Strategies to Reduce Ontario’s Electricity

Grid’s GHG Emissions Using CHP Systems

Presented at the EMC/NRCan Energy Summit, Vaughan, May 31, 2018

Aqeel Zaidi, P.Eng., CEM, CMVPEnergy Solutions ManagerEnbridge Gas DistributionAqeel.Zaidi@enbridge.com

Outline

1. What’s the rationale for CHP GHG reduction when on-site gas consumption increases

2. How grid electricity “Demand” and “Supply” outlook affects CHP’s role as a GHG reducing technology

3. How CHP can reduce GHG emissions

4. Key findings of a report on CHP GHG reduction assessment, completed by Power Advisory for Enbridge and Union Gas.

5. Flexible CHP

6. Conclusions

Rationale for CHP GHG ReductionCHP reduces draw from the entire gas system just like it reduces draw from the bulk electric grid

1. CHP significantly reduces demand from the electricity grid:

1. Basis for eligibility under CMD programs: The 2015-2020 Conservation First Framework (CFF):

1. CHP does not reduce electric load on site, reduces draw on the entire electricity grid

2. Similarly CHP does not lower gas use at site, but reduces draw on the entire gas system

2. Gas-fired CHP projects submitted after July 1, 2018 are excluded from CDM to align government’s climate change policies : Ontario’s Long-Term Energy Plan (LTEP) 2017

1. No details provided to explain why CHP does not align with climate change policies, although acknowledged that it reduces grid demand

2. Cited London DE gas-fired CHP as an example that help address the climate challenge

2. Which generation source is impacted when CHP reduces draw from the grid?

Which Fuel will likely be Displaced with CHP?Fuel that balances the grid

• Nuclear provides base-load, runs 24/7• Hydro generally runs as based load, however fills demand during certain

periods• Renewables such as wind and solar can provide significant generation, but

are intermittent• Natural gas primarily fills the electricity generation needs between base

load, intermittent generation, and demand

Avoided GHG EmissionsConfusion about which grid emission factor should be used to assess GHG impact

1. Average grid emission factor = 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝐺𝐺𝐺𝐺𝐺𝐺 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑇𝑇𝑒𝑒𝑒𝑒

𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝐺𝐺𝑒𝑒𝑒𝑒𝑒𝑒𝐺𝐺𝑇𝑇𝑇𝑇𝑒𝑒𝑇𝑇𝑒𝑒 𝑓𝑓𝐺𝐺𝑇𝑇𝑒𝑒 𝑇𝑇𝑇𝑇𝑇𝑇 𝑒𝑒𝑇𝑇𝑠𝑠𝐺𝐺𝑠𝑠𝑒𝑒𝑒𝑒 (𝑁𝑁𝑠𝑠𝑠𝑠𝑇𝑇𝑒𝑒𝑇𝑇𝐺𝐺,𝑅𝑅𝑒𝑒𝑒𝑒𝑒𝑒𝑅𝑅𝑇𝑇𝑅𝑅𝑇𝑇𝑒𝑒,𝐹𝐹𝑇𝑇𝑒𝑒𝑒𝑒𝑒𝑒𝑇𝑇)

2. 2015 Average grid GHG emission factor = 7.1 𝑀𝑀𝑇𝑇160 𝑇𝑇𝑇𝑇𝑇

= 44 gm/kWh

3. GHG emission from central gas plants = 400 gm/kWh

4. Need for a standard avoided emission factor for CHP projects

5. Avoided emission factors should consider the impact of :

1. seasonal and time of use periods

2. imports and exports, spinning reserves, ramping, grid resiliency etc.

6. Avoided emissions factors should be based on future generation mix and operation of the grid

Electricity Demand Outlook

• Outlook A – declining demand from 2015• Outlook B – flat demand • Outlook C & D – higher demand outlooks driven by deeper

electrification • Deeper electrification will very likely increase gas electricity generation

• CHP could play a bigger role in generation mix

Highly Variable: Four different outlooks(source OPO 2016)

Installed Capacity (excluding expired contracts)

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Nuclear refurbishment will change generation sources starting 2020

Source: Power Advisory LLC, Dec. 19, 2017 Final Report, prepared for Enbridge and Union Gas

Nuclear Refurbishment Schedule (ieso)

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Nuclear refurbishment heavily influences the Supply Outlook for existing generation

• Pickering shut down in 2024 removing 3000 MW of baseload generation

• Significant shortfall beyond 2020

2500 MW shortfall

GHG Emission Forecast for Ontario's Energy Production (2017 LTEP)

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Emissions expected to double suggesting longer operation of gas plants

Gas Plants Expected to Run Longer starting 2020

1. Demand expected to grow due to increased electrification – Option C/D

2. Non-emitting base load generation expected to shrink due to refurbishment and Pickering closure beyond 2020

3. Renewables and battery storage could fill some gap, but central gas plant will be needed in the LTEP time frame to 2037

4. High efficiency CHP offers an excellent solution to reduce Province wide GHG emission by displacing generation from less efficient gas plants

5. Site vs. Source perspective is required to understand CHP GHG benefits:

1. Methodology proposed by U.S. EPA and CHP Partnership, February 2015, “Fuel and Carbon Dioxide Emissions Savings Calculations Methodology for Combined Heat and Power Systems”

CHP could reduce run time of central gas plants, reducing GHG emissions

How CHP Saves Natural Gas

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Site vs. Source

Electricity = 32.4 units76 units

54 units

Thermal = 42.4 units

Electricity

Combined Heat and

PowerCHP

Heat

Electricity

Heat

Gas-fired Power Plants

Eff = 45%Nat. Gas

BoilerEff=78%Nat. Gas

Line losses 5%

Conventional Generation

Total gas consumption = 130unitsOverall efficiency = 57%

Total gas consumption = 100 unitsOverall efficiency = 75%

Gas Saving = 30 units or 23% of gas used in SHP(Annual savings depend on operating hours of power plants and CHP)

100 units

Nat. Gas

Note: All values reported on higher heating value

Separate Heat & Power (SHP)

How CHP Saves GHG EmissionsSite vs. Source

76 m3/hr

54 m3/hr

Electricity = 340 kW

Thermal = 1.52 MMBtu/hr

Electricity

Combined Heat and

PowerCHP

Heat

Electricity

Heat

Gas-fired Power Plants

Eff = 45 %

Nat. Gas

100 m3/hrNat. Gas

BoilerEff = 78%

Nat. Gas

Line losses 5%

Conventional GenerationSeparate Heat & Power (SHP)

Total gas consumption = 130 m3/hrCO2e emissions = 0.24 tonne/hr

= 720 gm/kWh

Total gas consumption = 100 m3/hrCO2e emissions = 0.188 tonne/hr

= 553 gm/kWh

CO2e Reduction = 167 gm/kWh of displaced electricity from gas plants(Annual savings depend on operating hours of power plants and CHP)

419 gm/kWh

301 gm/kWh

All values reported on higher heating value

CHP GHG Impact Analysis for Ontario Grid – Power Advisory Report

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Jointly sponsored by Enbridge and Union Gas

• Estimated GHG impact for the LTEP time frame to 2037• Power Advisory’s models takes into account the impact of:

• Imports and exports• Ramping, startup/shut-down of gas plants

• Estimated avoided GHG emissions as a function of “net demand”

• Net demand = Ontario demand - Ontario non-fossil generation (i.e., nuclear, hydro, wind, solar and bio-energy)

• Net demand = (Fossil generation + Imports) - Exports

• Net demand can be positive (i.e., additional supply is needed) or negative (i.e., Ontario has a surplus for export)

• CHP can have an impact only when net demand is positive

Quantitative Assessment

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Five CHP Profiles

1. Baseload 24 x 7 - year-round

2. Industrial 24 x 7 Monday – Friday

3. Residential space heating only

4. Residential space heating in conjunction with air source heat pump Net Zero Energy Emission (NZEE). CHP runs when outside temp drops below -4 C

5. Responsive and flexible CHP

CHP Impacts on GHGs

• The average overall GHG benefit over 20 year planning period is estimated to range from 0.06 tonnes / MWh (outlook B) to 0.16 tonnes / MWh under deeper electrification scenarios like outlook D

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Industrial CHP would reduce emissions in all scenarios from 2020 onward

2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037

Source: Power Advisory LLC, Dec. 19, 2017 Final Report (Enbridge and Union Gas)

Residential NZEE CHP Results

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• Residential mCHP used for space heating when ambient temperature drops -4 C (25 F)

• ASHP runs when ambient temperature above -4 C (25 F)

mCHP reduces GHG emissions when operating in flexible GHG reduction mode

2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037

Source: Power Advisory LLC, Dec. 19, 2017 Final Report (Enbridge and Union Gas)

CHP Emission Reduction Potential

• High efficiency CHP offers system-wide GHG reductions over the 20 year time horizon.

• Dispatchable flexible CHP could respond to market signals for deeper GHG reductions

• The average GHG emission reduction during 2018 – 2037 period varies from 50 to 230 gm/kWh.

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Power Advisory - GHG Emission Impact Analysis Completed for Ont.

Source: Power Advisory LLC, Dec. 19, 2017 Final Report (Enbridge and Union Gas)

Key Findings of Power Advisory Report• Reducing the occurrences of surplus baseload generation

will improve the emission avoidance of DG CHP• Starting 2020 and beyond, base-load generation is expected to shrink

due to refurbishment and shutdown of nuclear plants,

• Central gas plants are expected to run longer to meet supply short fall of base-load generation and increased demand due to deeper electrification

• Ontario’s peak electricity demand may shift from summer to winter due to electrification of space heating

• High efficiency CHP can reduce bulk grid GHG emissions by displacing central gas-fired generation

• Responsive DG CHP (e.g., ability to response to market signals) offers the best opportunity to reduce GHG emissions and decrease peak demand needs

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Flexible CHP Concept

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Flexible CHP systems that can automatically and seamlessly provide needed grid services could offer deeper GHG reductions

Source: US DOE, Advanced Manufacturing Office, Office of Energy Efficiency and Renewable Energy

Highlights of US DOE White Paper on Flexible CHP Systems

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Vision: Manufacturers deliver grid services to improve bottom line

• As intermittent energy sources like wind and solar become more prevalent, the need for grid services becomes even greater

• Keeping the grid stable becomes far more complex and time sensitive as variable generation resources play a larger role in meeting the usual fluctuations in demand.

• The new, flexible CHP systems must interact seamlessly with the grid, and this interaction must be fully automated.

• A concentrated research and development (R&D) effort is required to develop these critically needed technologies

Conclusions

• Central gas plants are expected to run longer to meet supply short fall of base-load generation and increased demand due to deeper electrification

• High efficiency CHP can reduce bulk grid GHG emissions by displacing central gas-fired generation

• A responsive flexible CHP system that can automatically and seamlessly interact with grid could offer deeper GHG reductions.

• CHP should be considered in future mix of electricity generation, just like other DG technologies

• CHP has the same impact of reducing demand from the grid as other forms of distributed generation such as Solar PV, Wind, therefore deserves to be treated accordingly.

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