and equipment capable of making use of
them.

Supply implications affect agreements with utilities.

Suppliers of the primary fuel must be able to switch to the alternate fuel, or additional suppliers may be
required.
Contractual language must provide for the possibility of switching.
Deadlines for the utility must be understood by the analyst and decision-makers.

Slide 8: Measuring Fuels

These different forms may be measured in different ways:

Measures of the energy content of the fuel (such as BTUs or joules)

Measures of the mass of the fuel (such as pounds or kilograms)
Measures of the volume of the fuel (such as gallons, litres, cubic feet and cubic metres)

Slide 9: Energy Mass and Volume

Let's explore these further. Click here to view this discussion in SI units. Click here to view it in US
customary units.

Slide 10: Energy Mass and Volume - SI Units

Energy is the ability to do work. For example, if I move a rock a distance of one metre, I used a certain
amount of energy to do that work.

The standard international system chiefly uses joules to measure energy. A joule is about the amount of
energy needed to lift an apple to a height of 1 metre. That's not very much energy, so measures such as
kilojoules (kj) equal to 1,000 joules, and Megajoules (Mj) equal to a million joules are common. You may
also see gigajoules, equal to one billion joules, where a billion is a thousand million or 10 to the power of 9
(109)
Kilowatt-hours and calories or Calories are sometimes also used.

A kWh is 3,600,000 joules.

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A calorie is 4.184 joules.
A Calorie with a capital “c” is 1,000 calories.

Gas is often measured by volume, such as in cubic metres (m³).

Liquid fuels like oil and gasoline may also be measured by volume, using litres.

Crude oil is sold in barrels. A barrel of oil is 42 US gallons, approximately 159 litres. However this is a
historical artifact used only as a unit of measure, since a physical oil barrel today is normally 55 gallons.

Coal is generally sold by mass. A metric tonne is 1000 kg.

Slide 11: Energy Mass and Volume –

US Customary Units
Energy is the ability to do work. For example, if I move a rock a distance of three feet, I used a certain
amount of energy to do that work.

In countries using the US customary measures, energy is often expressed in British Thermal Units. A BTU
is the amount of heat required to raise the temperature of one pound of liquid water from 60 to 61 degrees
Fahrenheit at a constant pressure of one atmosphere. It’s about the same amount of energy as you get
from burning a wooden match.

Because the BTU is a small amount of energy, multipliers such as MBTU or MMBTU are used to express
energy at higher levels. The letter “M” is the Roman numeral for 1,000, so one MBTU is equal to 1,000 BTU
of energy. 1,000,000 BTU is expressed as MMBTU – a thousand times a thousand. However, you have to
take care, because in the standard international system, “M” means “mega” and is a multiplier of 1,000,000.
So you may run into cases where “M” means one thousand (as in MBTU) or where it means one million (as
in Megawatts). Check to be sure.

Kilowatt-hours are also sometimes used. A kWh is 3412 BTUs.

Gas may be measured by volume in cubic feet (ft³). You may also see ccf. This means 100 ft³ The first ‘C’
is the Roman numeral for 100, and cf is cubic feet. Similarly, an Mcf is 1000 ft³.

Gas may also be sold by energy content, in therms. A therm is 10 to the 5th power or 100,000 British
Thermal Units, or BTUs.

So when you buy a therm of natural gas, you are getting an amount of gas that has an energy content of
100,000 BTUs. What volume of gas would that be? Well, one cubic foot of gas contains about 1,000
BTUs. So a therm of natural gas would have a volume of about 100 cubic feet.

Liquid fuels like oil and gasoline may also be measured by volume, using gallons. Crude oil is sold in
barrels. A barrel of oil is 42 US gallons. However this is a historical artifact used only as a unit of

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
measurement, since a physical oil barrel today is normally 55 gallons.

Coal is generally sold by mass. In the US customary measure system, a ton is equal to 2000 lb.

Slide 12: Higher and Lower Heating Values

Fuels like natural gas, oil and gasoline contain differing amounts of energy. The attachment titled Energy
Units and Fuel Values gives examples of these.

How do we know how much energy is contained in different fuel types? Fuel tables are published giving the
values. But we have to be careful, because there are different ways of determining the energy content.
The energy content may be expressed as Higher Heating Value, or Lower Heating Value.

Higher heating value (HHV) is found by burning a small sample of fuel in an oxygen environment and
recording the heat released. Combustion of the fuel usually results in some water vapor formed from the
hydrogen and oxygen. Higher heating values include the energy contained in that water vapor.

Lower heating value (LHV) subtracts the heat associated with the water changing state, since in practice,
you generally can’t access that energy when you burn the fuel.

Slide 13: Higher and Lower Heating Values

In some countries, such as the US, higher heating values are normally used, while in other regions such as
Europe it’s more common to use the lower heating value.

If we look in the download sheet, we can see that:

A litre of ethanol contains 21 MJ per litre when measured with lower heating value and 24 MJ per litre when
measured with higher heating value.
In US units, a gallon of ethanol contains 76,330 BTUs when measured with lower heating value, and
84,820 when measured with higher heating value.
So it is important to know which heating value has been used in any calculation.

Slide 14: Energy and Power

Power is how fast work gets done. It is the rate at which energy is consumed. Moving one rock per minute
uses a certain amount of energy and hence power. Moving 10 rocks per minute will use more energy and
hence more power. Let’s say I move 200 rocks in 15 minutes. How much energy does that use, and how
much power?

Click here to discuss this in SI units and here to discuss this in US customary units:

Slide 15: Energy and Power – SI Units

Let’s assume it takes 45 joules to move one rock

Here is the formula that we will use, power equals the work done divided by the time required.

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The energy needed for 200 rocks is 45 joules x 200 rocks = 9000 joules. That's the work done.

15 minutes is equivalent to 900 seconds. This is the time required.

To achieve this work in 15 minutes I will need power of 9000 joules divided by 900 seconds.

9000 divided by 900 is 10 joules per second.

So the energy needed is 9000 joules, but the power needed is 10 joules per second.

Power is often expressed in watts. A watt is equal to 1 joule per second. So this would be 10 watts of
power.

Slide 16: Energy and Power – US Customary Units

Let’s assume it takes 15 BTUs to move one rock

Here is the formula that we will use, power equals the work done divided by the time required.

The energy needed for 200 rocks is 200 rocks x 15 BTUs per rock = 3000 BTUs. That's the work done.

15 minutes is equivalent to 900 seconds. That is the time required.

To achieve that in 15 minutes I will need power of 3000 BTUs divided by 900 seconds.

3000 divided by 900 is 3.3 BTUs per second.

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So the energy needed is 3000 BTUs, but the power needed is 3.3 BTUs per second.

Slide 17: Energy and Power – US Customary Units

Power is often expressed in watts. A BTU is equivalent to 1055 joules, and 1 joule per second is a watt. So
we can convert this result as shown to get a result of just over 3,516 watts of power needed for this task.

Power may also be expressed in horsepower. One horsepower is approximately 0.7 BTU / sec. Hence this
is also 4.7 horsepower.

Slide 18: Electricity

Electricity is measured by energy content. In both the US and SI systems, electrical power is typically
measured in watts, or more commonly kilowatts.

Remember that Power = work done (or energy) / time required

A watt is equivalent to 1 joule / second.

1 kilowatt is 1000 joules of work performed in a period of 1 second; or more simply, 1000 joules per second
kilowatt-hours (kWh) are a measure of electrical energy consumption.

Let’s say you have an electrical motor rated to draw 50 kW, and it runs for half an hour. How much energy
does it consume?

Power = Energy divided by Time. Therefore, Energy = Power multiplied by Time

Therefore the energy consumed = 50 kW x 0.5 hours = 25 kWh.

If the same motor runs for 2 hours then the energy consumed is 50kW x 2.0 hours = 100 kWh.

1 kWh = 3412 BTU.

Slide 19: Conversions of Alternate Fuels

To evaluate the implications of switching between fuels, we must be able convert the prices of the
alternates to compare them to the primary.

Click here to do this section in SI units. Click here to do it in US customary units.

Slide 20: Conversion of Alternate Fuels – SI Units

As you work in energy efficiency, you will need to be able to combine formulas and convert between units.

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
One convenient method of doing these conversions is to lay out all the terms like fractions, showing the
units above and below the line. You can then ensure that when like terms are cancelled, the results on
both sides of the equation are what you expected. You’re less likely to make a mistake multiplying when
you should divide or vice versa, or to accidentally leave out a conversion.

Slide 21: Conversion of Alternate Fuels – SI Units

Here's a simple example

1 kWh of electricity = 3.6 megajoules

1 litre of gasoline contains 32 megajoules

What is the energy contained in gasoline in kWh per litre?

We can lay out the problem like this:

MJs cancel with MJs, giving a result of 8.9, with kWh on the top, and litres on the bottom. 8.9 kWh per litre
of gasoline.

If we had made a mistake with the conversions, the MJs would not have cancelled out, or we would have
ended up with litres on the top and kWh on the bottom, which was not what we were looking for. We would
have been able to detect the problem and correct it before moving on.

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Slide 22: Initial Energy Cost
Meet Darlene. Darlene has to figure out which of the following is the most economical:

Natural gas at 20c per cubic metre

Conventional diesel at 40c per litre
Electricity at 3.5c per kWh.

These are not so easy to compare because all of the units are different. Additionally, all these fuels have
different energy values.

A simple method is to convert all the fuel costs to a common unit of measure, for example megajoules or
gigajoules.

Let’s try doing that now, using the lower heating values from the attachment called Energy Units and Fuel
Values.

When we look at this file, we see that natural gas has an LHV of 37 MJ per cubic metre.

Starting from the cost, we know that gas is 20c per cubic metre, and can be written like this:

And we know that there are 37 MJ per cubic metre. We can write this like so:

Slide 23: Initial Energy Cost

But it's actually more useful to turn that upside down and add it to our equation like this:

The m3 units above and below cancel out, to give us euros per MJ. However, 0.2 divided by 37 is a really
small number, so it would be more convenient to use GJ. There are 1,000 MJ per GJ, so let's add that
conversion:

And the result of this calculation is:

That a gigajoule of natural gas costs 5.41 euros.

Now try to do the same calculation for conventional diesel and electricity using the numbers from the
attachment. Remember that 1 kWh of electricity is 3.6 MJ.
Click the play button to compare your results with the answers.

Slide 24: Initial Energy Cost

So, based on the initial cost of each fuel, natural gas is the least expensive option.

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Slide 25: Conversion Efficiency
Unfortunately, not all fuels are equal when they are consumed. Remember that when energy is converted
from primary to secondary to end use energy, some of the energy is typically lost at each stage of the
conversion.

For example let’s think about an electric motor. If we use electricity from the supply transformer to power
the motor, there’s no need to convert it to a different energy source. 100% of the electricity can be
transmitted to the motor.

Slide 26: Conversion Efficiency

On the other hand, if we decide to generate electricity on-site using a diesel powered generator, some of
the energy contained in the diesel fuel will be lost in heat and will not be converted to electricity.

The efficiency of any conversion can be expressed as a percentage, and calculated as the output energy
divided by the input energy.

So if we put 100 joules into a conversion and get 80 out, the efficiency is 80%.

Slide 27: Conversion Efficiency

This means that Darlene is now not so sure if natural gas is the best option after all. She finds out what the
conversion efficiency of each fuel would be for her application.

Natural gas has 80% conversion efficiency for this application.

Diesel has 67% and electricity has 100%.
She needs to factor in these efficiencies.

We already know the cost per unit of input energy from our last set of calculations. And the efficiencies tell
us the ratio of output to input energy. So we can use the input and output energy figures to find the cost
per unit of output energy like this:

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Or we can put the efficiency in the equation like this:

Slide 28: Conversion Efficiency

So for natural gas, our calculation looks like this:

The result is that at 80% conversion efficiency, a gigajoule of energy derived from natural gas costs €6.76,
whereas a gigajoule before conversion cost only €5.41.

Now do the same calculation for the other energy types. Click the play button to compare your results with
the answers.

Slide 29: Conversion Efficiency

The answer is that natural gas is still Darlene’s lowest cost option for this application.

Slide 30: Conversion of Alternate Fuels –

US Customary Units
As you work in energy efficiency, you will need to be able to combine formulas and convert between units.
One convenient method of doing these conversions is to lay out all the terms like fractions, showing the
units above and below the line. You can then ensure that when like terms are cancelled, the results on
both sides of the equation are what you expected. You’re less likely to make a mistake multiplying when
you should divide or vice versa, or to accidentally leave out a conversion.

Slide 31: Conversion of Alternate Fuels –

US Customary Units
Here's a simple example

1 kWh of electricity = 3412 BTU

1 gallon of gasoline contains 124,340 BTU

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
What is the energy contained in gasoline in kWh per gallon?

We can lay out the problem like this:

BTUs cancel with BTUs, giving a result of 36.4, with kWh on the top, and gallons on the bottom. 36.4 kWh
per gallon of gasoline.

If we had made a mistake with the conversions, the BTUs would not have cancelled out, or we would have
ended up with gallons on the top and kWh on the bottom, which was not what we were looking for. We
would have been able to detect the problem and correct it before moving on.

Slide 32: Initial Energy Cost

Meet Darlene. Darlene has to figure out which of the following is the most economical:

Natural gas at 65c per therm

Conventional diesel at $1.80 per gallon
Electricity at 3.5c per kWh.

These are not so easy to compare. All of the units are different. Plus all these fuels have different energy
values.

A simple method is to convert all the fuel costs to a common unit of measure, for example BTUs or
MMBTUs.

Let’s try doing that now using the higher heating values from the file available from the attachments tab.

Slide 33: Initial Energy Cost

When we look at this file, we see that diesel has an HHV of 137,380 BTU per gallon. That will be useful in
a moment.

Starting from the cost, we know that gas is 65c per therm, so we can write that like this:

And by definition, there are 100,000 BTU per therm. We can write this like so:

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
But it’s actually more useful to turn that upside down and add it to our equation like this:

The therm units above and below cancel out, to give us dollars per BTU. However, 0.65 divided by
100,000 is a really small number, so it would be more convenient to use MMBTU. There are 1,000,000
BTU per MMBTU, so let’s add that conversion:

And the result of this calculation is:

That a MMBTU of natural gas costs $6.50.

Slide 34: Initial Energy Cost

Now try to do the same calculation for conventional diesel and electricity using the numbers from the
attachment.

Click the play button to compare your results with the answers.

Slide 35: Initial Energy Cost

So, based on the initial cost of each fuel, natural gas is the least expensive.

Slide 36: Conversion Efficiency

Unfortunately, not all fuels are equal when they are consumed. Remember that when energy is converted
from primary to secondary to end use energy, some of the energy is typically lost at each stage of
conversion.

For example let’s think about an electric motor. If we use electricity from the supply transformer to power
the motor, there’s no need to convert it to a different energy source. 100% of the electricity can be
transmitted to the motor.

Slide 37: Conversion Efficiency

On the other hand, if we decide to generate electricity on-site using a diesel powered generator, some of
the energy contained in the diesel fuel will be lost in heat and will not be converted to electricity.

The efficiency of any conversion can be expressed as a percentage, and calculated as the output energy
divided by the input energy.

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
So if we put 100 BTU into a conversion and get 80 out, the efficiency is 80%.

Slide 38: Conversion Efficiency

This means that Darlene is now not so sure if natural gas is the best option after all. She finds out what the
conversion efficiency of each fuel would be for her application.

Natural gas has 80% conversion efficiency for this application.

Diesel has 67% and electricity has 100%.
She needs to factor in these efficiencies.

Slide 39: Conversion Efficiency

We already know the cost per unit of input energy from our last set of calculations. And the efficiencies tell
us the ratio of output to input energy. So we can use the input and output energy figures to find the cost
per unit of output energy like this.

Or we can put the efficiency in the equation like this:

Slide 40: Conversion Efficiency

So for natural gas, our calculation looks like this:

The result is that at 80% conversion efficiency, a gigajoule of energy derived from natural gas costs $7.22,
whereas a gigajoule before conversion cost only $6.50.

©2012 Schneider Electric. All rights reserved. All trademarks provided are the property of their respective owners.
Now do the same calculation for the other energy types using the information from the attachment. Click
the play button to compare your results with the answers.

Slide 41: Conversion Efficiency

The answer is that natural gas is still Darlene’s lowest cost option for this application.

Slide 42: Summary

Let’s take a moment to review what we have covered in this course.

An alternate fuel is any fuel that you can use instead of your primary fuel. The advantages lie in ability to
cope with curtailment or interruption, and price negotiations. Implications include environmental and
regulatory issues, physical issues, and supply impacts.

We learned about the main units of energy, mass and volume.

We also examined the difference between energy and power.

We saw the the energy value of a fuel may be expressed with Higher Heating Value or Lower Heating
Value.

And we learned how to convert between different fuels to evaluate their energy value and costs, including
conversion efficiencies.

Slide 43: Thank You!

Thank you for participating in this course.

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