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MID-SIZED NEW GENERATION: RECIPROCATING INTERNAL

COMBUSTION ENGINES OR COMBUSTION TURBINE?

Presented to Power-Gen International 2017

Melanie J. Schmeida, P.E., Louis Perry Group, a CDM Smith Company

165 Smokerise Dr., Wadsworth, OH 44281,

mschmeida@louisperry.com, 330-760-0645

Abstract For any new natural gas-fired power generation project, a developer or owner must wrestle with

the question “what is the right technology?”. For very small projects, the answer often defaults

to reciprocating engines. For very large projects, it is combustion turbines in a combined cycle

configuration. But for the facilities in between, the right answer is not always so clear. This

paper compares reciprocating engines to simple cycle combustion turbines for a nominal 50 MW

gas-fired plant in the Midwest, connected to the electric grid. It evaluates capital costs, operating

costs, reliability, operational flexibility, system responsiveness to dispatch requirements, and site

considerations.

Background Inexpensive shale gas has resulted in an increased interest in natural gas-fired power generation

in many parts of the nation. The profusion of this new generation, its implications on the utility

and distributed generation markets, and project viability are topics of many publications. For the

purposes of this paper, it is sufficient to say new natural gas-fired electricity generation is

attractive for an owner in the Midwest, and evaluation of their needs indicates approximately 50-

MW electric generating capacity is the appropriate size. Additionally, the purpose of the facility

is electric generation only; no thermal energy in the form of steam or hot water is being

considered.

For all generating facilities, the best-fit technology needs to be evaluated carefully. Developers

and owners are making large investments, and need to consider many factors to ensure

appropriate returns on that investment. However, conventional wisdom would dictate that a

“small” natural gas-fired generating facility is best served by reciprocating internal combustion

engines (RICE), as it would be expected to operate intermittently, and that a “large” generating

facility is best served by a combined cycle system(s) as it would be expected to operate nearly

continuously. But what about this 50-MW facility, which is “mid-sized”? What is the

appropriate technology for this installation?

When this study was first contemplated, the primary technology options were intended to be

RICE, a simple cycle combustion turbine (CT), and a combined cycle system. However, we

quickly determined that the combined cycle arrangement was not going to be cost effective. It is

conceivable that a combined cycle plant might be the right choice for a mid-sized facility if the

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thermal energy can be used and/or the facility will run continuously, but with our premise that

the thermal energy has no value beyond additional electric generating capacity, the payback for

the additional capital expense was not reasonable. Therefore, this paper focuses on a comparison

between RICE and simple cycle CT for this application, contemplating the major questions of:

• How much should it cost?

• How will it be used?

• Where will it be located?

• How much will it actually cost?

It is also worth noting that, while this study utilizes a specific example site, the items evaluated

can be applied to any project.

How Much Should It Cost?

As a starting point in the evaluation, typical engineering, procurement, and construction (EPC)

costs for the technologies were evaluated to establish viability. Property costs were excluded, as

the site was already owned, as were permitting and other owner costs since those would be

similar regardless of the technology selected.

Figure 1: Published Estimated RICE and CT EPC Costs (see References)

Based on a sampling of published cost information, average EPC costs for RICE technology is

approximately $1100/kW, and $800/kW for CT. The sample selected was based on installations

in the 20-100MW size range, where such delineation was possible, and data points that appeared

to be outliers were discounted.

0

200

400

600

800

1000

1200

1400

1600

1800

$/k

W

Estimated EPC Costs

RICE

CT

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Similarly, typical O&M costs were evaluated for the two technologies. Fuel costs, which

represent the largest portion of overall operating costs, were excluded, as differences in those

costs can be accounted for in the differing efficiencies of the equipment. Apples-to-apples data

comparison for these costs proved more difficult, since the data can be represented in a variety of

ways.

The non-fuel O&M costs in Figure 2 address both fixed and variable costs for a typical

installation. For the most comparable data, over the expected unit life, the average annual O&M

cost for RICE was approximately $0.016/kWh and $0.007/kWh for CT.

Figure 2: Published Estimated RICE and CT Non-Fuel O&M Costs (see References)

Operating and maintenance costs for RICE include maintenance labor, engine parts and materials

such as oil filters, air filters, spark plugs, gaskets, valves, piston rings, and electronic

components, and consumables. The recommended service includes inspections/adjustments and

periodic replacement of engine oil and filters, coolant, and spark plugs every 500 to 2,000 hours.

A top-end overhaul is recommended between 8,000 and 30,000 operating hours, which includes

a cylinder head and turbocharger rebuild, and a major overhaul is performed after 30,000 to

72,000 operating hours, which involves piston/liner replacement, crankshaft inspection, bearings,

and seals.

For CTs, the maintenance requirements are less than RICE, and include labor for routine

inspections and procedures, and major overhauls. Generally, routine inspections are required

every 4,000 operating hours to ensure that the turbine vibration is within tolerance. A gas

turbine overhaul is needed every 50,000 to 60,000 operating hours, which includes a complete

inspection and rebuild of components to restore the gas turbine to nearly original performance.

Note that operating hours for CTs are not directly comparable to RICE operating hours, as virtual

hours are added to CTs for starts/stops and excessive load changes.

0.000

0.005

0.010

0.015

0.020

0.025

0.030

$/k

Wh

Estimated O&M Costs

RICE

CT

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As shown, typical installed and non-fuel O&M costs are lower for CTs than RICE. The potential

advantage of a RICE facility comes into play when operating characteristics and usage

considerations are evaluated. Since maintenance costs for RICE installations do not increase

with cycling and multiple starts and stops of the equipment, effective O&M costs begin to

levelize between the technologies when employed in facilities that will experience this type of

operation.

How Will It Be Used?

As engineers, we often seek an optimized solution, a “best fit”. With this mindset, the intended

purpose of the generating facility can often drive the technology selection, since the technical

characteristics of the equipment inherently lend themselves to different applications. However,

careful consideration is still needed, and final selections are, of course, still rooted in economics.

These technologies can be used for a variety of purposes in generating facilities, such as peaking

generation, frequency stabilization and renewable generation support, to address reliability and

resiliency concerns, and for capacity sales. As part of the comparison for these uses, some of the

key differing technical features are shown in Table 1 below.

Table 1: Basic Technical Comparison RICE CT

Heat Rate (Btu/kWh) 7400-8200 8100-9200

Max Efficiency (%)

Full Load 48-50 40-43

50% Load 48-50 30-33

Footprint (ft2/kw) 0.28-0.38 0.02-0.08

Time to Full Load (min) 5 15

Ramp Rate (%/min) 100-130 20-50

Turndown (singe unit) 25% 30%

CHP Applications Hot Water/Steam Steam

Dual Fuel / Fuel Range Low BTU Low and High BTU

RICE heat rates are lower and efficiencies higher than CT, which results in lower fuel costs for

the same output. Since fuel is the single largest operating expense for a generating facility, this

is an important factor. Additionally, RICE efficiency remains steady throughout the load range,

whereas CT efficiency decreases at reduced loads. The load range is broader for RICE than CT,

both for a single unit, as well as for the total facility due to multiple smaller machines instead of

one larger machine.

Reciprocating engines are also able to start-up and reach full load capacity more quickly, and can

withstand dramatic changes in load and many starts and stops with minimal impacts to the

equipment and maintenance cycles. The ramp rate, both up and down, is substantially higher for

RICE than for CT. Although CTs can be cycled, excessive load changes and starts and stops

effectively adds operating hours, dramatically increasing maintenance costs.

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Based on these characteristics, either RICE or CT appears to be the better fit for certain

operational scenarios. When the hours of operation and load range are closer to intermediate

load than to a high-cycling type of operation, the lower capital and O&M costs for the CT

typically result in a higher return on investment, despite the lower efficiency. When the load

profile is more volatile, the lower fuel and O&M costs for the RICE typically results in a higher

return on investment, despite the higher installed cost.

Table 2: Operating Characteristics – Best Fit RICE CT

Load Profile Peaking to Intermediate Intermediate to Base

Starts/Stops Many Few

Capacity Factor Low High

Hours of Operation Low High

Operating Range Low Load Mid Load

Peaking Generation

For peaking applications, both RICE and CT can be viable options. Most of the literature

advocates RICE for its fast start capabilities and broader load range as a better match to changing

grid needs. Reciprocating engine facilities can reach full load within 3-5 minutes, and depending

on the number of units, can operate from 10-100% of total plant load, or even lower. As stated

above, they do not decrease in efficiency at reduced load operation, and can withstand many load

changes and starts and stops without penalizing maintenance costs.

When evaluating the cost implications of these attributes (reduced fuel and maintenance costs),

RICE may very well be superior. However, CTs can still be an attractive option for peaking

applications depending on the specific conditions. For example, many regional organizations

have excellent peak prediction tools. This information allows operators to make informed

decisions regarding start-up and run time for their CT plants, reducing concerns about response

time and cycling operation, as they can choose to respond only to longer duration peaks.

Frequency Stabilization and Renewable Support

Different from peaking applications, the use of generating facilities for frequency stabilization

requires fast response. This is most often needed to support the grid as a result of the increased

use of renewable generation, due to the non-synchronous generation of wind and solar power.

Wind and solar may account for 20% of installed power capacity by 2035, but only contributes

about 2% of firm capacity that can be relied on to generate at any given time. Other factors that

can lead to grid instability include fast variations in consumption, errors in forecasting, and

unexpected disturbances in capacity or loads. As a RICE facility can ramp quickly, it is the

rational choice if this is the goal of the facility.

Reliability and Resiliency

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Recent natural and man-made disasters have placed reliability and resiliency of our electric

power supply at the forefront of national discussion. Both RICE and CT facilities are highly

reliable, with up to 98% availability with proper maintenance; this equipment can be counted on

to operate when called upon. However, RICE does have some advantages in this area. For our

50-MW plant, a single CT would be employed, as that would be the most economical

installation. Since there is only a single unit, versus multiple RICE, the RICE installation has

inherent redundancy that the CT could not match. In the event one engine was out of service, the

remainder could still produce power. In the unlikely event emergency power was required

during a turbine rebuild/replacement, there would be no option for generation. Additionally,

RICE facilities can be used for black-start support, as they can be started without auxiliary

power. Combustion turbines require auxiliary power to start system components.

Capacity Sales

Some facilities exist for electricity sales to wholesale capacity markets. In this case, either

technology is well-suited for the application. Both technologies are completely dispatchable, so

they can be utilized when the price of electricity is advantageous for them to do so or when

called upon by a grid operator. However, some operators attempt to capture very short-term

price spikes, in which case RICE may have an advantage due to its faster response time.

Where Will It Be Located?

Every site is unique, and specific site attributes can have a major impact on the financial viability

of a project in general, and on the selection of the appropriate technology. In many cases, these

will override the well-established rules discussed above.

Footprint

As illustrated in Table 1, CT systems utilize approximately one-third to one-quarter of the area

needed for equivalent RICE generation. Additionally, CTs are relatively lighter weight and do

not require substantial support foundations, resulting in less site work overall. This difference in

footprint is accounted for in the installation cost of the project, including the typical EPC costs

referenced in this paper. However, beyond the common installation costs, this difference in

footprint can result in additional costs to the project. For a brownfield site, this may mean

additional demolition or remediation services are required. Or for a landlocked area, the expense

to purchase additional land could make selection of RICE prohibitively expensive.

Ambient Conditions

Reciprocating engine performance is impacted very little by changes to the incoming air

conditions, therefore air pressure reductions at high altitude (up to 3,000-ft above sea level or

more) and large ambient temperature ranges (up to 100 °F) do not significantly affect operations.

Conversely, CT performance may degrade as much as 10-15% from ISO conditions for the same

range due to incoming air properties. High altitude installations need to adjust heat

rate/efficiencies in their performance model to properly represent the expected output. To

combat the degraded performance for CT at high air temperatures, an inlet air cooler is often

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installed. This results in improved efficiency of the CT, but requires additional capital

expenditure, and operating expense in the form of water usage. Either technology can be

effectively utilized, but RICE has the advantage of maintaining base performance.

Natural Gas Pressure

Combustion turbines require much higher inlet gas pressure than RICE, 300-600 psig vs 75-150

psig. If the site has access to a high pressure natural gas line, this may not be of much concern.

However, most owners do not have such luxury, and therefore will need to install gas

compressors for a CT installation. These compressors are noteworthy pieces of equipment in

their own right, with significant capital and O&M expenditures required.

Noise

Both technologies will generate far-field noise when in operation, so proximity to receptors will

be a concern regardless of selection. Typically, specifically engineered sound enclosures and/or

buildings will be sufficient; however, RICE tend to generate higher frequency noise that is more

difficult to control than the lower frequencies produced by CTs. If the site is in an area with

sensitive receptors, additional sound mitigation measures may be required, resulting in increased

capital costs for the RICE.

Emissions

Both technologies are efficient combustors and have low resulting emissions, and both can be

outfitted with selective catalytic reduction (SCR) systems for NOx and CO control. This is an

area where the fast start and response time of RICE can be a detriment, as the emissions control

equipment does not respond as quickly. During start-up or fast ramping, emissions levels may

fluctuate, causing temporary spikes. Average emissions limits are not likely to be a concern in

most parts of the U.S., however, permits need to be reviewed carefully for instantaneous or peak

allowable emissions levels. Restrictions on instantaneous levels may restrict operational

flexibility, resulting in loss of function that impacts the project pro forma.

Water Availability

As noted above, for high ambient temperature installations, CTs will often be outfitted with an

inlet air cooler, which will require high purity water. Some CT models also require water

injection for cooling and emissions controls. If water scarcity, or the cost of demineralized

water, is a concern at a site, the resulting operating costs may favor RICE. Reciprocating

engines require an external cooling circuit, but typically utilize a closed-loop system with

minimal make-up water needs.

Future Expansion

Both CT and RICE equipment can be supplied as modular units, which can reduce installation

costs by shifting labor from the field to the shop. Additional units can be added on site as a path

to expand generation capacity in the future. Due to the smaller size of the RICE units, it is far

more practical to incrementally expand capacity by adding one engine at a time than it is for CT.

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If incremental expansion is a possibility for a facility, RICE will permit that expansion, whereas

additional CTs will result in major step changes.

Unique Site Considerations

The list of potential site considerations is nearly inexhaustible. There are many unique features

to any location that could impact cost and/or technology selection. In many cases, the outcome

will be the same regardless of the technology selected, but consideration is still warranted. Some

items to evaluate include:

• Does the site share utilities with other facilities? What is the impact of installing new

generation capacity on these utilities. For example, will the natural gas consumption

restrict capacity or impact pressure for the other users? Will a substation connection or

upgrade impact operations?

• For a re-development site, are there opportunities to re-use existing infrastructure, such as

electrical distribution equipment, water or compressed air systems, buildings, etc. to

reduce capital costs?

• Is there the potential for unknown subsurface conditions, contaminated soil, hazardous

materials, or other similar brownfield issues? In cases like these, the smaller footprint of

the CT could result in significant savings over the RICE.

• Air permit considerations were noted above, but are there other permitting concerns that

could impact the installation? Siting and connection permits can be just as challenging as

air permits.

• Does the owner or community have aesthetic concerns or preferences to incorporate?

• Does the installation need to consider future development in the area?

Example Facility

How do the criteria above play out for our 50-MW example facility in the Midwest?

How Much Should It Cost?

As noted in the background, new natural gas-fired electricity generation is attractive for an

owner, who intends to generate electricity only; no thermal energy use is being considered. The

rough pro forma indicated a breakeven EPC cost of $1100/kW, dependent on the actual

estimated O&M expenses. This alone leaves either RICE or CT squarely in contention.

How Will It Be Used?

Like most installations, the facility is intended to address many needs. Its primary purpose is

peak shaving, where the owner feels they can save their customers money by avoiding utility

peak rates. It is also viewed as a resiliency addition, as many customers in the area are served by

a single utility feed; if the primary line goes out this generation can serve as back-up for those

users. Also, if electricity prices increase in future PJM capacity auctions, this operator may

choose to sell into the open market and take further advantage of their investment. Again, this

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blend of needs leaves RICE and CT both as viable options, although many would argue that

RICE would be the better option for a peaking application as well as for redundancy.

Where Will It Be Located?

The site is an existing electric generating facility that has been decommissioned, but the building

and some equipment remains. Figure 3 below shows an edited aerial view of the example site.

Some of the typical site considerations discussed above do not heavily influence the technology

selection for this site. The location is in the Midwest, so altitude or extreme ambient temperature

effects are generally negligible. There is an existing gas line to the property at approximately

150-psig operating pressure. Therefore, a gas compressor will be required for CT, which will be

accounted for in the EPC and O&M cost estimates; the owner has no concern with installing or

operating the compressors. Water is available, and in fact an existing demineralized water

system is still functional. There are no specific permitting concerns for either technology.

Again, clear drivers towards one technology or the other have not presented themselves,

although the added expense of the gas compression may slightly favor RICE.

Figure 3: Example Site for New Generation Installation

At this point, the paths start to diverge. The site is large, and has ample clear space. As shown

in Figures 4 and 5 below, it appears that the footprint for CT or RICE can be accommodated.

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Figure 4: Example Site CT Footprint

Figure 5A&B: Example Site RICE Footprint Options

What’s not clear upon first glance are the unique site considerations. As seen in Figure 3, there

are currently residences across the street from this facility, and there are plans to modify the

same area as a recreational/entertainment district in the future. Therefore, the community has

strong preferences to maintain the vintage appearance of the old boiler house, and keep any new

equipment out of view from the road. They are also dictating noise restrictions at the road.

These restrictions rule out the RICE A arrangement without erecting a barrier wall or upgraded

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building walls to create an aesthetically pleasing façade and provide additional sound

attenuation.

This is an old site, that has had equipment added and removed over its lifetime. The potential to

encounter unknown subsurface utilities and structures is high, so a smaller footprint presents less

risk. Specifically, regarding the RICE B arrangement, in the half of the clear area near the

neighboring building, there are groundwater remediation and monitoring wells for a nearby site.

Obtaining approval and relocating these wells to accommodate the RICE B arrangement would

be a costly endeavor.

In addition to the demineralized water system already mentioned, the existing stack shown is in

good condition for re-use, as is the compressed air system, and some electrical distribution gear.

The differentiator is the stack; the single CT could possibly utilize the stack, whereas multiple

RICE cannot.

The owners of the proposed generation facility also prefer to leave space for additional capacity.

There is space for another CT unit, but increasing the size of the RICE facility would only

exacerbate the aesthetic, noise, and subsurface situations.

How Much Will It Actually Cost?

Typical EPC and O&M costs were presented at the beginning of this paper. While average

numbers are good to use for screening purposes, as shown in Figures 1 and 2, the actual figures

can vary widely. EPC costs for RICE varied from $700/kW to $1700/kW, and from $400/kW to

$1100/kW for CT. Non-fuel O&M costs varied from $0.007/kWh to $0.025/kWh for RICE and

$0.004/kWh to $0.015/kWh for CT. Based on the factors presented here regarding facility use

and location, the reader can gain appreciation for why that variation exists.

For our example project, the system’s essential purpose and expected usage would tend to favor

RICE. In a vacuum, that’s likely what the owner would choose to deploy. But footprint, noise,

future expansion, and other unique site considerations favor CT. Fortunately, the financial

implications of those site factors could be evaluated to select the technology best suited for the

project overall.

The EPC cost for the CT installation is approximately $850/kW and the cost for the RICE

installation is approximately $1250/kW. In this case, the financial models showed that CT was

the preferred choice. Over the lifecycle of the facility, the additional capital associated with site

modifications for the RICE installation was costlier than the lower efficiency and O&M penalties

associated with less than ideal operation of the CT.

The owner evaluated changing the plant size to see if the financial model would favor RICE at

another output. As the facility decreased in size, the differential did close. However, concerns

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then arose regarding the ability to meet peak load requirements. As the facility increased in size

up to approximately 100MW, the preferred technology remained CT.

Conclusion

For a mid-sized generating facility, approximately 50-MW, either RICE or CT technology can be

the “right” choice depending on the specific attributes of the project. Conventional wisdom

exists for a reason, and often points to the best fit solution. However, like our example facility,

care needs to be taken to account for many competing factors before making a final selection,

some of which have been discussed in this paper, and others that may be completely unique to an

owner/developer or to a specific site. With proper diligence, the proper selection emerges.

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