10 th annual iof wv symposium november 9, 2006 energy recycling – a convenient truth!
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10 th Annual IOF WV Symposium November 9, 2006 Energy Recycling – A Convenient Truth! Thomas R. Casten Past Chairman & CEO Primary Energy, LLC. An Inconvenient Truth. Al Gore has described global warming as an ‘Inconvenient Truth’ – a reality that we would rather not face - PowerPoint PPT PresentationTRANSCRIPT
10th Annual IOF WV Symposium November 9, 2006
Energy Recycling – A Convenient Truth!
Thomas R. Casten
Past Chairman & CEOPrimary Energy, LLC
An Inconvenient TruthAn Inconvenient Truth Al Gore has described global warming Al Gore has described global warming
as an ‘Inconvenient Truth’ – a reality that as an ‘Inconvenient Truth’ – a reality that we would rather not facewe would rather not face
Present and coming policy changes Present and coming policy changes mandate GHG (Greenhouse Gas) mandate GHG (Greenhouse Gas) reductionsreductions
Conventional wisdom: restrictions will Conventional wisdom: restrictions will increase energy costs and penalize increase energy costs and penalize industryindustry
More ‘Inconvenient Truths”More ‘Inconvenient Truths” Richard McCormack: US industrial Richard McCormack: US industrial
production shrinking at alarming rateproduction shrinking at alarming rate
Grid electricity cost is certain to rise due to Grid electricity cost is certain to rise due to CAIR, rebuilding US T&D system, and CAIR, rebuilding US T&D system, and permanently higher fossil fuel pricespermanently higher fossil fuel prices
US fossil fuel addiction dictates foreign US fossil fuel addiction dictates foreign policy (and expensive wars), bloats balance policy (and expensive wars), bloats balance of payments deficits, and exacerbates of payments deficits, and exacerbates pollution control costspollution control costs
‘‘A Convenient Truth’ A Convenient Truth’ Energy RecyclingEnergy Recycling
US industrial waste energy could produce 20% US industrial waste energy could produce 20% of US electricityof US electricity
Recycling creates significant new revenue streams Recycling creates significant new revenue streams for US manufacturers and reduces emissionsfor US manufacturers and reduces emissions
Power generation that recycles waste heat uses Power generation that recycles waste heat uses half of the fossil fuel of conventional generationhalf of the fossil fuel of conventional generation
Recycling cuts power costs, reduces emissionsRecycling cuts power costs, reduces emissions
US industries single best hope to regain US industries single best hope to regain competitiveness:competitiveness: recycle waste energy recycle waste energy
Examining Energy TrendsExamining Energy Trends New work by Robert U. Ayres examines New work by Robert U. Ayres examines
relationship of energy, conversion to relationship of energy, conversion to useful work, and GDP (Gross domestic useful work, and GDP (Gross domestic product)product)
Raw energy use and GDP do not Raw energy use and GDP do not correlate, economists treat energy as correlate, economists treat energy as simply a 4% factor in overall economysimply a 4% factor in overall economy
Ayres finds changes in useful work Ayres finds changes in useful work explain over 50% of past century’s explain over 50% of past century’s economic growtheconomic growth
Economic Growth Driven by Economic Growth Driven by Improving Energy EfficiencyImproving Energy Efficiency
Long trend of falling energy use per dollar Long trend of falling energy use per dollar of GDP, does not correlate with rising GDPof GDP, does not correlate with rising GDP
However, also long trend of increasing However, also long trend of increasing efficiency of converting exergy (potential efficiency of converting exergy (potential energy) to useful workenergy) to useful work
Useful work per $ of GDP has been Useful work per $ of GDP has been remarkably constant, explains over half of remarkably constant, explains over half of economic growtheconomic growth
Trends of energy efficiency have reversed, Trends of energy efficiency have reversed, largely due to electric industry stagnationlargely due to electric industry stagnation
US Exergy and Useful Work per $ GDP
-
2
4
6
8
10
12
14
16
18
Year
kWh
/ $G
DP
watts total exergy / $GDP watts useful work / $GDP 10 year moving average
KWh Useful Work / $GDP
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Year
kWh
/ $G
DP
kWh of useful work per $GDP 10 per. Mov. Avg. (kWh of useful work per $GDP)
Conversion Efficiency, Exergy to Useful Work
0%
2%
4%
6%
8%
10%
12%
14%
Year
Per
cent
of r
aw e
xerg
y to
use
ful w
ork
Conversion efficiency to useful work
5 per. Mov. Avg. (Conversion efficiency to useful work)
Conversion Efficiency, Exergy to Useful Work work 1960-2005
9%
10%
11%
12%
13%
14%
Year
% e
ffic
ienc
y of
con
vers
ion
% input exergy to useful work 5 per. Mov. Avg. (% input exergy to useful work)
Exergy Conversion to Useful work Exergy Conversion to Useful work by Sectorby Sector
Look at the % of exergy converted to useful work Look at the % of exergy converted to useful work in low temperature heat, high temperature heat, in low temperature heat, high temperature heat, lighting, and electricitylighting, and electricity
Electricity is by far the most efficient way to use Electricity is by far the most efficient way to use energy, butenergy, but
Efficiency has stagnated in electricity productionEfficiency has stagnated in electricity production Stagnant power industry efficiency is key to many US Stagnant power industry efficiency is key to many US
problems, including industrial competitiveness, problems, including industrial competitiveness, pollution, jobs, balance of payments, and global pollution, jobs, balance of payments, and global warmingwarming
Conversion Efficiency of Low Temp Heat
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Year
Eff
icie
ncy
of C
on
vers
ion
Conversion Efficiency of High Temp Heat
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Year
Eff
icie
ncy
of C
onve
rsio
n
Conversion Efficiency of Electricity to Light
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Year
Effi
cien
cy o
f Con
vers
ion
US Electric Efficiency,1900-2005
0%
5%
10%
15%
20%
25%
30%
35%
Year
% E
ffic
ien
cy
Primary Efficiency, Delivered Electricity
Conversion Efficiency of All Electric Uses
46%
48%
50%
52%
54%
56%
58%
60%
2005
1995
1985
1975
1965
1955
1945
1935
1925
1915
1905
Year
Ele
c. C
on
vers
ion
to
Use
ful W
ork
US Electric Efficiency,1900-2005
0%
5%
10%
15%
20%
25%
30%
35%
Year
% E
ffic
ien
cy
Primary Efficiency, Delivered Electricity Final Efficiency raw energy to useful work
Ten year Moving Average 10 year moving average
Industry Has OptionsIndustry Has Options
Recycle energy to reduce cost Recycle energy to reduce cost and reduce pollutionand reduce pollution
Conventional Central ApproachConventional Central Approach1960 Data (& 2003 Data)1960 Data (& 2003 Data)
Pollution
Fuel
100 units
Power Plant
=
67 units Waste Energy
33 units Electricity
End User
Waste HeatTransmission Line Losses
3 units (7.5%)
Decentralized Generation Option Decentralized Generation Option Combined Heat and PowerCombined Heat and Power
Pollution
Recycle Waste Heat
CHP Plant
End User Site
33 units Waste Energy
=66 units Useful Work 33 units
Electricity
33 units Thermal Energy
Fuel
100 units
Defining Recycled EnergyDefining Recycled Energy Recycled energy is useful energy Recycled energy is useful energy
derived from:derived from: Exhaust heat from any industrial process or Exhaust heat from any industrial process or
power generation power generation Industrial tail gas that would otherwise be Industrial tail gas that would otherwise be
flared, incinerated or vented, flared, incinerated or vented, Pressure drop in any gas Pressure drop in any gas
Industrial Energy OptionsIndustrial Energy Options
ElectricitySteam
Hot Water
End User Site
Energy Recycling
Plant
Electricity
Process Fuel
Finished Goods
Waste Energy
SavedEnergy Input
Primary Energy’s Approach Primary Energy’s Approach 90 MW Recycled from Coke Production90 MW Recycled from Coke Production
Comparative Deployment of Combined Heat Comparative Deployment of Combined Heat and Power in 2004and Power in 2004
0
10
20
30
40
50
60
Denmar
k
Nether
lands
Finlan
d
Russia
Germ
any
Poland
Japa
n
China
Portugal
Canada
Mex
ico
WORLD US UK
Indon
esia
France
Brazil
India
Argentin
aDE
sh
are
as a
% o
f to
tal
po
wer
gen
erat
ion
Future Generation Options
Existing Coal Fossil Plant - No new T&D
New Coal
New Combined Cycle Gas Turbine
Coal Gassification CCGT
Remote Wind
Coal Gas with CO2 Sequestration
Balanced CHP Recycled Industrial Energy
0
5
10
15
20
-10123
Average Fossil Heat Rate (Units of fossil fuel per unit of delivered electricity)
Cen
ts /
kWh
Renewable Energy Options
Central Generation
Options
No incremental fossil fuel line
Recycled Energy Options
Avg. Industrial Power Price 5.5¢ / kWh
(33% efficiency) (50% efficiency) (100% efficiency) (net fossil savings)
Avg. Retail Power Price 8.1¢ / kWh
Power Cost and COPower Cost and CO22 Policy Choices Policy Choices
Cost down Cost / MWh Cost up
CO
2 dow
n
CO
2/M
Wh
C
O2 u
p
Coal gasification, CCGT,
Cost up, CO2 up
Central generation with coal, no criteria pollutant control
Cost down, CO2 up
Wind, Geothermal, CO2 sequestering, on grid solar
Cost up, CO2 down
CHP, industrial energy recycling(Requires local generation) off
grid solar, local hydro
Cost down, CO2 down
Cost and Emissions Today
Policy Goal
How Can WVA Governance Spur How Can WVA Governance Spur Reduced Energy Costs & GHG Reduced Energy Costs & GHG
Modernize old rules that are now Modernize old rules that are now barriers to modern technologybarriers to modern technology
Enable Enable recycled energyrecycled energy projects to projects to capture more of value they createcapture more of value they create Reward local generation for avoiding T&D Reward local generation for avoiding T&D
capital and line lossescapital and line losses Pay part of health and environmental Pay part of health and environmental
savings to savings to energy recyclingenergy recycling facilities facilities
More Specific WVA SuggestionsMore Specific WVA Suggestions Provide open standard offer for power Provide open standard offer for power
from energy recycling facilitiesfrom energy recycling facilities
Provide limited loan guarantees for Provide limited loan guarantees for industrial energy recycling plants, valid industrial energy recycling plants, valid only if waste energy supply ceases only if waste energy supply ceases
Identify specific barriers to efficiency Identify specific barriers to efficiency and enact new rules that serve the social and enact new rules that serve the social purpose but do not block efficiency.purpose but do not block efficiency.
Convenient Truth:Convenient Truth:Energy Recycling Solves Multiple ProblemsEnergy Recycling Solves Multiple Problems WVA can ‘mine’ industrial waste energy, create WVA can ‘mine’ industrial waste energy, create
added revenue streams for industryadded revenue streams for industry Recycle presently wasted energy streams to provide Recycle presently wasted energy streams to provide
affordable, clean energyaffordable, clean energy
Requires unconventional, innovative governanceRequires unconventional, innovative governance Remove barriers to efficiencyRemove barriers to efficiency Pay part of health savings to recycled energy facilities Pay part of health savings to recycled energy facilities
that create those savingsthat create those savings Pay T&D savings to energy recycling facilitiesPay T&D savings to energy recycling facilities Permit energy recycling as pollution control device Permit energy recycling as pollution control device
Denmark Changed in Two DecadesDenmark Changed in Two Decades
Source: Danish Energy CenterSource: Danish Energy Center
Conclusions:Conclusions: Local pollution, global warming, and Local pollution, global warming, and
industrial competitiveness are all industrial competitiveness are all serious problems serious problems
The only ‘double dividend’ approach is The only ‘double dividend’ approach is energy recycling -- clean energy energy recycling -- clean energy solutions that reduce costs and solutions that reduce costs and emissionsemissions
Our collective future depends on how Our collective future depends on how fast governments remove barriers to fast governments remove barriers to efficiency and encourage clean energyefficiency and encourage clean energy
Thank you for listening
Economies of Scale?Economies of Scale? Central versus Decentralized Generation Central versus Decentralized Generation
Transmission Transmission & Distribution& Distribution
$1380$1380
$138$138
$1,242$1,242
1000%1000%
GenerationGeneration
Central GenerationCentral Generation $890$890
Local GenerationLocal Generation $1,200$1,200
Savings (Excess) of Savings (Excess) of Central vs. Local Central vs. Local
GenerationGeneration$310$310
Central generation Central generation capital as a % of capital as a % of
local capitallocal capital 74%74%
Total / kW Total / kW of of
GenerationGeneration
$2,270$2,270
$1,338$1,338
$1,068$1,068
213%213%
KW KW required/ required/ kW LoadkW Load
1.441.44
1.071.07
0.370.37
135%135%
Total Total costs/ kW costs/ kW New LoadNew Load
$3,269$3,269
$1,432$1,432
$1,837$1,837
228%228%