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HomeMy WebLinkAboutCold Bay Heat Recovery Feasibility Report - June 2018 - REF Grant 70400046/8/2018 Cold Bay, AK Preliminary Heat Recovery Assessment Cold Bay Power Plant Prepared by Devany Plentovich Program Manager, Alaska Energy Authority Introduction The Cold Bay electric utility, G&K, Inc., received grant funding through the Renewable Energy Fund to conduct a feasibility assessment of waste heat recovery for the community. In 2015, G & K, Inc. contracted with Marsh Creek, LLC to conduct this feasibility assessment. Marsh Creek used the 1991 Moolin and Associates, Inc. report “Cold Bay Waste Heat Recovery Report and Concept Design” as the basis of their analysis. This feasibility assessment was completed in February of 2016. Due to staff changes at both Marsh Creek and Alaska Energy Authority, the feasibility assessment was never completed. Alaska Energy Authority is conducting an analysis to verify the heat recovery feasibility assessment that was completed by Marsh Creek and to update recommendations and next steps for the community of Cold Bay. For this analysis PCE data from 2014 to 2017 was used for the power plant loads; while data on existing diesel generation equipment was pulled from the Marsh Creek Heat Recovery Report. A site visit WAS NOT conducted for this analysis, so it is recommended that all assumptions and calculations be verified in the field. Analysis The purpose of this assessment is to provide an estimate of the heat that can be recovered from the jacket water of the Cold Bay power plant diesel engines and used to offset heating oil consumption at nearby buildings. Useable recovered heat is quantified in gallons of #1 arctic diesel heating fuel saved; each gallon is assumed to have a gross heating value of 132,000 BTU per gallon. The current generators in the Cold Bay power plant are as follows: #1 – Caterpillar 3512 – 650 KW - Confirm #2 – Caterpillar 3512 – 845 KW #3 – Caterpillar 3512 – 650 KW - Confirm The heating fuel consumption of the following buildings located near the Cold Bay Power Plant, assuming a 75% boiler efficiency, is shown below. The heating fuel usage values came from the Marsh Creek report and should be confirmed. State Department of Transportation and Public Facilities:  Shop 7800 gallons  Warm storage 4200 gallons  Warm sand storage 8000 gallons  Federal Aviation Administration (FAA) shop 5800 gallons Using a heat recovery utilization spreadsheet customized by Alaska Energy and Engineering, recoverable heat was estimated using the monthly total electrical power production, engine heat rates, building heating demand, and heating degree days. Passive losses for the power plant heat and piping and arctic piping losses were estimated to be similar to the Moolin Report. The spreadsheet uses assumed time-of-day variations for electrical power production and heat demand. Power Cost Equalization (PCE) data for FY 2014 – FY 2017 were averaged and used in the spreadsheet. To determine heat load, the spreadsheet uses monthly heating degree days based on Cold Bay climate data to distribute annual fuel consumption by month. The monthly heat load is then allocated by hour of day using an estimated daily temperature variation (diurnal cycle). The end-user hourly heat load is compared to the hourly available heat from the power plant, less power plant heating loads and parasitic piping losses, and the net delivered heat to the end-user is determined. Based on the analysis of a Cat 3512 genset and assuming the parasitic heating loads from the Moolin report, a heat recovery system in Cold Bay could displace approximately 25,000 gallons of heating fuel at an annual savings of approximately $113,500 based on a $4.54 per gallon heating fuel cost (2017 generation fuel cost). This assumes that the heating season is September to May. Figure 1 illustrates the heating needs and recovered heat availability for the four State of Alaska buildings. FIGURE 1: Heat Demand at Four State Buildings and Waste Heat Available 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Heating Fuel Equivalent (Gallons per Month)Cold Bay Estimated Recovered Heat Utilization Recovered Heat Available Total Heat Demand Recovered Heat Delivered The heat recovery analysis also included an additional (theoretical) load to understand how much heating fuel could be displaced with waste heat if the heating loads existing near the power plant. This analysis resulted in an additional 10,000 gallons (35,000 gallons total) of potential waste heat available. An additional 3,000 gallons (38,000 gallons total) of potential waste heat would be available if heating loads were required during the summer months. Figure 2 – Heating Load with Theoretical Load to Illustrate Maximum Recovered Heat Available Capital Estimate Because a site trip was not conducted for this audit, a capital estimate was not completed. Sam Tappen, an AEA economist, performed an analysis based on the potential fuel savings using the Benefit to Cost (B/C) Ratio process from the Renewable Energy Fund Grant program. The B/C ratio model uses the revenue from a heat sales agreement with 70% of the benefit going to the utility. The utility operates and maintains the heat recovery system up to the walls of the customer buildings. The fuel prices used in the analysis were $4.54/gallon for 2017 diesel fuel used in the power house and $4.39/gallon for 2016 retail No. 1 fuel oil for use in home heating escalated to 2018 costs. With the annual savings of 25,000 gallons of fuel oil, a project could support a capital cost of $350,712 to achieve a Benefit to Cost Ratio of 2.0, which would receive full points for the financial benefit of the project 0 1000 2000 3000 4000 5000 6000 7000 Heating Fuel Equivalent (Gallons per Month)Cold Bay Estimated Recovered Heat Utilization Recovered Heat Available Total Heat Demand Recovered Heat Delivered under the Renewable Energy Fund scoring process. A B/C ratio of 2.0 pays for itself 2 times during the life of the project – conservatively estimated at 20 years. A B/C ratio of 1.0 would support a capital cost of $701,128. The Marsh Creek report utilized the 1991 capital cost from the Moolin Report and added an annual escalation of 3% resulting in an estimated capital cost of $378,055. This estimate would result in a project with a B/C ratio just under 2.0. Conclusion and Recommendations Based on this preliminary analysis, it appears that the design and construction of a heat recovery system in the Cold Bay power plant supplying recovered heat to four adjacent State of Alaska buildings is a viable project. The cost savings from the potential 25,000 gallons of fuel displaced could conservatively offset a capital cost of $350,000 to $700,000; resulting in a B/C ratio range of approximately 1.0 to 2.0. It is recommended that the project team develop an accurate capital estimate taking into consideration local construction knowledge, and consider options for completing the engineering design. Alaska Energy Authority will look for funding opportunities for heat recovery project designs.