Dr Cliff

Susan Dansoh:
Scotcher: AssociateSenior 15:07:2015 – Renewable Energy.
Professor|Lecturer

CHP Sizing and techno-economics

October 2022
Dr Cliff Dansoh
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Agenda
▪ Introduction to CHP
▪ Efficiencies
▪ Uses for heat
▪ CHP sizing
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Introduction to CHP
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What is CHP?
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Types of CHP system

Prime mover:
▪ ICE
▪ Steam cycle
▪ Gas turbine
▪ ORC

▪ Variety of fuels
▪ Fossil to biomass
 Drivers for renewable energy
Dr Cliff Dansoh: October 2016 Document Title | Presenter’s Name & Job Title | Date

Types of CHP system

Micro- CHP
▪ Defined as <50kWel
▪ Most systems are 10-
15kWel
▪ 2 main types in the market
are Stirling and 2 & 4
stroke ICEs
▪ There are fuel cell micro-
CHPs on the market but
the economics don’t really
stack up for the much
lower cost types above.
 Dr Cliff Dansoh
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Comparison of various micro

CHP options
Advantages Disadvantages Producer Market Maintenance Pay
price (£) cost back
(yrs)
Stirling • Appropriate • Unproven technology Baxi 6000< High 6<
engine- size • Low reliability (http://www.baxi.co.uk/rene
1kW- • Low pollutant Insufficient heat wables/combined-heat-
2kW and noise • Uncertainty in life and-power/ecogen.htm),
• Long Inspirit (http://www.inspirit-
maintenance energy.com/)
intervals
Rankine • Proven • High noise Flow energy 4000< Medium 6
Cycle technology • High emission (http://www.flowenergy.uk.c
(ICE) - • Simple • Bulky om/meet-flow/#), OTAG
1kW- system • Expensive (http://www.powerblock.eu/
2.5kW • High reliability • Short maintenance de/lion-
intervals powerblock/rechenbar.php)
Fuel cell- • Low noise • Insufficient heat Ceres Power 6000< Low ?
1kW- 2kW and emission • Unproven technology (http://www.cerespower.co
• No moving • Uncertainty in life m/market-opportunity/a-
parts • Expensive change-of-power/for-
home), Valiant, Ballard

Ene-Farm in Japan – 300k

installed (2019)

Based extensively on http://www.brunogpollet.com/wp-content/uploads/2016/04/Current-status-of-fuel-cell-based-combined-heat-and-power-

systems-for-residential-sector.pdf
 Dr Cliff Dansoh
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Comparison of various micro

CHP options
Advantages Disadvantages Producer Market price Maintenance Pay back
(£) cost (yrs)
Gas Yanmar 7000< High 8
engine- (http://www.yanmaren
4kW- ergysystems.eu/Micro-
15kW Cogeneration-CHP-
unit/), Ecopower
(http://www.marathone
ngine.com/)
Micro • Low noise and Slightly behind MTT (http://www.mtt- 7000< Low 7
turbine emission others in eu.com/applications/m
2kW -3kW • Relatively lighter development icro-chp/)
and smaller stage
Samad Power 2300 Low 4
• Higher power
(http://www.samad-
• Long maintenance
power.co.uk/)
intervals
• Simple system
• Proven technology
• High reliability
• Different power to
heat ratios
• Relatively cheaper
• Relatively longer
life
 Dr Cliff Dansoh
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Types of CHP system

Type of plant Typical power Typical heat to
output (MWe) power ratio
Steam turbine[1] ≥ 0.5 MWe 3:1 - 10:1

ORC turbine[2] ≤ 3 MWe 4.2 - 4.9:1[3]

Gas turbine ≤ 3 MWe 1.6:1, up to 5:1 with

supplementary firing
Gas turbine ≤ 4 MWe 1:1 - 1.7:1

1 Taken from DECC [1]

2 Taken from Turboden [2]
3 Calculated as thermal power to hot water circuit / net active power efficiency of the Turboden systems [2]

What do we conclude from

this?
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Heat is important
▪ Nationally there is an issue with CHP schemes
utilising a significant proportion of their thermal
output
▪ Not only is this inefficient but also loses potential
revenue for the generator

▪ Cooling was supported under the RHI

 Dr Cliff Dansoh
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Heat mapping exercise

Use the following link:
http://chptools.decc.gov.uk/developmentmap/
Research indicates that:
▪ Up to 85% of the UK’s heat demand could be met by
individual building-level solutions, such as heat pumps,
solar thermal and biomass boilers.
▪ Separately, as much as 60% could be met by efficient
district heating.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499417/
Final_NCA_Report_for_publication.pdf
 Dr Cliff Dansoh
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CHP sizing methodology

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Overview
The purpose of this exercise is to enable you to
apply the industry norm for calculating the
approximate size of a CHP system using the
degree day method
▪ We will go through the steps together and
then you will do a case study
▪ This will then be linked to a techno-economic
assessment of whether a CHP scheme is
suitable
 Dr Cliff Dansoh
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Heating load

What proportion of UK domestic heating load

is for space heating?
 Dr Cliff Dansoh
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Heating load

http://www.esru.strath.ac.uk/EandE/Web_sites/12-13/Demand_supply_orchestration/dsm.html
 Dr Cliff Dansoh
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▪ It is very difficult to
accurately predict
heating and cooling
requirements in
buildings due to the
many
interrelationships

CIBSE TM41
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Degree days
▪ Approx. half our primary energy use is for heating
purposes
▪ Heating (and cooling) consumption is linked to the
weather
▪ Degree days are a method for looking at weather
related heating consumption.
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Degree days
▪ Degree days are “…essentially the summation of temperature
differences over time, and hence they capture both extremity
and duration of outdoor temperatures” (CIBSE)
▪ Temperature difference is between a reference temperature
and the outdoor air temperature
 Dr Cliff Dansoh
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Degree days
18.5ºC
Hospitals 15.5ºC
most
buildings

Desired temp

Temperatures that need to be maintained can vary due to human

need within the building or something else, i.e. AD (mesophilic 30
– 42C- thermophilic 43 – 55C) , chemical processes
 Dr Cliff Dansoh
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Degree days

Desired temp

▪ The reference outdoor temperature is the mean

temperature over the day
▪ E.g. 10.5 degrees (day 1); 9.5 degrees (day 2) etc.
Dr Cliff Dansoh
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Desired temp

Day Outside temp Difference Degree days

(degrees) between outside
and base temp
(degrees)

1 10.5 5 5

2 9.5 6 6

3 13 2.5 2.5

4 9.5 6 6
 Dr Cliff Dansoh
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Degree days

Desired temp

▪ What is required if the reference outdoor temp > base

temp?
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Two types of degree days

Heating Degree Days (HDD) – base temp 15.5C

Cooling Degree Days (CDD) – base temp 18.5C
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Step 1
Collection and processing of
data
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Degree days
▪ The reference weather data is
best taken from the local
weather station to the
development
▪ As long as your nearest weather
station is in a comparable
location
▪ Regional degree data is
published as well (as shown in
the map) with current and
historical 20 yr trend data
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Degree days Climate Change!!

Due to the effects of climate
▪ The reference weather change, it may not be accurate to
data is best taken from the forecast future heating and cooling
demand on historical weather data.
local weather station to the
development “In the period 1976-1995, annual
heating degree-days in London
▪ As long as your nearest
and Edinburgh fell by around 10%”
weather station is in a (CISBE TM36)
comparable location
▪ Regional degree data is “It is predicted that heating degree-
days could fall by 30-40% in the UK
published as well (as by the 2080s, with a similar
shown in the map) with reduction in heating energy
current and historical 20 yr consumption”
(CIBSE TM41)
trend data
 Dr Cliff Dansoh
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Degree days
▪ We know where to gather degree data from for
assessing our development
▪ …but we also need to gather energy data

The three possible sources are:

▪ Automatic collection via the BMS (building
management system)
▪ Manual reading of meters
▪ From utility bills
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Degree days
Data quality is dependent on several things:
▪ Reliability of the source;
▪ Meter reading timings;
▪ Accuracy; and
▪ Calibration of meters

▪ That occupants do rationale things!

 Dr Cliff Dansoh
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Degree days
What explanations are
there for the outliers?

Summer months Winter months

▪ Monthly data collection is standard and will give enough detail at this
stage
▪ It is also at the same time scale as the monthly degree day data
 Dr Cliff Dansoh
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Degree days
Quantity of data
▪ Statistically better to have more
data points for accuracy (good
quality data!)
▪ Building uses change over time,
more recent data is likely to be
more representative

▪ Strange data patterns likely to

indicate change of use, control
settings, energy efficient
measures etc.
 Dr Cliff Dansoh
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Step 2
Collection and processing of
data
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Degree days

Performance lines
▪ Show the relationship between space-heating and weather
▪ This is typically shown using a straight line
▪ Least squares regression analysis gives this

▪ Performance lines show us a ‘prediction’ of how much energy

we expect the building(s) to consume for a number of degree
days
 Dr Cliff Dansoh
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Positive intercept
What does the positive
intercept show us?

Pause to provide
explanation.
 Dr Cliff Dansoh
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Negative intercept
What does the negative
intercept show us?

Pause to provide
explanation.
 Dr Cliff Dansoh
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Degree day activity

There are 3 client case studies and an excel sheet to

work off.

Link to exercise on CANVAS.

 Dr Cliff Dansoh
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Step 3
Predict future energy usage
 Dr Cliff Dansoh
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Monthly Historic
Degree Consumption Degree
days (kWh) days

Future demand
Jan-01 400334 288
Feb-01 503247 346
Mar-01 430589 255
Apr-01 302496 209
May-01 109235 49
Jun-01 65213 12
Jul-01 115568 31
Aug-01 88959 31
Sep-01 145482 43
Oct-01 195256 110
Nov-01 382548 202
Dec-01 532689 327
Jan-02 703568 409
Feb-02 593458 370
Mar-02 465870 239
Apr-02 218550 142
May-02 152400 76
Jun-02 92556 9
Jul-02 35455 6
Aug-02 76523 2
Sep-02 176889 78
Oct-02 342448 204
Nov-02 361258 258
Dec-02 492550 302
 Dr Cliff Dansoh
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Degree days
800000

700000
Monthly consumption (kWh)

600000

500000

400000

300000

200000

100000

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan-01 Jan-02 Jan-13

Predict 2013 demand and use 5yr, 10yr averages etc. using
Degree Day Exercise (Handout)
 Dr Cliff Dansoh
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Step 4
Generate load and exceedance
curves
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Heating load example

Month kWh
Jan 332,887
400
Feb 376,045 350

Mar 312,410 Thermal Load (kWhth) 300

250
Apr 203,191 200

May 169,956 150

100
Jun 119,678
50
Jul 97,154 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Aug 41,741 Monthly Input Usage
Sep 69,589
Oct 200,482
Nov 277,064
Dec 209,366
 Dr Cliff Dansoh
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CHP sizing
400

350

Thermal Load (kWhth)

300

250

200

150

100

50

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly Input Usage

Avg. monthly temp - Birmingham Monthly commercial building heat use

▪ Coldest month leads to the highest heat usage

(Feb)
▪ Summer month (Aug) leads to low heat usage
 Dr Cliff Dansoh
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Heating load example

1200

Month kWh 1000

Jan 332,887

thernal load (kWth)

800
Days in month 31 Load for 24HH
600
Load for 10HH

400

200

▪ Its important to factor in heating hours to

calculate the thermal load of a building or
development
 Dr Cliff Dansoh
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Heating load example Thermal load =

total KWh per
month / est.
Calculate approx load per
1) 1.1) 1.2) month operating hours
est.
Heating Days in Hours in %of operating Energy load
Month kWh Day Hours Month month month year hour equiv per hour (kW)
Jan 332,887 Mon 15 Jan 31 744 8.49% 419.5616 793.4161878
Feb 376,045 Tues 15 Feb 28 672 7.67% 378.9589 992.3107649
Mar 312,410 Wed 15 Mar 31 744 8.49% 419.5616 744.6104871
Apr 203,191 Thurs 15 Apr 30 720 8.22% 406.0274 500.4366734
May 169,956 Fri 15 May 31 744 8.49% 419.5616 405.0799269
Jun 119,678 Sat 10 Jun 30 720 8.22% 406.0274 294.7535088
Jul 97,154 Sun 10 Jul 31 744 8.49% 419.5616 231.5607287
Aug 41,741 Week total 95 Aug 31 744 8.49% 419.5616 99.4871686
Sep 69,589 Yearly total 4940 Sep 30 720 8.22% 406.0274 171.3899123
Oct 200,482 Oct 31 744 8.49% 419.5616 477.836816
Nov 277,064 Nov 30 720 8.22% 406.0274 682.3775978
Dec 209,366 Heating patterns are Dec 31 744 8.49% 419.5616 499.0112969
likely to also change Total: 8760 4940
for weekend usage Convert the yearly total to a relative
etc. scale of heating hours using the HH
yearly total (e.g. 4940)
 Dr Cliff Dansoh
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Feb Thermal provision from CHP

1200
CHP thermal capacity not
1000 used
Heat demand satisfied by CHP
Thermal Load (kW)

800

600

400 Aug

200

0
0 1000 2000 3000 4000 5000 6000 7000
load (kWth) CHP Heat

What is the base thermal load? • It is easy once it is in this format

to look at sizing the CHP
 Dr Cliff Dansoh
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Thermal provision from CHP

1200

1000
Thermal Load (kW)

800
Conventional heating (gas boiler)

600

400

200

0
0 1000 2000 3000 4000 5000 6000 7000
load (kWth) CHP Heat
 Dr Cliff Dansoh
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Electricity profile 250

200
Electrical load (kW)

150

100

50

Average
Usually between 125kW and 200kW. High % load factor
 Dr Cliff Dansoh
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Annual electrical demand profile

180,000

160,000

140,000
kWh(el) used per month (bill data)

120,000

100,000

80,000

60,000

40,000

20,000

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Dr Cliff Dansoh
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 Dr Cliff Dansoh
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Notional case: CHP sizing

▪ CHP(s) should at least take the base load and run
for >4000 hrs per year (Rule of thumb)
▪ Must consider the heat to power ratio effects of
CHP on the sizing of the system
▪ Avoid heat dumping
▪ This is often easier said than done and the
economics often don’t go in your favour
▪ Future changes to the site and demand?
 Dr Cliff Dansoh
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Step 5
High level techno-economics
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Assess the options

▪ The final stage is to do some simple techno-
economics to assess the option(s)

▪ You would want the proposed CHP solution to

payback
▪ This is different to how things are currently done!
▪ There will likely be a payback period limit (3yrs,
5yrs etc.) depending on the company etc.
 Dr Cliff Dansoh
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Techno-economics
Unit Value
System
Feedstock input Tonnes 428.24
Feedstock cost £/t 200
▪ A (very) simple Boiler size
CAPEX
kWth 200

techno-economic Boiler CAPEX

OPEX
£,000s 300

analysis would be the Feedstock

O&M
£,000s/yr
£,000s/yr
85.65
45
main revenue Topup electric heating
£,000s/yr
Total£,000s/yr
65.63
196.28
sources minus the Production
Total heat generation MWhth/yr 1747.2
costs Heat utilised
Revenue
MWhth/yr 1,677.26

▪ This gross indicator is Avoided electric heating cost £,000s 134.18

Avoided CCL £,000s 8.79
normally sufficient at RHI £,000s 40.86
Total (excl. avoided costs)£,000s 40.86
the early stages Total Annual Cost£,000s -155.42
Less incumbent system cost £,000s -208.60
Annual saving over current
£,000s 53.18
system
Simple paybackYrs 5.6
 Dr Cliff Dansoh
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Techno-economics
Year
Variable Unit 1 2 3 … 10 … 19 20
Depreciation … …
Beginning of year £000s 4,000 3,600 3,200 … 400 … - -
… …
▪ More detailed
Depreciated £000s 400 400 400 400 - -
End of year £000s 3,600 3,200 2,800 … 0 … - -
Debt … …
financial models of Begin year debt £000s 2,880.00 2,661.50 2,429.89 … 369.15 … - -
Debt amortisation £000s 391.30 391.30 391.30 … 391.30 … - -
techno-economic Interest
Principal
£000s
£000s
172.80
218.50
159.69
231.61
145.79
245.51
…
…
22.15
369.15
…
…
-
-
-
-
working assumptions End year debt amount
Production
£000s 2,661.50 2,429.89 2,184.38 …
…
0 …
…
- -

will be required later. Electricity

Utilised heat
MWhel
MWhth
11,826
1,700
11,826
1,700
11,826
1,700
…
…
11,826
1,700
…
…
11,826
1,700
11,826
1,700
… …
▪ Fuller appreciation of Income
Energy sales and £000s 1,497.255 1,497.255 1,497.255 … 1,497.255 … 1,497.255 1,497.255
incentive revenue
costs, contingencies, Costs … …
Fuel £000s -804.918 -804.918 -804.918 … -804.918 … -804.918 -804.918
financial covenants, O&M £000s -505 -505 -505 … -505 … -505 -505

etc. EBITDA
Depreciation
£000s
£000s
187.337
-400
187.337
-400
187.337
-400 …
187.337
-400 …
187.337
-
187.337
-
▪ Establish whether EBIT
Interest
£000s
£000s
-212.663
-172.8
-212.663
-159.69
-212.663
-145.793
…
…
-212.663
-22.149
…
…
187.337
-
187.337
-
EBT £000s -385.463 -372.353 -358.456 … -234.812 … 187.337 187.337
hurdle rate has been Income tax £000s 0 0 0 … 0 … 52.454 52.454
After tax £000s -385.463 -372.353 -358.456 … -234.812 … 134.883 134.883
met. Return depreciation £000s 400 400 400 … 400 … - -
Deduct principal £000s -218.5 -231.61 -245.506 … -369.151 … - -
Free cash flow £000s -203.963 -203.963 -203.963 … -203.963 … 134.883 134.883
ROE % - … …
EBITDA NPV1 £000s -3559.242
Coverage Ratios … …
Debt Service Cover £000s 187.337 187.337 187.337 … 187.337 … - -
DSCR, MAX: 0.479 0.479 0.479 … 0.479 … - -
1 EBITDA NPV (net present value) discounted at 14%
 Dr Cliff Dansoh
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Hurdle rate
▪ Denotes appropriate rate of compensation
for the risk associated with the project.
▪ Functions as means of comparing the
worthiness of a particular investment
considering the associated risk.
▪ Normally, if the IRR is higher than the hurdle
rate, the project is likely to proceed.

http://www.investopedia.com/terms/h/hurdlerate.asp
 Dr Cliff Dansoh
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Brewdog

Source: https://www.brewdog.com/blog/brewdog-
tomorrow-a-sustainability-update
 Dr Cliff Dansoh
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Agriculture

Source: https://www.environmentalleader.com/2012/08/houwelings-installs-10-6-
mw-chp-capturing-carbon-for-fertilizer/ also see
https://www.sciencedirect.com/science/article/pii/S0306261919304490
 Dr Cliff Dansoh
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Agriculture

Source: https://www.greencoat-
capital.com/news/2019/031019-greenhouses
 Dr Cliff Dansoh
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The Loca Hotel

Pause to conduct exercise.

 Dr Cliff Dansoh
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References
▪ DECC CHP Density Map: http://chptools.decc.gov.uk/developmentmap/
▪ Investopedia: http://www.investopedia.com/terms/h/hurdlerate.asp
▪ CHPA District Heating Map:
http://batchgeo.com/map/7002eac6eeae19252d35acb1e708122b
▪ A good read on Degree Days: Degree Days – Handle with Care!
(energylens.com)
 Dr Cliff Dansoh
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Any questions?