The world of natural gas

Heat and Power

Combined Heat and Power: An Overview and Guideline
 The world of natural gas

Heat and Power

Combined Heat and Power: An Overview and Guideline
 The world of natural gas

Heat and Power

Combined Heat and Power: An Overview and Guideline

GasTerra / Castel International Publishers

Groningen, The Netherlands
 Contents
Introduction 6 3.3 Detailing and realisation 76
3.3.1 Final design and tendering 76
Preface 8 3.3.2 Regulations and permits 78
3.3.3 Financing 83
Chapter 1 Vision on natural gas and cogeneration 11 3.3.4 The decision-making process 85
1.1 Natural gas, the national fuel 11 3.3.5 Planning and realisation 86
This book was compiled and written in 2008 by Cogen Projects, 1.2 Natural gas and decentralised power generation 12 3.4 Management and maintenance 89
in Driebergen, the Netherlands from a concept by GasTerra 1.3 The role of CHP in the Netherlands 12 3.4.1 Maintenance requirements 89
Communication. Cogen Projects is a specialist organisation in the 1.3.1 Power plants and industry 12 3.4.2 Contract types 90
field of CHP (Combined Heat and Power) and is a member of the 1.3.2 Developed areas 12 3.4.3 Selection criteria for the contract type 91
Cogen Nederland and Cogen Europe associations. Please note 1.4 The future role of natural gas  13 3.4.4 Calling for outsourcing tenders 92
that any information referred to in this book reflects its status as 3.5 Micro CHP 96
at 2008. Chapter 2 CHP in the Netherlands 15 3.5.1 Situation in 2008 96
English translation: September 2010 2.1 CHP as a means to save primary fuels 15 3.5.2 Technology 97
2.2 Natural gas as a fuel for CHP 18 3.5.3 Integrating micro CHP 102
Authors: Erik Koolwijk, Peter Goudswaard, Jan Grift, Arjen de 2.3 Benefits of CHP 19 3.5.4 Micro CHP in the market 105
Jong, Stijn Schlatmann, Peter Steenbergen, Margot van Gastel and 2.4 The development of CHP in the Netherlands 20
Ina de Visser (all of Cogen Projects), Gerard Hoek 2.5 CHP potential in the Netherlands 21 Chapter 4 Example projects 109
Editors GasTerra: Hans Overdiep, Henk Ensing and Ben Warner 2.5.1 CHP potential for glasshouse cultivation 21 4.1 Agfa-Gevaert Project, Mortsel (Belgium) 110
Editor Castel Mediaproducties: Arnold Assink 2.5.2 CHP potential for non-residential buildings 21 4.2 Bosbad Putten Project  113
Editor Cogen Projects: Erik Koolwijk 2.5.3 CHP potential for the industrial sector  22 4.3 Emmtec Cogeneration Project 115
Final editing Energy Delta Institute: Pieternel Overmars 2.5.4 CHP potential for district heating 22 4.4 Micro CHP Project  118
English translation and editing: WTS Vertalingen B.V. 2.5.5 CHP potential for dwellings  23 4.5 De Omval Cogeneration Plant Project 120
Figures and illustrations: Cogen Projects, Corbis, Asue, Nuon, 2.5.6 Complete overview of CHP potential up to 2020 23 4.6 UMC Utrecht Power Plant Project 123
Emmtec Services, Capstone Turbine Company, CFC Solutions 2.6 Environmental impact of CHP in the Netherlands 23 4.7 Amersfoort-Vathorst Dictrict Heating Project 126
GmbH, Gas Transport Services, MicroGen, NedStack, Daarderop, 4.8 Gebr. de Groot Kwekerijen CHP Project  129
MTT, Agfa-Gevaert, Bosbad Putten, GasTerra and Axima Services Chapter 3 Cogeneration: from concept to realisation  27
Concept and design: Castel International Publishers 3.1 Technology, design and use 29 Appendix 1 The hydraulic and steam-side integration of CHP 133
3.1.1 Conversion technology  30
2010 GasTerra / Castel International Publishers 3.1.2 CHP design 44 Appendix 2 Determining the size of a CHP installation 141
All rights reserved. No part of this publication may be reproduced, 3.1.3 Usage aspects 52
held in an automatic database or made publicly available in any 3.2 Economic analysis 56 Appendix 3 CHP and protection of interests 147
form or by any means, whether electronic, mechanical, by photo- 3.2.1 Basic principle of economic analyses 56
copying, photography or by any other means, without prior 3.2.2 Operating costs and benefits for CHP 59 Bibliography 148
permission from the publisher. 3.2.3 Required investments  65
3.2.4 Influence of the energy market and energy contracts 67 Index 149
ISBN 978 90 79147 11 3 3.2.5 Subsidies and fiscal benefits  71
NUR 600 3.2.6 Determining profitability  72 Corporate statement GasTerra 152
3.2.7 Feasibility calculations  72
www.castel.nl www.cogenprojects.nl
www.cogen.nl www.energydelta.com
www.cogeneurope.eu www.gasterra.nl

5
Heat and Power Introduction

Introduction

GasTerra is of the opinion that natural gas will play an important role in global energy supply far into
the 21st century. This view is based on facts and prognoses. It is a fact that fossil fuels still supply 90%
of primary energy needs within the current time frame and that it has relatively good use properties
and the least environmental impact of all fossil fuels.
Gas reserves will last far into this century. In this era of transition to more sustainable forms of energy,
renewable sources will gain a larger share in the energy supply. Prognoses indicate that in the total
picture of supply and demand, of growth and economising and the development of alternative energy
sources and current knowledge, renewable resources will gain a 20 to 30% share by the middle of this
century. Even in the event of an unforeseen acceleration in the energy conservation process it is clear
that natural gas will be an important energy source, together with oil and coal.
Heat and Power is one of several books in this series. The content is compiled and written by Cogen
Projects in Driebergen, an expert organisation in the field of combined heat and power. GasTerra,
although acting as principal, has had no contextual involvement other than this introduction but does
agree with its content. Cogen Projects deserves our appreciation for this comprehensive overview,
which in my expectation will contribute to knowledge and usage of CHP for the benefit of maximum
energy efficiency.
Gertjan Lankhorst
CEO GasTerra

This creates a double responsibility. The existing natural gas supply must be maintained at a high
level whilst vigorously pursuing a transition. GasTerra considers itself an expert in the field of natural
gas and in that capacity considers transition opportunities related to natural gas: what can be done
more economically, cleaner and more effectively? GasTerra also feels obligated to share its know-
ledge in this field. Energy developments affect everyone: specialists and consumers. Discussions
and choices will benefit from correct information from all concerned. GasTerra will therefore apart
from other means of transferring knowledge publish a number of books to make this information
available in the coming years.

6 7
Heat and Power Preface

Preface

Knowledge is power; power which

GasTerra wants to share.

Between 1800 and 2100 fossil fuels have and will be used in abundance. Humanity has been using
natural gas, oil and coal for heat and cooking purposes for centuries but the heaviest use has occurred
in our time. It has gradually increased since the origin of modern living habits and the implementation
of industrial technologies to peak demand in the last decades. Yet we can look ahead with a reasonable
amount of certainty at reserves and future use of fossil fuels. We know that these reserves even
though they will be available for another 500 to 1000 years will ultimately diminish.
The world is faced with the enormous task of using new energy sources as large-scale replacements
and successors of current fuels; preferably sources that are renewable and clean in view of the threat
of possible climate change.
GasTerra has specialised in natural gas since it was established in 1963 as a consequence of the
1959 discovery of the Groningenveld, a large natural gas field. This field was supplemented by the
discovery during the past 50 years of several smaller fields whose total capacity equals half that of
the Groningenveld. Together these discoveries have contributed substantially to the Dutch natural gas
reserves.
We emphasize that natural gas does have a major role to play for some time yet in the Netherlands,
the European Union and in many other places in the world. For that reason we wish to share our
natural gas knowledge with as many people as possible so that all concerned are aware of the facts
and can make the most of its possibilities.
This publication, the second in a series entitled The World of Natural Gas written by GasTerra and
external specialists, provides an insight into the function and the role of natural gas for combined heat
and power applications. The combined heat and power process (CHP) has two obvious advantages: high
energy efficiency and both large and small scale applications. CHP is therefore pre-eminently suited
for decentralised energy supply systems.
Other publications in the GasTerra series The World of Natural Gas deal with natural gas and
transition (published in 2008), the history of natural gas from 1963 with a view to future use in this
century (published in 2009) and the gas heat pump. This will be published in 2010.

The Netherlands has developed into a natural gas country, using this natural resource in a number of
ways and reducing the countrys dependency on fuels originating outside the EU. This will still apply
in the next decades because despite our decreasing reserves the Dutch natural gas supply will
suffice till after 2030.
Gertjan Lankhorst
Now that a considerable transition must be made to alternative and successive energy sources in the CEO GasTerra
first half of this century natural gas is entering a second stage of life. The development and intensive
use phases have given way to a phase in which more sustainable use of economic and high-efficiency
applications contribute to a CO2 reduction and the development of renewable energy sources. GasTerras
transition policy enables us to work towards this transition based on our specialist knowledge.

8 9
 Chapter 1 | Vision on natural gas and cogeneration

Chapter 1

Vision on natural gas

and cogeneration
In the first half of the twentieth century coal was the most important energy source and fuel
in the Netherlands. Sporadic use was still made of natural gas, either as town gas or coal
gas. In 1959 Europes largest gas field at that time was discovered near Slochteren, in the
province of Groningen. This discovery began a revolution in the Dutch energy supply which
led to a decision to connect all of the Netherlands to natural gas.

1.1 Natural gas, the national fuel
The use of natural gas in the Netherlands increased substantially
between 1965 and 1980. In that period natural gas became the
national fuel and the most important source of energy in Dutch
households, amounting to 50% of the total Dutch energy demand.
About half of Dutch electricity was generated from natural gas.
The share of coal in energy generation decreased from almost
80% in 1950 to 10% in 2006.
Natural gas took over the entire domestic and commercial
building heating market and part of the industrial steam
production market. It was not just availability which caused
this massive use. The fact that natural gas is by far the
cleanest fossil fuel where NOx and SO2 emissions are
concerned also contributed to its popularity. Natural gas also has
lower CO2 emissions than any other fossil fuel and are half that
of coal for instance.
The Dutch government aims to reshape the current national
energy system into an energy supply based on the most sustainable
sources. This transition, referred to as the transition era, requires
much time and financial investment. Over the past few years several
organisations have worked hard in various fields to contribute to
the development of a sustainable energy management system
in which far-reaching energy savings and emission reductions
are policy objectives. However, even the substantial efficiency
improvement achieved in fossil fuel use of the last decades does
not appear to be sufficient to realise the environmental objectives,
even less so with the added goal of halting climate change. The
objectives of the Dutch and European governments are becoming

11
Heat and Power
clearer and stricter. An absolute CO2 emission reduction of 20%
to 30% is aimed at for 2020. This is not the final objective but an
interim one, with the final goal being an 80% to 90% reduction
of CO2 in the western world by 2050, with a 50% reduction score
in 2030 as an important stage on the way.
1.2 Natural gas and decentralised power generation
Nearly all heat generation with natural gas is decentralised.
Power generation with natural gas is partly decentralised via CHP
installations. Decentralised conversion of natural gas into
heat and electricity is preferred to central conversion since
the transport of heat and electricity involves considerably
higher losses than the transport of natural gas. Combined heat
and power (CHP) is a very efficient way to simultaneously
convert natural gas into both heat and electricity. Further
decentralisation of this process has great benefits. Conse-
quently, there is a strong movement in 2008 towards
the introduction of smaller CHP types; Mini CHPs for
non-domestic buildings and Micro CHPs for dwellings.
1.3 The role of CHP in the Netherlands
1.3.1 Power plants and industry
Natural gas has become the most important fuel in the Dutch
power generation sector, achieving a 60% market share in the
Dutch electricity production in 2008, due mainly to improved
efficiency of so called STAG technology (Steam and Gas). A STAG
is a power plant driven by two turbines, one driven by the
combustion of natural gas and the other by steam. The steam is
produced by heating the combustion gases of the turbine in a
heat recovery boiler. STAGs can achieve an efficiency of almost
60% (lower heating value) and they are flexible in meeting peak
demand. This flexibility gives natural gas a unique position when
it comes to electricity generation for daily, regular and even
unexpected peaks in electricity demand. The only technologies
at present that can fulfil a similar role are hydro power and
flex fuel power plants, where flexibility comes from natural
gas (source: CE Delft and ECN, 2007). STAG installations that
supply both heat and electricity are in fact CHP installations. Gas
turbines and gas engines are other examples of CHP installations
as they also supply both electricity and heat. Gas engines are
primarily used in glasshouse cultivation.
12
STAGs are the preferred choice for new power plants in many
countries. 40% of electricity in the Netherlands is presently
generated by a STAG, 90% comes from natural gas (CBS, Central
Statistical Office, 2007).
Electricity generating installations based on natural gas are, as
previously stated, characterised by their large regulating capacity.
Gas-fired power plants (CHP or otherwise) can quickly increase
their production. Other energy sources (such as coal, oil and
nuclear energy) are characterised by slow regulating capacity.
For this reason the role natural gas plays in electricity production
will continue to increase. At the same time efficiency must be
improved through further development of STAGs and CHP systems
(including Mini CHPs and Micro CHPs).
1.3.2 Developed areas
A number of changes can be observed in developed areas. A
decreasing trend in the consumption of natural gas in households
was observed from the end of the 1970s, despite an increase in
the number of dwellings. This decrease was caused by demand
reduction measures (insulation), efficiency improvements in central-
heating systems (high efficiency boilers) and milder winters.
Research and market prognoses indicate that by 2030 the primary
energy demand for heating and warm water supply in the domestic
sector will decrease by approximately 20%, while the use of
electricity in this period will double to almost 55%. This sub-
stantial increase in primary energy use for electricity will be
caused by an increase in average domestic use and the total
number of households. The number of electrical appliances is
growing with the rise in number of television sets and personal
computers per household coupled with the fact that more
appliances run on electricity and demand for comfort, for instance
with respect to air-conditioning is on the increase.
A micro cogeneration installation, or Micro CHP, is a development
that anticipates this increasing use of electricity. A Micro CHP is
a high efficiency combi boiler which generates both heat and
electricity. As a result, less electricity need be bought from the
electricity company thus realising a saving. Large power plants
cannot use this low quality heat and their efficiency is thus lower
than that of CHP installations. Electricity generated in the home
Chapter 1 | Vision on natural gas and cogeneration
with a Micro CHP has twice the efficiency of a modern STAG (after requires a different, more flexible role of natural gas in the near
the reduction of transport losses). Emission reductions of up to future, making it the ultimate transition fuel.
1,000 kilograms of CO2 per dwelling per year can be achieved.
The import (in gas and liquid form) and the addition of biogas,
Micro CHPs have developed rapidly. The design phase and the secures the role of natural gas in the energy supply sector for
lab test phase lie behind us and many field tests are in place. many decades to come. The combination of heat and power can
An increasing number of boiler manufacturers are working on be used in this context as a very efficient conversion technology to
or developing prototypes. There are now (2008) various Micro generate heat and electricity until at least 2050.
CHP technologies. These include the Stirling engine, the ORC
(Organic Rankine Cycle), the gas engine, the gas turbine and the
fuel cell. Each of these technologies is in a different development
stage. At present the Stirling engine for compact integration
with a high efficiency boiler seems to be the most advanced.
Since Micro CHPs produce power based on the heat demand
in a dwelling these boilers are less suitable for homes with a
low heat demand, as in well insulated new buildings. Fuel cell
technology, which is still being developed, is considered to be
suitable for new builds as a result of the favourable relation
between heat and power.
1.4 The future role of natural gas
Energy supply in the Netherlands is based largely on the use of
natural gas which is being used ever more efficiently. The design
of sustainable energy supply is still undergoing development
requiring a lot of time and effort of many organisations and
institutions to ensure natural gas meets increasing requirements.
In the time ahead natural gas as a relatively clean fossil fuel with a
high conversion efficiency can fulfil this important role. More than
any other EU country the Netherlands will for decades to come
have sufficient gas reserves, combined with imported natural gas,
for this fuel to play a prominent role in its energy supply. New and
improved energy systems and technologies and the more efficient
use of natural gas will ensure that national gas reserves last longer,
whilst achieving an emission reduction. Within that framework
new technologies are being developed such as gas heat pumps,
gas cooling machines, STAG systems and Micro CHPs. Natural
gas can also fulfil a useful additional role for other sustainable
energy types such as solar energy, wind energy and biogas. It
is quite possible to add biogas (derived from fermentation and
gasification) to natural gas, so that natural gas becomes an even
cleaner fuel. However, the integration of sustainable sources
13

Chapter 2
CHP in the Netherlands
This chapter discusses the role of CHP in the various sectors in the Netherlands, as well as
its background and potential for the future use of CHP. Environmental advantages of CHP
such as CO2 reduction and decreased NOx emissions are also recorded.
2.1 CHP as a means to save primary fuels
Most companies and buildings have energy requirements comprising
both electricity and heat demands. The source of this electricity
and heat in the Netherlands is traditionally a primary energy
source such as natural gas, oil or coal. Heat, for instance, comes
from a gas boiler and electricity is supplied by the electricity grid.
This electricity in its turn comes from a power plant, which burns
and converts primary fuels (Figure 1, page 17). There is, however,
an alternative that can save a lot of energy by combining heat
and power.
Combined heat and power, or CHP in short, is in fact no more
than a clever conversion method which converts primary energy
efficiently into heat and electricity. Plain electricity generation
such as in power plants requires fuel that is converted into high
Chapter 2 | CHP in the Netherlands
temperature heat. This subsequently undergoes a conversion
process, producing electricity and eventually exiting the process
as low temperature heat.
The French physicist Nicolas Carnot was aware in 1825 that this
conversion from heat to electricity is physically limited, which is
why large power plants will always release a large proportion, 40
to 60%, of this excess heat energy into the environment in the
form of low quality heat. This excess heat is released into rivers
or the sea, or into the open air via large cooling towers. Because
of the large capacities concerned this can be problematic, for
instance in situations with high river water temperatures.
Like normal electricity production, CHP installations also convert
the primary fuel by means of combustion into high temperature
15
Heat and Power Chapter 2 | CHP in the Netherlands

heat and subsequently into electricity. The difference is that the
heat in CHP installations is extracted from the process at a slightly
higher temperature so that it can be put to good use, for instance
as central heating at 90 C or as steam at 10bar/180 C, and not
as cooling-water at 30 C. The total energy loss drops to between
10% and 15% and the total use of energy increases to 85%-90%
(Figure 2).
Combined heat and power technology for larger installations
does not differ much from that of power plants, only the
location and the scale are different. The CHP installation is
usually situated at the heat customers site and the capacity
The Trias Energetica must be followed in this case. This
means that energy is saved firstly in the process itself,
secondly that as much of the energy demand as possible is
met by sustainable sources and finally, that primary energy is
used as economically and efficiently as possible. Options chosen
in the different steps of the Trias Energetica influence each
other. Even though these steps are described separately, it is an
integrated approach. CHP is situated in the outer layer of this
model (Figure 4).
Conventional CHP
production
Many sustainable energy applications can be combined with Electricity
52 units
CHP to reach the highest possible conversion efficiency. If, Fuel
Electricity
Fuel

Power plant 52% Electricity 42%

is aligned with the customers demands. An electricity surplus for example, biomass is used to produce electricity it can Energy supply
81 42

100 units 100

can be fed back onto the grid if required and a shortage best be used in a bio CHP installation. The same applies for Heat
Loss 52 Boiler 96% 50 Heat 50%
can be purchased. Local use of electricity also avoids the use of hydrogen for electricity production in a fuel cell. 48 units
Total Total
transport and transformation losses in the electricity grid. These The dimensioning of CHP installations is discussed in the next 133 100

can amount to a sufficient percentage to decrease the need for
grid capacity.
Figure 3 contains the energy saving principle of CHP, using a
power plant and a natural gas boiler for reference. In this
numerical example the energy saving based on primary energy
(for example natural gas) is 25%. Depending on the reference
and the CHP technology used, savings are usually between 15%
and 35%.
CO2 greenhouse gas emissions are part and parcel of burning
fossil fuels, including natural gas. However, CHP reduces CO2
emissions due to its net fossil fuel saving. When comparing
CHP to a reference based on natural gas, the reduction
percentage is equal to the savings percentage. When CHP
is compared to the fuel mixture in the Netherlands, the
reduction is larger, since the average emission in the Nether-
lands is higher. CHP averages 230g CO2 /kWh (the CO2 reduc-
tion here is attributed entirely to electricity) and a natural gas
power plant averages 360g CO2 / kWh, whereas the average
power plant in the Netherlands averages 500g CO2 /kWh.
Proper integration of CHP installations is required for sub-
stantial savings in energy use and energy costs. The future
development of heat and electricity demands of the projected
customer must be taken duly into account in the design
phase, possibly through savings in the business process itself.
chapter. Energy savings=
133 - 100
= 25 %
133
CHP installations and heat pumps are a good combination. Expressed in primary energy (gas) units Expressed in primary energy (gas) units
Heat pumps pump heat from the environment to a higher
(useful) temperature level. Heat pumps use electricity as its Figure 1 Diagram of power plant energy management. Figure 3 Energy saving principle with CHP.
power source. From an energy efficiency viewpoint, heat
pumps should be fed with electricity from a CHP installation.
Conversely, heat should not be supplied by a boiler but by a
CHP power plant or by a heat pump. For space heating, CHPs
and heat pumps complement each others load. If a CHP
STEP 1:
installation supplies 100% of the heat a residential area Electricity Limit the energy demand
42 units
must be equipped with an extra heavy duty electricity network
and a transformer station to enable the transport of all Energy supply STEP 2:
generated electricity. In the same way, a residential area where 100 units
Heat (90C) 1 2 3 Use sustainable fuels
50 units
100% of the heat supply is delivered via heat pumps must STEP 3:
Use fossil fuels as cleanly
also be equipped with an extra heavy duty electricity network Loss as possible
8 units
in order to meet the electricity demand for the heat pumps.
An optimum combination of CHP and heat pumps prevents an
increased load on the network and the transformation station Expressed in primary energy (gas) units
in the area and would therefore result in the most efficient
conversion of primary fuels. Figure 2 Diagram of CHP installation energy management. Figure 4 Trias Energetica principle.

16 17
Heat and Power Chapter 2 | CHP in the Netherlands

2.2 Natural gas as a fuel for CHP The fact that natural gas is so prominent in CHP in the Netherlands on CHP since the main concern is the relationship between the For many companies, there are other arguments in addition to
The CHP conversion technology is in principle fuel independent. is, of course, related to the popular widespread use of this fuel. electricity price (the return) and the gas price (the cost), also the (direct) financial ones. Increasing availability as compared
The majority of CHP installations in the Netherlands, however, are In contrast to other countries virtually all buildings and industrial called the spark spread (see the next chapter). The availability of to purchasing electricity from the grid and the possibility of
used for the conversion of natural gas. Out of a CHP total of more estates are connected to the natural gas network system. The use natural gas is occasionally mentioned as a future risk. However it supplying emergency power are important factors for energy
than 11,000 MWe in 2007, approximately 1,950 MWe consisted of other fuels such as fuel oil or coal is strongly discouraged in is not that straightforward, as stated in the previous chapter and intensive industries and hospitals, for example. Whether flexibility
of installations based on coal and waste. the Netherlands. Furthermore, natural gas has proven to be an as discussed in the book entitled Natural Gas as a Transition Fuel, is increased by means of a CHP installation depends heavily on
excellent fuel for most CHP technologies. published by GasTerra in July 2008. the integration and use of the installation. In the current energy
Below is an overview of the installed capacity as per 1 January market flexibility is an important means to increase income or
2007: Natural gas has major benefits, the main advantages being: 2.3 Benefits of CHP reduce energy costs.
Widely available; Most CHP users like to see energy savings translated into cost
Extremely reliable, more so than electricity or fuel transported benefits. A substantially higher investment is required as com- CHP installations also have disadvantages for operators. These
by road; pared to the reference situation, which only requires an investment include higher investments and a requirement for trained operation
Operational capacity per 1 January 2007 No above ground transport (via land or water) is required; in a boiler. The higher investment required by a CHP installation and maintenance staff, which in some instances can be compensated
Industrial CHP ( > 30 MWe) 2,850 MWe (natural gas) No storage is required; must be recovered by energy cost savings, and possibly also by the by outsourcing the installation (also see chapter 3). In addition,
Industrial CHP ( < 30 MWe) 850 MWe (natural gas) Is a flexible fuel, which can easily be used in processes and proceeds made from supply to third parties. The network connec- the installation takes up more ambient space (noise emissions
District heating based on 1,850 MWe sub-processes (for example co-firing burners) and combined tion is the same in both situations, or perhaps slightly larger for and additional emissions of, for instance, NOx, etc.). The latter
natural gas with other fuels (for instance residue gas or gas from water CHPs as production exceeds demand. is a factor to be considered when erecting CHPs on existing
District heating other 1,950 MWe (coal/waste/residual purification); sites. This could be a bottleneck when limits set by environmental
power) Can also be used successfully in small-scale high-efficiency Apart from cost benefits, CHP has other benefits for the user permits for noise, NOx, etc., have already been reached, in which
Gas engines in glasshouse 2,500 MWe installations (gas engines/turbines); such as: case the technical and organisational aspects of the installation
cultivation Is a clean fuel, with a modern burner technology and low NOx Energy and cost reduction; would be more complex than in the reference situation. This
Gas engines in buildings 750 MWe (natural gas) emission; Energy trading (Flexible / Programme Responsablity capacity); means that there will always be a certain barrier for companies
Of these approx. 500 MWe < 300kWe, or Mini CHP Is safe and enjoys a high acceptance level. CO2 reduction (long-term agreements / emission trading); to invest in CHP. To justify their higher investment costs CHP must
Total CHP capacity 10,750 MWe
Generation of own power and therefore lower dependency on have clear and structural economic benefits.
Installations with the highest efficiency are specifically reliant the purchase of grid electricity or third party steam;
Total CHP capacity on 8,800 MWe
natural gas on high quality fuels such as natural gas. This applies to large Higher availability in combination with the grid; The use of CHP provides advantages that serve the common
installations as well as but particularly to smaller installations in Possible emergency power supply function; good, the most important being energy savings, CO2 reduction,
Table 1 Installed capacity per 1 January 2007. developed areas; the licensing body will certainly not permit any Possible additional advantages through process integration; increased flexibility (regulating capacity, Programme Responsibility),
other fuel. Increased flexibility (sales, purchasing, stand-alone operation); no heat discharge (bottleneck for rivers), reduced electricity
A good image (corporate social responsibility). transport losses and costs, increased electricity grid stability and
Natural gas for CHP installations is essential in glasshouse increased electricity production reliability due to an increase in
cultivation because flue gases must be clean enough to be In addition to cost saving, those who exploit CHP installations production units in scattered locations.
750 2,850 recycled into the glasshouse. Plants use the CO2 contained in the (operators) can benefit from energy trading by offering flexible
2,500 flue gases for growth. This application is therefore also called capacity to the market. These installations can be put on the spot Without energy savings and CO2 reduction through CHP, it will not
850 CO2 fertilisation. Flue gases must be clean enough so as not to be market (APX) or used by parties with Programme Responsibility be possible to achieve national policy objectives in the short term.
Glasshouse cultivation
Buildings harmful to humans or plants. Additional purification of flue gases (PR) for the production of regulating capacity. Benefits can also be The flexible capacity of CHP installations also figures largely in off-
Mini CHP
Industry > 30Mwe is therefore required. achieved through the reduction of CO2 emissions. However this setting variations in electricity supply caused by the unpredictability
1,950
1,850
Industry < 30Mwe
District heating natural gas
involves CO2 allocation so that this benefit shows up only partly if and limited regulating capacity of wind power. CHP can provide
District heating other The disadvantages of natural gas include its uncertain price at all. A second effect of emission trading is the increased market this regulating capacity, even though additional investments are
development and/or the link between the market price and the price for electricity as a result of the CO2 emission trading. All required such as new or larger heat buffers,auxiliary boilers or
oil price as well as the availability of gas in the long term. However power generators with CO2 savings (both CHPs and sustainable CHP installation modifications, these extra investments must
Figure 5 Installed CHP capacity in the Netherlands. the uncertain price development of natural gas has little impact generators) could benefit from this effect. eventually be recovered.

18 19
Heat and Power
Capacity regulation and the monitoring of medium and high
voltage networks require the attention of the grid operator. The
electricity network can be monitored and its quality ensured by
means of modern monitoring and communication technologies.
CHP units of more than 5 MWe must be registered with TenneT,
the high voltage grid operator, to safeguard the control of the
electricity grid. The availability of these CHP units must also be
reported to TenneT on an hourly basis, so that this company can
monitor the available capacity.
Because new natural gas or biogas CHP installations are currently
used at locations where no attention was ever given to the
technical structure of the electricity grid, these locations present
technical bottlenecks with respect to the transport of electricity.
Technical solutions to these bottlenecks require time and in some
instances major investment. It is a short-term problem which can
be solved by expanding and/or reinforcing the grid. It is important
for both the long term development of decentralised CHPs and
sustainable power generators that the electricity grid is designed
to handle these technologies. A proper spread of CHPs generally
reduces resistance and transformation losses, and grid reinforcement
can in many cases be prevented.
2.4 The development of CHP in the Netherlands
At the beginning of the last century, many parties generated their
own electricity for lack of a strong and reliable electricity grid.
Many industrial companies generated their own power at that
time, sometimes even using steam engines or steam turbines to
directly power their machines. The generated steam could also
be used for heating. From there, it was a small step to use back
pressure steam turbines to convert high pressure steam into low
pressure steam and at the same time produce electricity. We still
find this concept today in many dairy and sugar factories, breweries
and salt refineries. Except for industrial CHP installations,only
the city of Utrecht used the residual heat from a power plant
for district heating in those days. Only after 1945, during the
post-war reconstruction, was district heating installed in Rotter-
dam as well.
Gas turbines, derived from jet engines in aircraft, started to
become popular for driving generators in the 1970s. These
turbines were combined with conventional power plants first
20
as additions to the existing power plants (the combi power
plant) and later as a fully fledged Steam and Gas turbine power
plant (STAG power plant, see chapter 3). Many district heating
systems in the Netherlands were based on this type of central
power plant in the 1970s and 1980s: a total of 42 different
district heating systems were set up. The industrial sector has
also built more CHP installations from the 1980s onwards but
the real golden era for CHP began in the 1990s (also see the
growth in Figure 6).
Due to a concurrence of circumstances CHP was able to develop
strongly in all sectors. The boom in the built environment and in
the glasshouse cultivation sector, for example, was technically
enabled by the arrival of CHPs based on natural gas engines.
Apart from technological developments, the 1989 Electricity Act
(Elektriciteitswet) was also an important political economic
factor, allowing distribution companies to produce their
own power and to bundle gas and electricity companies. The
incentives policy also played an important part and the possibility
of financing CHP installations by means of off balance
financing through joint ventures was discovered. Policy makers
were very interested in CHPs and strongly promoted this
technology via MJAs (MeerJarenAfspraken/ Long-Term Agreements)
and the MAP (MilieuActiePlan/Environmental Action Plan (EAP)).
Figure 7 contains the development of CHPs from 1987 up to
the present day.
This rapid growth of CHP in the 1990s stagnated from 2000
onwards, mainly due to the liberalisation of the electricity market,
which caused the fixed compensation for electricity fed back into
the grid to lapse and the market price for electricity to fall. Despite
the low gas price in those years, returns from CHP remained low
because of the difference between the proceeds from electricity
and natural gas costs (the spark spread, see chapter 3). CHP
installations had difficulty running efficiently at marginal costs
and the investment climate was not favourable. In off-peak hours,
many installations would run with a negative margin and were
shut down where possible. CHP installations whose economic
lifespan had expired were not replaced by new installations.
A positive trend with regard to CHP capacity was noticeable from
the middle of 2005. Gas engines especially in glasshouse cultivation
increased, from 1,000 MWe in 2005 to approximately 2,750 MWe
in 2007. This trend can be explained by a much improved result
from the sale of electricity during the daytime peak, despite the
high natural gas price. Investments became cost-effective again
with these market prices. Profitability also increased through the
use of CO2 and heat storage in buffers, so that flexible capacity
could be offered on the electricity market. An increased interest
in CHP is also noticeable in developed areas and in the industrial
sector in 2008, which may lead to new capacity growth in these
sectors.
2.5 CHP potential in the Netherlands
CHP potential in the Netherlands can be divided into four
different sectors, based on current technology: glasshouse
cultivation, non-residential buildings, industrial sector and district
heating. A fifth sector can be added, due to the development
of micro CHP, namely the individual home sector. The following
paragraphs give an estimate of CHP potential up to 2020. The
method used was to first determine the technical potential
capacity, followed by an estimate of the capacity components
which can be realised by 2020 in which operational capacity,
competing technologies, required build time, adaptation, etc.
are taken into consideration.
2.5.1 CHP potential for glasshouse cultivation
As a result of market saturation the strong increase of CHP in
glasshouse cultivation will not continue in the coming years.
MWe
30,000
E-power plants CHP Sustainable
25,000
20,000
15,000
10,000
5,000
0 0
1960 1970 1980 1990 2000
Figure 6 G
 rowth of total operational capacity in the Netherlands
(central capacity, CHP and sustainable power).
Chapter 2 | CHP in the Netherlands
Assuming an operational capacity of 500 kWe per hectare for
energy-intensive cultivation and an available area of 6,000
to 7,000 hectares, CHP capacity will eventually stabilise
around 3,500 MWe. This is an increase of approximately 1,000
MWe compared to the current situation of 2,500 MWe
operational capacity on 1 January 2008. This is shown in Figure
8 on page 22.
2.5.2 CHP potential for non-residential buildings
Approximately 750 MWe of CHP is operational in 2008, mainly in
larger building complexes, such as hospitals, university buildings
and shopping malls. These CHP installations are usually based on
gas engines. More than half of these installations have less than
300 kWe capacity.
A total of 700 PJ (Peta Joules) of low quality heat (< 100 C) is
used in the Netherlands, an approximate 180 PJ of which is used
in non-residential buildings. If all buildings were heated by CHP
installations, assuming approximately 80% CHP heat supply and
an operating time of approximately 5,000 hours per year, a CHP
capacity of 7,000 MWe could be installed.
When estimating the suitability of the different segments of non-
residential buildings, it becomes apparent that approximately
3,000 MWe of the theoretic potential could realistically be supplied
with CHP. It is estimated that it should be possible to realise 50%
of this capacity by 2020.
MWe
9,000 Gas engines
District heating
Industrial CHP
6,000
3,000
2008 1987 1990 1993 1996 1999 2002 2005 2008
Figure 7 Increase of CHP capacity in the Netherlands (excl. coal and
waste incinerators).
21
Heat and Power
2.5.3 CHP potential for the industrial sector
In the industrial sector, heat is used at different temperature levels
and a total of approximately 4,000 MWe of CHP has already been
installed, mainly in the 250 C temperature range. The energy
consumption in this range is approximately 150 PJ per year, which
gives an approximate theoretic potential of 6,000 MWe. 3,700
MWe has been installed in this segment, with a potential of
approximately 2,300 MWe. It is estimated that 80% of this
capacity (1,800 MWe) could potentially be realised by 2020.
There are some technical difficulties when it comes to the use of
CHP for higher temperatures, for instance by preheating combus-
tion air for furnaces, ovens and dryers. These uses require 377 PJ
of energy. Considering the fact that this is a technically compli-
cated application with capital intensive installations, whereby the
impact on the product must also be examined, potential which
could be realised by 2020 is estimated to be 10%. This still comes
to 1,500 MWe.
The industrial sector also uses large quantities of cold generated
largely by means of electricity. It consumes approximately 8%
of industrial energy or 10 PJ per year. However, this cold can
be supplied by CHP installations in combination with absorption
chillers. The drive heat for absorption chillers is 90 C to 120 C.
The technical potential for this type of CHP lies within a range
of 1,000 to 2,000 MWe. An estimated 300MWe potential can
be realised by 2020, amounting to a total industrial potential of
4,100 MWe by 2020.
2.5.4 CHP potential for district heating
District heating has grown little since the late 1990s. Various
projects were studied or prepared in 2008. They concern, for
instance, expansions in Amsterdam (heat from Afval Energiebedrijf
or Waste Energy Company), Leeuwarden, Almere, Arnhem-Nijmegen,
Drechtsteden, Hengelo, Alkmaar, Leiden and Delft. Possible heat
networks around the Botlek, to transport residual heat from the port
area to homes and glasshouses, are also being considered. Also,
existing heat networks are being compressed, which means that
additional customers are added to the existing networks. The
increased demand for domestic hot water counterbalances the
reduced heat demand from existing customers due to milder
weather and increased building quality.
22
Chapter 2 | CHP in the Netherlands
As power plants are not always in the vicinity to supply heat, of course, what capacity will actually be realised. This depends
district heating in new builds will be restricted. A new district largely on environmental factors such as price development in
MWe
4,000 heating plant must compete with other concepts and will win the energy markets, the development of CO2 emission trading,
this competition only in a limited number of cases. Examples of government support policies and the general (economic) develop-
Glasshouse farmers own management
Energy companies at glasshouse farmers
recent projects are the suburbs of Vathorst in Amersfoort and ment in the various sectors. Local factors such as space occupancy,
3,000
Ypenburg in The Hague, where district heating is provided via local permit requirements, the availability of (regional) network
power plants with gas engines. capacity, etc., are contributing factors.
2,000
Technically speaking, the number of CHP projects for district In its Schoon en Zuinig Werkprogramma (Clean and Efficient work
1,000 heating can definitely increase, if as much residual heat aspossible programme), the Cabinet assumes an increase in CHP capacity
is distributed from existing power plants. However, these systems of 50% of the current installed capacity. ECN subscribes to these
will not be built in a hurry, considering the issues involved with the large uncertainties and also estimates values to be around 50%,
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
installation of heat networks in existing built-up areas. ECN which would result in an increased in CHP capacity of 4,000 to
(Energieonderzoek Centrum Nederland / Energy Research Center 5,000 MWe to achieve 12,000 MWe by the year 2020.
Figure 8 Estimation of the increase of CHP in glasshouse cultivation. of the Netherlands) sees virtually no growth in this sector in its
reference estimations. Should the trend of the last few years The realisation of this additional CHP capacity does not seem
continue district heating will only be expanded on a very limited to be an issue, considering the estimated potential, and even a
scale. This book assumes a feasible limited growth potential of larger increase seems possible. A breakthrough of Micro or Mini
1,000 MWe by 2020. CHPs opens up a whole new CHP segment and could result in a
difference of 1,000 MWe or more. It is especially important that
1,000
750
2.5.5 CHP potential for dwellings most of the savings and reduction objectives of most sectors be
1,500
Glasshouse Micro CHPs are coming into focus for individual homes. The first achieved through CHP.
cultivation
750 Non-residential
version is based on Stirling technology and is expected to be
1,000 buildings
marketed in 2010. Micro CHP installations based on fuel cells are 2.6 Environmental impact of CHP in the Netherlands
Mini CHP
300 Industry: heat expected in the longer term (see chapter 3). Energy savings realised by CHP were 95 PJ in 2005 (based on ECN
3,300 IIndustry: cold
District heating data). ECN has determined the technical potential to be 160 to
Micro CHP
The largest Micro CHP potential is in existing homes; an approximate 200 PJ by 2020, whereas estimations assume savings of 130 PJ.
6.6 million in the Netherlands. Micro CHP developers and This value is in line with the assumption that CHP capacity will
boiler manufacturers, united in the Smart Power Foundation, increase by 50%.
Figure 9 Potential for CHP in the Netherlands by 2020 (MWe). expect that an approximate total of 1.5 million Micro CHP
installations of 1 kWe with a total capacity of 1,500 MWe will Current CO2 reductions as a result of CHP amount to 6 to 8 Mtons
be installed by 2020. This is the value used to determine the per year (depending on references) and expectations are that this
Existing Potential Total
technical potential. saving will increase by 3 Mtons by 2020. CHP therefore accounts
Glasshouse cultivation 2,500 MWe 1,000 MWe 3,500 MWe
for 16% of the national reduction objectives for greenhouse gas
Non-residential buildings 750 MWe 1,500 MWe 2,250 MWe 2.5.6 Complete overview of CHP potential up to 2020 emissions by 2020 (from 214 Mtons in 1990 to 150 Mtons in
Industry: heat 3,700 MWe 3,300 MWe 7,000 MWe Figure 9 shows the technical potential for CHPs still to be realised 2020; see the Clean and Efficient work programme of the Ministry
Industry: cold 0 MWe 300 MWe 300 MWe for new builds by 2020. This potential can therefore be added to of Housing, Spatial Planning and the Environment (Ministerie van
District heating 3,800 MWe 1,000 MWe 4,800 MWe the potential for existing CHP installations. VROM).
Micro CHP 0 MWe 1,500 MWe 1,500 MWe
The total estimate of over 19,000 MWe lies above the values CHP based on natural gas involves NOx emissions, just like other
Total 10,750 MWe 8,600 MWe 19,350 MWe
stated by ECN in its reference estimations. ECN nevertheless also combustion processes based on fossil fuels. This emission is not
Table 2 Background data CHP potential. anticipates a 50% increase in CHP capacity. The big question is, welcome, as it causes environmental acidification and unwanted
23
Heat and Power Chapter 2 | CHP in the Netherlands

nitrogen deposits (over-fertilisation) and has a negative influence

on air quality. Emission levels for larger CHP installations based on
gas turbine technology are equal to large power plants. The NOx
emission of gas engines especially requires attention. This emission
level is twice as high (140 g NOx/GJ) as for large power plants (45
to 65 g NOx/GJ).

Government policy seems to be aiming for a required emission

level of 30 g NOx/GJ for both larger installations (via emission
trading) and gas engines from 2009. Gas engines can meet this
requirement with the use of a catalytic flue gas cleaner. As soon as
this requirement is enforced the CHP emission level with regards
to fuel input (in GJ) will be entirely equal to that of other power
generators. However, on a net basis emissions are substantially
reduced as compared to a reference with separate generation,
since 20% to 30% of the energy and related emissions is saved.

24 25
 Chapter 3|Cogeneration: from concept to realisation

Chapter 3

Cogeneration:
from concept to realisation
Cogeneration (also referred to as combined heat and power, CHP) is an exceptionally general
broad term referring to various techniques and systems and can be found in various market
segments. The objective of CHP is to make optimum use of electricity and heat released
during the electricity generation process.

Several forms of cogeneration can be distinguished in terms of
capacity:
Micro CHP for domestic purposes, with a capacity of 1 kWe
to approximately 5 kWe;
Mini CHP for use in small and medium-sized enterprises or small-
scale industry, in a capacity range of about 5 kWe to 300 kWe;
CHP for glasshouse cultivation, built environments and small-
scale industries, with a capacity range of approximately 200
kWe to approximately 20 MWe;
Medium-sized CHP;
Large-scale CHP.
Two remarks can be made with respect to these forms of
cogeneration. The first pertains to the micro CHP technology.
This technology, currently in a pilot phase, is aimed at anentirely
different market segment than those of the other CHP types.
Consequently, many of its design and economic issues call for
their own unique approach. Micro CHP is therefore discussed in
a dedicated section.
Secondly, heat distribution is disregarded in this listing by capacity.
In principle, all cogeneration variations enable the distribution
of heat; the generated heat is distributed via a network to
customers. The aspects involved in the construction and
management of heat transport networks are not discussed in
this document.

27
Heat and Power Paragraph 3.1|Technology, design and use

The structure of this chapter is in line with the four phases that must be completed in order to progress from initial 3.1 Technology, design and use
idea to concrete, running installation. These phases are described in sections 3.1 through 3.4. Section 3.5 deals with
micro CHP.

Section 3.1 - Technology, design and use

The possibilities for combining heat and power (CHP) are first analysed on the basis of theoretical knowledge. It is a casual
thought process Would it be possible to install a CHP system in our company in order to save energy? Basic knowledge is This section enters into the technological aspects of CHP installations conversion technology, design and usage aspects
of particular importance in this phase. The most relevant aspects in this respect are the technology, ones energy use and starting with a run through of the various components within CHP installations. Conventional as well as new technology is
the wants of the user. described. An analysis of the energy consumption profile is essential when designing a CHP installation. Section 3.1.2 opens
with this analysis, followed by relevant design aspects such as levelling out peak demand and CO2 utilisation. Section 3.1
Section 3.2 - Economic analysis closes with a description of the hydraulic, electrical and structural integration of CHP systems. The usage aspects of CHP
Once the technical options have been examined and the CHP system that best suits the specified wants has been installations are discussed in section 3.1.3.
determined, the project can proceed with an economic analysis of the CHP installation. It is important in this respect to
thoroughly investigate the following points:
Basic principles of an economic analysis
Investment and maintenance costs CHP installations The generator is an important part of the CHP installation. The
Energy market Figure 1 contains a schematic depiction of a CHP installation as entire electrical output of the installation depends on the efficiency
Subsidies and support it is generally used. The figure depicts the CHP installation as a of this generator and of the mechanical conversion. This efficiency is
black box in which air and fuel are converted into electricity and between 96% and 98% and hinges on the quality of the installation.
heat. The CHP installation in this black box is a combination of the This is an important point of consideration in deciding on the whole
Section 3.3 Detailing and realisation converter that produces mechanical energy in addition to heat, CHP installation, because it also establishes the generator losses
After all options have been investigated and the CHP system with the highest cost-effectiveness has been identified, the the heat transfer system and a generator. The generator converts during the installations entire life span. The highest efficiency of
implementation phase can commence. This phase includes the final design, legislation or permits, the decision-making the mechanical energy into electricity. most generators is approximately 80% of their maximum load.
process, and planning and realisation.
The entire CHP system comprises the electricity and heat
converter plus the required installation and connections. A gas
Section 3.4 Management and maintenance connection is needed for the supply of gas. A connection to the
Once the installation has been realised it must, of course, keep running. This requires a watchful eye on such matters as electricity grid is essential for integrating the CHP installation
Flue gas Steam /
management, maintenance and control. and for the possibility of feeding electricity back into the grid.
hot water
Generally speaking, the installation is required to have a Air
CHP: Consumption
Converter
security and a control system as well as an installation room Generator
Natural gas
designed to limit any nuisance (vibrations and noise). Other Heat production Electricity

important aspects in the entire system are the electricity and gas Gas connection
Control Consumption Grid connection
Section 3.5 Micro CHP connections. Often, more electricity is produced than is required Safety
Installation room
The micro CHP technologies are currently in a pilot phase. Section 3.5 discusses the development of this technology, whose for ones own needs; therefore, the possibility of feeding
main aspects and characteristics are being documented by means of various tests. The four steps that apply to the other electricity back into the electricity grid is essential for most CHP
CHP installations are followed here as well. systems. The gas networks pressure and capacity must also be
taken into account. Figure 1 Black box of a CHP installation running on natural gas.

28 29
Heat and Power Paragraph 3.1|Technology, design and use

3.1.1 Conversion technology
Various technologies apply for CHP installations. The choice of
technique is dependent on use and operating time, electricity
and heat requirements, and desired temperature (steam or hot
water). The most popularly used technologies at this point in
time are gas engines, steam turbines, gas turbines and steam
and gas (STAG) power plants. In addition to these favoured
technologies, the following new technologies are already being
used (to a limited extent) in CHP installations or promise to
be used in the future: the Organic Rankine Cycle (ORC), fuel
cells, the Solid Oxide Fuel Cell (SOFC) gas turbine system and
trigeneration. Other technologies are used for micro CHP, such as
the Stirling engine and the micro gas turbine. These techniques
are described in section 3.5.
Figure 2 provides an indication of the electrical output and the
capacity of the various technologies. Obviously, small-scale CHP
installations call for other techniques than those for large-scale
installations.
Heat use
In principle, there are two ways to remove heat created through
the combustion process in the CHP installations. Firstly, by direct
cooling of the installation (such as machine or oil cooling) and
secondly with flue gases. The ratio between both streams depends
80%
70% SOFC+gas turbine
60%
HT fuel cells
STAG
Electrical Efficiency
heavily on the selected technique. For instance, machine cooling
in the event of gas engines (of the engine block, the oil cooler
and intercoolers) forms a considerable part of the total heat flow
(approximately 50% of the total heat). In the event of gas turbines,
on the other hand, virtually all heat in the exhaust is released in
the form of flue gases.
Gas engines
Gas engine is the generic term for piston engines that run on
a gaseous fuel. In the Netherlands, most small-scale CHP
applications are based on gas engines. Gas engines are used in
CHP installations in various places. Examples can be found in
greenhouses, the oil and gas industry, office buildings, swimming
pools and hospitals. The performance range of engines lies
roughly between 0.2 and 10 MWe. Occasionally, various CHP
units are combined at one location to ensure controllability or
operational security.
The greatest benefit of gas engines is their relatively low cost and
high electrical and thermal output. Gas engines are produced in
series, are reliable and virtually at the top of their development.
The required maintenance is relatively easy to learn and can there-
fore be performed to a large extent by the user and his technical
staff, limiting whatever maintenance costs : (for activities carried
out by an external party) remain. As the engines are produced in
series, parts are usually readily available. Furthermore, integration
into the gas and electricity network on site is taken into account
during their production so that these costs too can be kept to
a minimum. Of course, costs are still involved in connecting up
to the grid of the grid operator. As an additional advantage
gas engines can reach their maximum capacity relatively quickly,
to approximately 110C) it can be provided through the heat
from an engines flue gases. However, this is at the expense
of the total energy output. Also, the number of maintenance
services is slightly higher than for gas turbines as they require
more frequent fine-tuning, inspections and oil changes. Further-
more, gas engines emit more nitric oxide (NOx) and unburned
hydrocarbons. This can be solved to some extent by using
techniques such as catalytic reduction.
Gas engines have a net electrical output of approximately 30%
to 45% and a net thermal output of 45% to 55% (Figure 3, page
32), resulting in a total output of 85% to 95% (Figure 4, page 32).
These values are based on the lower calorific value of natural gas.
In principle, suppliers of gas engines for CHP installations can
assemble any desired configuration, thus meeting the customers
temperature and capacity needs as closely as possible.
Gas engine installed at University Medical Centre Groningen.
Operating principle
Gas engines for CHP applications run on the four-stroke
principle; the process completes four steps in one cylinder.
Figure 5 (page 32) contains a simplified depiction of a gas
engine cylinder.
A mixture of fuel gas and air is drawn in upon the suction
stroke. The inlet valve of the cylinder is then open.
This is followed by the compression stroke: the valves
are closed and the mixture is compressed. Pressure and
temperature rise and just before the end of the compression
stroke a spark plug ignites the mixture. The mixture ignites
(burns) and both the pressure and the temperature increase
rapidly.
The mixture expands, making the piston drive the crankshaft.
The actual energy is produced in this expansion stroke.
In the fourth stroke the piston drives the mixture through the
open outlet valve to the exhaust system.

(SOFC, MCFC)
although special provisions are required to do so. This helps make
50%
LT fuel cells
(PAM, PEFC)
them suitable for emergency power.
40%
Gas turbine
Gas engine
30% Steam turbine
A special point of attention with regard to gas engines is the
noise and vibrations they produce. Installing a gas engine in the
20%
work space of a utility building, for instance, therefore requires
10% ample consideration. Furthermore, the power density of gas
engines is low as compared to that of gas turbines. In other
0%
0.01 0.1 1 10 100 1,000 words, gas engines with the same capacity are relatively bigger.
Capacity (MW)
Gas engines are particularly suitable for producing hot water up
Figure 2 Field of application and output of various techniques. to approximately 100C. If low pressure steam is required (up

30 31
Heat and Power Paragraph 3.1|Technology, design and use

Modern, large gas engines are usually equipped with a turbo-
charger. They are referred to as turbo charged engines. The engines
hot exhaust fumes drive an air compressor in the inlet via an
expansion turbine in the exhaust duct. By using a turbocharger the
same engine produces considerably more power, increasing the
50%
electrical output. A turbocharger is usually not used for smaller
Spark plug gas engines (< 100 kWe) making them relatively less expensive
45% to purchase. When using a gas engine a major part of the useful
Air inlet Flue gas outlet
heat is released in the form of exhaust fumes. Furthermore, heat
40%
is released in the engine blocks cooling system, the lubricant and
Electrical capacity
There are various ways to combine the cooling circuits. It is
important in this respect that the cooling of the lubricant and
the engine block is fed with cooling water below 70C. If the
inlet temperature of the cooling water is any higher the engine
will stop running as the safety device will kick in. To keep the gas
engine running when the temperature of the cooling water that
goes into the machine is not cold enough (for emergency power,
for instance) the inlet temperature of the cooling water must be
kept below the permitted 70C. This can be achieved by cooling
the recycled water with a dry horizontal cooler (see picture on

35% 36 %
Piston the compressed combustion air after the turbocharger (the inter- page 33): a heat exchanger fitted with a ventilator to discharge
34 %

32 %
cooler). This forms a considerable part of a gas engines heat the heat into the environment.
30% 30 % (approximately 50% of all heat). The heat is made available for
28 %

26 % use through a hot water system (Figure 6). A distinction is made Depending on the heat users desired temperature the heat from
24 %
25%
22 % between high temperature heat (temperature between approxi- the flue gas condenser and from the cooling of the turbocharger can
Crankshaft
20 %
0 10 20 30 40 50 60 70 80 90 100 mately 90C and 70C) and low temperature heat (temperature or cannot be used efficiently. A greenhouse grower, for instance,
20%
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
between approximately 50C and 30C). who has a gas engine CHP, will generally be able to make efficient
Electrical capacity in kW
Crankcase
Figure 3 Electrical output of gasengines as function of the volume. A horizontal cooler alongside a heat buffer.
Source: Asue

Figure 5 Simplified depiction of a gas engine cylinder.

100%
Not used
90% Exhaust
Thermal LT 5%
80%
Condensation Condenser
8%
70%
Hot water
Total Efficiency

41%
60% Thermal 18% Exhaust cooler
Radiation and Convection
p 4% Generator
50%
2%
Electricity
40% 40%
Natural gas Gas engine Air
30% 100%

20% Electrical
Turbocharger
10%
15% 5% 3%
0%
Engine block cooler Oil cooler Intercooler
35% 36% 37% 38% 39% 40% 41% 42% 43% 44% 45%

Electrical Efficiency

Figure 4 R
 elation between electrical and thermal output of Figure 6 Diagram of a gas engine.
gasengines (LEI).

32 33
Heat and Power Paragraph 3.1|Technology, design and use

use of the low temperature (LT) heat as he has a large LT heating
system. If no LT grid is available, the heat is not used efficiently.
The temperature of the flue gases released from the gas engine
is between 350C and 500C, which is much lower than the
temperature of flue gases released from a gas turbine. The hot
their long life span (25 to 35 years). A significant disadvantage
is their installation period, which varies from 12 to 18 months
for small-scale systems up to three years for large-scale systems.
Depending on how their energy flows are utilised, steam turbines
have an electrical output of 25% to 40% and a total output of
approximately 85%.
In the evaporator, part of the water evaporates into steam.
This steam and water mixture then flows back into the drum.
In the drum, the steam and water are separated. The water
flows together with water from the economisers back into the Generator
evaporator and the steam exits the drum in the direction of
Fuel Turbine
the superheater. In the superheater the steam is heated to the Steam boiler

flue gases can be used directly in thermal processes such as
dryers, or indirectly by means of heat exchangers. They can cool
down in stages. It is possible to use the flue gases to produce
both steam and hot water for central heating, and hot water
for tap water, for instance. The successive heat exchangers
are then called steam generator, economiser and flue gas
condenser. In such a case the total system performance comes
to 90% net heat.
Modern gas engines with a high excess air factor are used to limit
the emission of nitric oxides. This keeps the combustion temperature
in the cylinder under control. As a result the flue gases still contain
large amounts of unused oxygen. When an operation requires steam
it is useful to conduct the flue gases through a heat recovery boiler
(also called Heat Recovery Steam Generator (HRSG)) fitted with
a gas burner in order to increase the temperature from 400C to
around 800C. With this heat, steam, central heating water and
low temperature heat can be produced with a very high boiler
efficiency (almost 100%).
Steam turbines
Operating principle
Installations based on steam turbines basically consist of four
components: a steam boiler, a steam grid, a steam turbine and
a heat consumer. The steam boiler or the heat recovery boiler
generates water into superheated steam whose pressure in some
systems exceeds 100 bars.
This process takes place in a number of steps. The feed water is
pressurised by boiler feed water pumps and enters the boiler via
the economiser. In the economiser the water is heated to just
below boiling point and flows from there into the steam drum.
Water circulates from this steam drum through the evaporator
by natural or forced circulation (the latter by means of pumps).
Configurations can also comprise various turbines connected in
series. For this process or for district heating, for instance, steam
desired temperature.
Process steam
In some systems the steam temperature reaches 540C. The super-
heated steam is conducted from the boiler to a steam turbine Condensate from process
where the steam expands and sets the vanes of the turbine axle
in motion. In Figure 7 the steam does not condense but is used at
a lower pressure as process steam. Consequently, it is referred to
as a back pressure steam turbine. The heat from the flue gases of Figure 7 Simplified diagram of a back pressure steam turbine.
the steam boiler is cooled by the superheater, the evaporator and
the economiser successively, after which a flue gas condenser can
be linked if necessary. The feed water is preheated by means of
the flue gas condenser before entering the boiler. In some cases
the combustion air is preheated by the last remaining heat in the
Generator
flue gases by means of an air preheater.
Steam boiler Turbine
Fuel
Process steam
is tapped off in between the turbines. Should some of the steam
Condenser Cooling water
not be used for heating or as process steam, the steam turbine
can also be used as a condensing unit
Condensate

In this method a steam turbine is used to convert the potential This means that the steam in the last step of the turbine expands Condensate drum

energy from high pressure steam (40 to 80 bar) into electricity
before using the low pressure steam at the outlet of the steam
turbine for process heating (5 to 20 bar). This is a technique that
is often applied in the industrial sector. Often, a gas turbines
steam boiler or heat recovery boiler produces overheated
high pressure steam (for instance 60 to 80 bars) which is then
transported via a central steam grid. This steam is then used to
drive a steam turbine with which electricity is generated. The
reduced pressure steam at the outlet of the steam turbine can
then be used for process purposes such as process heating and
air humidification.
Large steam turbines have several strong features including their
high reliability, high availability percentage (less down time) and
Example of a steam turbine. Source: Corbis
to conditions under the atmospheric pressure (Figure 8). The em-
phasis lies in this case on electricity production.
Turbines with reheaters are often connected in series to increase
output. After the steam has expanded in the first high pressure
turbine it is transported to reheaters that raise the temperature at
the same pressure. The steam is then transported to a low pres-
sure turbine. It is necessary to reheat or mix the steam with higher
pressure steam because the turbines can only tolerate super-
heated steam. Should the steam condense in the turbine, drops
of water are created that can cause significant damage to the
turbine vanes which turn at such high velocities that the drops can
create craters in the vanes. The humidity in a turbine may there-
fore not exceed 14%.
Figure 8 S
 implified diagram of a condensing steam turbine with
draw-off.
Gas turbines
Because of their high reliability and their ability to produce high
pressure steam in the heat recovery boiler, gas turbines are
often applied in the industrial sector. Furthermore, gas turbines
are the most suitable option if they operate throughout
the entire year. Gas turbines produce mechanical energy by
injecting and burning gaseous or liquid fuel into compressed air
which expands as a hot gas in the turbine. Part of the released

34 35
Heat and Power Paragraph 3.1|Technology, design and use

air in the compressor and the flue gases in the expansion turbine
flow in a different direction than the larger gasturbines. Axial tur-
45
bines are often used for larger capacities; their flow runs parallel 40
to the axle. Figures 11 and 12 contain examples of both turbines

Electrical efficiency (%)

35

(page 38). 30
25
20
The flow of air in a radial turbine is changed 90 degrees. This 15
technique is related to the turbo chargers that are used in 10
5
gas and diesel engines. The use of micro turbines is described
0
in more detail in section 3.5. A so-called heat recovery boiler 1 10 100 1,000
Electrical capacity (MWe)
(a heat exchanger placed in the flue gas exhaust outlet of the
gas turbine) can make hot water or steam. The maximum steam Figure 9 Electrical efficiency og gasturbines as a function of the
temperature is 25C to 40C lower than the flue gas tempera- capacity (based on ASUE).
ture at the turbines exhaust outlet while the steam pressure
can reach an approximate maximum of 80 bars depending
on its projected use. If a higher temperature and pressure is
required, a heat recovery boiler with gas burner inserts can be
used for additional combustion (co-firing). No additional air is Flue gas

generally needed because the flue gases of the gas turbine still Process steam
contain an oxygen concentration of approximately 15% due or heat

to a large amount of excess air in the gas turbines supply of

combustion air.
Fuel
Combustion Flue gas
Compressor chamber
Example of a gas turbine. Source: Corbis The efficiency of gas turbines is influenced by temperature
and air density. These factors determine the required energy
for compression, the amount of fuel that can be burned and Turbine

mechanical energy is used to compress combustion air. Fuel Operating principle the amount of fuel to reach the desired temperature for the Air inlet

must also be pressurised if it is not available at the required
pressure. Advantages of gas turbines include low maintenance
costs, clean flue gases and high fuel flexibility. Reliability and
limited maintenance effort as compared with other systems are
also major advantages. As a result gas turbines are very suitable
for full year use (base load operations). Consequently, they are
the preferred choice in the industrial sector. Disadvantages
of gas turbines are their higher capital and component costs.
Because of this gas turbines require many operating hours to
counteract these disadvantages. Also, the number of starts
and stops must be kept to a minimum (preferably fewer than
20 per year). Gas turbines can achieve an electrical efficiency
of 25% to 40%; depending on their configuration and the
heat reduction total efficiency comes to approximately 80% to
90% (Figure 9).
Gas turbines comprise three main components: compressor,
combustion chamber and (expansion) turbine. The compressor
compresses indrawn air and feeds this into the combustion
chamber where fuel is injected into the compressed air and
burns as a hot gas. The increased temperature increases the gas
volume. The subsequent hot combustion gases then expand in
the turbine. Unlike gas engines, gas turbines run in a continuous
process (Figure 10).
Micro gas turbines (smaller than 5 kWe) and mini gas turbines
(up to 100 kWe) are smaller scale options. The drawback of small
capacities is their low conversion efficiency which is partially over-
come by applying a recuperator. In this recuperator some of the
heat from the flue gases is used to heat up the compressed air
before it enters the combustion chamber. Also, the combustion
turbine inlet. Part load operations can also lower a turbines
efficiency. Figure 13 (page 39) provides an indication of the
effect of part load and air inlet temperature on the efficiency of
a gas turbine system.
In gas turbines heat from the flue gases can be recovered and
used to reheat combustion air that has already been com-
pressed, thus significantly increasing efficiency. This is also
referred to as recuperation (Figure 14). However, the use of
recuperators has several disadvantages. Recuperators are often
bulky and difficult to build in a way that will withstand major
changes in temperature over long periods of time.
Furthermore, these turbine installations are more complex. The
maximum steam temperature drops when the heat from the
Figure 10 S
 implified diagram of a gas turbine with heat recovery
boiler.
flue gases is released to the compressed combustion air and the
temperature of the exhaust fumes after the recuperator is
significantly lower. Not many gas turbines have as yet been fitted
with a recuperator. Those that have are generally small-scale gas
turbines below 1 MWe.
The steam produced in the heat recovery boiler can be used for
process purposes as well as for injection into the combustion
chamber: the so-called steam injected gas turbine (STIG,
Figure 15). The steam lowers the combustion temperature thus

36 37
Heat and Power Paragraph 3.1|Technology, design and use

preventing the formation of NOx. The total mass flow in the
combustion chamber and the expansion turbine increases, thereby
releasing more energy. On the other hand, additional energy is
required because the back pressure for the compressor increases.
Ultimately, the net electrical efficiency increases when steam
injection is applied. However, in using the steam the thermal
efficiency drops significantly.
Steam and gas power plants (STAG)
STAGs are a combined process of steam and gas turbines (com-
bined Joule-Rankine cycle). These systems are costly, but they
By connecting a gas turbine to a steam turbine a total
efficiency of 80% to 90% can be reached if the residual steam
is still used as process steam or for district heating. Electri-
cal efficiency of STAG power plants varies between 42% and
58% depending on the heat supply. An electrical efficiency of
58% can only be achieved if all steam is expanded via turbines
to below the atmospheric pressure. The principle diagram of
32
the STAG in Figure 16 is one of many possible configura-
tions. In the configuration chosen here all steam is sup- Flue gas
30
plied to the process after it has been expanded in the steam Process steam
Heat recovery
boiler
turbine. This kind of steam turbine is also called a back 28

Electrical efficiency (%)

can reach very high electrical and thermal efficiencies. STAGs are pressure turbine. (Steam injection)
Fuel
therefore frequently applied in large-scale CHP installations in the 26
Fuel
Combustion Flue gas
industrial sector (30 to 400 MW). When opting for maximum reliability of heat supply in addition Compressor chamber
24
to flexibility, a co-firing burner with additional combustion air T = 5 C

T = 15 C
A gas turbine is used as a basis for the installation. The hot flue ventilators can be installed. These ventilators start working only
22 T = 25 C
gases of the gas turbine are used in a heat recovery boiler to when the gas turbine malfunctions. Valves close the outlet of Turbine
T = 35 C Air inlet
produce steam (as described previously). This steam is not sup- the gas turbine and open the inlet of the ventilators. This option 20
plied directly to the process but instead at higher pressure to a is also referred to as cold air operations (Figure 17, page 41). It 50 60 70 80 90 100
Part load (%)
steam turbine. Steam then flows from the steam turbine at a is not commonly applied as the costs are high and the installa-
lower pressure to the industrial processes. The expansion of the tion is more liable to malfunction due to the flue gas valves and Figure 13 Effect of part load and inlet temperature of air on the Figure 15 Simplified diagram of a gas turbine with heat recovery
steam in the turbine produces energy with which a generator can other additional components. electrical efficiency of a gas turbine system. boiler and steam injection.
produce electricity.

Recuperator Heat recovery

boiler
Fuel Process steam

Combustion
Fuel chamber Flue gas Verbrandings-
-
kamer Flue gas
Compressor
Compressor Steam turbine

Turbine
Air inlet Gasturbine
Air inlet

Figure 14 Simplified diagram of a recuperating gas turbine. Figure 16 Diagram of a possible STAG system (back pressure system).

Figure 11 Cross-section of an axial gas turbine. Source: Asue Figure 12 Cross-section of a radial gas turbine.
Source: Capstone Turbine Company

38 39
Heat and Power Paragraph 3.1|Technology, design and use

Another way to create more flexibility is a STAG with a draw- or more steam turbines are connected to the steam grid. These
off steam turbine (Figure 18). With the gas turbine at constant steam turbines can even be distributed over the site and can drive
capacity the heat supply can be adjusted to the customers machines, such as large compressors, directly.
demand with tapped steam. The heat/power ratio can therefore
vary between 1 and 0. This creates a high-efficiency and Organic Rankine Cycles (ORC)
high-flexibility installation. Most of the larger CHP plants in Linking an Organic Rankine Cycle as a subsequent process to a
the industrial sector such as Delesto 2 in Delfzijl and Elsta in CHP installation increases the electrical efficiency of the installation,
Terneuzen are of this type. STAGs can also be designed with but it does lower the thermal efficiency of the CHP installation.
a gas turbine that operates constantly even if there is no heat ORCs are able to generate electricity with low-quality heat
Chimney By-pass Chimney
demand. To prevent unnecessary blow off or cooling of steam, when a steam turbine no longer works properly. The ORCs chimney
a by-pass chimney can be installed (Figure 19) in which the currently available are characterised by major differences in price,
turbines flue gases are blown off directly. maintenance and usage range (based on temperature). Combustion air
ventilator Fuel
Fuel
Fuel
Fuel Combustion
From an energy point of view the use of the by-pass chimney Calculations show that with an ORC linked to a gas engine the air ventilator

is, of course, unwelcome. This option is applicable mainly when total electrical efficiency improves by 4 to 8 percent. An ORC Steam turbine

supply reliability is essential, such as when the installation also linked to a gas turbine improves the electrical efficiency by 10 to Air inlet Gas turbine Process steam Air inlet Gas turbine
Steam turbine
Process steam
serves to provide emergency power. A frequently used option 14 percent, for instance from 25% to 36%. The power/heat ratio
for increasing the efficiency of a STAG cycle is the use of a can therefore increase by more than 25%.
multi-pressure boiler. In this boiler, steam is produced at two,
three and even four pressure levels. Because the construction Operating principle Figure 17 Co-firing with cold air operation. Figure 19 STAG with by-pass chimney.
is more expensive, the number of pressure systems generally An ORC is a closed system in which an organic liquid (such as
increases as capacity increases. Installations of less than 30 isobutene, pentane, hexane, toluene or ammonia) is evaporated
MWe usually use one pressure. The largest STAG installations, in a heat exchanger placed in the flue gases of a gas engine,
with triple-pressure boilers or quadruple-pressure boilers can gas turbine or hot water boiler. The gas then expands in a
reach an electrical efficiency of approximately 60% if no heat turbine that drives a generator. In the condenser this gas must
is supplied. again condense, whereby it releases its heat either to a hot Heat recovery
boiler
water system or unused into the environment. Natural cooling Fuel
1: Feed water inlet
2: Economiser Flue gas
Figure 20 contains a diagram of a double-pressure boiler. Every by means of horizontal coolers takes a lot of electrical energy 3: Evaporator 4 4 ~ 75 C
Steam 4: Steam drum
pressure system has its own boiler feed water inlet, economiser, which is disadvantageous for the electrical output (Figure 21, Combustion
chamber Flue gas
turbine 5: Super-heater

evaporator, steam drum and super-heater. These are arranged so page 43). The type of ORC depends heavily on the temperature Compressor Low pressure steam
5 3 2 5 3 2
as to make optimum use of the heat in the flue gases. The diagram level of the heat source. Gas- Medium pressure
turbine steam
also shows a separate hot water heat exchanger with which the
last remaining heat is utilised (19 MWth). In this example, the flue Fuel cells Air inlet Condensor 1 1
Cooling water Hot water
gas is cooled to 75C. Fuel cells do not work on the basis of mechanical conversion HP steam LP steam

into electricity, but are based on an electrochemical conversion

The gas turbine and the steam turbine in a double-pressure boiler
are connected to one axle. Both turbines therefore drive the
same generator. The advantage of this system is that it requires
a lower investment. On the other hand the operational manage-
ment of the installation is more complex. Especially at industrial
sites where various gas turbines with heat recovery boilers can be
connected to one high-pressure steam grid. In their turn, one
technology in which hydrogen reacts with oxygen which produces
electricity and steam. Unlike the other technologies the Figure 18 STAG with draw-off. Figure 20 Diagram of a double-pressure boiler.
efficiency of the fuel cell is not limited by the maximum temper-
ature difference in the cycle (the so-called Carnot efficiency).
In practice, however, various losses occur in the components
of the fuel cell system. Commercially obtainable fuel cells have
an electrical efficiency of 37% to 45%, depending on the fuel

40 41
Heat and Power
ORC fed with flue gases (Turboden).
quality and the operating conditions. Electrical efficiencies
of over 50% are expected in the future. Even higher system
efficiencies can be achieved by combining fuel cells with other
technologies. On paper, the combination of a high tempera-
ture fuel cell with a gas turbine generates electrical efficiencies
of over 70%.
Operating principle
Fuel cells consist of two electrodes: an anode and a cathode
separated by an electrolyte. An electrolyte is a conductive mate-
rial whereby the electricity is produced by positively or negatively
charged molecules, so-called ions (Figure 22). Hydrogen is added
to the anode and oxygen from the air is added to the cathode.
The hydrogen atom is split at the anode into protons and elec-
trons. In the electrolyte, the protons (H+) diffuse to the cathode,
while the electrons (e-) move to the cathode side via an external
circuit. The electron current that flows via this external circuit
42
is a usable form of electricity. On the cathode side the protons
and electrons come together again and react with the oxygen,
creating a water molecule.
To achieve the required voltage and capacity the separate cells
are placed in a modular arrangement. Usually, the cells are
stacked in flat stacks. High temperature fuel cells are arranged
in tubular stacks. Fuel cells are generally categorised by type
of electrolyte. The choice of material for the electrolyte greatly
determines the other design variables. Table 1 (page 44) lists
the characteristics of the five main types: Alkaline Fuel Cells
(AFCs), Phosphoric Acid Fuel Cells (PAFCs), Polymer Electrolyte
Fuel Cells (PEFCs), Molten Carbonate Fuel Cells (MCFCs) and
Solid Oxide Fuel Cells (SOFCs).
To use natural gas in fuel cells, natural gas must be converted
into hydrogen. This is referred to as reforming natural gas. Impu-
rities such as sulphur compounds must be removed as they have
a major impact on the life span of the stack. The temperature
of high temperature fuel cells (MCFCs, SOFCs) is high enough
to reform the natural gas in the fuel cell itself. Low temperature
fuel cells (AFCs, PEFCs and PAFCs) require a separate reformer.
Because of their low operating temperature the latter fuel cells
are less vulnerable to start-stops than high temperature fuel cells.
SOFC / gas turbine hybrid systems
By combining a Solid Oxide Fuel Cell (SOFC) with a micro/mini gas
turbine electrical efficiencies of 60% to 70% can be achieved. A
turbine-driven compressor pressurises the SOFC and keeps it at 4
bars or more (Figure 23, page 45). The cells efficiency improves
at this increased pressure. The SOFCs high temperature flue gases
(approximately 1000C) are co-fired with natural gas. These gases
then expand in the turbine that drives not only the compressor
but a generator as well, thereby producing even higher amounts
of additional electricity.
Trigeneration
Many industrial processes and utility complexes require cooling
in addition to electricity, steam and hot water. Trigeneration is
Heat in
Evaporator
Turbine
Condenser
Heat out
Figure 21 Simplified diagram of an ORC.
Paragraph 3.1|Technology, design and use
an option in this respect. This is a concept whereby cooling is
generated in addition to heat and electricity with the residual heat
of the CHP installation. An absorption chiller is the device that
uses the residual heat for cooling.
Operating principle of absorption chillers
Absorption chillers operate in the same way as compression
coolers. Pressure is increased in the liquid phase by means of a
pump instead of a compressor (Figure 24). Heating occurs by
means of residual heat. Absorption chillers generally contain three
liquids: an internal solution of water with lithium and bromide,
the liquid that is cooled and the cooling water that absorbs the
heat.
Then there is the heat source (steam or hot water) that drives the
cycle. The energy from the steam or from the hot exhaust gases of
the CHP installation is used to separate the components, such as
water and lithium-bromide in the generator. When the separated
water evaporates again (in the evaporator) after condensing and
expanding at lower pressure the heat can be absorbed at low
temperature (the cooling side). The heat released in the condenser
and the absorber is transported in water to a cooling tower.
e-
Fuel in Oxidant in
H2 Positive C2
ion
or
Negative
H2O H2O
ion
Flue gasses Oxidant out
Anode Electrolyte Cathode
Figure 22 Diagram of a fuel cell (based on EG&G Technical Services).
43
Heat and Power Paragraph 3.1|Technology, design and use

3.1.2 CHP design
CHP installations must undergo a feasibility study prior to instal-
lation. The following aspects are important in this respect (Figure
25, page 46):
The energy savings that can be realised in advance;
The volume and duration of the electricity and heat demand;
Whether the heat demand can be met by CHP heat production
(temperature levels);
Planned process changes (such as expansions) that could affect
the heat or electricity demand;
The concurrence or non-concurrence of supply and demand;
The available space and the supporting surface area for the
CHP system;
A possible link to the electricity grid;
The distance to the heat users or heat networks;
The integration of CHP in relation to other facilities such as
boilers, emergency power generators and compression or
absorption coolers.
External factors, such as the rates during peak and off-peak
hours, incentive schemes and the emission legislation apply in
addition to the technical possibilities. Section 3.2 enters into the
economic aspects in detail. The emission legislation is discussed
in section 3.3.
Analysis of the energy consumption profile
The first step in the design of a CHP installation is to analyse the
energy consumption profile. An investment is based on a long-
term perspective of at least 10 years. The analysis of the energy
consumption profile must therefore include any expectations
for the future, such as increased use as well as energy savings
measures. After these developments have been discounted, a
net energy consumption remains to which the CHP installation
can be geared.
Gearing the energy supply of a CHP installation to the users
electricity and heat (and cold) need is a complex matter. The number
of energy streams differs per sector. For instance, the industrial
sector often uses various steam types, cooling at various tempera-
ture levels, ventilation, tap water and space heating in addition to
the provision of electricity. Glasshouse cultivation mainly requires
greenhouse heating, electricity and CO2, whilst office buildings
need heat, electricity and cooling. Besides the inventory of the
various energy streams it is also important to know the capacity
and exactly when demand occurs. Peak hours for electricity are
between 7:00 am and 11:00 pm on working days. Off-peak hours
are all other hours and weekends. The purchase and return supply
rates can differ significantly as regards peak and off-peak hours.
The desired temperature at which the heat is to be provided must
also be considered.
An analysis of the energy consumption profile is summarised
on the basis of the number of full load hours and the load
duration curve. The number of full load hours is the total energy
MCFC unit. Source: CFC Solutions GmbH
use expressed in kWh divided by the installed capacity expressed
in kW. A high number of full load hours is desirable for employing
CHP. A low number of full load hours suggests a user that uses
the installation for only part of the year. Figure 26 (page 46) 33 oC
98 oC 85 oC Cooling
shows that CHP is an interesting option in terms of demand tower
Water vapour
for heat, particularly for hospitals and glasshouse cultivation. Fuel
Generator Condenser

Combustor Air inlet

Condensation
Abbreviation AFC PEFC or PEM PAFC MCFC SOFC Strong
Weak solution
Type of Fuel Cell (FC) Alkaline Polymer Electrolyte (Membrane) Phosphoric Acid Molton Carbonate Solid Oxide Fuel DC/AC 31 oC
SOFC converter solution
Gas turbine Compressor
Electrolyte KOH Fixed ion conducting membrane Liquid Li2CO3 en K2CO3 Ceramics Y2O3ZrO2
H3PO4 Li2CO3 and K2CO3 Ceramics Y2O3ZrO2 205C 650C 600 - 1,000 C Fuel Absorber Evaporator

Water vapour
Operating temperature 65 220 C 40 80 C 205 C 650 C 600 1,000 C
12 oC 6 oC
Heat
Cell efficiency 45 60% 30 60% 40% 45 60% 45 65% exchanger 27 oC

Capacity 20 kW > 1kW 1 MW 50 kW 1 MW 1 MW 5kW 3 MW

Applications Submarines, space travel Transport small, idle CHP CHP CHP

Table 1 Types of fuel cells and their characteristics (EG&G Technical Services). Figure 23 Diagram of an SOFC / gas turbine hybrid system. Figure 24 Principle diagram of an absorption cooler.

44 45
Heat and Power Paragraph 3.1|Technology, design and use

If we also consider cold production in the analysis then univer-
sities also qualify. CHP is suitable for shopping malls, offices and
housing projects only if their scale is large enough. The number of
full load hours is limited in these cases and therefore sufficient scale
is required to lower the investment per kW to make CHP profitable.
A quick preliminary estimate of the capacity of a CHP instal-
lation can be made by means of load duration curves. In the
diagram in Figure 27 the capacity (the vertical axis) is plotted
against the number of hours by which this capacity is exceeded
(the horizontal axis). The surface area in the diagram (kW times
hours) is an indication for the energy demand. The load duration
curves for some sectors also show that CHP is less attractive
for offices that are open for only five days per week. At
4,000 hours the curve intersects below 10% of the maximum
capacity. However, this need not stand in the way if the office
is large enough.
CHP installations can be successfully implemented in offices if
properly dimensioned and ingeniously combined with a heat
buffer. CHP installations can be an especially attractive option
from a financial perspective if they are integrated in the cooling
and emergency power system (such as in buildings of the
European Parliament). CHP installations can also be a reasonable
alternative for smaller offices that are used seven days per week.
Based on curves like these, rules of thumb can be drawn up for
a preliminary estimate of the most efficient capacity. However,
a preliminary estimate of the capacity of the planned CHP
installation can be made on the basis of previous experience
(Figure 28). Each load duration curve is unique and major
differences can be seen within the sectors. Therefore, hourly
energy consumption data must always be requested or measured
first before assessing feasibility. In many cases a buildings
installed thermal capacity does not correspond with the maximum
thermal capacity it actually requires. Often approximately 40%
excess thermal capacity is installed due to customary extra
allowances and uncertainties in the heat requirement calculation.
The method for determining the required scale of the CHP
installation depends on the situation. In principle, two situations
can be distinguished:
Buildings for which historical annual consumption data is
available;
New buildings for which no energy consumption data is
available.
These situations are worked out in more detail in Appendix 2 at
the end of this book.
Design aspects
The load duration curve is one point of departure in the design
of a CHP installation. Other aspects also figure largely, namely
those that extend the operating time or that can improve the
cost-effectiveness of the CHP installation. Some examples are
provided below.
a) Levelling off peak heat demand
In cases where there is a substantial peak in heat demand,
solutions must be found for maintaining the net heat demand
whilst increasing the number of CHP operating hours. One
possibility is not to reduce or barely reduce temperatures at night
in properly insulated buildings. Heating up the building in the
mornings causes a peak in demand which the CHP installation
can only partially cover. After office hours the CHP installation
stands idle for several hours because the building cools down
slowly.
However, the higher peak rate for electricity applies up to 11:00
pm. Considering that the CHP installation can run cost-effectively
during high peak rate hours, the fact that it stands idle after office
hours is particularly unfavourable.
b) Heat buffering
Another option is to buffer heat, for instance in the bulk of the
building (concrete core activation) but also in hot water buffers or
in the hot tap water supply. By buffering, more CHP capacity can be
installed and these larger systems can operate longer. Both aspects
improve the financial feasibility of the CHP installation. In addition
to levelling off the demand profile, buffering also serves to supply
a maximum amount of electricity during peak hours for which
considerably higher electricity rates apply. Figure 29 (page 48) contains
an example of the effect of buffering on the capacity to be installed.
Heat demand can differ significantly as the seasons change.
Long-term energy storage (LTES) in aquifers is a possible solution
here. In this process excess heat is released to a closed circuit
comprising two sources: a heat source and a cold source. In
summer, water from the cold source is heated to a maximum
temperature of 30C and pumped to underground storage from
where it can be pumped up as needed. This heat is absorbed by
a heat pump, after which the cooled water is pumped back to
the cold source. Heat loss deep underground (80 to 200 metres
down) is minimal.
What is leading: heat or electricity?
The design of a CHP installation is largely determined by the instal-
lations specific application. Examples:
In the processing industry it is quite possible that a customer is
interested only in steam, in which case the produced electricity
is used on the spot or fed back into the grid. The grid is then
used for balancing purposes.

Analysis of the use profile: Other wants and limitations:

Energy savings in advance
Volume and duration of electricity
and heat demand
Temperature level of heat demand
Future energy demand
Non-concurrence of heat and
electricity
Back-up facility or emergency power
Integration in and effect on the existing
system Indicative CHP capacities
Available space and supporting surface area 100%
Distance to users of heat networks Maximum demand
CHP area
Distance to users of heat network
Full load heating hours Hospital Offices

Hospital with air treatment Residential flats

Hospitals New
Additional for existing Office 7 days/week Glasshouse cultivation high

Sector
CHP design Glasshouse Cooling via ACM
cultivation Glasshouse cultivation low
Sector

Universities Care centres

Capacity
External factors: Possibilities: Glasshouse cultivation
Tariff structures Prime movers: Nursing homes
Shopping malls
Incentive scheme - Field of application
Emissions legislation - Efficiency Hospitals
Office
Buffering Offices 5 days/ Swimmingpools
CO2 -utilisation week
Trigeneration Housing 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Excess hours/year Heat capacity / maximum demand
1,000 2,000 3,000 4,000 5,000 6,000
Full load hours per year
Figure 27Load duration curves for heat use in some sectors Figure 28 R
 ules of thumb for a preliminary estimate of the CHP
Figure 25 Factors that figure in the design of a CHP installation. Figure 26 Full load heating hours in various sectors. (examples). capacity to be installed.

46 47
Heat and Power Paragraph 3.1|Technology, design and use

The situation may be the exact opposite for a greenhouse
grower with crop lighting, in which case electricity demand
is leading.
When applied in a hospital, reliability of the energy supply is of
particular importance. Various units can be installed to guarantee
this reliability.
Furthermore, it is important to know whether the production of
heat and electricity is for ones own use or for that of customers,
or whether it will be fed back into the electricity grid.
CHP as a part of the energy supply
CHP installations usually supply the base load. Supplementary
boilers handle peak loads and serve as backups. The electricity
grid covers peaks and also serves as a backup. In sectors in which
reliability is essential, such as in hospitals, the entire energy instal-
lation is designed to produce sufficient electricity and heat in
the event of a power failure or if one of the components breaks
down. For instance, in University Medical Centre Utrecht one flue
gas boiler can be linked to three gas engines that in principle can
meet the hospitals full heat and electricity demand. Two reserve
boilers and a diesel engine have been installed as well. The
integration of the CHP installation into the system is discussed in
more detail later on in this chapter.
The influence of tariff structures
Some companies purchase their electricity at rates per hour,
in which case the time at which the electricity is produced is
essential for managing the CHP installation efficiently. This also
applies to a lesser extent to companies that purchase on the
basis of peak and off-peak hours or on a weekly basis through
other kinds of block purchasing. This is discussed in more detail
in section 3.2.
heat. Also, systems can be tested with emergency coolers inde-
pendent of heat demand.
Government incentives: tax exemption, subsidies
The government has various incentive schemes in place that
promote the use of CHP. Several national subsidies and financing
options available in 2008 are discussed in section 3.2.
The utilisation of flue gases
Heat from the flue gases of a CHP installation can be used in
several ways, namely:
To produce steam and/or heat;
Directly for industrial processes such as ovens and dryers;
To evaporate LNG;
For CO2 fertilisation among greenhouse grower
Flue gases often need to be purified before they can be used
directly, such as in the case of CO2 fertilisation and for drying
foodstuffs.
Flue gases from gas engines must be purified to reduce (in par-
ticular) the NOx and ethane (C2H4) content in order to make
them suitable for CO2 fertilisation in greenhouses. By using a flue
gas purification installation greenhouse growers can extend the
operating time of their CHP installation by at least 1,500 hours.
Their greenhouses will also contain more CO2 as CHP installations
consume almost twice as much gas per unit of heat as boilers.
0.9
0.8
0.7
This is because some of the gas is converted into electricity.
Consequently, less heat need be stored in the buffer per m3 of
required CO2.
Integration of a CHP system
Hydraulic, electrical and structural integration of a CHP system is
no easy matter. With respect to hydraulics, things can go amiss
if the supply temperature to the CHP installation is too high. As
regards electricity, the system may not hinder ones own network
or the national grid, nor may the installation lead to unsafe
situations. From a structural point of view, the following must be
taken into account: noise, vibrations and ventilation of the CHP
installation, chimney, outlet location vis--vis adjacent premises,
volume and weight.
Hydraulic integration
The hydraulic integration of a CHP installation for steam production
is easier (but not necessarily safer) than the integration for hot
A greenhouse growers storage tank for buffering.
Central heating
From buffer
CHP to buffer
CHP direct
water production. For hot water production the following must
be taken into account when determining the configuration:
The temperature of the water exiting the CHP installation must
be as high as possible in connection with optimum heat transfer
(less expensive heat exchangers) and the flow of water must
be as small as possible (higher temperature difference between
feed water and recycled water).
When combined with high efficiency boilers instead of
conventional boilers, parallel connections are required in place
of serial connections. High efficiency boilers fed with preheated
water have no condensation effect and therefore do not
achieve the desired efficiency.
The temperature of the recycled water entering the CHP instal-
lation may not exceed the specifications of the manufacturer
(usually 70C max).
Furthermore, it must be decided whether a parallel or serial
connection is required between CHP and boilers and whether

0.6
Capacity

Whether electricity can be used on site (behind the meter) or is 0.5

0.4
fed back into the grid, is another essential question. During peak
0.3
hours it can be beneficial to feed back into the grid, whereas this
0.2
is not true during off-peak hours. For financial reasons it can be
0.1
attractive to equip the CHP installation with emergency coolers so
0
that it can supply electricity for a few hours per year in order to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the day
keep down any peaks or so that it can generate electricity during
hours at which extremely high rates apply without utilising the Figure 29 Effect of buffering on the capacity to be installed.

48 49
Heat and Power
or not to use a heat buffer. For parallel connection the required
heat capacity is determined by measuring the amount of recycled
water coming from the central heating system and the difference
in temperature between inlet and outlet.
Based on this heat capacity it can be determined when and at
what capacity level (full load or partial load) the CHP installation
must kick in. The control strategy is as follows (Figure 30):
If the capacity is smaller than the lower limit of what is supplied
by the CHP installation, only the boiler is used.
If the capacity is larger than the lower limit of the CHP installa-
tion, only the CHP installation kicks in.
If the capacity exceeds the upper limit of the CHP installation,
both the CHP installation and the boiler are used.
Should there be any excess heat capacity a heat buffer can be
used in parallel to the CHP installation. The CHP installation
feeds the buffer with the excess hot water until the buffer is
full. When the CHP installation cannot meet capacity demand,
extra heat capacity can automatically be obtained from the
buffer. The temperature is controlled wholly separately from
the central heating control and the hydraulic control; the CHP
installation and the heat buffer become an independent control
unit (Figure 31).
In a serial integration situation the recycled water from the central
heating system is preheated before it is sent to the primary circuit.
Here, too, it is recommended that preheating is activated by
means of forward control based on heat demand (amount of
water and temperature difference). Activation of the heat boiler
is delayed or set in such a way as to ensure a slight downward
deviation in comparison to the desired value so that the CHP
installation can continue to run. The benefit of serial integration
is that CHP and boiler are controlled separately. Appendix
1 provides a detailed explanation of the hydraulic integration of
both water and steam.
Electrical integration
Various configurations are conceivable for the electrical integration
of a CHP installation. Figure 32 (page 53) provides one example.
The most popular configuration for small systems (up to 1 MWe) is a
connection to the 400 V grid. For larger systems (over 2 MW) one
50
Paragraph 3.1|Technology, design and use
can opt for a low voltage or a medium voltage generator (10 kV).
The required switch and control equipment for medium voltage
is more expensive than the equipment that is mass produced for
400 V. So it is quite possible that there is no difference in invest-
ment costs. Also, the electrical efficiency of a 400 V generator in
combination with a good step-up converter is still more appealing
than a medium voltage generator. Furthermore, a highly skilled
technician is required to operate and maintain a medium voltage
installation and these technicians are scarce. In all cases ones
own use of peripherals such as pumps and ventilators must be
taken into account.
Because return supply to the grid is still not very profitable,
as much of the electricity as possible is generally directed to
ones own requirements. This applies particularly to night-rate
electricity (off-peak hours) during evenings and weekends.
On the other hand an agreement with a power company for
delivery at agreed times often produces extra benefit. If a CHP
installation is deployed for emergency power the start-up load
and fluctuations in electricity demand on the grid must be
considered (Figure 33).
With respect to the start-up procedure it is important that the
CHP installation, after it is up to speed, does not immediately
run at full load as the gas engine is unable to cope with this;
the number of revolutions will drop and in the worst case the CO2 fertilisation is often used in glasshouse cultivation.
machine will fail. The preferential emergency power groups
must be enabled in small steps, with no more than 25% of the
full load capacity of the CHP installation per step. This is allowed
up to a capacity of 50%, after which the steps become smaller,
namely approximately 15% per step, until 85% of the full load CHP combined with Central heating
capacity is reached.
Central
Capacity
coverage CHP upper limit
heating
Modern gas engines are unable to cope with severe load
fluctuations. Because of the length of the gas control system the CHP
Central Central Pumps
Buffer CHP
response time of the fuel supply is too long, which means that CHP lower limit heating heating
an emergency power diesel engine must level off the load peaks
or that the capacity demand must be limited in some other way.
Central
heating
The use of large accumulator batteries as an emergency power Capacity demand
buffer is costly; these batteries require a lot of maintenance and CHP upper llimit
electricity when on standby. Suppliers are zealously searching for
a suitable solution. Figure 30 Example of control strategy. Figure 31 Example of parallel integration with a buffer.
51
Heat and Power
Integration into buildings and surroundings
Due attention must be paid to the integration of CHP installa-
tions in buildings. Noise and vibration feature largely as well as
volume and weight (Figures 34 and 35). As with boilers the supply
of combustion air, the necessary supply of ventilation air and the
discharge of flue gas must be taken into account. In order to meet
future environmental constraints it may be necessary to reserve
extra space in the installation room for bulky flue gas cleaners
and catalytic converters. Placing CHP installations in a container
to limit the amount of noise makes them heavier and larger. CHP
installations in excess of 1.5 MWe are too large to fit in a mari-
time container.
To sum up: the hydraulic, electrical and structural integration of
CHP installations requires due attention. The use of cogeneration
is endangered if not properly supervised or implemented. High
costs can be involved in reintegrating an installations hydraulics. Reliability and availability
In addition, integration into the surrounding area also requires
attention. Vibration for instance can be a nuisance to people
living in the vicinity and the solving of this problem is no sinecure.
Removing structure-borne noise by means of flexible connections
and/or contact separations is a specialised field. Also, exhaust
pipe noises (chimneys) are a very sensitive point for people who
sleep with their window open as they are sometimes known to be
heard several blocks away. Remedying noise pollution by means
of additional silencers is often very difficult due to lack of space.
The outlet for discharging flue gases produced by CHP installa-
tions (if they involve a flue gas condenser in built up areas) also
requires extra care, as the flue gases no longer have any upward
force to rise; this causes fog formation resulting in reduced
visibility during the day. Diluting the flue gases by means of
air slightly relieves this problem. When properly executed the
engineering (design, choice of technology and integration) of a
CHP installation will guarantee the success of the CHP application,
both from a technical and a financial perspective.
3.1.3 Usage aspects
Commercial-economic aspects
It is of the utmost importance for users that their CHP installation
is cost effective. Various commercial-economic aspects feature in
52
Paragraph 3.1|Technology, design and use
deciding on the type of CHP installation. The extra investment
can be recovered by generating additional revenues in delivering
250
electricity to the grid. However, CHP installations can also save GRID
costs by avoiding purchasing peaks and heavy-duty mains connec- M G
400 V
200
Surface area (m)/MWe
tions, in which case the installation is used to cover peak loads. To
prevent overly high peak loads on the connection and thus high 400 V
Step - up
10 kV
150
M G
related costs as a result, the installation must be suitably reliable.
100
By integrating the installation with other functions, such as emer- In container
gency power, possible other investments such as in an emergency M G
10 kV
50
Not confined
power aggregate can be avoided. These costs can then be 400 V
attributed to the CHP installation, thus keeping down the total -
0 500 1,000 1,500 2,000 2,500
investment for achieving cost-effectiveness. Section 3.2 discusses 10 kV 400 V
Electrical capacity in kWe
the main aspects of the economic analysis, i.e., the exploitation
Figure 34 R
 equired surface area for CHP installations based on a gas
calculation and the investment costs of CHP installations, in more engine.
detail. Figure 32 Integration of the CHP installation into the electricity grid.
Every year, CHP installations are shut down for several hours for
maintenance and repairs. A maintenance schedule (number of
70
hours and point in time) is planned in advance. A distinction can
60
be made between installation availability and reliability. Availability
is a criterion for the total number of hours that an installation is NSA V 50
Tonnes/MWe
In container
out of operation (downtime), including malfunctions and planned (stand by generator) IV 40
Pe
maintenance. Reliability indicates how long the installation is M G
III 30
down outside planned maintenance hours. Section 3.4 discusses 20
II
the nature of maintenance on and malfunctions in CHP installa-
I 10
tions. This section therefore touches only briefly on two different GRID
<40% Pe Not confined
-
methods for calculating reliability and availability. 0 500 1,000 1,500 2,000 2,500
Pe in kWe
The use of CHP installations differs per user. Roughly speaking, Figure 33 CHP deployed as emergency power aggregate. Figure 35 Weight of CHP installations based on a gas engine.
there are two kinds of users. Installations in areas such as the
industrial sector run the highest possible number of operating
hours (8,760 hours in a normal year). Any downtime due to
maintenance or malfunctions cannot be recovered. The second
user type comprises the sectors in which installations run on the is required. For CHP installations in other sectors this can be during can be equal to reliability or even 100% if malfunctions can be
basis of a pre-determined pattern of operating hours. In this case weekends or national holidays. compensated by additional operating hours. However, this is not
installations operate when the user wishes. Maintenance on the always possible. If, for instance, electricity is sold at pre-deter-
installation must be done at times when the installation is not In principle, the availability of CHP installations (total availability mined hours any malfunctions during these hours cannot be
running or (if there is no other way) at times that it is less important or on the basis of malfunctions) in sectors with a pre-determined recovered.
for the installation to run. Examples of such times for glasshouse pattern of operating hours can be higher than when they run
cultivation are when crops are being replaced (in October and all year round. Most maintenance can usually be scheduled for The starting principle is to minimise malfunctions by means of
November) or during the summer months when little if any lighting outside the planned operating hours. In principle, total availability preventive maintenance. Malfunctions can be detected at an
53
Heat and Power Paragraph 3.1|Technology, design and use

early stage by means of a proper monitoring system and action
taken prior to their occurrence. A proper maintenance contract is
essential to ensure that all maintenance tasks are carried out
according to schedule, to enable professional monitoring and
analysis and to arrange that malfunctions are dealt with within
the shortest possible response time. Such matters must be agreed
with the maintenance parties.
Image of CHP installations
Besides financial considerations, the image of CHP installations
can also be a factor when investing in the supply of energy. Due
to societys growing attention for a reduction in the emission of
greenhouse gases and for energy saving, efficient techniques like
CHP are becoming increasingly more important. CHP installations
can achieve considerable savings with respect to primary energy
consumption as compared to individual generation of heat and
electricity. As the required energy is generated close to the user,
transport losses are minimal. CHP installations thus contribute to
the reduction of CO2 emissions, which is important for employ-
ees, consumers and parent companies. Shareholders also set
great store by green companies. Besides being of environmental
importance, the fact that companies with a CHP installation are
less vulnerable to fluctuations in oil prices also plays a role.
The gas engines run during plateau hours at a sufficient enough
level to require only a small capacity from the grid. If the grid
fails, gas engines are disconnected and operations continue in
the dark. The vital business units draw on batteries for their
electricity (UPS: Uninterrupted Power System). The emergency
diesel power aggregates that feed the preferential grid kick in
after which the gas engines take over until all groups are live
again (UMC Groningen operates in this manner).
The various units must be properly adjusted to each other to
prevent problems. This is a rather complex process, particularly
when loads fluctuate heavily. Furthermore, there must be a black
start facility in order to start up without power. A black start
facility is an accumulator battery with sufficient capacity to start
up the CHP installation. Finally, dual fuel engines that run on both
diesel and natural gas are also used. These systems are a solution
for situations in which the gas grid breaks down.

Emergency power, reserves and dual fuel

In some sectors, such as the care sector, uninterrupted supply
of energy is crucial. Smart designs can increase redundancy, for
instance by installing various small units in accordance with the
n-1 principle. According to the n-1 principle, one single unit
may malfunction at any one time without users being affected.
Hospitals, in particular, use quick start-up gas engines as a standby
in the event of a failure in the electricity grid.

Malfunctions in the grid can be absorbed in various ways:

Throughout the entire day, a monitoring system determines
the demand of each user group as well as the supply of the
gas engines. As soon as the grid fails, the system immediately
switches to isolated operation. To balance supply and demand,
a number of low priority groups immediately switch off. A
gas engine, possibly deactivated, starts up again, after which
the switched off groups come back on, one by one, until the
maximum is reached (UMC Utrecht operates in this manner). Cogenerated heat and electricity with the ROCA3 plant. Source: Corbis

54 55
Heat and Power Paragraph 3.2|Economic analysis

3.2 Economic analysis Reference situation

The economic performance of CHP installations is not an isolated
matter, but is compared to a situation without CHP. It is important
in this respect to properly document in advance to which situation Determine point
of departure,
Determine and calculate Economic analysis: draw
up operation calculation
the energy potential of
the total economic performance of the CHP project is to be particularly the possible CHPs
and calculate cost-
energy requirement effectiveness
compared. This is referred to as the reference situation. There are
two standard reference situations:
The user uses only the heat generated by the CHP installation.
In this case, a standard natural gas boiler is usually the Figure 1 General progress of an economic calculation.
As CHP installations generate both heat and electricity they replace the purchase of electricity from the grid and the reference to which the CHP installation is compared. All of
production of heat or steam with (gas-fired) boilers. However, some of the required energy must still be purchased from the electricity produced is supplied to the grid atcommercial
the grid. The total original energy requirement is referred to as the reference situation. There are several pros and cons prices.
The users objective is to use both the heat and the
connected to CHP installations as compared to the reference situation without CHP usually a boiler in combination Economy Tariffs
electricity generated by the CHP installation for himself. The
with purchased electricity. CHPs call for a higher investment, lead to additional fuel consumption on site and require reference situation in this case is a boiler in combination Economic Energy Input energy
additional attention to maintenance and integration in existing systems. On the other hand, CHPs save money as no or with the purchase of electricity from the public grid. Excess
principles tax rates management with
CHP
Data on Electricity grid
only some electricity needs to be purchased and/or the generated electricity can be sold. The economic analysis of CHP electricity is supplied to the public grid and any shortage is Input
reference situation
energy prices tariff CHP data
Type of
installations is often a complex one. In this section the total economic analysis is divided into subtopics. purchased. purchasing Gas transport Purchase of
Reference boiler contract tariff natural gas
CHP
Purchase of Gas distribution Purchase of
Several variations to these reference situations are conceivable natural gas
investment &
maintenance tariff electricity

such as situations in which the user already has a CHP installation Purchase of Electricity
electricity production
or situations in which the heat is purchased from or supplied to
Subsection 1 enters into the main aspects of the economic analysis calculated. These must be translated into an economic analysis, third parties.
in the operation calculation, after which the investment costs with which the cost savings that can be achieved during the
of CHP installations and the influence of energy markets and installations life span can be calculated. These cost savings are If the user wishes to calculate the economic performance of
Situation without Situation with
contracts are discussed. Brief attention is paid to the current then compared to the required (extra) investment in the CHP two different CHP installations for his own specific situation CHP CHP

types of CHP support and to the basic principles for calculating project. This then determines the feasibility or cost-effectiveness to discover which type best suits his energy needs, both instal- Calculation of
gas costs
Calculation of
gas costs

profitability. This section closes with three different examples of of the CHP installation (Figure 1). lations can be compared to the pre-defined reference. This way, Calculation of Calculation of
e-costs purchasing
CHP installations. the results for the two CHP installations can be compared with e-costs
purchasing
Calculation of
The flow chart on page 57 (Figure 2) provides an overview of the each other. Calculation of
e-revenue
supply
3.2.1 Basic principle of economic analyses main steps and focus points for the economic calculation. The energy tax
Calculation of

Economic analyses of investments in CHP are complex calculations input for the calculation shown here comprises: Operation calculation energy tax

as CHP installations, which combine the generation of heat and The energy consumption and production with and without The economic feasibility of a CHP installation is calculated by
electricity into one machine, wholly or partially replace the energy CHP; determining the operational profit and losses of the situations
Calculation of CHP profitability Calculation of
generated by existing technologies (such as boilers) and the Basic principles as regards tariffs (such as grid tariffs and taxes) with and without CHP during the anticipated duration of the CHP production
purchase of electricity from the grid. and prices (particularly for gas and electricity); project. This determines the difference (the operating result) for Profit and loss
analysis
Cash flow
calculation
costs

This means that CHP installations must generally be compared
with situations in which electricity is purchased and heat is
generated separately by means of gas. After analysing the technical
integration (the principle of which is described in section 3.1.2)
the implications with respect to energy management are
Costs for management and maintenance; both situations. Ultimately, the operating result is compared to Calculation
of costs
Determine per kWh
The required investment. the (extra) investment in the CHP installation. payback period
& IRR
With this data, the operation calculation of the CHP installation Table 1 (page 58) contains a schematic comparison between the
as compared to the situation without CHP can be done and the operation of a CHP installation and that of a boiler. Both situations
profitability of the project calculated. require maintenance on the boiler. It is generally assumed that Figure 2 Details of an economic calculation.

56 57
Heat and Power Paragraph 3.2|Economic analysis

these maintenance costs are equal thus cancelling each other out. Boiler operating costs CHP operating costs project. As an indication: projects with a SPOT of four years or For CHP installations that do not produce electricity on an
To state it simply, the CHP installation increases the amount less are generally judged to be favourable projects. However, ongoing basis but are on stand-by (for instance as a running
Purchase of gas for boiler Purchase of gas for CHP + boiler
of purchased gas while decreasing the amount of purchased some sectors have stricter payback periods for non-core back-up), it can be useful to contract the maintenance costs
Boiler maintenance CHP + boiler maintenance and
electricity. By granting heat customers (in the case of a third party) management
activities, such as investing in a CHP installation. In order to in terms of kWh instead of per operating hour. This can limit
a discount on the purchased heat, customers are encouraged nevertheless use CHP in these sectors, one can consider out- maintenance costs considerably. Another possibility is to split
Purchase of electricity (total Purchase of electricity (possible back-up
to purchase as much heat (or steam) as possible from the CHP requirement) and/or supplementation) sourcing the installation. the maintenance costs into an annual fixed amount and a lower
installation. This so-called heat discount is at the expense of the variable amount.
Heat discount
operator of the CHP installation. Sensitivities and risks
Machine breakdown insurance
When calculating the SPOT, sensitivities to fluctuations in fuel 3.2.2 Operating costs and benefits for CHP
Sale of (excess) electricity
Figure 3 contains a graphical representation of the operational prices, the amount of a possible subsidy, revenues from the sale This subsection details the operating costs and benefits of CHP
costs and benefits of a large STAG (the amounts are indicative). Possible subsidy on electricity production of electricity, etc., must be taken into account. All projects have installations. Gas costs, electricity costs, revenues, maintenance
The depreciation and interest costs are not included. Purchasing their own sensitivities which must be considered carefully before and management are discussed in successive order.
Table 1 Operational costs and benefits.
costs are by far the largest cost item in the operation of a CHP any final investment decision can be made.
installation. On the other hand the installation generates a lot Gas prices
of revenue by supplying and selling electricity to the grid (and Although the SPOT is a fast and powerful way to assess a project, The integral gas price is built up of various cost components:
by reducing the purchase of electricity). In this example the it does not take into account project results after the investment The commodity price;
total costs for the CHP installation as compared to the reference Operating costs for purchase from Electricity sales payback period. There are other (and more complicated) ways The service costs (use of the national transport network and
Net CHP costs
situation are approximately 33 million less due to the sale of the grid versus CHP (255 Mw)
Heat discount
to assess the profitability of a project which do take taxes, capacity services) and the costs for using the local distribution
electricity to the grid. Maintenance
Electricity energy tax
interest on losses and cash flows during the entire duration of network (the distribution costs in euros per m3/hr);
Electricity costs
Gas energy tax
the project into account. More details are provided elsewhere in Energy tax.
140
Feasibility Gas costs this section.
120
Operation calculations largely reflect the cash flows involved in 100
Million

CHP installations. The profitability of the installation can be deter- 80

mined by relating the ultimate operational costs savings to the
investment. The easiest way to establish the cost-effectiveness is
to determine the simple payback period of the extra investment
(Figure 4).
The extra investment relates to the sum of the total invest-
ment costs involved in the CHP installation and all incidental
costs (excluding any investment subsidy) minus the investment
costs incurred in the reference situation. If the installation of a
CHP installation eliminates the need for purchasing an emergency
power aggregate, the investment costs of this emergency power
aggregate can be deducted from the total investment. Another
example is the grid connection. For those who deploy the CHP
installation purely for purposes of supplying electricity to the
grid the investment in the enlargement and/or expansion of
their connection to the electricity grid comprises part of the total
investment costs. If the grid connection is required in any case
for the production process it is not realistic to include these costs
in the total investment amount, in which case the extra invest-
Operating result Influence of design
60 The importance of making the proper choice as regards the
40 capacity of the CHP installation has already been pointed out. The maintenance costs of a CHP installation of 4000 kWe are settled
20 If the selected capacity is too large for a companys energy entirely by operating hour.
-
Reference CHP (net) CHP CHP
requirement, the installation cannot achieve the desired (or
(costs) (benefits) planned) number of operating hours or it must run in partial Assume these costs amount to 20 per operating hour.
load mode. Another possible effect is that the CHP installation The maintenance costs per kWh for full load then amount to:
Figure 3 E
 xploitation of STEG 255 MWe as compared to purchasing
from the grid (price level 2007). runs in start-stop mode, which often results in higher mainte-
20 x 100 + 4000 x 1 = 0.5 ct/kWh
nance costs. However, if the selected installation is too small,
the financial benefit is too low to be truly cost-effective.
If the installation runs at 75% of its capacity it produces in an hour:
Extra investment
Payback period =
Saving on operating costs per year (net) When operating a CHP installation it is important to consider
75% of 4000 = 3000 kWh
whether it can run at full capacity (in full load) or whether it
Figure 4 The simple payback period. The maintenance costs then increase per kilowatt hour to:
must be set to partial load. The performance of an installation
running in partial load mode changes, producing less electricity
20 x 100 (4000 x 0.75) = 0.66 ct/kWh
ment is lower. and relatively more heat per operating hour. Also, the capital
costs per kWh are higher as the capital costs are fixed. Often, So apart from possible diminished efficiency the maintenance costs
The payback period described previously is also referred to as maintenance costs are also settled entirely or partially per increase per kWh by 33%.
SPOT (Simple Pay Out Time, before taxes). This can give the operating hour. This leads to higher costs per produced kWh (see
entrepreneur a quick insight into the financial strength of the example in Figure 5). Figure 5 Calculation example of maintenance costs in partial load.

58 59
Heat and Power Paragraph 3.2|Economic analysis

Commodity prices Schematic diagram of the main transport network in the Netherlands, end 2007
Figure 6 shows the development of natural gas prices based
on a one-year forward purchasing contract from January
30
2002 to February 2008. Gas prices have increased substantially
during the past few years. Between July 2004 and January 2008 25
prices for natural gas have more than doubled.
20

ct/m3
Depending on the purchasing quantity and the term of the con- 15
tract customers can negotiate the commodity price. Customers BBL
nowadays can join a cooperative - such as a group of greenhouse 10

growers and purchase in bulk. By increasing the total volume

5
of purchased natural gas a more favourable gas price can be
TTF natural gas year ahead forward
negotiated. 0
jan jul jan jul jan jul jan jul jan jul jan jul jan
02 02 03 03 04 04 05 05 06 06 07 07 08

Services and distribution costs

With respect to natural gas the costs of the local distribution Figure 6 Development of gas prices from 2002 to January 2008.
network (8 bars and less) are charged via a stamp tariff (a tariff
independent of the location in the local distribution network).
The costs of the national and regional network operated by Gas
Transport Services (N.V. Nederlandse Gasunie) are settled by an
Annual consumption gas / 8,760 hours =
entry/exit system. These costs are usually paid by the supplier and boundary between base and additional capacity

included in the price charged to the customer. To some extent, Contract capacity (m3/hour)
the entry/exit system makes the off-take point a relevant factor Hourly
off-take
in the costs. m3/hour Additional capacity m3/hour

Base load capacity m3/hour

Besides the commodity price (as discussed previously) the
supplier charges an amount for the capacity of the gas that
has been used for supply flexibility. Capacity in this respect Hours/year 8,760 hours
is the maximum off-take via the gas connection in m3/hour.
+ = Total off-take volume in one year
Incidentally, the rate that applies for customers who consume
up to 170,000 m3 per year is entirely dependent on their
consumption. Capacity does not figure for these customers.
Capacity is a major component in the transport and flexibility Figure 7 Clarification of gas consumption and capacity off-take.
pipeline Groningen gas entry point(s) PLANNED EXPANSIONS
costs (service costs) of gas. The capacity draw-off in relation to
pipeline high calorific gas compressor and mixing station pipeline high calorific gas
the annual draw-off is important in this respect and is expressed
pipeline low calorific gas compressor station compressor station
in the maximum draw-off peak (the contract capacity in m3/
pipeline nitrogen mixing station underground storage installation
hour) per year. tional capacity. This is reflected in the graph contained in Figure 7.
underground storage installation
It is in the gas customers own interest (also financially speaking)
export station
The required contract capacity is the sum of two parts, i.e., base to prevent extremely high peaks in their gas off-take. By having a
installation for liquid natural gas
load capacity and additional capacity. The base load capacity is better insight into their own gas off-take pattern and taking
nitrogen injection
defined as being the total annual off-take divided by 8,760 hours. measures to lower the peaks they can reduce their additional
The remaining portion of the required capacity is called addi- capacity costs. The Netherlands gas network. Source: Gas Transport Services BV

60 61
Heat and Power Paragraph 3.2|Economic analysis

Table 2 provides an indication of the average costs for capacity Supply prices The once-only connection tariff is regulated up to a connection Low in ct/m3 High in ct/m3
and transport of an off-take of 170,000 m3 and of 1 million m3 The current supply prices for supply in the coming months, of 10 MVA. The costs for larger connections are charged up to < 170,000 m /year 3
11.0 (13.0) 14.0 (16.0)
of natural gas in 2007. The difference between high and low is quarters and years the so-called forwards can be found, among the point in the electricity grid that has sufficient capacity. This
1 mio m3 1,000 hours 9.0 (11.5) 13.0 (15.5)
related to the region. The lowest costs apply to the Groningen other places, at www.endex.nl. These prices are wholesale prices, once-only charge can be considered part of the investment; more
1 mio m3 2,500 hours 5.0 (6.0) 3.5 (4.5)
region. The highest, due to the distance to the Groningen gas in other words the prices on the market where the producers, details are provided in section 3.2.3.
field, apply to the provinces of Zeeland and Limburg. The costs of suppliers and dealers operate. Suppliers surcharge their customers 1 mio m 4,000 hours
3
2.0 (2.6) 3.0 (3.6)

the local grid operator are listed in the table in brackets. However, on these wholesale prices for processing the off-take profile, The system services tariff is a charge for monitoring and 1 mio m3 8,000 hours 1.0 (1.3) 0.5 (0.8)
these apply only to connections of 8 bars and higher. administration, sales costs and their margin. The wholesale prices maintaining the quality of the supplied electricity. This service
Table 2 Indicative costs for capacity and transport of natural gas.
are also a good indication for determining ones revenue when is provided by TenneT, the national grid operator, and charged
The local network costs for customers who are measured by supplying to the grid. to customers via the grid operators. In 2008 this tariff was
capacity amount to approximately 25/m3/hour for small-scale 1.17/MWh, payable over the full electricity consumption.
consumers (in the order of 0.2/m3). The services costs for small- As the graph contained in Figure 8 shows, electricity prices This charge must also be paid for electricity for ones own use Tranche 2004 2005 2006 2007 2008
scale consumers are increased by a regional surcharge. This regional are subject to strong fluctuations. The graph shows the devel- generated by a CHP installation running in parallel to the 0 5,000 m3 14.29 14.94 15.07 15.31 15.54
surcharge (in ct/m3) depends on the region where the off-take of opment of the forward prices from the beginning of 2002 to public grid. If the CHP installation runs ones own electricity (1.412) (1.433)

natural gas occurs). the start of 2008 for supply in the following year. The forward grid which is physically separated from the public grid all year 5,000 170,000 m3 7.27 10.19 12.38 13.42 13.62
(2.245) (2.279)
prices in early 2008 apply for delivery throughout 2009. round (stand-alone operations) the operator is not required to
Energy tax on gas Traditionally, a distinction is made between high cost electricity pay system services. 170,000 1 mio m3 2.27 3.11 3.40 3.72 3.78
(1.88) (1.908)
The Tax Department levies a tax on natural gas as well as electri- during work weeks and cheaper rates during weekends, nights
city and certain mineral oils with the aim of reducing CO2 emis- and public holidays. The top rates apply between 07:00 am Transport costs are a principal part of the network costs. The 1 10 mio m3 1.13 1.15 1.16 1.18 1.20
(1.18) (1.20)
sions and reducing the use of energy. Graduated tariffs cover all and 11:00 pm (also called peak hours; an average 4,080 hours amount and structure of the transport tariffs are based on the
> 10 mio m3 0.75 0.76 0.77 0.78 0.79
connections. The limits are applied pro rata if off-take occurs per year). Lower off-peak rates apply for an average of 4,680 contracted capacity and the connection voltage. The transport
commercial (1.18) (0.79)
in parts of a year. For example in 2007 customers with an off- hours per year. All sorts of sales variants have been introduced. costs for small-scale consumers are charged mainly via their kWh
take of 700,000 m3 of gas paid 15.31/m3 for the first 5,000 m3, These are based, for instance, on the structure of the customer consumption. Settlement at the highest voltage levels occurs via Table 3 Energy tax on gas during the past few years.
13.42/m3 for the next 165,000 m3 and 3.72/m3 for the portfolio of energy companies and take such matters as their an amount per kW contracted capacity.
remaining 30,000 m3. An exception is made for block heating: reduced production during the more expensive hours at week-
if gas is used in an installation for block heating (central heating ends into account. Also, other market places have developed The lower the voltage level the higher the transport costs
of individual dwellings and offices), the entire consumption is which enable electricity providers to optimise their revenue. become. This is because of the cascade system. The transport
charged at the highest graduated tariff for the off-take of the More details are provided elsewhere in this chapter. tariff is a point tariff, charged no matter where the electricity is
gas consumption. Electricity generators such as CHP installations produced. Producers such as CHP owners currently do not pay
with efficiencies of over 30% and a capacity of at least 60 kWe Network tariffs a transport tariff for supplying to the grid but are charged only
are exempt from energy tax. The energy tax rates for glasshouse In the Netherlands today (2008) there are still more than 10 public for the connection tariff. Table 4 (page 64) shows the indicative 100 Peak next year /MWh

cultivation up to 1 million m3 were substantially lower in 2007. and private network companies. They are supervised by Dutch transport costs per kWh for some operating times and voltage Off-peak next year /MWh
80
These tariffs are listed in brackets in Table 3. A LASER statement energy regulator DTe (Dienst Toezicht en Uitvoering Energie). levels (average for the Netherlands in 2008). The operating time
is required in order to be eligible for the reduced horticulture tax. Regulations for grid operators and affiliated parties are laid here is annual consumption (total kWh off-take) divided by 60

/MWh
This tax reduction is part of a scheme for greenhouse growers down in technical codes. Natural gas is subject to its own sepa- maximum capacity in kW. This is a measure for the continuity
who use natural gas to heat their glasshouses in order to boost rate codes. The structure and calculation method of the network in off-take. 40

the growth of their produce. tariffs are recorded in the Tariffs Code.
The stated costs, which do not include connection costs and 20

Electricity prices Network costs are made up of the connection tariff (a once-only system services, are average costs for the Netherlands and are Year ahead forward electricity Platts/Endex
0
As in the case of gas, the price for purchasing electricity from charge and a periodical payment), the system services tariff and intended as an indication only. Costs for small-scale consump- jan jul jan jul jan jul jan jul jan jul jan jul jan
02 02 03 03 04 04 05 05 06 06 07 07 08
the grid is built up of various components, namely supply price, the transport tariff. tion are similar to low voltage bulk consumption (220V/380V).
network tariff and energy tax. The intention is to eventually unbundle the transport tariff for Figure 8 Development of forward prices for electricity as from 2002.

62 63
Heat and Power Paragraph 3.2|Economic analysis

small-scale consumers from consumption (also for natural gas)
and to change it into a fixed sum per year for purposes of simpli-
fying administrative requirements. The aim is to compensate this
unbundling in a similar way as the energy tax so that on balance
the consumption-dependent costs for small-scale consumers will
remain unchanged. Regulator DTe determines the network tariffs.
The DTe is successfully striving to lower the costs via yardstick
competition. On the other hand, substantial investments will be
needed over the next few years mainly in the national grid, par-
ticularly to enable new generation by means of such technolo-
gies as CPH, wind farms and new power plants (coal-fired or
otherwise).
Significant savings can be realised on grid costs if the electric-
ity generated by a CHP installation is used for ones own use.
However, the remaining amount of electricity to be purchased
from the grid will be relatively much more expensive due to a
lower operating time. If the operating time drops from, say, 4,000
to 2,500 hours the transport costs for low voltage bulk consump-
tion will rise from 2.8 ct/kWh to 3 ct/kWh (Table 4). If the CHP
installation supplies all electricity to one location a backup con-
tract covers electricity demand while the installation is down for
maintenance or due to a failure. Separate rates apply for higher
voltage levels.
Energy tax on electricity
As with natural gas, graduated tariffs apply to the energy tax on
electricity. Table 5 contains an overview of the energy tax of the
past few years (tariff in ct/kWh). The energy tax for electricity is
also charged by the second last link in the supply process, i.e., the
end users supplier.
An exemption applies for electricity if used for ones own use and
generated by a CHP installation at a Senter efficiency of at least
60%. This Senter efficiency calculation is based on the sum of the
total electrical efficiency and two-thirds of the thermal efficiency.
Only ones own use is involved here; if supplied to third parties the
normal energy tax is charged which subjects all customers to the
various graduated tariffs.
Maintenance and management costs
CHP systems require considerably more attention than boilers.
Maintenance intervals apply for changing the lubricant, adjust-
ing the valves, replacing spark plugs and filters, etc. The periods
in which these activities must be carried out differ for each
component.
Each CHP installation has a preventive maintenance plan to
prevent damage to the system and to anticipate malfunctions.
It is comparable with maintenance on a car. As maintenance is a
specialised activity it is often contracted out to the supplier who
can also provide remote management services. The installations
critical parameters (lubricant usage, engine temperature, vibration
etc.) are read out and analysed from a remote location. There are
also parties in the market who manage and finance the entire
system (outsourcing).
Joint ventures can be entered into for larger systems, in which
case the user and the manager participate in a separate
management company. In some situations the outsourcer offers
a conversion contract, whereby the user offtakes electricity and
heat, and purchases natural gas himself. The outsourcer guarantees
an agreed minimum efficiency and a minimum availability
percentage. Deviations can be compensated for by fines and
reimbursements. Section 3.4 contains more information on the
management and maintenance of CHP installations. As an indica-
tion, Table 6 contains a rough estimate of the maintenance costs
for the various types of CHP installations.
The costs for machine breakdown insurance are not included. The
reason is that factors on which these costs are based e.g. machine
type, application and capacity volume, ancillary and preceding
processes, the environment and possible combinations with other
machines, may differ significantly between installations.
3.2.3 Required investments
The cost price of a complete CHP installation is determined by its
components as previously indicated in section 3.1.
CHP installation (prime mover) with generator;
Heat transfer system;
Soundproof housing and outlet;
Integration, electronics and installation room;
Investment in mains connections.
Mains connections for fuel and electricity are often separate
investment projects. This section discusses the costs for the mains
connection for electricity but not the connection for natural gas.
Investment in the CPH installation
The following is a run-down of the general investment costs for
the most common CHP installation, including the costs for the
heat transfer system. This is a turnkey investment, whereby the
installation is delivered according to specifications. The costs for
Capacity range Management and
Maintenance (ct/kWh)
From To Minimum Maximum
the mains connections are not included here. The structure of
the investment costs differs significantly per CHP category. For
instance, engineering costs weigh heavily on the total investment
costs of small-scale installations. The scale effect has a major
impact. Large CHP installations are often made to order. These are
generally industrial projects with many more or less unique instal-
lation components. Table 7 provides an overview of the invest-
ment costs per kWe.
On the other hand the investment costs for gas engines are very
low for their capacity volume, due to extensive standardisation
of the installations as well as large production volumes. For that
reason overhead costs are relatively low and the integration costs
are generally low as well. In Table 8 (page 66) a gas engine at a
horticultural company is given as an overall example. The invest-
ment costs of a CHP system of over 1.5 MWe are virtually propor-
tional to its capacity. Below 1.5 MWe the price per kWe increases
exponentially with the drop in electrical capacity (see, for example,
Figure 9). The same applies to the maintenance costs per kWhe.
Investment in the connection to the electricity grid
Depending on the situation, connecting the CHP installation to
the electricity grid can lead to considerable costs, i.e., up to 50%
of the cost of the entire installation. This means the way in which
the connection is to be installed should be considered at an early
stage of the project. The local grid operator is responsible for the
physical connection of a CHP installation to the public grid. In 1998
the elements comprising the connection costs were regulated
in Article 28 of the Electricity Act. These tariffs are drawn up
Capacity range Investment range
(/kWe)
From To Minimum Maximum

Operating time LV bulk consumption MV(10kV) IV(50 kV) Tranche 2004 2005 2006 2007 2008 Large STAG 80 MWe 250 MWe 0.45 0.65 Large STAG 80 MWe 400 MW 600 900

1,000 hours 3.5 ct/kWh 3.5 ct/kWh 3.5 ct/kWh 0 10,000 kWh 6.54 6.99 7.05 7.16 7.27 Small-scale STAG 15 MWe 80 MWe 0.80 1.20 Small-scale STAG 15 MWe 80 MWe 1,000 1,300

2,500 hours 3.0 ct/kWh 2.0 ct/kWh 1.5 ct/kWh 10,000 50,000 kWh 2.12 2.63 3.43 3.69 3.75 GT large 8 MWe 45 MWe 0.50 0.65 GT large 8 MWe 45 MWe 800 1,100

4,000 hours 2.8 ct/kWh 1.6 ct/kWh 1,0 ct/kWh 50,000 10 mio kWh 0.65 0.86 0.94 1,02 1.04 GT small 2 MWe 8 MWe 0.90 1.25 GT small 2 MWe 8 MWe 1,100 1,600

8,000 hours 2.5 ct/kWh 1.3 ct/kWh 0,5 ct/kWh > 10 GWh commercial 0.05 0.05 0.05 0.05 0.05 GE large 800 kWe 10 MWe 0.50 0.90 GE large 800 kWe 10 MWe 350 700

> 10 - GWh non -commercial 0.10 0.10 0.10 0.10 0.10 GE small 250 kWe 800 kWe 0.50 2.00 GE small 250 kWe 800 kWe 600 1,400
Table 4 Indicative average transport costs per kWh.
Table 5 Energy tax on electricity during the past few years. Table 6 Cost indication per kWh for management and maintenance. Table 7 Indication of the investment costs per kW. Source: ECN
Source: ECN

64 65
Heat and Power
according to a fixed formula and are determined on an annual
basis by regulator DTe.
Up to 10 MVA the connection is charged at standard rates,
irrespective of the manner in which the connection is realised.
From 10 MVA the connection is based on the project costs incurred
on the basis of a cost estimate. As of 1 MVA the connection may
be put out to tender, provided the local grid operator approves
the plans with the technical specifications of the connection.
Also as from 1 MVA, the standard connection can be changed
upon the request of the customer or producer. According to the
Electricity Act, all customers are entitled to a connection at their
desired voltage level, unless for technical reasons this cannot
be effected by the grid operator. Customers also have the right
to be connected to the closest point in the grid with the desired
voltage, regardless of the available capacity at that point. For
connections of 10 MVA or higher, the closest point in the grid
where capacity is available applies.
Changes in the grid associated with the connection are at the
expense of the grid operator who manages the relevant grid.
Costs incurred by a grid operator for required investments in his
high voltage grid due to new connections on lower grids may not
be settled via connection costs but rather transport tariffs. The
grid operator is obliged to transport electricity supplied by the
customer to the grid at a rate and other conditions that are in
conformity with the Electricity Act.
This obligation applies only if the grid operator has available capacity
for the requested transport. So the grid operator can apply
restrictions to the capacity that is to be connected. After all, the
operator must be given the opportunity to implement changes in the
transport network. These must, however, be temporary restric-
tions. Legislation does not stipulate what may be considered as
temporary in this respect. In exceptional cases, the restriction
periods can be very protracted.
The structure of and the payment method for the network tariffs,
including the connection fee, are regulated in the Tariff Code. The
connection fee is based on three tariffs in the form of a:
Non-recurrent contribution to cover the initial investment costs
for the following:
- The physical connection to the network;
66
- The safeguards at the transfer point;
- The connection between the physical connection and the
safeguards.
Periodic fee for the use of reusable assets (such as transformers);
A periodic fee for maintaining the connection.
The standard amount for the connection includes 25 metres of
cable. Any additional length is charged at a metre rate set by the
DTe. The length of the cable is based on the distance between the
safeguards and the relevant connection point, measured along
the centre of the public road. Generally speaking, standard cate-
gories apply for the connection method, although grid operators
can deviate from them. The categories are as follows:
Up to and including 60 kVA: low voltage cable;
60 kVA through 0.3 MVA: MV/LV transformer station;
0.3 MVA through 3 MVA: Medium voltage cable;
3 MVA 10 MVA: MV grid supply or distribution station;
> 10 MVA: Nearest point in the grid with sufficient capacity.
Based on the above categories, a connection of 2.5 MVA and a
connection of 3.5 MVA are taken as examples. The first can be
connected to a MV cable running along the public road. The cable
is 50 metres long, so 25 metres must be paid for. The second
Breakdown of investment costs for stand-alone CHP of 1,000 kWe
(no grid connection)
Basic price in
CHP installation (excl. condenser) 355,000
Telemetry system 2,300
Additional costs
Foundation + concrete works 7,800
Roof/wall conduits 2,300
LV cable to internal distribution station 3,000
Gas network connection 7,300
Integration with existing central heating system 17,200
Permits and incidentals 6,800
Total CHP investment costs (excl. condenser) 401,700
Costs per kWe capacity, in /kWe 402
Table 8 Example of the investment costs for a gas engine.
Paragraph 3.2|Economic analysis
example is based on a connection to the nearest HV/MV station and several years. Trading occurs via dealers or directly between
and the connection cable is 4 km long. As an indication the rate provider and customer. As an example, Figure 12 provides the
for a medium voltage cable is approximately 60 per metre. An movement of the electricity forwards for one year ahead, in
additional length of 4 km means 240,000 additional connection other words the prices at any point in time for supply throughout
costs, excluding engineering works such as bridges over water- the entire following year. The price movement (in Figure 12 as
ways (Figure 10). from January 2002 to mid February 2008) shows that electricity
prices are rising. The price movements of the past few years were
3.2.4 Influence of the energy market and energy provided in a previous section.
contracts
Movement of natural gas prices
The main cost item for CHP installations is the purchase of energy,
i.e., the purchase of natural gas. A substantial part of the natural 1,200
gas is supplied by GasTerra via retailers or other parties. GasTerra Indication of the budget price of CHP gas engines
links its prices to those of oil products but when fixing its formula (in per kWe installed capacity)
900
it follows the price on the free market. This price is reflected by
600
the TTF price listed on Endex. TTF stands for Title Transfer Facility,
a volume of gas that has been placed on the network. Since 2006
300
gas can also be traded on a daily basis via the APX, which makes it
possible to trade short-term gas shortages or excesses on a day- 0
25 750 1,475 2,200 2,925
ahead basis. This short-term market gives customers an additional Electrical capacity (kWe)
optimisation instrument based on gas; this book makes no further
mention of this. Figure 9 Development of costs of a gas engine package for CHP.
Figure 11 (page 69) reflects the movement of the gas price for
consumers and the industrial sector including transport and energy
tax costs. As stated previously, the amount of these two items depends
on the total offtake per year and on the maximum offtake peak
during the year. Figure 11 assumes a consumption of approximately CHP HV/MV station
2,600 m3 per year for households and 1.3 million m3 for the 3.5 MVA MV connection cable
industrial sector. 4,000 metres
Sale of electricity
Since the liberalisation of the energy market, electricity can be
purchased and sold on various markets, the main ones being
the long-term market, the short-term market and the balancing 50 metres MV mains cable
2.5 MVA
market.
CHP
Long-term market
The long-term market (also referred to as Over The Counter
(OTC)) is based on long-term contracts between producers and
customers. The term of the contracts varies between a few weeks Figure 10 Example of a connection to the electricity grid.
67
Heat and Power Paragraph 3.2|Economic analysis

Short-term market Responsible) party must be involved in order to supply electricity

The short-term market (mainly the APX market) is based on to the grid. The PR party is responsible for settling differences
next-day supply. Suppliers on this market state in advance between transactions and actual situations. These differences
at what price (per hour) they are willing to supply electricity ensue from deviations between purchase and sales contracts and
the following day. Customers state at what price they wish to actual production or consumption.
purchase electricity. These bids result in one market price for a
specific hour with a fixed volume of electricity for that specific An MR (Measurement Responsible) party must also be appointed.
1,000
hour. This procedure is completed for all hours of the next This party ensures that meters are installed, checked and read. Industrial
Households 900
day. The movement of the APX prices fluctuates heavily and is The MR party also validates read data and sends consumption 60 sector
800
strongly influenced by short term excesses and shortages. The data to the grid operators. 50
700
example in figure 13 shows the APX prices of 2006 in /MWh.
40 600
Prices on the long-term market show a limited response to In the simplest case, CHP operators provide their electricity on

ct/m 3
500
fluctuations on the APX market. the basis of long-term contracts. This is profitable mainly during

/MWh
30
400
peak hours at which time the cost of producing electricity
Balancing market with a CHP installation is lower than the sales price. It is often 20 300

200
There is also a balancing market in addition to the two term unprofitable to supply to the grid during off-peak hours as 10
100
markets. On this market TenneT organises the regulating capacity revenues are then lower than production costs. In some
0 0
of the national electricity grid. It is mandatory for large-scale instances, however, suppliers must nevertheless supply 1991 1993 1995 1997 1999 2001 2003 2005 2007 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
06 06 06 06 06 06 06 06 06 06 06 06 07
electricity suppliers to participate actively on this market, whilst electricity due to supply obligations (must run capacity)
other suppliers can do so voluntarily. The total supplied capacity is for power production, for instance. Forwards are a good Figure 11 N
 atural gas price movements from 1991 to 2007 (including Figure 13 APX electricity price movements in 2006.
divisible into three groups: indication of the prices at which electricity is traded at transport and taxes). Source: www.energie.nl
Regulating capacity. This capacity can be controlled contin- a specific moment in time. When selling, dealers generally apply
uously by the national frequency capacity regulation. The a trade margin vis--vis the forward prices.
total volume is determined on the basis of the controlling
signal. Besides the normal peak and off-peak hours, other sales schemes
Reserve capacity. This capacity is called up as needed; the offer an extended peak rate (also referred to as super peak). This
100
Balancing prices 12-03-2008
volume is calculated on the basis of the offered call-up time. extended peak runs daily from 8 am to 8 pm during work days

Balancing price (/MWh)

Peak next year /MWh 600
Offtake Feed-in
Emergency capacity. and weekends. This can be an advantageous scheme if the CHP Off-peak next year /MWh
500
80
installation is running to produce heat over the weekend in any
400
The balancing market works two ways: on the one hand, additional case. 60

/MWh
capacity can be offered in order to ramp up the available capacity 300
in the grid. On the other hand suppliers can switch off capacity Another way to sell electricity to the grid is to use the installation 40
200
or consume more capacity. Prices on this market fluctuate heavily, as a back-up, in other words to use it to trade on the electricity
20
making it difficult to produce a forecast. markets (such as the APX market). Operators specify in hours 100

when their installation can supply to the grid. These hours are sold Year ahead forward electricity Platts/Endex
0
0
As an example, Figure 14 contains the price movement of the in advance to customers on the free market. If, however, elec- jan
02
jul
02
jan
03
jul
03
jan
04
jul
04
jan
05
jul
05
jan
06
jul
06
jan
07
jul
07
jan
08
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Hour
balancing prices on 12 March 2008. tricity is offered via the APX at lower costs than the production
costs of an operators own CHP installation during the previously Figure 12 Electricity forward price movements as from 2002. Figure 14 Electricity balancing price movements on 12 March 2008.
Models for electricity sales specified hours there is no need for the operator to run his instal- Source: www.tennet.nl

CHP installations can produce electricity for ones own use or for lation but can instead purchase the electricity on the APX market
supplying the grid. Supply can be directed at the afore-mentioned and subsequently supply it to the customer. This is shown in the
markets, depending on the type of installation. A PR (Programme example in Figure 15 (page 70).

68 69
Heat and Power
A limiting condition when optimising via the APX is that the heat
consumer may not require any heat at that point in time or that he
must postpone his heat demand. Also, if the customer needs his
own electricity there is little flexibility to optimise the installation.
Each CHP installation has its own level of flexibility.
APX also offers the possibility of purchasing electricity for ones
own requirement when the APX price is low, in which case the
CHP installation does not operate for ones own use. Playing
with the operating hours carries the risk of more starts and stops
which may generate additional maintenance costs. Another risk
is that the installation does not run as many operating hours
as planned, jeopardising the offtake of previously contracted
amounts of gas.
The CHP installation can also run in TenneTs balancing pool and
be switched on and off on an on-call basis, as indicated previously.
If ones own operations require a large amount of electricity the
possibility exists of modifying the operating process and supplying
the produced electricity to the grid.
If a CHP producer unexpectedly cannot meet his planned supply
to the grid due to a failure or other problems he creates an
imbalance in the grid. The costs (penalty) in this respect are in
principle the balancing costs. However this also depends on the
portfolio of the PR party. In the event of protracted inactivity,
for instance due to a machine breakdown, the CHP producer
may need to buy off his contract which obviously incurs extra
costs.
Spark spread
The financial returns of CHP installations are largely determined
by the prices of electricity, gas and related heat. The relationship
between gas price and electricity price can be expressed in a spark
spread, which is the gross margin expressed in euros per produced
MWh. This gross margin depends on the technical specifications
of the CHP installation and must cover such matters as the instal-
lations depreciation and maintenance.
As an example, Figure 16 contains the calculation of the spark
spread of a gas turbine with a heat recovery boiler, an electrical
output of 31.6% and a thermal output of 46%. The produced
70
Paragraph 3.2|Economic analysis
Gas price (commodity) 0.27/m3 including interest amount to approximately 22 per MWh. Main-
Calculation of trade between OTC and APX market
88.00/MWh tenance costs amount to approximately 7/MWh. Therefore, the
Peak electricity price
Suppose an operator of a 1-MWe CHP installation sells all the electricity that spark spread must be at least 29 per MWh to fully cover the
Off-peak electricity price 50.00/MWh
was generated throughout the entire year between 8 am and 8 pm for 78/ maintenance costs, interest and depreciation.
MWh. This is a total of 4,380 operating hours with the CHP installation and Electricity production during peak 54 %
so 4,380 MWh. The sales revenues come to 78 x 4,380 = 341,640. hours
3.2.5 Subsidies and fiscal benefits
The variable production price of electricity generated by the installation is set Average electricity price 70.50/MWh
Various incentive schemes help promote the use of CHP instal-
at 60/MWh (including maintenance). The operating result comes to
78,840 at the end of that year. Table 9 Basis for calculating spark spread. lations. This section discusses a number of nationwide subsidies
and financing possibilities that applied in the Netherlands in 2008.
Now suppose that for 1,200 hours of those sold hours, the APX price is lower Many sectors already use CHP installations. Other than standard
than the price of the electricity produced by the operators own CHP. The
average APX price is, for instance, 38/MWh.
schemes such as EIA and SDE, these sectors enjoy little support
in the form of subsidies. Obviously, additional support is
During those 1,200 hours the operator can purchase the electricity on the available for front-runner projects for boosting the use of CHP in
APX and supply it to the customer at that average purchase price (without Gas 3.2 MWh Electricity 1 MWh
having to run his CHP installation).
new sectors. Innovative CHP applications are also eligible for this
CHP
Heat 1.5 MWh
type of support.
The additional sales margin amounts to 60 38 = 22/MWh during 1,200 hours. Boiler gas 188 m
Gas in m 367 m Electricity proceeds 71
EIA / Energy Investment Deduction Scheme
The additional trade result is 22 x 1,200 = 26,400 (8% additional sales
Gas price 27 ct/m Heat proceeds 51
revenues in rounded percentage), not taking any extra maintenance or service Gas costs 99 Total 121
EIA has been in place since 1 January 1997. It is one of the
costs into account. governments instruments for stimulating the business commu-
Sparkspread
22 /Mwh nity in the Netherlands to opt for low-energy operating assets
and sustainable energy. Entrepreneurs can deduct 44% of their
Figure 15 Calculation example of optimisation with APX.
investments in low-energy operating assets from their taxable
heat or steam is compared to a boiler with an output of 90%. This Figure 16 Illustration of a CHP spark spread for a gas turbine with profit (in addition to the normal depreciation) with a maximum
shows that 3.2 MWh of gas are needed to produce 1 MWh of heat recovery boiler. CHP deduction of 350/kW for gas engines and 600/kWe for
electricity. Translated (at lower calorific value) to natural gas this other installations.
equals approximately 367 m3 of gas. Heat is produced (approxi-
mately 1.5 MWh) in addition to electricity (1 MWh). This heat This maximum is substantially lower than actual investments,
40
price is settled as if it had been generated by a boiler. The spark Forwards Forwards Forwards Forwards Forwards Forwards particularly for small-scale CHP installations. The scheme is
2003 2004 2005 2006 2007 2008
spread (the difference between income and expenses) in this 35 an initiative of the Ministry of Economic Affairs. The Tax Depart-
example is 121 99 = 22/MWh. 30
ment and SenterNovem (an agency of the Dutch Ministry
of Economic Affairs promoting sustainable development and
Spread in /MWh
25
Figure 17 shows the development of the spark spread over the innovation) oversee the schemes implementation. As from
past few years for that same gas turbine with a heat recovery 20 2008, EIA distinguishes between CHP installations driven by
boiler. The spread is calculated on the basis of wholesale commod- 15 piston-engines and installations driven by other power units.
ity prices (with no uplifts) on the assumption that electricity and CHP installations with a higher electrical capacity than 150
10
natural gas prices are fixed at the same point in time. Forward MWe are no longer eligible for EIA. This limit has been intro-
prices are used for supply in the next year. For that reason there 5 duced in order to focus EIA on small-scale and decentralised
are the occasional jumps at the beginning of the year. To put 0 generation of heat and power.
2002 2003 2004 2005 2006 2007 2008
things in perspective: the investment costs for the installation in
Electricity-natural gas spread based on forwards next calendar year
this spark spread amount to approximately 1,250,000 per MWe Operating assets that are eligible for EIA can be found in the
(excluding subsidies). Taking 8,000 operating hours and a depreci- Figure 17 D
 evelopment of the spark spread of a typical gas turbine Energy List. Examples are purchasing and assembly costs and
ation of 10 years at an interest rate of 7%, the depreciation costs as from 2002. provisions that are technically required for or are beneficial to the
71
Heat and Power Paragraph 3.2|Economic analysis

CHP installation, such as pipes and cables. Maintenance costs do value over time. Their internal interest sets the worth of future 3.2.7 Feasibility calculations Operating Produc- Own Investment Mainte-
not qualify for compensation and funds received through other cash flows at a lower value. An annual cash flow of 1,000 with a This section contains some examples of feasibility calculations time in tion % electricity (/kWe) nance
hours during off-take (ct/kWH)
subsidies must be deducted from the investment amount. Energy term of 10 years is used here as an example. In 10 years time this based on the year 2007. These examples relate to three cases: peak
consultancy costs do qualify for EIA provided an investment in cash flow produces a contribution of 1,000 (1+r)10 = 385 (at A large STAG of 255 MWe; hours
energy actually ensues from the advice given. 10% interest (r)). The sum of all NPVs of all years within the term A gas turbine with a heat recovery boiler (GT/HRB) of 7 MWe; 1. STAG 6800 54% 25% 634 0.49
minus the initial investment (this is a negative cash flow) equals A gas engine of 1,500 kWe installed at a greenhouse grower. 2. GT/HRB 6100 60% 25% 1412 1.04
EOS / Energy Research Subsidies the total NPV at the end of the term. In many cases, the internal
3. Gas 4200 90% 0% 470 0.65
There are four kinds of EOS subsidies, of which the EOS-Demon- interest (or discount rate) is set at 10%. Cases 1 and 2 assume a back-up contract of six weeks; case 3 assumes engine
stratie (EOS for pilot plants) can be particularly relevant. This no back-up contract. All installations are depreciated over 10 years.
subsidy is intended for the implementation of new energy In principle, the IRR method works in the same way as the NPV The STAG and GT/HRB in these cases supply steam to an industrial Table 11 Bases for calculation examples.
technology in the surroundings in which it will actually be used. method, except that the interest is calculated in such a way that customer. The gas engine produces heat for the greenhouse and uses
As a pre-condition for this scheme the project must be unprec- the NPV is exactly nil at the end of the term. Subsequently, the a buffer in order to run as many operating hours as possible during Pay-back period (year) IRR

edented in the Netherlands. Within EOS-Demonstratie the IRR is compared to a criterion used within the company. An IRR of peak hours. The energy prices are those that would have been set in 1. STAG 5.6 12.3%

additional investment costs for materials, as compared to a
reference situation, are eligible for a subsidy grant. Regional
subsidy schemes are also available but differ for each Province.
This book makes no further reference to these subsidies.
Green funding
Green funding offers favourable rates for projects that benefit the
environment. Green funding is provided when an investment is
interesting as regards risks, environmental importance and
economic return, and would be impossible to realise without such
funding. The cost of the project must be at least 22,689. The
interest rate for green funding can be 1% to 1.5% lower than
normal. A green certificate is required to qualify for green funding.
The Regeling Groenprojecten (Green Projects Scheme) decides
which environmental projects in the Netherlands are accepted for
certification. The Ministry of Housing, Spatial Planning and the
Environment (VROM) issues the certificates. The banks Green Fund
applies for the subsidy at the schemes department of the Ministry
of Agriculture, Nature and Food Quality (LNV) or at SenterNovem.
The application takes approximately eight weeks. Various banks
provide green funding; each applies their own rules with respect to
interest percentages, credit risks, etc.
3.2.6 Determining profitability
To determine the profitability of the investment in the CHP instal-
lation more precisely the previously mentioned SPOT is not
sufficient. Companies usually determine the profitability on the basis
of the Net Present Value (NPV) or the Internal Rate of Return (IRR).
The NPV method is based on the principle that money drops in
15% is normal and can also be found, for instance, in the environ-
mental license that applies for energy saving measures. An IRR of
15% (before taxes) corresponds approximately with a SPOT of five
years (for equal annual cash flows). Table 10 contains examples
based on the NPV and IRR methods.
Besides the profitability, companies also consider their investment
capacity. Environmental legislation requires companies, where
technically possible, to install a CHP installation if IRR exceeds
15%. Third-party funding is an option if the company itself does
not wish to invest. Based on the economic data it can also be
assessed whether a CHP installation can run profitably in part load.
It is important to check carefully that the returns are not too low
and maintenance costs on the installation are not too high. This
helps to determine the marginal result. If profits at a certain load
do not offset the yield the system must be shut down, provided
this does occur too frequently. Running on part load is often not
feasible, for instance in the event of high maintenance costs.
A project requires an investment of 500 and produces an annual
saving of 100 on operating costs.
The discount rate is 10% with a term of 10 years.
NPV:
(1001+0.1)+100(1+0.1)2+..etc..+(100(1+0.1)10)500=113 be eligible for EIA. The pay-back period for the gas turbine plus
IRR (the result is the interest rate):
(100(1+i)+(100(1+i)2+..etc..+(100(1+i)10=500=>i=15%
Table 10 Example of Net Present Value and IRR.
the fourth quarter of 2006 for offtake in 2007: 2. GT/HRB > project -4.2%
Gas price level: Q4 2006 forward prices for 2007 (21.7 ct/m3) and 3. Gas engine 2.5 34%
services rates in accordance with the entry/exit system in 2007;
Market price for electricity: 93.9/MWh for peak hours and Table 12 Results of calculation examples.
39.8/MWh for off-peak hours. When fed back into the grid a
discount of 10% applies.
An 11.2% EIA benefit is assumed for investment subsidies insofar
as the Senter efficiency exceeds 65% (this applies only to the gas
engine case). The financial results in each instance are calculated
in terms of pay-back period and internal return rate both after
settlement of interest and taxes. The results are listed in the
tables opposite. Particularly notable is the very short payback
period and thus high IRR (Internal Rate of Return) in the gas
engine case. This could be because the engine in this example is
economic to purchase and maintain and by using a heat buffer it can
run during peak hours. With its high output (both thermal and
electrical) the gas engine is ideal for saving energy in relatively
small locations.
The detailed results are presented on page 74 and 75. The pay-
back period for the STAG case is 5.6 years as the STAG also runs
during off-peak hours in order to supply steam. Its pay-back
period is so high partly because the Senter efficiency is too low to
heat recovery boiler falls outside the project period. Cost savings
achieved through the CHP are not high enough to recover the
investment in the CHP installation before the end of the depreci-
ation period.

72 73
Heat and Power Paragraph 3.2|Economic analysis

STAG Gas turbine with heat recovery boiler Gas engine installed in a greenhouse
CHP characteristic CHP characteristic CHP characteristic
Electrical output 43.9 % Electrical output 28.5 % Electrical output 41.0 %

Thermal output 28.5 % Thermal output 44.8 % Thermal output 48.0 %

Electrical capacity 255,000 kWe Electrical capacity 7,000 kW Electrical capacity 1,500 kW

Reference boiler 90 % Reference boiler 90 % Reference boiler 95 %

Energy management Reference CHP Energy management Reference CHP Energy management Reference CHP
Purchase of gas (m3) 142,270,779 449,276,145 Purchase of gas (m3) 8,482,958 17,041,656 Purchase of gas (m3) 883,086 1,747,775

Purchase of electricity during off-peak hours (kWh) 239,700,000 14,981,250 Purchase of electricity during off-peak hours (kWh) 5,600,000 350,000 Purchase of electricity during off-peak hours (kWh) - -

Purchase of electricity during peak hours (kWh) 270,300,000 16,893,750 Purchase of electricity during peak hours (kWh) 8,400,000 525,000 Purchase of electricity during peak hours (kWh) - -

Sale of electricity during off-peak hours (kWh) - 572,921,250 Sale of electricity during off-peak hours (kWh) - 11,830,000 Sale of electricity during off-peak hours (kWh) - 630,000

Sale of electricity during peak hours (kWh) - 682,953,750 Sale of electricity during peak hours (kWh) - 17,745,000 Sale of electricity during peak hours (kWh) - 5,670,000

Exploitation in Reference CHP Exploitation in Reference CHP Exploitation in Reference CHP

Gas costs 31,986,523 101,035,203 Gas costs 1,925,676 3,869,988 Gas costs 214,819 424,757

Energy tax on gas 1,191,697 - Energy tax on gas 142,083 - Energy tax on gas 17,181 -

Electricity costs 39,536,753 3,377,556 Electricity costs 1,289,688 127,516 Electricity costs - -

Energy tax on electricity 103,483 103,483 Energy tax on electricity 103,483 10,048 Energy tax on electricity - -

Maintenance - 8,496,600 Heat discount - 198,119 Maintenance - 40,925

Heat discount - 3,203,600 Maintenance - 444,763 Heat discount - -

Sale of electricity - 76,691,573 Sale of electricity - 1,891,440 Sale of electricity - 472,257

MEP support - - MEP support - - MEP support - 49,392

Result -72,818,455 -39,524,869 Result -3,460,930 -2,759,354 Result -232,000 55,968

Difference CHP vs boiler 33,293,586 Difference CHP vs boiler 701,576 Difference CHP vs boiler 287,968

Investment 161,670,000 Investment 9,886,240 Investment 705,600

Pay-back period (after taxes) 5.59 Pay-back period (after taxes) >project period Pay-back period (after taxes) 2.45

IRR (%) 12.3 IRR (%) -4.2 IRR (%) 34.0

Table 13 Calculation example for a 255 MW STAG. Table 14 Calculation example for a 7 MWe gas turbine with heat Table 15 Calculation example for a 1,500 kW gas engine installed in
recovery boiler. a greenhouse.

74 75
Heat and Power
3.3 Detailing and realisation
Once the CHP possibilities have been investigated and the CHP system that best matches requirements has been
identified, the project can progress to the final investment decision stage. This section covers the main points for
actual project realisation, such as tendering, current legislation, permits and financing, followed by the realisation and
commissioning of the installation.
3.3.1 Final design and tendering
The final design can be approached in various ways
depending on the contract type. It is customary for clients to
order the main components (gas turbine, steam turbine and
boiler or gas engine) as a partial delivery from suppliers and
to see to the engineering of the CHP installation themselves.
Clients also control the building design, the foundations (civil
engineering), connection pipework to all heat exchangers and
pumps (referred to as piping or balance of plant), cabling
(electrical and instrumentation), control system and finishing
(miscellaneous). All this is usually done in conjunction with
an engineering firm as the process demands considerable engi-
neering capacity.
The advantage of this approach is that the client decides on the
entire design and therefore has everything under control. This
approach lends itself especially to unique installations. The main
disadvantage is that the client is responsible for the functioning
of the installation, whereas the connections between the com-
ponents and the control of the entire installation regularly fail to
function. Furthermore, the client should not underestimate the
magnitude of the work and the specialised knowledge required to
bring it to successful completion.
76
As a second option, the supplier of the main components designs
and delivers the complete CHP installation. This often applies
to turn-key situations: the installation is designed and then
delivered as a fully operating system. It is especially important
that the client details the installation as accurately as possible in a
specification (also referred to as a bid book), particularly with
respect to the following aspects:
Minimum scope of delivery
Functional requirements (electrical capacity, heat supply, oper-
ating procedure, etc.)
Process conditions
Location, available space and equipment
Quality requirements for supplied materials and components
Applicable norms and standards
National and specific site requirements
Environmental and permit requirements
Necessary documentation included in quotation and delivery
It is necessary to be precise here because any overlooked
elements can lead to additional costs. For instance noise require-
ments that are increased later on always result in additional costs.
In the tender the supplier includes important documents and
calculations for acquiring a permit such as process diagrams, instal-
lation and aspect drawings, and noise calculations. The documents
enable the client to assess the tender with respect to scope of
delivery and quality. A detailed diagram (P&ID or Piping and Instru-
mentation Diagram) gives a better indication than the specification
of the number of pumps, instrumentation, heat exchangers etc.,
in the installation. This diagram should always be requested along
with the tender.
For large industrial CHP installations of over 50 MWe tenders
are usually submitted in a consortium, spreading the risk among
several suppliers. The design and supply procedure corresponds
largely with the approach as described above. However, this
construction is more complex from a legal point of view and
requires great effort on the part of the client to oversee the
implementation.
As CHP installations are more standard than the average factory
they can easily be placed as a complete (turnkey) delivery
with one main contractor or consortium. The main contrac-
tor, usually the supplier of one of the main components, can
draw on several standard configurations for the CHP instal-
lation including diagrams, controls, etc. Any previous errors
are usually corrected in the design. The contact person and
responsibility are clearly defined should any problems arise. So
this construction is beneficial to the client. However, even in
this situation the client must possess or contract a considerable
amount of basic knowledge.
Previous paragraphs describe how to specify the installation.
Gas engine CHPs are mostly delivered as a complete package,
including heat exchangers, generator, electrical switches, control
and housing. Taking over any part of the delivery may result in
technical problems and disputes as to liability.
It is important that the client understands which elements are not
delivered by the turn-key suppliers. These can be site preparations;
metalling/asphalting of the grounds/roads; cooling water facilities;
steam, water, natural gas and electricity connections; and pro-
cedural matters such as MER and additional studies. These com-
ponents can produce considerable costs and are also critical in
making the permit application.
Virtually all industrial sites in the Netherlands are connected to
the natural gas network but in many instances the connection
Paragraph 3.3|Detailing and realisation
capacity is insufficient for the higher gas capacity required by
CHP installations. A capacity shortage has developed in the
transport and distribution network as well as in the electricity
grid. It is therefore essential that the network company is con-
sulted early in the project with respect to the available capacity
of the two networks. For the final design of the installation it
is important to know where the network connection is located,
when the connection can be realised and - by way of a hard
quotation provided by the network company - how much the
network connection will cost.
Tenders
There are various tender procedures. This book restricts itself to
the basics. Several steps must be taken to ensure smooth progress
through a tender procedure. These require manpower, knowledge
and time. Should one of these three components be lacking one
runs the risk of encountering recurring problems throughout the
entire project.
Roughly speaking, the following steps apply:
Specify delivery and maintenance
Select tenderers
Request tenders
Evaluate the tenders
Negotiate and prepare to order
It is advisable to ensure that the tender for the CHP installation
includes long-term maintenance. The client must specify what
the maintenance must cover, what maintenance activities the
client will take upon himself and what conditions apply. Normally
only a few maintenance parties are involved in a CHP installa-
tion. The customer is often obliged to have maintenance on the
main components carried out by the supplier. The client is put in a
commercially difficult position if a maintenance contract is only
requested after the tender.
It is usually a simple matter to select tenderers based on the
specification. A pre-qualification is often carried out for large
installations to keep the number of tender requests to a minimum.
Drawing up a complete tender including design is a very costly
process for tenderers. Tenderers must be given the time to submit
77
Heat and Power
a quotation. Three to four weeks suffices for a package such as a
gas engine; twelve to sixteen weeks should be allowed for a large-
scale industrial CHP installation.
Often, more time is involved in evaluating tenders than expected.
It takes time to match up the tenders as additional questions must
be asked and prices requested before the tenders fully meet the
specifications and can be compared with each other. After that the
evaluation is quickly done. Three to four weeks should be reserved
for this phase for a gas engine and six to eight weeks for an indus-
trial installation.
Guarantees and clauses
It is prudent to demand guarantees at least for performance and
output, availability and reliability, flue gas and noise emission, and
delivery time, making sure that the definitions for all components
are described correctly. Guarantees without penalty clauses count
for little. That is why every guarantee must have a penalty scheme,
with or without a bonus system (no claims bonus), if for instance
output exceeds what is tendered. The minimum permit or statu-
tory requirements apply to flue gas and noise emissions. If neces-
sary, a bonus can be agreed for lower emissions which can have
extra benefits for the installation. Once all tender details have
been agreed the contract sum is fixed during final negotiations.
Purchasing conditions such as instalments, warranties and penalty
amounts are often agreed during those negotiations as well. All
details of the discussions and negotiations should be recorded in
writing and confirmed by the supplier. Only then is the installation
ready to order.
3.3.2 Regulations and permits
This section describes the relevant aspects of regulations and
permits. For CHP installations running on natural gas the emission
and noise requirements for each individual installation require par-
ticular attention. Various general requirements apply as well; these
are described in the Decree on Facilities and Installations (Besluit
Voorzieningen en Installaties). Large-scale industrial cogeneration
plants and district heating plants may have to meet MER require-
ment. These are described below. CHP installations are often used
by institutions that are obliged to participate in the CO2 and NO2
emissions trading scheme (the implications of which are discussed
below). Generally speaking, an institution is a company or organi-
78
sation. Institution is a central term in the Environmental Protec-
tion Act (Wet Milieubeheer).
Permit procedure
Whether an institution requires a permit is regulated in the Decree
on General Rules for Environmental Protection Institutions (Besluit
algemene regels voor inrichtingen milieubeheer), better known as
the Activities Decree (Law Gazette 415). This Decree came into
force on 1 January 2008, replacing Order in Council 8.40 for
various sectors. If an institution falls into a category to which the
Activities Decree applies, notification to a designated authority
usually the local authority generally suffices for a CHP instal-
lation. The Activities Decree refers to the underlying regulations
with which the CHP installation must comply. Glasshouse horticul-
ture is subject to both the Glasshouse Horticulture Decree (Order
in Council 8.40) and the requirements as stated in chapter 3 of the
Activities Decree.
Institutions which require a permit in accordance with the
Environmental Protection Act must follow the normal permit
application procedure or permit change procedure, assuming
that the installation fits within the zoning plan. If not, a change
to the zoning plan can be requested by means of an Article
19.1 procedure. This takes approximately one year. A normal
permit application or permit change takes about six months. It
is important in the draft permit application phase to confer in
depth with the proper officials so that any additional require-
ments can be dealt with in advance.
After the final application has been submitted and a design
order has been drawn up, it is published and available for public
scrutiny for six weeks. Interested parties - such as persons living
in the vicinity and environmental organisations - can make their
standpoint on the application known or request a hearing with the
Provincial authorities. After this procedure the final order is drawn
up and again made available for a six week scrutiny period. During
this time interested parties who had already made their standpoint
known in the first round can lodge an appeal to the Council of
State (Raad van State). If no appeal is lodged the permit comes into
force after six further weeks. Once the permit has been granted a
representative of the Council or Province is authorised to check the
installation.
Designated authorities
The designated authority for the permits differs for each installa-
tion. In principle, the Province is the designated authority if a CHP
installation is installed in an institution for which the Province is
already the designated authority and whose fuel input exceeds 50
MW (~ 15 to 25 MWe). In all other instances the Council is the
designated authority.
Building permits
A building permit is required if the CHP installation is installed out-
doors, if the outside wall needs alterations, if certain work spaces
are given a new designation and if structural or constructional
elements must be built. Before submitting an application the
relevant council official should be consulted. If a building permit is
required it will be granted only after the environmental permit has
been issued. For the building permit structural and visual aspects
are assessed from which additional requirements may ensue.
A building permit application for which a standard form applies
can be submitted to the local council. The council must decide on
a regular building permit within 12 weeks. This period can be
extended by one additional period of six weeks if necessary.
Charges are attached to the building permit and differ per munici-
pality. More information can be provided by the local council or
the Ministry of VROM (www.vrom.nl > building and renovating >
building regulations).
IPPC (Integrated Pollution Prevention and Control)
Institutions and installations in the Netherlands must comply with
the IPPC directive (European Directive 96/61/EC regarding inte-
grated pollution prevention and control). This means that permits
must be based on the best available technology (BAT). The term
BAT is somewhat subjective and also depends on local conditions.
Among other things the definition of BAT covers the element of
economic feasibility, which is important for new construction as
well as for any mandatory alterations to existing installations.
A BAT reference document has been drawn up as a guideline for
determining BAT (BREF, see http://eippcb.jrc.es). In the Netherlands
this guideline has been incorporated into the Environmental Pro-
tection Act and will also be included in the BEES (emission require-
ments). For CHP installations this generally means that BAT applies
if they meet BEES A or B.
Paragraph 3.3|Detailing and realisation
MER (Environmental Impact Report)
A MER may be required for large installations. Installations with
a capacity of less than 10 MWe usually do not require a MER,
but when installed in a vulnerable environment it may still be
necessary. Whether a MER is required for installations with a
capacity in excess of 10 MWe but with a fuel input of no more
than 300 MWth (~ 90 to 150 MWe) depends on each separate
installation. A MER is always required for larger installations. A
MER extends lead times by approximately one year and raises
project costs by approximately 100,000 to 150,000. A MER
manual can be downloaded from the Infomil site:
www.infomil.nl (> legislation & enforcement > MER).
Decree on Facilities and Installations
The Decree on Facilities and Installations (Besluit Voorzieningen
en Installaties/BV&I or Activities Decree) applies to CHP instal-
lations with a motive power of less than 15 MWe. The decree
refers to the Environmental Management (Establishments and
Licences) Decree (Regeling algemene regels voor inrichtingen
milieubeheer) (Gazette 223) for regulations for installations.
This decree contains rules for CHP installations and refers to
the Decree on Facilities and Installations (Dutch law gazette
487). The latter decree applies only to establishments for which
the local council acts as designated authority, the installations
nominal electric power does not exceed 10 MWe and the instal-
lation uses no fuel other than natural gas, propane gas or calor
gas. The following is a summary of the most relevant rules
according to both decrees:
The following applies to gas engines:
Must be installed in a screened off, safe and fireproof room;
The installation must be in conformity with the safety regula-
tions for gas engines of the Safety Committee for Installations
for Burning Natural Gas (Commissie Veiligheid Installaties voor
het stoken van Aardgas / Visa, part C 1994);
Must have an average annual Senter efficiency of at least 60%
(electrical output and two-thirds of thermal output);
A heat meter must be installed in the event of structural loss of
heat;
The emission requirements must be in accordance with BEES-B;
Noise specifications apply (Table 1, page 80).
79
Heat and Power
The following applies to gas turbines:
Must be installed in a screened off, safe and fireproof room;
This installation must be in conformity with the safety regulations
for the use of natural gas in gas turbines of the Commissie Veilig-
heid Installaties voor het stoken van Aardgas (Safety Commit-
tee for Installations for Burning Natural Gas) (N.V. Nederlandse
Gasunie, 1997 publication, 2nd edition);
Must have an average annual Senter efficiency of at least 60%
(electrical output and two-thirds of thermal output);
The emission requirements must be in accordance with BEES-B
(if the Council is the designated authority);
Noise specifications apply (Table 1).
Installations over and above 15 MWe do not fall under the Activities
Decree and a permit procedure must be followed. BEES-A applies
instead of the Decree on Facilities and Installations. The designated
authority can then follow BEES-A (or stricter) and determine
itself within the legislative frameworks, what applies to the other
requirements. In practice this usually means that the designated
authority takes over the requirements as stated in the Activities
Decree. Gas turbines are subject to BEES-A if the Provincial
authority is the designated authority. Usually the establishment
also has to deal with NOx emission trading (see the separate section
on these topics). The Activities Decree also stipulates requirements
for commissioning, management, maintenance and inspections.
This book makes no further mention of these requirements.
In addition to these requirements CHP installations must also meet
current Dutch and European regulations for equipment, including
the Pressure Vessel Decree (Drukvatenbesluit), the European direc-
tives for pressurised equipment (PED), the Machine Directive (CE
label) and all requirements for electrical installations (NEN-EC,
etc.). Various requirements also apply to the storage of hazardous
substances (oil, fuel, etc., e.g. CPR 15).
BEES A/B
The Decree on Emission Standards for Burners for Environmental
Management (Besluit Emissie-Eisen Stookinstallaties, in short BEES)
is divided into an A version and a B version. BEES-B applies to instal-
lations with a fuel input lower than 50 MW (~ 15 MWe); BEES-A
applies to larger installations. If an installation falls under BEES-A
the Province is automatically the designated authority. Exceptions
80
Paragraph 3.3|Detailing and realisation
Point in time 7 am 7 pm 11 pm are stipulated for noise levels on facades, in the dwelling and in
7 pm 11 pm 7 am The Ministry of VROM is currently planning to update BEES-B with adjacent dwellings. These requirements are broken down into
Day/night average noise level 50 dB(A) 45 dB(A) 40 dB(A)
stricter emission requirements. The emission requirement for NOx three blocks of time in a 24-hour period; see Table 1.
assessment on house fronts
will probably be 30 gr/GJ. A hydrocarbon emission requirement
will also be included. Furthermore, separate requirements will be
Day/night average noise level 35 dB(A) 30 dB(A) 25 dB(A) added for biomass. These requirements will be announced during Installations that require a permit must meet the requirements
assessment in walled-in and the course of 2008 and come into force in 2009. As a consequence, as stated in the Environmental Protection Act. Regulations for
adjacent dwellings many gas engines will require a DeNOx installation.
protecting the environment are attached to a permit. To some
Max noise level assessment on 70 dB(A) 65 dB(A) 60 dB(A)
house fronts
degree, the designated authority is free to judge what the pro-
The current (mid 2008) BEES-B requirements for newly built instal- tection level is and to which properties it applies. The Industrial
Max noise level assessment in 55 dB(A) 50 dB(A) 45 dB(A)
walled-in and adjacent dwellings lations running on natural gas are: Noise and Licensing Brochure (Handreiking industrielawaai en ver-
gunningsverlening) (1998) is a tool to help determine the level of
Table 1 CHP noise specifications per block of time. Category Nox requirement mid 2008 protection. In this respect, the Environmental Protection Act
Source: Decree on Facilities and Installations
Gas engines < 50 shaft power 800 g/GJ * assumes the actual use of an establishment. The Noise Pollution
Act (Wet geluidshinder/Wgh) applies in addition to the Environ-
Gas engines > 50 shaft power 140 g/GJ *
are gas turbines with less than 1 MW shaft horsepower, gas turbines mental Protection Act. This Noise Pollution Act is based more on
Gas turbines 65 g/GJ *
with less than 500 operating hours per year and piston engines that town and country planning. Both the Environmental Protection Act
* An output adjustment applies (multiply by 1/30 of the electric output)
drive a pump or compressor for less than 5,000 hours per year. and the Noise Pollution Act apply to industries in zoned industrial
Table 2 Nox requirement in BEES-B mid 2008. estates in addition to test criteria.
The same requirement applies to gas turbine installations, i.e.,
a combination with heat recovery boiler and possibly a co-firing Category Nox requirement mid 2008 Technically speaking there are many ways to reduce the emis-
burner all requirements in conformity with ISO conditions. The Gas turbines < 50 MW fuel 65 g/GJ * sion of noise into the surrounding area. Both gas engines and
same requirements apply to gas engines in BEES-A as in BEES-B. Gas turbines > 50 MW fuel 45 g/GJ * gas turbines are fitted with soundproof housing to muffle direct
The requirement for new installations applies to gas turbines in * An output adjustment applies (multiply by 1/30 of the electric output)
noise. 75 dB (A) at a distance of 1 metre is a standard require-
accordance with Table 3. ment, but 70 or 65 dB (A) can also be achieved at additional
Table 3 Nox requirement for gas turbines in BEES-A mid 2008. cost. The standard requirement for ducts, ventilation grills, flue
The same requirement applies to gas turbine installations and ISO gas desulphurisers and chimneys is 75 dB (A) at a distance of 1
conditions apply. Other requirements can apply to existing gas law apply to existing installations. With new CHP installations it metre. Even stricter requirements, such as 65 dB (A), can apply.
engines and gas turbines and to the use of other fuels. Please refer is important to know to what extent their emissions add to local Additional dampers can be installed in chimneys and ventila-
to the full BEES-A and B text. The current version of BEES-A and B concentrations. It has been determined for certain projects with tion grills at extra costs. This low requirement can also be met
can be found at www.overheid.nl. The designated authority may quantified limits that they may contribute to no significant extent by means of thicker noise insulation on the ducts. With these
deviate from the BEES and prescribe a lower emission all the to air pollution. These projects may be implemented without being measures, a gas engine can even be used in a residential area.
more reason to place a final order for a CHP installation only when tested against the limits for air quality. Projects contribute to no Roughly similar norms apply to the ducts, the boiler and the
the permit is irrevocable. significant extent if they do not exceed the 1% limit. This 1% limit chimney of gas turbine installations.
is defined as being 1% of the limit for the average annual con-
Air Quality Act (Wet luchtkwaliteit) centration of NOx or 0.4 micrograms/m3. Whether the latter is the The main focus point for a new-build industrial CHP installation
Legislation with respect to air quality is laid down in the Air Quality case depends on the current values determining these values is is its contribution to the noise level at the outer zone limits. The
Act (law gazette 2007, 414). This act succeeds Air Quality Decree specialist work. It is prudent to discuss this topic at the start of the noise pressure levels as stated in Lp < = 75 dB (A) figure in this
2005 (Besluit luchtkwaliteit 2005) for the purpose of minimising permit application procedure with the relevant officials. respect as well as the total volume (Lwr in dB(A), depending on the
the negative effects of excessive pollution levels and to have local total surface area projecting the noise. A major point that requires
air quality meet European limits. The Air Quality Act centres on fine Noise requirements attention is the case of several installations operating at the same
particles and NOx. The latter requires particular attention for CHP The Activities Decree refers to regulations pertaining to noise with time as their combined noise level can exceed the noise standard,
installations. The old rules apply or transitional provisions in the which the relevant CHP installation must comply. Requirements whereas a single installation does meet the criteria. Excessive
81
Heat and Power
values at the outer zone limits can be sufficient reason to impose
stricter requirements on a CHP installation.
Arbo (Occupational Safety & Health) requirements also apply in
addition to the previously stated noise emission (permit) require-
ments. A noise requirement of 85 dB(A) applies to spaces where
employees are permanently exposed to noise; noise protection is
required over and above these requirements. The influence of a
CHP installation on the total amount of noise in a space depends
on the space itself and on many other factors. The maximum noise
load of a new-build CHP installation can be derived from a noise
calculation. The noise level within the noise enclosure will be too
high for staff to enter without hearing protection. For further infor-
mation see www.arbo.nl.
Emissions trading
As from 2005, installations of over 20 MW fuel input fall under the
CO2 emissions trading scheme. Both boilers and CHP installations
are counted in the value of 20 MW. This value is easily exceeded
by larger CHP operators.
CO2 emissions trading
The CO2 emissions trading system officially became effective on
1 March 2005. Companies within this system need emission rights
to emit a certain number of tons of CO2 per year. Participating
companies are allocated rights every year by means of an alloca-
tion plan. The companies must apply for these rights themselves.
Shortages or surpluses can be bought or sold via the emissions
trading system.
From 2005 through 2007 the distribution of rights had been
incorporated in the National Allocation Plan. As from 2008 a new
allocation cycle applies, requiring the participation of companies
that had previously fallen under a special regulation as their CO2
emissions were less than 25 ktons. The government has issued
fewer CO2 emission rights than the actual current CO2 emissions.
This is creating a shortage resulting in CO2 emissions savings
where they are most cost effective. CHP installations (realised
before the end of 2002) of participating companies were allocated
rights up to a maximum of 7% in excess of their actual emissions.
For upcoming periods the allocation plans will be drawn up for a
period of five years.
82
At the beginning of every year the Netherlands Emission rights allocation, the possible purchase of additional rights and
Authority (Nederlandse Emissieautoriteit / NEa) grants on behalf the additional proceeds due to the influence of electricity on
of the government a portion of the emission rights to the partic- the market price.
ipants in the emissions trading scheme. These companies must
measure their actual CO2 emissions according to specific pro- NOx emissions trading
tocols and report them every year to the NEa. To cover these As for the trade in CO2 emissions a system has been set up
emissions they must subsequently turn in to the NEa the equiv- for trading NOx emissions. Companies are obliged to join this
alent number of CO2 emission rights. Because emission rights are system if they have a total thermal capacity of at least 20 MW
marketable, companies can purchase rights in the event of an (fuel). The Dutch government has implemented this system
imminent shortage. Companies must have their CO2 rights for for three reasons. Firstly, the Netherlands has agreed on an inter-
the previous year in April at the latest. The government imposes national level to reduce the emission of NOx to a sustainable
a penalty on companies that do not have sufficient rights. This level, as have other European countries. Secondly, a trading
penalty amounts to the highest market price for CO2 emission system can be more economical for businesses than the present
rights (this was 40 per ton in 2008). measures and thirdly, it is obvious that the agreed standards will
not be achieved with the current policy instruments. Hence new
Companies participating in the European CO2 trading scheme mechanisms are required.
can also buy their emission rights in countries outside of the
European Union by means of the Clean Development Mechanism In 2001 the member states of the European Union (EU) agreed
CDM) and the Joint Implementation (JI). CDM and JI are instru- on each countrys maximum NOx emissions in 2010. These have
ments ensuing from the Kyoto Protocol. With the CDM compa- been recorded in the European NEC directive (National Emission
nies can stimulate sustainable energy and clean technologies Ceilings). According to this directive the Netherlands may emit
in developing countries; with JI they can reduce the emission
of greenhouse gases in other industrial countries. More infor-
mation on CDM and JI can be found in the Climate Change NOx NOx pro-
dossier. Companies can deduct the amount of CO2 that their Incineration plant cessing
plant
investments have helped reduced in other countries from their
own CO2 emissions. CDM and JI are only interesting if they are Class Thermal capacity Load Determination of NOx
load
cheaper than buying emission rights on the market. CO2 emis- (MWth) (tons/year)
sion trading is important for CHP installations because with a 1 NOx incineration plants 150 Continuous measuring of
nominal thermal entrance capacity of more than 20 MW they 100, waste incineration the NOx concentration and
plants and co-incineration continuous measuring or
fall under the scheme. An exception is made for installations plants as intended in the calculating of the
that burn hazardous waste or town refuse. Waste Incineration Decree fluegas output
CO2 emissions trading affects the market price for electricity. 2 50 en <100 75 en Based on specified
<150 indicators
The market price, and thus the proceeds of supply via the
grid, has increased due to the CO2 costs. This is favourable 3 20 en <50 30 en Based on specified
for ones own generation by means of CHP. In addition, rights <75 indicators
for the CHP installation may need to be purchased and these
costs influence the cost price of the electricity the installation 4 1 en <20 1 en Based on specified
produces. Emissions trading is supposed to reward the affect <30 indicators
of CHP installations on energy savings and the CO2 reductions.
Whether this occurs in practice depends on the net result of the Table 4 Monitoring requirements for NOx emissions trading.
Paragraph 3.3|Detailing and realisation
no more than 260 kilotons of NOx by 2010. However, the national
emission target as stated in the National Environmental Policy Plan
is almost 30 ktons stricter than the internationally agreed 260
ktons. With this higher target, the government aims to guarantee
that the Netherlands meets its international agreements, even in
the event of setbacks.
The requirements for specific burners are stated in the Decree
on Emission Standards for Burners for Environmental Manage-
ment Part A (BEES) and the Waste Incineration Decree (Besluit
verbranden afvalstoffen / BVA). These requirements depend on
the type, size and age of the installation and the fuel type it uses.
Still, despite these measures, the Netherlands will not achieve the
emission ceiling of 231 kilotons as stated in the NMP4 (National
Environment Plan no. 4).
From the governments point of view, the industry can contribute
to the emission tasks cost-effectively by trading in NOx emission
rights. The advantage of emission trading is that NOx can be
reduced in companies where it is comparatively the most econom-
ical to do so.
Check and adjustment of Registration frequency of load
determination of NOx load calculations
Parallel measurement once a year; Minimum hourly values
Verification test; and calibration once
every three years; uncertainty < 20% of
the annual average concentration and Half-hourly values if the Waste Incineration
target inaccuracy < 15% for the Decree applies
fluegas output
Periodical measurements (once every six Minimum monthly values
months)
If various indicators are used: every hour
Periodical measurements (once every six Minimum monthly values
months)
If various indicators are used: every hour
Periodical measurements (once every six Minimum monthly values
months)
If various indicators are used: every hour
83
Heat and Power
The trading scheme for NOx emissions is relatively simple, i.e.,
a performance standard is imposed on companies in heavy
industry (the law refers to institutions). The same standard
applies to all companies and is expressed for burners in grams
of NOx emission per gigajoule (GJ) used energy. Companies
that perform better than standard can sell their rights surplus to
companies who exceed the standard. The Performance Standard
Rate (PSR) indicates the amount of NOx rights companies build
up with their operations.
The following performance standards apply up until 2010: 52 g/GJ
in 2008, 46 g/GJ in 2009 and 40 g/GJ in 2010. The following cate-
gories fall under the NOx emissions trading scheme:
Companies with incineration plants with a total thermal capac-
ity of at least 20 megawatts (MWth). The thermal capacity
indicates the maximum amount of fuel an installation can burn.
This relates to refineries, power plants and (petro)chemical
companies, for instance.
Companies with processing plants, such as for producing steel,
nitric acid and phosphate.
Companies with combined incineration and processing plants.
Table 4 (page 84) provides an overview of the different classes of
plants and which monitoring requirements they must meet.
3.3.3 Financing
The financing of CHP installations is largely similar to general
project financing. Consequently, this subsection discusses only
some CHP particulars.
Financing by banks
CHP is a familiar term for banks; assessing financing proposals is
therefore a rather standard process. Proposals must meet the fol-
lowing requirements: a successfully completed permit process, a
substantiated investment with solid tenders and long-term security
of energy offtake accompanied by, for instance, supply contracts
and any available subsidies. Furthermore, the decisive factor in
any project for obtaining financing approval is the project output
plus risk profile. Banks perform due diligence for large projects,
i.e., they investigate the projects soundness and reliability. The
reliability of the technology, including statistics on the availability
of gas turbines and such, figures in this respect.
84
In the 1990s banks financed many industrial projects in joint
venture constructions with loan capital making up 80% of
the funds. That was still relatively easy in those days. Banks
are more critical now when dealing with industrial projects
considering their relatively low profitability (also see section 3.2
Economic analysis) and past experience. During the last few
years, however, glasshouse cultivation projects were easy to
finance through loan capital because of the positive profitability
of modern, large gas engines. Important factors in this respect
are a favourable electricity market with a positive spark spread
of three to five years, combined with a guaranteed heat offtake
(and CO2) and consequently a shorter pay back period for the
gas engine.
Joint ventures
In the 1990s industrial projects were frequently placed in a separate
private limited company. These were joint ventures between
the industrial company as a steam customer and the electricity
company as a surplus electricity customer. This construction
was very interesting because both partners contributed 10% of
the capital and the remaining 80% was financed by banks. The
accounting rules then permitted off-balance financing, as a result
of which the project hardly burdened the two partners balance
sheets if at all, and their borrowing capacity was either not or only
barely affected. This was an attractive position for industrial com-
panies, who preferably invest their capital in their core business.
Furthermore, with the leverage they could gain a very attractive
return on their own invested capital.
Example: a project with a return of 12% of which 80% has been
financed with loan capital at an interest rate of 6%, produces a
return on ones own investment of: (12% - 0.8 x 6%)/0.2 = 36%.
In the event of disappointing results the return can also swing the
other way.
Since the Enron scandal the accounting rules have been sharpened.
Today, private limited companies with a CHP installation on their
balance sheet must be reported if the installation meets the
following criteria:
The CHP installation is physically linked to the company;
The company is the only customer and has committed itself to
offtake over the long term.
This eliminates the advantage of off-balance financing. Never-
theless, separate private limited companies are a frequently used
construction for cogeneration plants in which several parties
participate.
Leasing
Leasing is a popular method for financing CHP installations as it
can generate a tax advantage for companies that lease out equip-
ment. This advantage depends heavily on national tax rules and
accounting regulations. However, the installation to be leased
out must comprise commonly used technology with a predictable
performance, cost and life span. CHP installations generally meet
these requirements.
Leasing has a number of advantages as compared to bank financ-
ing, the main advantages being:
100% financing: leasing frequently finances 100%, whereas
banks generally do not;
Fixed cashflows: the amounts are fixed over the long term;
Lower costs: in the correct circumstances, tax advantages
generated through leasing lead to lower financing costs than
a bank loan;
Off-balance financing: if operational lease applies the invest-
ment is not stated on the balance sheet and the borrowing
capacity of the company is not compromised.
Clear and simple structure: leasing creates minimum adminis-
tration costs, simplifying accounting.
A distinction can be made between a financial lease and an
operational lease. The difference between the two depends on
who bears the economic risk of the installation. Financial lease
applies if the user bears the risk. Operational lease applies if
the investor or owner bears the risk. The financial lease con-
struction applies for large-scale CHP installations that are leased
mainly during their technical life span, in which case the user
is responsible for maintenance, taxes and insurance. In some
instances lease and sale back constructions apply. In those cases
the ownership of the installation falls to the user when the
contract expires.
Operational lease is mainly applied in the glasshouse cultivation
sector. The CHP installation is not stated on the greenhouse growers
Paragraph 3.3|Detailing and realisation
balance sheet and the situation strongly resembles renting. Suppliers
can often assist in finding a lease company. Cross-border lease
constructions, which were popular in the energy sector in the
1990s, are now unworkable from a fiscal point of view.
3.3.4 The decision-making process
Ordering the CHP installation is the actual investment decision.
Even though the decision may have been made in principle at
an earlier stage, major financial commitments are not entered
into until the CHP installation is ordered. It is not done to cancel an
order and very high costs can ensue from doing so, depending
on how far the design and implementation have progressed.
Only in exceptional situations in which it is crucial to gain time
is a cancellation schedule agreed with the supplier. The costs
of ordering materials are still relatively limited up to, say,
approximately two months after the order but increase rapidly
after that time.
Before making any investment decision the client should
accumulate as many sureties as possible. Such sureties include
the grant of licenses, quotations ready to order (prices are fixed),
subsidies guaranteed or decided in favour of the CHP instal-
lation, financing arranged and contracts for the purchase and
supply of energy ready for signature. These sureties are usually
basic requirements by the financiers. However other factors
figure as well. Decision makers generally require an insight
into the sensitivities of the energy market, a notion of future
expectations and a risk estimate for factors such as breach of
contract, etc.
Participation of other parties e.g. energy customers and energy
companies also greatly influences how the risks are perceived.
Once these aspects are in place an investment decision can be
taken fairly promptly. Practical examples show that quick deci-
sions can be made but can also be delayed for unexpectedly
long periods of time, sometimes even years. In the latter case
one should be aware that all sorts of other factors may have
changed in the meantime such as equipment prices (price of
steel, exchange rates), available capacity on the grid, energy
prices, etc. At the very least, indexing must be taken into
account.
85
Heat and Power Paragraph 3.3|Detailing and realisation

3.3.5 Planning and realisation After the full installation is mechanical complete it is put into Rough schedule of a project with a gas-engine CHP
During the realisation phase the client focuses largely on super- operation. This procedure too must be previously agreed with
Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14
vising construction. The main contractor is entirely responsible for the suppliers to avoid any differences of opinion during the start-up
coordinating activities between the various contractors, particularly phase, all the more so since there may be various definitions of Request specification and quotations

when the entire project has been contracted out. The client
must ensure that the contractor and his employees adhere to
commencement of operations or being put into operation, also
referred to as commissioning and start-up.
Suppliers draw up quotations

Dutch statutory requirements and occupational health and safety
Evaluate quotations

legislation when on the site. During the construction process safety
and environmental requirements must be observed.
Commissioning
Commissioning takes place in several steps. All electrical equip-
Order /notify designated authority/
apply for subsidies <>
During construction the client must also check that the delivered
ment and instrumentation are first tested at low voltage (cold loop
testing) and then at normal voltage (hot loop testing), followed by
Delivery time/ construction time/
start-up

installations meet all specifications stated in the order documents as
regards delivered quantity, quality, thickness of insulation material,
the start-stop, direction of rotation, vibration dampers, etc., and
then dry commissioning or dry sequence testing of all systems. If
Final Start-up
<>
construction methods, measuring and precision instruments, etc. everything functions properly the systems are filled with a medium Table 5 Rough schedule for a project with a gas-engine CHP.
Managing the document flow is essential in supervising construc- (water, lubricating oil and cooling agent). The pipes often have to
Rough schedule for a project with an industrial CHP
tion. Contractors submit drawings, diagrams, descriptions and other be rinsed out or blown out and possibly treated to prevent corro-
documents, some for approval and others for information purposes sion (pickling and passivating). Month 1 2 3 4 5 6 7 8 9 10 11 12 13 t/m 30 31 32 33
only. The documents keep the client informed of the installation
design as well as of the progress, quality and completion of required The pumps and other equipment are then tested with a medium to
Pre-qualification

inspections (Steam Equipment Supervision Service (Stoomwe- ensure they function properly and are leakproof (wet commission-
Request specification and quotations

zen), Gasunie (Dutch natural gas infrastructure and transportation ing or wet sequence testing). If all subsystems operate satisfac- Contractors draw up tenders

company), welding inspections, etc.). The client can also carry out a
number of timely quality inspections in the contractors workshops.
torily the machines can be tested with fuel for the first time (first
fire), after which even more situations require testing, such as full
Evaluate quotations

load/no-load, normal start-stop cycle, emergency stop, etc. Prob-
Permit applications

Main contractors must inspect their subcontractors. Inspections lems must be solved at each stage as they arise until every test Subsidy applications

carried out by the client are also important in order to verify that
the contractors and manufacturers make sufficient inspections and
has been completed successfully. Ultimately the moment arrives at
which the entire system functions properly.
Investment decision/order
<>
checks. These inspections must take place early on in the process
Delivery time/ construction time

because physical inspections cannot be carried out on some details This is followed in some instances by a partial handover, after Commissioning / start-up

at a later stage and also to obviate repairs in the field which can
cause much more serious delays. Delays are expensive for the
which the clients operators can start using the installation, possi-
bly under the supervision of the main contractor.
Final Start-up
<>
Table 6 Rough schedule for a project with an industrial CHP (without MER procedure).
client and consequential damage is seldom fully covered by penal-
ties levied for non-completion within the stipulated time. As stipulated at time of contracting, the guarantee tests must be
passed prior to delivery. One of these is a duration test of one
Once all installations are delivered, installed and assembled the or two weeks. Any problems that may occur during the duration
construction reaches the mechanical complete stage. A proto- test must be dealt with after which the installation is subjected to
col, agreed before the order was commissioned, usually applies another duration test. Once all tests are completed successfully the
here and must be signed off by the client after inspection. It is also installation can be delivered. Negotiations often take place prior
expedient to link a term of payment to this protocol and not to to delivery during which all overrun and underrun work and any
suffice with a vague definition such as all components delivered. penalties and remaining points are settled. The warranty period
In some instances parts of the system are separately declared to be commences upon delivery and formal transfer. Only then does the
mechanical complete. owner bear full responsibility for the installation.

86 87
Heat and Power Paragraph 3.4|Management and maintenance

3.4 Management and maintenance

Companies and institutions that buy a CPH installation realise substantial energy savings. On the other hand, it takes up
available investment money and the time of the organisations maintenance department. It is therefore important to weigh
up the various ways in which to finance, manage and maintain a co-generation plant. This section first describes what
maintenance requirements apply to co-generation plants and the different ways to manage and finance these plants. This is
followed by an overview of the considerations that play a part in the choice of operation model and the manner in which a
contract is realised, namely through tendering.

3.4.1 Maintenance requirements a result of planned maintenance. Availability drops to 92%

The maintenance requirements for a co-generation plant depend when downtime due to failures is taken into account. Gas
heavily on its design. In this respect there is a major difference engines require much more attention. Component maintenance
between gas turbines and gas engines. Gas turbines require intervals vary between 1,500 hours (oil change) and 40,000
little maintenance and then mainly on peripherals. The turbine hours (honing cylinder liners). Figure 1 contains a simplified
itself requires maintenance once every one or two years. The depiction.
turbo blades are cleaned weekly with a liquid cleaner (e.g. water
containing additives) applied under pressure through nozzles.
The plant operates at reduced capacity while the turbo blades
Maximum maintenance intervals (idle time, example)
are being cleaned. The installation must be inspected and the Overhaul
Thorough maintenance
lubricant filters replaced on a regular basis. Standard maintenance
Cylinder liners
Honing

Gas turbines can only be maintained by specialised companies. Clean

exhaust cooler
The following inspections apply to natural gas turbines: the
Replace
combustion chamber and liners are due for inspection every cylinder head

Activity
8,000 operating hours (combustion inspection), the hot gas path Overhaul turbo Capacity
is inspected every 24,000 operating hours (hot gas path inspec- in kW
Replace spark plugs 400 - 800
tion) and a major overhaul is due every 48,000 operating hours. In 300 - 400
150 - 300
addition to regular maintenance gas turbines must be monitored Adjust valves

closely. Key measurements are pressures after the compressor

which could indicate fouling; intake and outlet temperatures of
air and flue gas near the turbine which have a bearing on output,
and vibration control (machine protection). Gas turbines within
a range of 1-5 MW have an availability percentage of 97% as
Change oil
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
Number of hours between maintenance activity
Figure 1 Example of maintenance intervals for a gas engine.

88 89
Heat and Power Paragraph 3.4|Management and maintenance

Maintenance intervals depend for instance on the type and
capacity of the gas engine, as well as on the load and the tem-
perature at which the engine gives off its heat. Nevertheless, the
availability percentage of a large gas engine (> 800 kW) is around
97% due to planned maintenance activities. When failures
and breakdowns are included availability is approximately 91%,
a fraction lower than that of a gas turbine. If necessary, in-house
employees can be trained to carry out basic maintenance (first
line maintenance) on gas engines. An external company must be
engaged for overhauls or for second line, third line and higher
maintenance.
In principle, both gas turbines and gas engines can be monitored
remotely and operated without staff. A daily round is customary
in order to respond effectively to faults such as leaks, etc. that are
not or not readily reported by sensors.
The greatest risk of badly maintained CPH installations is mechani-
cal damage due to jammed pistons, bearings, etc. A steam turbine
in a paper factory in the Czech Republic once ran amok due to a
poorly maintained steam valve, resulting in significant damage. The
valve was supposed to immediately shut down the supply of steam
should the generator be unexpectedly disconnected from the grid
and run without resistance at heightened speeds. In the case of the
runaway turbine in the paper factory it was quite a job to retrieve
the turbine vanes flung about the turbine house and even through
the roof of the factory.
During the warranty period the supplier of the installation is
responsible for any damage that may occur. After reaching a
certain number of agreed operating hours, the warranty period
expires. If the machine runs fewer hours than forecast, a maximum
2. Periodical analyses, such as a lubricant inspection, or techni-
cal analyses are carried out in accordance with requirements
set by the supplier.
3. Operating and maintenance regulations of the supplier/
manufacturer are strictly adhered to.
4. The logbook is always available for inspection.
5. The installation is run only on approved fuel type(s) as speci-
fied by the supplier at time of contracting.
In the event of damage the customer is responsible for proving that
correct operational procedures were in place, that the approved
fuels were used and above all that maintenance was carried
out in accordance with regulations. It is common practice to
place the machine breakdown insurance with the maintenance
company so as to avoid any disputes as to blame. Research by
the Vereniging Gasturbine/VGT (Dutch Gas Turbine Association)
(VGT, Utrecht, 2006) showed that over half the damage to gas
turbines can be attributed to design errors (new and overhauled
systems). It also made clear that more than half of the claims
were due to varying thermal load as a result of start-stop
operations. Only three of the 48 claims examined were the result
of operational errors.
3.4.2 Contract types
There are various contract types with a multitude of variants
for management and maintenance. One classification used for
maintenance is the extent to which the maintenance company
is responsible for the process. The Federatie Aandrijven en Auto-
matiseren/FEDA (Power and Automation Federation) indicates
six levels of Service Level Agreements (SLA) over and above
the standard obligations such as providing documentation and
product warranty (level 0). At the highest level (SLA category
annual budget for example maintenance on a gas engine (result
contract). In the case of a result contract Service Level Agreements
are concluded including a periodic appraisal of the maintenance
status of the installation. Standard methods apply for measuring
the maintenance condition of installations.
So-called Key Performance Indicators (KPIs) are included in perfor-
mance contracts. Examples of KPIs are work safety, environment
care, reliability, availability, output and maintenance costs. The
use of a no-claims bonus system is an incentive for maintenance
companies to strive for ongoing improvement in these areas.
Target values can be adjusted annually, thus constantly raising
the bar. A partnership like this leads to extensive collaboration
with reciprocal dependency. Parties jointly strive for maximum
profitability for the client whilst the contractor, besides enjoying the
normal margins, shares in the returns.
In many instances a monitoring system is required to set perfor-
mance indicators. It takes time for this system to operate fully so
parties usually first work through a settling-in period in prepara-
tion for the performance contract. Because this kind of contract
requires an investment on the part of both parties, each should
sign a letter of intent stating their intention to collaborate for a
number of years.
Operational lease contracts go a step further than performance
contracts. In such agreements the maintenance company handles
the financing in addition to managing and maintaining the system.
These contracts determine the legal ownership of the systems.
The entire Design, Build, Finance & Operate (operate includes
maintenance) or DBFO process for a planned boilerhouse can be
placed with a different company, in which case settlement occurs
Total outsourcing can apply to existing boilerhouses as well,
in which case they must be surveyed and a transfer scheme
arranged for the staff. These processes should be completed
with vigilance.
3.4.3 Selection criteria for the contract type
Under what circumstances is it advantageous to contract out
maintenance, management and/or financing? The current trend is
to have third parties carry out everything not part of the primary
process. It is therefore better to ask why one would not contract
out activities when the company has implemented or intends to
implement a co-generation plant.
Studies show that companies have the following reasons for con-
tracting out their energy supply:
Energy supply is not one of the companys core activities;
The contractor has more expertise;
Higher financial efficiency (cost saving);
Financing (no burden on liquid assets);
Greater current and potential security of supply;
Lower financing costs (the contractor accepts a lower internal
interest rate than the outsourcing party).
Contract type
Task Cost plus Fixed price Framework Performance

Management of maintenance concepts

period is defined.
Machine breakdown insurance generally covers damage to
the installation. The maintenance contract, the machine break-
down insurance and the ensuing warranties do not cover conse-
6) the maintenance company is responsible for continuously on the basis of the supplied products such as electricity, steam, Choice of work methods
Preparation and planning
improving process performance such as lowering the lifetime heat, cold and gas. External influences such as energy price in- Materials management
Execution management
costs of the system. Another classification is the extent to which creases and labour costs can be compensated by means of Execution
Maintenance registration
the maintenance company also takes on the system management. indexing. The supplier will strive to optimise the system from an Focal point analysis
Failure analysis
Design of maintenance
In this classification the contract can be a cost plus contract, economic perspective in order to offer a competitive rate and still Administration

quential damage. Insurers will take over the warranty on the
machine (machine breakdown) if the following requirements
are met:
1. An inspection report on the status of the installation vis--vis
factory specifications is drawn up.
a fixed price contract, a framework contract or a performance generate sufficient profit. A written agreement as to ownership In-house/
In-house contract out Contract out
contract (Figure 2). of the boilerhouse after the contract expires should be made in
advance. Usually a certain maintenance level and a transfer sum
Fixed price contracts can be contracts based on unit prices for are agreed. The client can then decide whether to take over the
specific activities such as changing the oil (effort contract) or an management or again put it out to tender. Figure 2 Contract types.

90 91
Heat and Power
Other points in favour of outsourcing as can found in literature are:
Fewer employees on the payroll (headcounts);
Ability to make use of the contractors purchasing capacity;
A lighter load on management (fewer employees to manage);
A lighter load on the purchasing department (fewer invoices).
The following situations can stand in the way of outsourcing:
Where installations are not freely accessible and/or not con-
centrated at one location, requiring maintenance staff to pass
through production buildings where classified techniques and/
or critical processes such as sterile processes occur;
When the co-generation plant must meet such high require-
ments with respect to quality (of steam, for example), reliability
and/or availability that no outsourcer is willing to or able to
meet the cost of compliance.
3.4.4 Calling for outsourcing tenders
The start-up situation is extremely important when putting co-
generation plants out to tender, i.e., is it a newly built plant or is
it an existing plant that has been taken over?
Calling for outsourcing tenders for a new plant
Various phases can be distinguished in calling for outsourcing
tenders for a new plant, namely the initiation, selection, contract,
realisation, operation and termination phases (Figure 3).
Initiation phase
In the initiation phase the outsourcer lists the pros and cons of
outsourcing and makes a provisional choice. He also establishes
the pre-conditions for the delivery.
The outsourcer stipulates what fuels must be delivered in what
quantities as well as quality, reliability and availability. It makes
things much easier for the tenderer if a load pattern or a load
duration curve is provided. A forecast of the operational develop-
ments with corresponding band width should also be stated.
Requirements and pre-conditions specified by the outsourcer can
be recorded in a performance specification. This specification
must be based on a black box approach to give the tenderers
maximum leeway in defining a solution. Environmental and
occupational, health and safety aspects, and any technical pre-
conditions must be included.
92
Also crucial are the available space and the physical and personnel
demarcation. The physical demarcation is the dividing line
between the installation of the contractor and the outsourcer,
for example a flange (a coupling unit on a pipe) including
packaging. The personnel demarcation comprises the availability
of staff for such things as inspection rounds. It is prudent to
specify the weight factors for the assessment in advance, even
in calls for tenders that are not required to comply with the
European tendering rules.
Tenders can reflect the regular prices in the market or the
prices that the client has determined on the basis of a shadow
calculation. Any tenders that exceed these prices must be halted.
In some instances it is more efficient to report these criteria in
advance so that tenderers who cannot comply can withdraw
without incurring avoidable costs.
Selection phase
The selection phase may be divided into a preselection and a
final selection. Considering the high costs involved in a tendering
process for both outsourcer and contractors a preselection should
be made in order to restrict the number of tenders. In the pre-
selection phase the outsourcer familiarises himself with suitable
market parties. Aspects such as culture, reliability, flexibility and
customer orientation rank high. It is advisable to check references
and to discuss matters at management level.
The tenderers culture should fit the clients strategy. The following
questions can help to assess this:
Does the tenderer possess sufficient vision and is he sufficiently
forceful for the outsourcer to fully commit to working with him
in the long term even during a slump?
Initiation Selection Contract Realisation Management
phase phase phase phas phase
Figure 3 Procedure for outsourcing energy supply.
Does the tenderer have enough work to offer his personnel,
keeping turnover at a reasonable level?
Are the employees sufficiently skilled and are they given sourcer, both should be in close contact during this phase. It is
adequate training to help make improvements on an ongoing
basis?
Which account managers will be assigned to the project and
how does the tenderer deal with staff changes?
How transparent is the tenderer in his aim for improving
processes on an ongoing basis?
How interested is the tenderer in his customers and how
cooperative in jointly coming up with improvements?
This is not just about supplying energy but also about realising
a mutually beneficial situation enabling the client to focus on
his primary aim and purchase energy at highly competitive rates
with the highest possible level of supply security. Minor changes
in the production process may lead to reduced rates as less addi-
tional capacity is required. The tenderer is expected to study the
offtake system so that both parties can maximise their profits.
The reliability of the tenderer can be derived from references and
from his financial position. An evaluation of his internal quality
system over and above the regular ISO certification can be a
means to increase confidence. Regular meetings at management
level can also assure parties that the partnership is supported at
all levels.
The contractor draws up a basic design for a plant in the selec-
tion phase and determines a rate per fuel and if necessary a basic
amount and/or an initial amount. Based on the lowest costs
during the course of the project and after possibly weighing other
factors, a selection can be made out of the preselected tenderers.
Contract phase
During the contract phase a legal document is drawn up con-
taining the collaboration agreements. Firstly, a joint vision must
be included, forming the basis of the contract. This vision is the
guiding factor in any interpretation disputes over implementa-
Termination
phase tion of the contract. The document also includes the conditions
as contained in the performance specification. A proper contract
is well-balanced and covers both the market-wide and project
related risks for both parties. Figure 4 (page 94) contains the
aspects against which a contract can be tested.
Paragraph 3.4|Management and maintenance
Realisation phase
Because the contractor usually builds on the site of the out-
important that the principles of the contract are monitored. If a
client is not sufficiently knowledgeable and/or wishes to build in
additional sureties, a commissioner can be engaged. The commis-
sioner as an independent, technical accountant can test the entire
process from performance specification to contract termination.
The commissioners responsibility is not restricted to the physical
delivery of the installation but also covers the assessment of
drawings and calculations.
Operation phase
During the operation phase regular meetings should be held at
strategic (management), tactical (planning) and operational (exe-
cution) levels. This is reflected in a diagram in Figure 5 (page 94).
A transparent system must also be in place to assess Key Perfor-
mance Indicators such as availability and reliability. In the event of
a failure an analysis and acceptance protocol should immediately
be put into action, as the cause of the failure may lie with the out-
sourcer and therefore the failure does not figure in the evaluation.
The indexes for energy and labour cost developments for instance
must be established on an annual basis.
It is difficult in virtually any industry to make a reliable prognosis
of the development of the use of energy. For that reason the pro-
cedures that apply to expansions and reductions should be agreed
in advance. If the contractor abuses his position there must be a
possibility of terminating the contract.
However, it is important that the outsourcer has some degree of
expertise so that he can be an equal discussion partner. If stipu-
lated correctly in the contract the contractor is required to help
reduce the outsourcers total energy costs. This can involve the
contractor having to study the user side as well. So-called load
management can postpone expansion investments.
The plant can be raised to a higher output level by replacing the
use of steam for heating purposes with central heating when pro-
duction systems are being modified. Heat exchangers can be regu-
lated more precisely thus having a positive influence on the return
temperature, increasing output and using less pumping energy.
93
Heat and Power Paragraph 3.4|Management and maintenance

If the capacity of an energy plant needs to be increased it can situation personnel may be seconded to the contractor on
be more economical for all parties to apply load management. a voluntary basis to give them the opportunity to familiarise
Where the capacity of pipes and pumps needs to be expanded it themselves with the new organisation.
Market-wide risk
can be more economical to install regulators and heat exchangers
Politics Legal Commercial Environment
to increase the difference in temperature between supply and Lastly, it can take some time to set up and validate the measu-
return. rement systems for the Key Performance Indicators when taking
Government Legal system Tender Surrounding
area
over a plant. It may be necessary to structure a two-stage contract
Internal Tender
Termination phase phase whereby a year is spent on arranging the transfer after
procedure Rates Emissions
organisation
Well before the contract enters the termination phase the which - based on an outsourcing contract - a no-claims bonus
Market CO2
parties should confer as to how to proceed. It may be difficult system comes into force.
for the outsourcer to manage his own energy plant again if
Project-related risk his level of expertise has dropped during the course of time. Summary
If during the term of the contract contractor and outsourcer Outsourcing provides good opportunities but the process of selec-
Technical Operational Financial Tenderer communicate as required and their confidence in each other tion, contracting, operation and termination must be treated with
Surrounding
remains high the contract will be extended. If this is not due care.
Government Legal system Tender
area the case a new contractor will need to be found. To ensure
Internal Tender
organisation Procedure Rates Emissions the installation remains in good condition and retains its
Internal Market Market
value during the last contract year the contract must define a
organisation De Omval in Amsterdam, a typical example of outsourcing. Source: Hanneke Wijte
measurable maintenance level.
Tender Tender

Rates Outsourcing an existing plant

Market
It is considerably more complex to outsource an existing plant.
The client has the necessary equipment as well as a technical
department which has generally been involved in the installation
for many years. Both aspects require special attention.
Figure 4 R
 isk aspects that must be covered in an outsourcing
contract.
An independent party can determine the value of an existing plant
on the basis of replacement value, age of the components, over-
haul schedule and state of repair.

It is important to communicate properly with the boiler-

house personnel. What are their prospects? Can they get a job
elsewhere in the company or will they be taken over by the
Strategic
contractor on a voluntary basis? Statutory rules apply in this
respect. Agreements should be in place to cover staff change-
Tactical over to the contractor and to compensate for any difference
in salary. This agreement should also cover an outplacement
for redundant personnel. It is essential that the time between
Operational
announcing the outsourcing and the transfer is kept as short as
possible in order to avoid highly qualified personnel leaving the
company and to safeguard the plants reliability. Negotiations
Figure 5 Consultation levels in the operation phase. with the works council can be time-consuming. As a transitional

94 95
Heat and Power Paragraph 3.5|Micro CHP

3.5 Micro CHP system gained momentum. In the Netherlands, various field
tests have already been carried out with a variety of micro CHP
concepts based on Stirling technology as well as fuel cells.
Considering the large number of companies around the world
focusing on the development of micro CHP, expectations are
that more field tests will follow in the coming years. In addition
to the Netherlands and some other European countries Japan is
currently very active in the development of micro CHP: 70,000
gas-fired micro CHP units (approximately 1 kWe) are already
CHP installed in housing is referred to as micro CHP. Micro CHP installations generate space heating in dwellings and running there. These installations are installed outside the dwell-
in some instances domestic hot water as well. They reduce the amount of electricity demanded from the grid as they ings. The technique is not yet suitable for application in Dutch
produce their own. The development of micro CHP systems with an electrical capacity of approximately 1 kWe is currently households.

being considered for the Netherlands and surrounding countries. This capacity dovetails well with the average household
electricity consumption. Larger micro CHP installations can be used for relatively large residential functions. Micro CHP is
defined as being a CHP installation with a capacity of less than 5 kWe.
Micro CHP saves energy and reduces CO2 emissions more
efficiently than the most effective high-efficiency boilers and
centralised generation of electricity. Micro CHP generates on
an annual basis a primary energy saving of 300 to 400 m3 of
natural gas and a reduction in CO2 emissions of approximately
700 to 800 kg CO2 per household, and is therefore considered
to be one of the future alternatives to high-efficiency boilers.
Micro CHP installations must be fully interchangeable with
existing central-heating boilers. The machines are installed in
the same situation as the existing central-heating boilers and
similarly run on natural gas. Electricity is produced at the same
time as the demand for heat. Any surplus electricity produced
is fed into the grid. The development objective is to make the
use of space, noise production, maintenance requirements and
installation activities comparable with that of high-efficiency
boilers. Due to considerable savings on the electricity bill the
consumer can recover a higher price than the high-efficiency
boiler.
3.5.1 Situation in 2008
The idea of designing a CHP installation on a domestic scale has
been around for some time. The concept of micro CHP installations
is being developed by approximately 100 companies around the
world. Several years ago the search for a suitable domestic CHP
Figure 1 The Micro CHP generates heat and electricity. Source: Asue
The roll-out of the first 10,000 micro CHP units in the Nether-
lands started in 2008. These installations are supplied by a range
of suppliers, enabling various technologies to prove their worth
on the Dutch market. Meanwhile, the development of new types
of micro CHPs, among which are fuel cells, continues. Most tech-
nologies on the market today still have great potential for further
development.
3.5.2 Technology
Micro CHP is a catch-all term for widely divergent technologies.
These techniques differ from each other in thermal and electrical
efficiency as well as emissions, fuel flexibility, noise production
and use of space. This subsection first explains the difference
with respect to efficiencies and the development phase, after
which the various technologies are discussed in detail.
Efficiencies
The total efficiency (the generating efficiency of heat plus
electricity) of micro CHP installations is expected to reach the
same level as that of modern high-efficiency boilers. Stirling
engines on the market today promise to reach a total efficiency
of 107%. The current prototypes of fuel cells still need to be
improved in order to lift their total efficiency to the level of
high-efficiency boilers. The distinction between the various
techniques lies in the ratio between the produced heat and
electricity (power). This ratio determines the deployment of micro
CHP for domestic heat requirements and the volume of the annual
production of electricity. Figure 2 (page 98) reflects the reach of
the power/heat ratios of the various micro CHP technologies, MicroGen micro CHP. Source: MicroGen

96 97
Heat and Power Paragraph 3.5|Micro CHP

including the development potential for the various types of of a generator. The engine has a high total efficiency due to the natural gas and air and then compresses it in the first part of the
micro CHP installations. condensing combustion gases and the use of both heat and cycle. A spark plug ignites the mixture after which it expands
1: 10
1: 9
electricity. (Otto principle). A piston drives the crankshaft. A generator
1: 8 Development phase then converts this mechanical energy into electricity. Because of
Power-heat ratio

1: 7
1: 6
Micro CHP technologies are in various stages of development. Various types of Stirling engine are currently under develop- its large-scale use, the technique of the gas engine has already
1: 5 The development of each technology is shown in Table 1 in five ment. The main types can be divided into kinematic Stirling come a long way in its development and can achieve very high
1: 4
1: 3
stages, from draft design to large-scale use. Most technologies engines and free-piston Stirling engines. The kinematic Stirling maximum efficiencies. This is the result of a range of technical
1: 2 are in the system design and demonstration phases. Of all engine converts the kinetic energy of the pistons into a rotating improvements such as an increased average working pressure
1: 1
1: 0
technologies, the Stirling engine is the closest to being intro- motion with which electricity is produced. In a free-piston in the engine. On a small-scale level the efficiencies are con-
Stirling engine Gas engine Fuel Cell ORC Gas turbine Steam engine duced onto the market. Although the gas engine is already in Stirling engine the piston supplies energy to a linear generator siderably lower, but they can profit from developments of the
large-scale use in Japan the present model is not yet suitable for via an electromagnetic field. Additionally, various gases, such as larger gas engines.
Figure 2 Power/heat ratios of the various micro CHP technologies. the Dutch market. nitrogen, helium, CO2 and air, can be used as a medium in the
process. Gas engine emissions require major attention, especially on smaller
Start Large-
Stirling engines scale levels. A flue gas cleaning system is required to achieve the
Draft System Pilot market in- scale The first Stirling engine was already developed at the start of the Use required emission level, increasing the required investment. In the
design design phase troduction Use
19th century. Since then it has been used in small niche markets Micro CHP with Stirling technology dovetails well with consumer further development of this technology attention must also be
Stirling engine such as the shipping and aerospace industries. The concept of the needs. Heat and electricity are produced in a suitable ratio. The paid to muffling of noise.
Gas engine free-piston Stirling engine has undergone further development installations require little maintenance, they produce little noise
Fuel cell and optimisation, particularly within the aerospace industry. The and their dimensions are comparable to those of the customary Use
ORC result is an efficient, compact and robust engine that can be used high efficiency boilers. They run on various fuels because of More than 70,000 gas engine micro CHP installations have already
Gas turbine in domestic micro CHP apparatus. The first generation micro CHP the Stirling engines external combustion as opposed to a piston been installed in Japan. Because they are installed outdoors (as
Steam engine installations to be introduced onto the market will be equipped engines cylinder combustion. The present generation Stirlings is customary in Japan) requirements as regards noise, vibration,
Table 1 Development phase of micro CHP technologies in the with a Stirling engine (Figure 3). run on natural gas but biogas, green gas or hydrogen could also maintenance and use of space are less strict. The integration of
Netherlands. be used. the gas engine into the heat use in typical Dutch households
Various tests are currently under way, i.e., endurance tests to needs refining. Only once these points have undergone further
test how robust the device is, and in dwellings to test for optimal The Stirling engine will develop strongly over the coming years, development can the gas engine micro CPH be a fully fledged
comfort control. As already stated previously, of all the technolo- increasing the electricity share in relation to the heat production. alternative for the Dutch market.
gies micro CHP based on a Stirling engine is the closest to being This development dovetails optimally with the development
introduced onto the market. Various suppliers of high efficiency of the energy use in Dutch households in which the heat Fuel cells
boilers are currently developing installations based on the Stir- demand per household is decreasing and demand for electricity Various sectors are developing fuel cells for efficient use in dwell-
ling engine. is increasing. ings and cars. A fuel cell is a device that converts gaseous fuel
directly into electrical energy. A very high electrical efficiency
Operating principle Gas engines can be achieved by skipping the combustion step (a step that is
The Stirling engine is an external combustion engine with an The gas engine CHP is a tried and tested technology in the Nether- required in conventional electricity generation). Because of this,
externally heated cylinder in which gas expands. This expanding lands. Thousands of engines with a capacity of 300 kWe and more the heat/power ratio differs significantly from that of Stirling
gas is the driving force for moving the piston in the cylinder. have already been installed, particularly in glasshouse cultivation, engines. Concepts on a larger scale than micro CHP, involving a
The volume is reduced by moving the heated gas in the cylinder as well as in developed areas. As they are produced in series gas fuel cell in combination with a gas turbine which can achieve an
to a cooled section. By moving air between the hot and cold engines have dropped significantly in cost. electrical efficiency of 70% are under development.
sides and because of the ensuing change in volume a cycle
is created that keeps the piston in motion. The released low Operating principle Fuel cells do not operate on natural gas but on hydrogen. To make
temperature heat is used for heating. The mechanical energy of The operating principle of the gas engine is similar to that of a car natural gas suitable for fuel cells the gas must first be converted
Figure 3 Operating principle Micro CHP with Stirling engine. the motion of the piston is converted into electricity by means engine. A gas engine is a piston engine that sucks in a mixture of (reformed) into hydrogen. Depending on the type of fuel cell it

98 99
Heat and Power
can be reformed in a separate device (the reformer) or within
the fuel cell itself (internal reforming). Numerous different types
of fuel cells are being developed whose membranes and there-
fore operating temperature differ from each other. These can be
roughly divided into high temperature fuel cells and low tempera-
ture fuel cells, explained below in further detail.
Operating principle
Fuel cells consist of three layers: the anode along which
hydrogen (H2) flows, the cathode along which oxygen (O2)
flows and the electrolyte that separates these two layers
and conducts the electricity. In the anode, hydrogen is
split into electrons and protons (H+). The electrons are con-
ducted via an external conducting circuit to the cathode,
whilst the remaining protons (H+) move through the electro-
lyte to the cathode. In the cathode, the electrons are linked
to the protons and to oxygen and together they form water
(H2O). The electrons that are conducted via the external
circuit form the electrical current that supplies the energy. Fuel
cells have a low voltage but by connecting fuel cells in series
(creating a stack) the required electrical voltage is achieved.
Two types of fuel cells are receiving particular attention for their
use as micro CHP, namely the Solid Oxide fuel cell (SO or SOFC)
as a high temperature fuel cell and the Proton Exchange Mem-
brane (PEM) as a low temperature fuel cell. Phosphoric Acid fuel
cells (PAFC) are being considered for low temperatures as well.
SO fuel cells can be fed directly by natural gas and operate at
high temperatures, namely 600 C to 900 C (internal reforming).
High temperature cells require a longer start-up time to reach oper-
ating temperature. PEM fuel cells operate at lower temperatures
(< 100 C) and are therefore able to quickly start up and connect
at the required output. However these fuel cells operate only on
very pure hydrogen. Because dwellings are not yet equipped with
a technical installation to supply hydrogen, natural gas will first
need to be reformed into hydrogen by means of a reformer, which
reduces efficiency.
Use
The electrical efficiency of fuel cells is high in comparison to other
technologies used in micro CHP. They generate a lower heat/
power ratio at a constant electrical capacity than other techniques
100
used, consequentially maintaining the same heat production
while more electricity is produced. So as to prevent the electricity
production of the micro CHP installations from falling too
much out of step with the households electricity demand, the
integration of fuel cells in the various types of households must
be examined. Adjusting the size of the fuel cells enables various
integration possibilities. Energy integration in households can be
optimised in combination with heat and/or electricity storage.
Fuel cells are developing favourably. Their cost price is dropping
steadily and work is being done to extend their lifespan, whilst
their performance during their lifespan is being examined. The
first types of micro CHP installations based on a fuel cell with
the same dimensions as a central-heating boiler are currently
being tested. The functioning of various membranes is still in
the research phase. The price of fuel cells continues to drop with
use of cheaper materials, reduction of the amount of material
required for each cell and efficient production in series.
Use
Fuel cell test installation. Source: NedStack
Organic Rankine Cycle (ORC)
Steam turbines work according to the standard Rankine cycle, a
thermodynamic principle. This steam cycle is currently applied in the
industrial sector and in power plants. The Organic Rankine Cycle is
a steam cycle that uses an organic material as a medium instead
of water. This enables the use of a lower heat level because the
evaporating temperature of these organic materials is lower than
that of water, making it possible to generate electricity on a smaller
scale without high steam pressure. The lower temperatures also
allow more materials to be used than in a steam cycle. An ORC can
use residual heat (for instance, from a gas engines flue gases) and
can also be driven directly by a burner.
Operating principle
The Organic Rankine Cycle is a thermodynamic cycle in which a
medium is compressed and heated to evaporation and expan-
sion point before cooling. With a turbine or expansion engine the
expansion can be used to generate electricity and, as previously
described, the organic medium operates efficiently at lower tem-
peratures. In a micro CHP installation electricity is produced by
a generator linked to a scroll compressor. This technique is fre-
quently used in air-conditioning systems. The organic material
flows through a closed circuit and cannot escape into or outside
the machine. When an ORC is used in a dwelling the burner of
the central-heating boiler is the heat source. The high-quality heat
from the burner is used first to produce electricity and then for
space heating and domestic hot water.
Steam engines are used only sparsely and particularly in mobile
The ORC is currently being piloted for higher capacities whereby
residual heat from gas engines or industrial processes is used to
generate electricity. A smaller scale ORC system is under develop-
ment and undergoing lab tests. Expectations are that by using
existing components these systems will have a low cost price.
Rankine cycles using either organic medium or steam are fired
externally enabling the use of fuels other than natural gas, just
like Stirling engines. For larger systems, residual heat can also be
used as fuel.
Gas turbines
Gas turbines are well-known for their large-scale applications
such as in the industrial sector and in jet aircraft. These turbines
Paragraph 3.5|Micro CHP
with their large capacities have come a long way in their
development and are an efficient means of converting energy.
The combustion heat of gas turbines used in CHP installations
is also used efficiently. Because this heat is released at a high
temperature gas turbines are combined on a large scale with
steam turbines, the so-called STAGs (Steam and Gas). In the
event of micro CHP the heat is used for space and domestic
water heating.
Operating principle
In terms of thermodynamics micro gas turbines work according
to the same cycle as the large gas turbines namely the Brayton
cycle. In this cycle the incoming air is compressed in a rotating
compressor and heated by adding heat and fuel, hugely
increasing the volume of the air. The hot air then releases a large
portion of its energy to the turbine in which the air expands.
Gas turbines are very compact and have lower emissions than
gas engines. Moreover they can run on various fuels, not only on
natural gas but also on hydrogen or biogas. Some gas turbines
run on oil or pyrolysis oil.
Use
The use of gas turbines in micro CHP installations is in
the concept phase. Designing a micro gas turbine is quite
challenging, because when scaled down other processes occur
in the turbine.
Steam engines
applications. Steam locomotives, among other things, gave them
their fame. A sludge processor in the Netherlands recently in-
stalled a new steam engine and now converts surplus steam into
electricity.
Operating principle
The operating principle behind the steam engine is the Rankine
cycle which was already mentioned in connection with the ORC.
Water is compressed and heated to expansion and evaporation
after which it recondenses. The expansion is used in the engine
to set a piston in motion. This motion is converted into electri-
cal energy.
101
Heat and Power
Use
In 2008 steam engines were designed solely for large capacities
although they are currently being adapted for household use.
Dwellings have different technology requirements from those
needed for large capacities hence design effort is now going
into efficiency increases, lower maintenance requirements and
reduction of noise levels in order to cut costs. A steam engine is
available on the Dutch market today which can be used for large
houses and small businesses.
3.5.3 Integrating micro CHP
Producing electricity and heat
The heat/power ratio of the first micro CHP installation models
dovetail well with the heat and electricity demand of the average
Dutch household. This installation is also used in cascade systems
for large scale use in office buildings, catering premises and public
buildings. The previous sections noted extensive development
potential for existing and new techniques. The electrical efficiency
of micro CHP installations will increase substantially over the
coming years. The heat/power ratio of improved Stirling engines
and fuel cells is significantly lower, so that more electricity is
produced with the same amount of heat production. The heat/
power ratio of the current Stirling technology is approximately
6:1, however new techniques are expected to achieve ratios of
Model of a micro CHP with ORC. Source: Daalderop 3:1 or lower.
With the changing ratio between production of electricity and
heat new concepts can be worked out and the use in properly
insulated dwellings with a lower heat demand will also become
increasingly interesting. Typical of such dwellings is their
even distribution of heat demand for space heating. Despite
their limited heat demand a good amount of electricity can
be produced throughout the year. Micro CHP installations with
a low heat/power ratio can also be used to produce domestic
hot water. It is also conceivable that more electricity may in
future be produced by households than is required inside
the home and the surplus becomes available to the grid. The
question is whether it will be appealing from a financial point
of view.
The changing ratio between electricity and heat production of
Micro-gas turbine. Source: MTT micro CHP installations fits well with the changing energy demand
102
of households. The installation of additional insulation in existing
dwellings and the steady replacement of old houses with better
insulated new buildings will cause the average demand for space
heating to drop. Climate change may also influence future heat
demand in dwellings. Overall, the electricity demand of house-
holds is rising due to the greater use of electrical appliances but as
the number of people per household is decreasing the demand for
domestic hot water is expected to remain stable over the coming
years.
Control
Micro CHP installations deliver two products, namely heat and
electricity whose offtake pattern is often asynchronous, requiring
intelligent control. When deciding on the control strategy
the characteristics of the technology such as start-up time,
flexibility ratio and start/ stop behaviour must be taken into
account to ensure continuous high efficiencies. The best efficiencies
are generally realised with a control system that keeps the number
of starts and stops to a minimum.
Individual control: heat or electricity demand dependent
The heat/power ratio, particularly of the first generations of micro
CHP installations, is relatively high and the produced electricity is
considered a by-product. The machines production is regulated
on the basis of heat demand. The machine starts up when there is
a demand for heat and then produces electricity at the same time.
The electricity demand does not influence the control of the micro
CHP installation.
New micro CHP technologies with a lower heat/power ratio
produce relatively large amounts of electricity. This can make it
attractive to have an electricity demand dependent control, or a
combination of the two controls. The heat comfort in the dwelling
is paramount and will continue to be so in guiding the design of
new controls for micro CHP installations. After all, no concessions
may be made with respect to comfort in the home. Heat storage
can be a solution in this respect.
It is not yet clear how an electricity demand dependent control
should work. Micro CHP installations produce electricity mainly
when there is a high demand for electricity. How this produc-
tion can best be optimised will depend on the type of micro CHP
Paragraph 3.5|Micro CHP
installation, the tariff structures for the offtake of electricity and
gas, and the offtake pattern of heat (space heating and domestic
hot water) and electricity. A pre-condition when implementing
fully electricity demand dependent micro CHP installations is the
presence of efficient and economically attractive heat buffering
and/or electricity storage. This will need to be examined in more
detail in the future.
The use of micro CHP as an emergency power supply is conceivable,
but not expected in the short term because it requires additional
investments in regulating equipment and electricity storage. Also,
the maximum production of micro CHP installations will not be
enough to meet the total electricity demand. Micro CHP can be
deployed for a preferential group so that in any case part of the
electricity demand can be covered.
For the time being, households will not be able to be self-sup-
porting through the use of micro CHP. Firstly because electricity
is not always produced at the same time as it is consumed.
Secondly, peak production is not enough to cover the entire
electricity demand. Electricity storage can be a solution; however
this requires relatively large storage capacity that cannot be
provided with batteries. Solutions with higher storage capacities
and power densities are currently being developed for dwellings
but these systems are still very expensive.
Virtual power plant
After a successful market introduction the growth of micro CHP
can amount to some hundreds of MW electrical capacity per
year, large enough to figure on a national scale. Many micro CHP
installations can be deployed as required and produce electricity
when necessary or only produce heat in the event of an electricity
surplus. Coordination of these micro CHP installations creates a
virtual power plant (or VPP) comprising many small generators.
To realise a virtual power plant, a large group of micro CHP instal-
lations must be linked to a central computer that coordinates the
overall control programme. Software for optimum remote control
of micro CHP installations is currently being developed.
The production and supply of electricity can be optimised by
centrally controlling the generating capacity of the micro CHP
installations in dwellings. With an increase in non-controllable
103
Heat and Power
decentralised generators such as those making use of wind
energy there is a need for flexible sources whose energy pro-
duction can be adjusted. This flexible source can be a combined
network of micro CHP machines that can be connected and
disconnected as needed, for instance when there is a big
drop in the electricity produced by wind farms. By integrating
micro CHP installations grid losses can be limited and generating
costs (investments and standby losses of reserve capacity)
are kept to a minimum. Centralised control of micro CHP
makes no concessions with respect to comfort in the home.
Micro CHP in combination with heat storage within the home
provides more freedom to control the installations without
reducing comfort.
In addition to the technical challenge of developing communi-
cation standards and reliable control programmes various other
topics require attention before the virtual power plant can start
up:
Firstly, it is important to know which party can take on the
control: the grid operators, the energy companies or a sepa-
rate commercial company.
Secondly, who owns the micro CHP installation?
Thirdly, it must be agreed which aspect is to be optimised: the
grid stability, the energy costs of the consumer, the central
electricity production or the limiting of CO2 emissions.
Fourthly, it must be determined how the profits of a virtual
power plant are to be divided among the participants.
The interests of the various parties must first be brought into
line.
Only when these aspects are clear and agreed can the virtual
power plant be operated.
Successful introduction of the micro CHP onto the market requires
that the installations be easy to purchase and to install. Plug and
play apparatus are being developed so that the systems can be
installed in the same way as central-heating boilers. Electricity is
supplied simply by putting the plug in the socket.
If the electrical capacity of a micro CHP installation does not
exceed 1 kWe, the safety fuses and cabling in the dwelling will
104
Power
plant
Figure 4 Virtual power plant.
suffice and a separate group to connect the installation will not
be required. The system is therefore easy to install. The micro
CHP machines currently being developed for the Dutch market
are mainly designed for 1 kWe. Large households, small offices,
catering premises, and such can have more heavy-duty electricity
connections and can therefore also connect larger micro CHP
installations or even a cascade of installations.
Connecting to the electricity grid
The energy market is not yet fully equipped to accommodate elec-
tricity supplied by consumers. Consumers are still customers of
electricity off the grid and not suppliers, temporary or otherwise.
Before the plug-and-play model can be used the supply of elec-
tricity must be organised both from a technical and an economic
perspective to accommodate two-way supply. The grid operator
and the energy provider need to be notified when a micro CHP
installation is installed in a dwelling. The energy provider can then
adjust the advance payments for gas and electricity. An excep-
tion is the installation of micro CHP systems on a project scale
which must be reported to the grid operators well before they
are installed.
Due to the installation of generators on low voltage grids the grid
operators will need to modify their operations in order to facilitate
two-way supply and to perform safe maintenance on the
electricity grid. The grid operators are also involved in tests that
simulate the impact of micro CHP installations on low voltage
grids. These tests have shown that large numbers of these
installations can be connected to the electricity grid in a residential
area without causing problems.
3.5.4 Micro CHP in the market
Micro CHP is on the verge of being introduced onto the market.
Many parties are involved in developing the technology and
preparing the market. An overview of the current situation is
provided below.
Market potential
The developers of micro CHP installations and boiler manufac-
turers, united in the Smart Power Foundation, have reached
a consensus on the market development of micro CHP in the
Netherlands.
This is that up to 2020 micro CHP will be one of the most impor-
tant successors of high efficiency boilers. This view is based on
the assumption that micro CHP will be launched successfully
and that this will prompt mass production and cost price reduc-
tion enabling consumers with average consumption to recover
the higher price of the installation as compared to a high effi-
ciency boiler within five years. In addition to financial benefit,
micro CHP provides a system that can be installed without inter-
ference in the home, the heating system or the electrical instal-
lation. Figure 5 contains the market development as projected
by the Smart Power Foundation in 2008. Up to 2020 approxi-
mately 1.5 million micro CHP installations will be installed.
These installations will produce as much electricity as a large
power plant.
The first micro CHP models are now ready to market for an
initial trial period during which supply and demand are to be
better coordinated. The production of larger numbers of micro
CHP installations will need to start up and lessons must be
learned from experiences in the field. The installation of the
first 10,000 systems will, with government support, provide a
learning path.
Possibilities are being considered for the support of micro CHP in
the run-up to serial production and a properly functioning installa-
tion market. It is expected to take a few more years before micro
CHP is ready to enter the mass market. Competition will occur
Paragraph 3.5|Micro CHP
over time between various providers. As a result, some parties
will disappear from the playing field because their technology
is below standard. This competition will further stimulate techno-
logical development.
Market preparation
The Netherlands is enjoying broad support for the micro CHP
concept. Most parties focusing on future heating of developed
areas and the sale and distribution of electricity are involved. A
number of joint ventures are working towards a quick and hassle
free introduction of micro CHP:
A number of energy companies have joined forces in the Sticht-
ing Slim met Gas (Smart with Gas Institute). The objective of
this institute is to increase the efficiency of processes to convert
natural gas. The organisation has worked since January 2007
to develop gas applications that significantly reduce the use of
natural gas and CO2 emissions. Slim met Gas will supervise the
market introduction of the first 10,000 micro CHP installations.
The institute will also focus on developing knowledge and
communication with respect to efficient gas applications.
The Smart Power Foundation (SPF) comprises micro CHP
developers and boiler manufacturers who will supply the micro
CHPs. SPF is therefore working out ways to smooth the intro-
duction of micro CHPs onto the market. The foundation is
engaged in government support, communication in the field of
micro CHP and the elimination of bottlenecks on the market.
300,000
Number per year
250,000
200,000
150,000
100,000
50,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 5 Projected market development of micro CHPs in the
Netherlands.
105
Heat and Power
Since 2001 Cogen Nederland, the CHP association in the
Netherlands, has facilitated a Micro CHP study group in which
boiler manufacturers, energy companies and umbrella orga-
nisations have joined forces to develop the market for micro
CHP. In addition to bringing together parties and developing
support, the study group finds ways to solve bottlenecks on
the interface between consumers, energy companies and
boiler manufacturers.
The Decentrale Gastoepassingen (Decentralised Gas Applica-
tions) study group was established as a part of the Platform
Nieuw Gas within Energietransitie (Energy Transition), an ini-
tiative of the government and the business community. The
objective of this study group is to stimulate efficient gas appli-
cations (including micro CHP) in developed areas. The study
group works out concrete ideas in this respect, examines the
possibility of more sustainable energy provision and strives to
eliminate bottlenecks by conferring with relevant parties such
as policy makers.
The joint ventures unite in various sectors and can therefore work
effectively on a quick and successful introduction of micro CHP
onto the market.
Advantage for consumers
Micro CHP saves on household energy costs; the gas consump-
tions of households will increase slightly due to the electricity
production but considerably less electricity will be purchased
from the grid. An average Dutch household can save an estimat-
ed 20% on its energy costs as compared with the use of a high
efficiency boiler and the purchase of electricity from the grid.
These savings depend heavily on the demand for space heating
and thus on the capacity to produce electricity. A household
with a space heating demand of 1,500 m3 can produce approxi-
mately 2,500 kWh with the current micro CHP installations on
a yearly basis and thus save approximately 350 on its energy
bill. The higher investment in micro CHP can be recovered
through the lower energy bill. As explained in this subsection
about market potential, after a successful market introduction
a Dutch household should be able to recover the higher price of
a micro CHP installation within five years and in some instances
in only three to four years.
106
Paragraph 3.5|Micro CHP
Contribution to environmental objectives solar thermal systems and small wind turbines. Micro CHP based
According to the CBS (Netherlands Central Statistical Office) on sustainable fuels such as hydrogen and green gas will be
energy balance, Dutch households currently consume approxima- able to play a role in the fully sustainable supply of energy in the
tely 10 billion m3 natural gas and 24 TWh electricity. This comes Netherlands well into the future.
down to a primary energy consumption of approximately 540 PJ
per year. The total amount of CO2 emitted by developed areas is
estimated at 30 Mton per year. This includes emissions as a result
of natural gas and electricity consumption.
Micro CHP installations save primary energy and reduce CO2
emissions more effectively than the most efficient high efficiency
boilers and centrally generated electricity. The Stichting
Energie Prestatiekeur (Energy Performance Hallmark Organisation),
in conjunction with parties in the sector, has developed a
hallmark for micro CHP machines: the Gaskeur HRe (CHP Gas
hallmark). Machines that bear this label meet all gas hallmark and
additional criteria with respect to micro CHP. The hallmark
guarantees a minimum efficiency resulting in significant energy
savings as compared to high efficiency boilers. The first micro
CHPs to appear on the market will bear this label.
As compared to todays separated power and heat genera-
tion the use of micro CHPs will generate annual energy savings
of 300 to 400 m3 natural gas equivalents and a CO2 emission
reduction of approximately 700 to 800 kg CO2 per household.
If the micro CHP market develops according to the previously
outlined projections, micro CHP can achieve energy savings
of 50 to 55 PJ per year. This corresponds to annual savings of
1 to 2 billion m3 natural gas. CO2 emissions as a result of
heating and electricity use in dwellings will be reduced by 1.5
to 3.0 Mton per year, taking a modern natural gas-fired STAG
installation as a reference (STAG stands for Steam And Gas
because a steam cycle is combined with a gas turbine. These
power plants achieve the highest electrical efficiency in com-
parison to other electricity generators). Micro CHP can there-
fore contribute significantly to reducing energy use in develo-
ped areas.
In conclusion
Micro CHP is an innovative, energy-saving concept with a large
development potential. Micro CHP can be combined with other
sustainable generators on low voltage grids, such as solar energy,
107
 Chapter 4|Example projects

Chapter 4

Example projects

This chapter discusses various CHP projects that have been realised during the past few
years. These examples concern different techniques and come from various sectors
among which the industrial sector, households, swimming pools, glasshouse cultivation
and hospitals. They have been selected to present various design and user aspects of CHP.

1. Agfa-Gevaert: The industrial CHP application of gas engines
in combination with heat recovery boilers for the delivery of
steam, electricity and heat. Due to smart heat utilisation the
power plant has a total efficiency of 102%.
2. Bosbad Putten: A mini gas turbine delivers heat and electricity
to a swimming pool. This project started as a pilot but in 2008
the swimming pool was still using this very reliable installation.
3. Emmtec services: A STAG with two gas turbines and a steam
turbine for the supply of steam, heat and electricity to indus-
trial estate Emmtec. The purchase of an refurbished gas turbine
boosted the feasibility of this project.
4. Micro CHP: A field test with a state-of-the-art micro CHP
installation on the basis of a Stirling engine for use in house-
holds in Groningen. The micro CHP supplies 1 kWe electricity
in addition to hot water.
5. De Omval: Four gas engines enable the generation of heat,
cold and emergency power for a block of office buildings,
shops and dwellings.
6. UMC Utrecht: Gas engines for generating electricity, heat
and cooling. Should the national grid fail the system supplies
emergency power to the main facilities without interruption.
7. Vathorst: A power plant for district heating on the basis of gas
engines with electricity supplied to the grid. The installation
heats approximately 2,500 new dwellings.
8. Gebr. De Groot Kwekerijen: A gas engine supplies heat and
CO2 to the greenhouse while supplying electricity to the public
grid, resulting in significant savings in energy costs.

109
Heat and Power
4.1 Agfa-Gevaert Project, Mortsel (Belgium)
Agfa produces polyester films in the town of Mortsel, Belgium, for printing applications and for medical imaging. The
company employs approximately 4,000 people. Agfa operates four gas engines to produce heat as well as steam for the
production process. A co-fired heat recovery boiler is used to produce electricity.
Agfas basic electricity requirement in Belgium is 18 MW, peaking
to 30 MW in summer when all cooling units are operating.
Agfa has individual networks for steam, heat and cooling. Two
steam networks of 7 and 17 bar, a central-heating network of
90/70 C and a residual heat network with a surplus dependent
floating temperature (approximately 30 C). The residual heat
network feeds the companys various heat pumps (6 MW
combined). There are various cooling networks, including a 7C
network, that are partly fed by a steam-driven compression
cooling system. In 2007, after years of research, Afga built a new
power plant based on four gas engines of 2 MWe each. With
its ingenious heat utilisation the power plants total efficiency
is 102% of lower heating value.
The net electrical efficiency of the engines comes to 40%. All of
the engine heat is used whilst the flue gases exit the chimney at a
temperature of 40 C. The afterburner of one of the heat recovery
boilers provides an additional saving. The engine heat can be fully
utilised by making efficient use of the radiant heat, the engine
cooling and the cooling of the turbo compressor.
The gas engines radiation and convection losses are extracted
and used in a drying process elsewhere in the factory.
A separate duct has been installed for this purpose on a pipe
bridge.
110
Chapter 4|Example projects
One of the gas engines installed at Agfa. Source: Agfa-Gevaert Stephan Thijs, Afga project manager: By reheating flue gases we
achieve the utmost.
The air coming out of the turbo compressors is cooled in two
steps. The heat from the lower temperature step is used in the
residual heat network. The heat from the higher temperature 40 C
25 C
step serves to preheat the 90/70 C network.
The engine cooling (oil collecting device and oil collecting 90 C
Return
housing) is used to preheat the 90/70 C network. conden-
sate
The flue gases exit the engine at a temperature of approximately 18 bar/
240 C
500 C and flow through the various sections of the steam boiler
(a superheater, an evaporator, two economisers and a flue gas
Gas engine
condenser successively). The boiler produces 1.25 ton/h super- 70 C 40 C
Hot air 35 C
heated steam (340 C, 19 bar). The hot water circuit (90/70 C) Gas engine room External air
is reheated by the economiser and the residual heat system is fed
by the flue gas condenser.
Figure 1 Diagram of the CHP installation at Agfa.
One of the four CHP units is fitted with a burner in the heat
recovery boiler. The lean burn engines still contain enough
oxygen in the flue gases to burn natural gas. The temperature of
the flue gases is thus raised from 500 C to 800 C, producing This configuration generates total fuel savings of 37%. A gas-
roughly four tons of extra steam at 19 bar. This also increases the fired power plant with an efficiency of 42.6%, including network
capacity of the high and low temperature hot water. Because of losses, requires approximately 4,690 kW natural gas to produce
the positive results of this process the three other units were also 1,970 kWe. Steam production, hot water and hot air would
Agfas power plant. fitted with a burner in mid 2008 (Figure 1). require roughly 3,134 kW natural gas per unit.
111
Heat and Power Chapter 4|Example projects

The power plant cost approximately 6.5 million, excluding 4.2 Bosbad Putten Project
approximately 1 million for system modifications. The payback
period is less than three years. However, subsidies from the Flemish
green certificates system have reduced the payback period to well
under two years, which is entirely acceptable for a company like Bosbad in Putten (NL) has various swimming pools including a subtropical pool and a heated outdoor pool. Bosbad Putten
Afga. employs about 30 people. With an approximate average of 350,000 visitors per year it is among the top 10 swimming
pools in the Netherlands.

Key features
Engine: Caterpillar G3520C
Engine supplied by: Eneria (Overijsel, NL)
Steam boiler supplied by: Clayton
Installer: Devis (Geel)
External consultant: Indea

Gross electrical capacity:
Net electrical capacity:
Thermal capacity steam
1.25 t/h 19 bar 340 C:
4 x 2,020 kWe The swimming pool complex in Putten was the first in Europe to
install a micro gas turbine (2001). The pilot project was a joint
4 x 1,970 kWe
initiative of GasTerra b.v. (Gasunie Trade & Supply at that time)
4 x 965 kWth
and Dutch energy company Nuon.

Thermal capacity 4 x 1,s327 kWth

HT hot water (90 C): The micro gas turbine takes up very little space in this project.
The picture on page 114 shows the operator standing beside the
Thermal capacity 4 x 555 kWth
LT hot water (40 C): housing of the gas turbine. The control box (not in the picture)
Hot air (35 C): 4 x 200 kWth
behind the gas turbine regulates the central-heating boilers. With
an electrical capacity of 28 kWe the generator supplies part of
Input natural gas: 4.930 kW the swimming pools electricity demand. The residual heat of the
flue gases (64 kW) is drawn off via a flue gas cooler in the central-
Net electrical efficiency: 40.0%
heating system. This flue gas cooler is hydraulically connected in
Net thermal efficiency: 61.8% parallel to the central-heating boilers. In principle, the gas turbine
Total efficiency: 101.8% runs at full load and depending on the heat demand additional
central-heating boilers are connected.
Table 1 Features of the energy installation. Heat recovery boiler. Source: Agfa-Gevaert

The turbine achieves a total efficiency of 90%. As a connection

has been laid between the boilerhouse and the tropical indoor
pool the turbine can run all year round.

Integration of the CHP installation had implications for the instal-

lation. For example, for its 1-bar gas connection a 250-metre pipe
had to be laid and Nuons pressure reduction station had to be Indoor swimming pool at Bosbad Putten. Source: Bosbad Putten

112 113
Heat and Power Chapter 4|Example projects

changed. Furthermore, after the start-up a defect occurred in the 4.3 Emmtec Cogeneration Project
flue gas cooler supplied with the CHP installation requiring the
design and installation of a new flue gas cooler. The internal gas
Capstone mini gas turbine
compressor was also replaced several times until a suitable one Flue gas with recuperator

was found. This difficult start contrasts with the installations per- Heat Existing On a large industrial estate in Emmen (Emmtec Industry & Business Park) Emmtec Services provides virtually every
exchanger central-heating
formance today. In 2008 its reliability was very high and required (64 kWth) system conceivable utility to the companies on the estate. In addition to steam at various pressure levels and electricity,
little maintenance. Unlike gas engines, a turbine does not need to Emmtec also supplies compressed air, nitrogen, process water, central-heating water, drinking water, cold water and
be greased and requires no coolant. The gas turbine is currently Generator
(28 kWe) Burner cooling. Emmtec Services also exploits its own electricity network on the industrial estate, a waste water purification
shut down one day each year to enable maintenance.
plant and a biological sulphate removal installation. Emmtec purchases the natural gas centrally and uses most of it to
The pilot project ran for 18 months, after which the installation generate steam and electricity. The remaining gas is supplied to the companies on the industrial estate, which focus
was sold to Bosbad Putten. The gas turbine has now run smoothly Air
Natural gas mainly on the production of high-grade materials for the chemical and processing industries. Examples are superstrong
for more than 45,000 continuous hours. fibres (aramide), high-quality synthetics, gelatine and biodiesel.

Figure 1 Schematic diagram of the micro gas turbine at Bosbad.

Key features Emmtec has two cogeneration plants each with an electri-
Gas turbine supplied by Capstone cal capacity of approximately 25 MW for its supply of steam
Test participants GasTerra, and electricity. Both installations are based on a GE frame-5
Nuon gas turbine with steam injection for NOx reduction and a
Model Capstone C30 co-fired heat recovery boiler. The installations supply steam
to a joint system into which two other steam turbines have
Installed capacity 1,100 kW
been incorporated. One boiler supplies 30-bar steam as well
Heat demand 450 kW as hot water, the other supplies steam at pressures of 30 bar
Electrical capacity 28 kW and 4 bar.
Thermal capacity 64 kW
The combined thermal capacity of the CHP installations amounts
Table 1 Features of the energy installation.
to approximately 200 tons of steam per hour at a pressure of
30 bar. The steam turbines (with a combined maximum capacity
of 10 MWe) are used to expand the steam that is not supplied
directly to customers from 30 bar to 4 bar.

The nature of the industrial activities on the industrial estate requires

a very reliable and continuous supply of steam and electricity.
Any hitch in the supply can result in lengthy failures and stagna-
tion on the part of the customers. Emmtec makes every effort
to guarantee continuous production. During the past eight years
Emmtec Services has been able to achieve 100% availability of the
 olkert van Walstijn, operator of the gas turbine at Bosbad Putten: It
V
utilities for its customers.
looks after itself.
Birds-eye view of the industrial estate in Emmen.
Source: Emmtec Services

114 115
Heat and Power
The first cogeneration plant was installed in 1980 with the objective
of generating more efficient energy. The base capacity of the
steam from this cogeneration plant amounted to 55 tons per
hour. Co-firing burners in the heat recovery boiler made it possible
to guarantee a total capacity of 100 tons of steam per hour.
At the end of the 1990s the demand for steam increased sub-
stantially when one of the companies on the estate expanded its
production lines. The customers steam demand exceeded the
capacity of the installed CHP installation. Emmtec subsequently
considered the various possibilities for meeting this additional
steam demand.
The company compared the various options for producing addi-
tional steam, such as a new steam boiler and several variants
of gas turbines with heat recovery boiler. Their studies showed
that the new gas turbine in those days was not cost-effec-
Gas turbine being hoisted by a crane. Source: Emmtec Services
116
tive enough to invest. The additional proceeds from the higher
efficiency were not sufficient to offset the extra investment costs.
Emmtec therefore also considered purchasing a refurbished
gas turbine of the same type already installed. In other words, a
gas turbine that was virtually as new. The investment costs for
a refurbished installation were significantly lower, increasing its
cost-effectiveness.
The realisation of the new cogeneration plant in those days can be
considered unique. Around 2002 the liberalisation of the energy
market had just been completed and the spark spread wasnt yet
as it should be. So the profitability of CHP was under pressure. A
number of CHP installations were decommissioned at that time,
whereas Emmtec was investing in CHP. The lower cost price of
the refurbished gas turbine was a very positive factor. There were
other arguments in favour of purchasing the same gas turbine:
Chapter 4|Example projects
the first turbines proven reliability was very high and the staff cogeneration plant only just missed the crown of the tree and the
was already familiar with the installation, therefore requiring no oak was saved. Needless to say, part of the electricity generated
additional training. by the cogeneration plant in this case has a green character.
When the project started, Emmtec was faced with a large oak tree
that had to make way for the new cogeneration plant. This led to
hefty internal debates between those who were for and against
removing the tree. In the end the cogeneration plant could
be positioned in such a way as to leave enough room around
the installation for maintenance and to provide a good view over
the estate from the central control room. The chimney of the
Key details
2 GE Frame 5 gas turbines Approx 50 MW in total
2 Heat recovery boilers with co-firing burner 200 tons per hour in total
2 Steam turbines Approx 10 MW in total
Steam supplied at 30 bar and 4 bar
Hot water production
Own electricity network
Table 1 Details of power installation.
 enk Leentjes, manager Utilities & Waste Water Purification Emmtec:
H Cogeneration plant with the oak tree in the forefront.
Customers are guiding for Emmtec and we gear everything to them. Source: Emmtec Services
117
Heat and Power Chapter 4|Example projects

4.4 Micro CHP Project Key features

kWh Technology Free piston Stirling engine
140
Gas consumption
120 Purchase/sale of electricity Engine supplied by Microgen Engine Corp.
In 2007 a micro CHP installation was installed in the home of Hans Overdiep in Groningen. It is a unique installation, 100 Electricity generation
Micro CHP installation supplied by Remeha
being part of an initial field test of eight new type Stirling engines. The machine is used to heat the house as well 80
Investments Part of test
60
as domestic water and functions perfectly to date. The Stichting Slim met Gas will soon install another 100 of these 40 Total efficiency 107% (lower heating value)
units in dwellings. 20
Thermal capacity 5 kWth
0
1 6 11 16 21 26 31 36 41 46 51 Electrical capacity 1 kWe
-20

-40
Week Table 1 Details of power installation.

Figure 1 O
 fftake pattern of gas and electricity with the micro CHP
installation.
The micro CHP installation being read out. Source: GasTerra

In this project example a Remeha micro CHP was installed which
uses a Microgen Engine Corporation free piston Stirling engine.
The micro CHP installation has an electrical capacity of 1 kWe, a
heat capacity of 5 kWth and runs on natural gas. In order to meet
peak demand a 20 kWth auxiliary burner was installed as well.
The installation of a micro CHP installation instead of a high effi-
ciency boiler required no structural modifications or adjustments
to the heating or electrical system.
The total efficiency of the machine is 107% (of lower heating
value) so it makes maximum use of the energy in natural gas.
The boiler meets the requirements stipulated in the Gaskeur micro
CHP label and therefore this installation may be referred to as a
micro CHP. The micro CHP installation starts up as soon as space
heating is required. If only domestic hot water heating is required
the auxiliary burner kicks in to prevent the Stirling engine having
to start up too often.

If at any time the installation produces more electricity than is

Martha and Hans Overdiep. Source: Hans Overdiep
used in the dwelling, the surplus electricity is supplied to the
grid. The electricity meter is turned back to settle the supplied
electricity against the purchased electricity. The return supply rate
is equal to the purchase price insofar as over the course of a year
the return supply does not exceed the purchased amount of elec-
tricity. Figure 1 shows how the micro CHP influences the offtake
pattern of gas and electricity. The annual gas consumption for
space heating and domestic hot water with the micro CHP instal-
lation amounts to 2,729 m3.
The micro CHP produces 3,013 kWh electricity at the same time,
reducing the purchased electricity to 1,151 kWh. It is clear that
more electricity is produced than consumed in the home between
November and mid March and therefore electricity is supplied to
the grid. In the summer months the heat requirement is low and
the micro CHP does not run many hours, so most electricity is
purchased from the grid. Hans and Martha Overdiep are satisfied
with the micro CHP: The difference with a high-efficiency boiler
lies not in comfort or ease, but in electricity: the electricity produc-
tion can clearly be seen on the room thermostat and of course in
our lower energy bill as well.

118 119
Heat and Power Chapter 4|Example projects

4.5 De Omval Cogeneration Plant Project

The area between the River Amstel, the Weespertrekvaart, Amstel Station and Mr. Treublaan is known as De Omval. The
River Amstel bends sharply there. Under certain wind conditions ships had to change tack. This is called omvallen in Dutch
and that is where De Omval gets its name. It is a unique corner of the city, once popular among painters, and therefore
sufficient reason to immortalise the names of three famous Dutch masters in the high-rise office buildings Mondriaan,
Breitner and Rembrandt. The University of Amsterdam and a number of offices and dwellings are also located at De Omval.

When the De Omval project was developed in the 1990s the

decision was made to organise the energy supply from a central
location and to use heat and cold from a cogeneration plant.
In total the plant supplies heat, cold and emergency power
to offices with a surface area of 130,000 m2, 400 dwellings
and a number of shops. This cogeneration plant has run now
for over 13 years to the full satisfaction of its users. Nuon
Business Energy Solutions is responsible for its exploitation and
distribution.
The engines of the cogeneration plant. Source: Nuon
The De Omval cogeneration plant comprises four gas engines
with a combined capacity of 2,634 kWe. The produced electricity
is supplied to the public grid. The thermal capacity of the gas To regulate the CHP installations, the cogeneration plant primarily the year by a combination of absorption chiller, free cooling and
engines is used in the heat network for space heating and follows the heat demand of its surroundings. The peak demand in the electrically driven cooling compressors.
domestic hot water. In summer, the heat is used in an absorp- winter is 7 MWth, which means that the heat production of the
tion chiller to generate temperatures of 12 C to 7 C, sup- CHP installation (4 MWth) is supplemented by one or more boilers. Cogeneration plant De Omval supplies emergency power to four
plemented by centrifugal compressors. In winter, if outdoor This demand varies by the day and by the hour. Heat demand is locations. Should the public grid fail, the buildings switch over to
temperatures drop below 8 C, free cooling via the air coolers lower outside office hours than during office hours so more heat the cogeneration plants stand-alone 10 kV supply cable which
can be used to supply cold air, supplemented by the compres- is generated than consumed. Due to the 450 m3 auxiliary buffer supplies electricity to preferential groups in the building, thus
sors. This cooling is deployed, for instance, to cool offices Nuon is able to meet brief fluctuations in demand and to optimise maintaining partially at least the supply of electricity. The CHP
containing ICT equipment and air-conditioning (internal heat the production on a daily basis according to its own supply obliga- engines are designed to provide this emergency power.
load). tions and deployment strategy. When the demand for heat drops
the boilers and the CHP installations are switched off one by one. The power plant is monitored daily (online) enabling quick action
The three high-rises of De Omval. Source: Nuon Furthermore, the cooling demand at De Omval is met throughout should any deviations or malfunctions occur. Nuon Business

120 121
Heat and Power Chapter 4|Example projects

Energy Solutions sets great score by customer satisfaction, as is Key features 4.6 UMC Utrecht Power Plant Project
expressed in the recently renewed maintenance concept whereby Engines 2 x TBG 620 v8
malfunctions can be solved quickly and safely. The users are very 2 x TBG 620 v12
satisfied with this organisation and are also better off with respect Engine supplied by Deutz
to their energy costs. In addition, the environment benefits from UMC Utrecht (University Medical Center Utrecht) employs approximately 10,000 people. In addition to patient care, UMC
Absorption chiller supplied by Carrier
cogeneration plant De Omval. With an annual production of 10 carries out medical research and Utrecht University students are trained there. Stringent requirements with respect to
Other chillers Carrier / York
million kWh it saves more than one million cubic metres of natural energy supply are incident to the hospitals function. Continuous supply of heat, cooling and electricity is essential. As one
gas, whilst reducing the production of CO2 by 2,000 tons. Heat storage tank 450,000 litres of the principles in the choice of CHP installation in Utrecht it must be able to run as a stand-alone installation.
Because cogeneration plant De Omval is situated in an area where Net electrical capacity 2,646 kWe (total)
many people work, study and live, much attention was paid to CHP thermal capacity 3,826 kWth
the plants spatial integration. With the help of an architect the Total thermal capacity
building was designed to harmonise with its surroundings and the
Hot water (90 C) 13 MWth
plant fits perfectly in the streetscape.
Cooling capacity of absorption chiller 340 kW
Total cold capacity 5 MW

Table 1 Details of power installation.

UMC Utrecht has various networks: a cooling network, a steam

network and a central-heating network. Three Wrtsil gas
engines of 2.15 MWe each are used to produce electricity (see
picture). The engine heat flows to the central-heating network
whilst the flue gases flow through a shared heat recovery boiler
that feeds the steam network as well as the central-heating
network (indirectly). The entry temperature of the central-
heating network varies depending on the time of year (70 C
in summer and 90 C in winter). The return temperature is
generally 45 C.

The cooling network is fed by one cold storage system, two

absorption chillers (one of 600 kW fed by steam and one of 1,500
kW fed by central-heating water) and four centrifugal compres-
sors (2.50 kW each). The temperature of the cold water pumped
up in early summer is 7 C to 8 C.

The steam network is used, for example, to humidify and to

sterilise and in summer also for the absorption chillers. It is fed by
the heat recovery boiler and by three steam boilers, of which two
are fitted with dual fuel burners (natural gas/domestic fuel oil).
UMC Utrecht can also fulfil its own heat requirement should the
gas network fail.
The cogeneration plants integration in the area. One of the 2.15 MWe gas engines at UMC Utrecht.

122 123
Heat and Power Chapter 4|Example projects

The engines run at full load during peak hours because any surplus All units are autonomously regulated. In this way a malfunction
steam can be sold at the peak rate. During off-peak hours the engines in a single unit will not cause a malfunction elsewhere. With their
are regulated to purchase a small amount of electricity. Should the direct gas injection the Wrtsil gas engines respond quickly to Peak hours
10
CHP system malfunction the national grid serves as back-up. load fluctuations. Within a half second a gas engine can double Demand
9
its capacity (from 40% to 80%, for example). In the event the gas 8
Purchase
from grid Return supply
Should the national grid fail the system switches to stand-alone network fails or malfunctions occur in the gas network the system 7

operation without any interruption to the critical hospital facilities switches over to the 3 MWe diesel engine and two steam boilers 6

MWe capacity
5
as the control system continuously calculates the capacity sup- (11 MWth each) that can run on gas oil as well. 4 Supply through
plied from the grid. In combination with the number of connect- 3 gas engine

ed CHP units it can thus be determined whether any overloading 2

1
will occur if the grid fails. Based on this determination, a pre-cal- 0
0 2 4 6 8 10 12 14 16 18 20 22 24
culated number of low-priority users are connected or discon- Hour of the day
nected during stand-alone operations, based on a 90% to 95%
maximum load of the gas engines. In 2006 the installation was Figure 1 24-hour load curve of UMCG.
successfully put into stand-alone operation on twelve occasions.
The heat recovery boiler (maximum 20 tons/h).

Key details
3 Wrtsil gas engines 6.5 MW (total)
1 heat recovery boiler + economiser 3.0 MW
1 diesel engine back-up 3.0 MW
2 dual fuel steam boilers 22 MW
1 steam boiler, natural gas only 5.5 MW
Cold storage system 2.7 MW
2 absorption chillers 2.1 MW
4 centrifugal compressors 10 MW

Key data energy demand

Cooling network of 6/16 C 16 MW
Steam network 7 bar Maximum 20 ton/h
Central-heating network 15 MW
Electricity peak demand 9 MW

Table 1 Details of power installation.  ans Vlodrop: Our high reliability is thanks to our motivated
H
maintenance staff and not just to our fast response engines.

1.5 MW absorption chiller.

124 125
Heat and Power
4.7 Amersfoort-Vathorst District Heating Project
Eneco laid a network for district heating in the new Amersfoort Vathorst urban expansion location (Vinex-wijk). In 2002
construction started on approximately 11,000 dwellings of which roughly 2,500 were connected to district heating. The
original plans included a wood-fired CHP installation for heating the homes and for domestic hot water. Considering the
space required for storing the wood and the proximity of dwellings the plans were changed to include the construction of a
natural gas CHP installation which will be able to run on green gas (of natural gas quality) if necessary. The installation, built
in a corner of the intersection where the Amersfoort-Zwolle railway line and motorway A1 cross, was put into operation
at the beginning of 2007.
The power plant has three hot water boilers with a capacity of
6,000 kWth each and two gas engines with a thermal capacity
of 1,680 kWth each. The electrical and thermal efficiencies are
both around 40%. A 250 m3 storage tank has been installed
beside the building as a heat buffer. The system is designed to
allow for one other system to fail while maintenance is carried
out on one of the gas engines without jeopardising supply (n-1
principle).
The power plant is integrated into the electricity and heat network.
The generators of the CHP installations supply 400 V electricity.
One of the advantages of this low voltage is that no special safety
measures are required for maintenance on the engines. In addi-
tion, the pumps and ventilators in the power plant can be fed
directly. Electricity is fed back into the grid via (step-up) trans-
formers at 10 kV level (Figure 1).
The heating system of the dwellings is hydraulically linked directly
to the heat network, with the advantage that no heat exchangers
are required for heating. Every dwelling has its own heat exchanger
to heat domestic water. To keep the pressure in the dwellings
at the proper level the power plant is equipped with supply
pumps as well as return pumps. The return temperature from the
View of the new Vathorst district. network is approximately 55 C, making it possible to integrate
126
Chapter 4|Example projects
the gas engines in parallel to the central-heating boilers and the
buffer tank.
10kV
The water supplied to the dwellings is heated to at least 80 C so
that the domestic hot water is at least 60 C, which is required
to kill any legionella bacteria. The flow of the water fed in and
400V out through the top of the heat buffer is kept at minimum speed,
which is essential for proper stratification (Figure 2).
CHP CHP
In principle, the gas engines run only during the day at peak
hours. In addition to supplying direct heat the buffer is filled
as well. During winter the buffer is completely filled, but not in
Figure 1 Integration into the electricity grid. summer in order to prevent unnecessary heat loss and to be able
to intervene should there be a peak in electricity demand. The
cold part of the buffer cools the gas engines, avoiding the use of
an emergency cooler (Figure 3).
To minimise noise pollution from the CHP installation situated
CHP CHP SH on the districts perimeter silencers have been installed in all
Dhw openings in the building - chimneys, air inlets and outlets -and
the air intakes and flue gas exhausts in the power plant have also
Buffer Boilers CHPs Pumps Space heating and
domestic hot water been fitted with acoustic silencers.
The entire power plant can be operated remotely. In ordinary
Figure 2 Hydraulic integration. situations a technician visits the plant once a week for a visual
inspection. In addition, Eneco monitors the power plant from its
head office. The monitoring system has many built-in sensors so
that deviations can be attended to promptly. For instance, the
noise pressure is monitored per cylinder, whilst moisture sensors
on the floor alert staff to leakages.
Buffer Boilers & CHPs
Figure 3 The principle of the heat buffer.
127
Heat and Power
 en Buwalda of Eneco: Proper monitoring is essential for supply
R Silencers at the intake of the boilers.
security.
Key features
Gas engines supplied by:
Central-heating boilers supplied by:
Installed electrical capacity:
Installed thermal capacity:
Capacity of buffer tank:
Average electrical efficiency:
Average thermal efficiency:
Table 1 Details of power installation.
128
Chapter 4|Example projects
4.8 Gebr. de Groot Kwekerijen CHP Project
The Gebroeders De Groot Kwekerijen (nursery) in Harmelerwaard cultivates vine tomatoes in greenhouses covering 15 hectares,
divided over three separate sections. The company was established in 2003, employs around 60 people and was expanded
in 2005. Approximately 9.5 million kilos of vine tomatoes are produced every year.
The greenhouses of Gebroeders De Groot were originally heated
with natural gas boilers. Due to rising natural gas prices the
use of alternatives based on a gas engine CHP became more
appealing. Three Jenbacher J616 GS engines were installed in
2006, one in each section. The CHP installations produce heat
for the greenhouses and electricity for supply to the public grid.
Jenbacher
If the thermal capacity of the engines is insufficient to meet
Viessmann
the heat requirement in the greenhouses, the boiler can be used
2 x 1,680 kWe to supplement.
3 x 6,000 kWth
250 m3 In winter the generated heat keeps a constant temperature in
40% the greenhouses. In summer the engines are used to administer
doses of CO2 in the greenhouse, whilst the heat released in the
40%
process is stored in a heat buffer. This buffer is used to keep the
temperature up during the night and to dehumidify the air in
early morning.
The engines are controlled on the basis of the electricity price and
to produce CO2. Consequently, they operate often during the day
whereas the greenhouses require heat at night. The CHP installation
is therefore combined with a heat buffer so as to bridge differ-
ences in heat production and heat requirement for approximately
24 hours. In principle, heat from the CHP installation is always
sent to the buffer first, from where it passes through a pipe Vine tomatoes, cultivated above the pipes of the hot water system.
129
Heat and Power Chapter 4|Example projects

system to the greenhouses. To make the CHP flue gases suitable
for CO2 plant fertilisation the flue gases of the gas engines are
purified by means of a CodiNOx installation supplied by the
Hanwel company. This comprises selective catalytic reduction
with urea and an oxidation catalyst. Before the flue gases enter
the greenhouses, the installation removes hazardous components
such as NOx, H2S and ethylene.
No lighting is used in the cultivation of vine tomatoes and the
companys electricity requirement is low. To make optimum use of
the economic value of the produced electricity De Groot and five
other greenhouse growers have invested in the electricity network
of the Tuinbouwcombinatie Hamelerwaard BV (Harmelerwaard
cable. By using their own network the produced electricity can continue to produce tomatoes at competitive prices. So it looks
also be used by their fellow greenhouse growers in the vicinity. as if he is running two companies: a tomato nursery and a power
Any surplus is supplied to the public grid. plant. The latter halves the heating costs with relatively little
effort and consequently the prices of the vine tomatoes are kept
By combining peak hours (7 a.m. 11 p.m.) during week days stable.
and expensive weekend hours (8 a.m. 8 p.m.) the engines at
De Groot run approximately 4,600 hours per year. The electricity
proceeds are therefore fixed for a longer period of time. A sepa-
rate agency has been contracted to optimise the proceeds of the
Key features
engines on the APX and balancing markets. During installation,
Supplier: GE Jenbacher
problems were encountered with the engines at De Groot. One of
Maintenance: GE Jenbacher
the engines had to be returned to the factory because it seized.
There was also a break in one of the cables between the local Model: JMS 616 GS (3x)

Greenhouse Growers Association Ltd.). The greenhouse growers greenhouse growers network and the public grid but fortunately
Electrical capacity: 2.4 MW per engine
in this association had their own network laid and purchased the this was relatively easy to repair.
Thermal capacity: 2.4 MW per engine
CHP installations collectively. They installed seven CHP installations
with a combined capacity of 13 MWe. Their own network is Marcel de Groot, one of the owners of the nursery says that Heat buffer: 1,000 m3 per greenhouse area
of 5 ha
connected to the national grid via a separate 7.5-kilometre long without the CHP installations it would have become difficult to
Hot water: Available at temperatures between
90 C and 30 C
Flue gas cleaner Codinox

Table 1 Details of power installation. Heat buffer containing 1,000 m3 of water.

 arcel de Groot: CHP installations achieve a high efficiency and

M The Jenbacher JMS 616 GS.
produce a substantial cost saving with little effort once they are
up and running.

130 131
 Appendix 1 | The hydraulic and steam-side integration of CHP

Appendix 1

The hydraulic and

steam-side integration
of CHP
The manner in which CHP installations are integrated into heating or steam systems is of
vital importance for the installation to function properly. This appendix discusses various
popular approaches to the hydraulic integration of CHP in a number of different central-
heating systems. The integration of CHP installations in steam systems differs from the
hydraulic integration and is discussed separately in this appendix.

Pre-heating recycled water in a standard central-

heating system by means of a CHP installation
Heat production Heat consumption
Figure 1 shows the simplest way to integrate a CHP installation
into a heating system with one standard - not high-efficiency - 2 3

boiler. The CHP installation is fed with the coldest recycled water
and starts running only when sufficient heat is required, the recy-
Cogen-
cled temperature is cold enough and the electricity can be fed Boiler eration
unit Heat Domestic
into the grid. groups hot water
Heat meter

When the demand for heat is low only the central-heating boiler 1

runs and pump 1 stands idle. The central-heating boiler turns on Non-return valve

and off or regulates only in the lower regulating range. When

there is enough demand for heat, pump 1 kicks in and the CHP
installation starts running in pre-heating mode. If necessary the Figure 1 P
 re-heating recycled water in a standard central-heating
central-heating boiler reheats the circulating water. Preferably the system by means of a CHP installation.

133
Heat and Power Appendix 1 | The hydraulic and steam-side integration of CHP

consumed thermal capacity of the circuit is measured in order
to calculate the connection moment. One flow meter and two
temperature sensors are needed for this. Non-return valves
prevent a thermal stream from flowing against the direction of
the heat circulation. The regulating range of the CHP installation
generally ranges between 30% and 100% of maximum load. The
lower limit can be raised depending on the cost structure and
the efficiency curve. The maintenance costs are calculated per
operating hour and as the capacity drops, the electrical efficiency
drops slightly as well.
Heat production Heat consumption
CHP installation with a high-efficiency boiler
If a high-efficiency boiler is used it is not advisable to pre-heat the
recycled water as no condensation occurs in the boiler and there-
fore the efficiency will be lower than required. Consequently, a
CHP installation is connected in parallel to a high-efficiency boiler
(Figure 2). When the demand for heat is low, only the high-effici-
ency boiler turns on and pump 1 stands idle. The high-efficiency
boiler turns on and off or only regulates in the lower regulating
range. As soon as there is enough demand for heat, the system
switches over to the CHP installation and pump 1 kicks in. At an
even higher demand for heat the high-efficiency boiler also starts
running.
CHP installation with heat buffer
The use of a heat buffer can increase the economic efficiency of
CHP installation is used (in the event of concurrent demand for installation and the buffer combined form an internal circulation
electricity) and the high-efficiency boiler switches on when the unit. The temperature of the recycled water comes to a maximum
heating capacity of the buffer or of the CHP installation is insuf- of 70 C. Figure 7 describes this schematically.
ficient or when no electricity is needed. The system is regulated
mainly by turning the pumps on and off.
Indirect integration of a CHP installation with heat
buffer and a standard central-heating boiler
In this configuration (Figure 5) the CHP installation constantly fills
the heat buffer as long as there is a demand for electricity and
there is still capacity in the buffer to store heat. When heat is
required, the heat in the buffer is automatically used. The cen-
tral-heating boiler is used only when the buffer can no longer Heat production Heat consumption
maintain the required supply temperature. The advantages of this
alternative are a simple structure, simple control and high cover- 4
=M
2 3

2 3
a CHP installation by: age by the CHP installation.
Clustering as many operating hours as possible in the peak High-

hours (giving greater savings or a higher return supply rate); Indirect integration of a CHP installation with heat effi-
ciency
CHP
unit
Buffer
Domestic
High-
effi- CHP Running the CHP installation as much as possible at full load buffer and a high-efficiency boiler boiler hot water

ciency unit Heat Domestic Heat Heat

boiler groups hot water
(giving a higher economic and technical efficiency); In Figure 6 (page 136) a high-efficiency boiler is connected in meter groups

Heat meter Also being able to operate during a peak in electricity demand parallel to make optimum use of high-efficiency. The CHP instal- 1 5

Non-return valve
1
when there is no demand for heat. lation surrenders its heat via the buffer when there is a demand
non-return valve for electricity.
The principle reflected in the diagram in Figure 3 is similar to that
of Figure 1. Heat can be stored in the added heat buffer. In the Practical example of the integration of a CHP Figure 4 CHP installation with a high-efficiency boiler and buffer.
event of a heat surplus, heat is stored in the buffer by means of installation into an existing central-heating system
Figure 2 CHP installation with a high-efficiency boiler.
pump 4. Pump 1 then kicks in to meet the limited heat demand.
When hardly any electricity is consumed and/or during off-peak Points of departure:
hours the heat can be re-used by starting up the corresponding A CHP installation is to be installed in an existing central-heating
Heat production Heat consumption
Heat production Heat consumption
pump (5), opening the valve above the buffer and emptying the installation with two boilers;
buffer. When the demand for heat is high or if the buffer is empty, The temperatures in the pipes may not be changed too much =M
2 3
4
=M
2 3
the central-heating boiler switches on. and for the major part are dictated by the existing central-
heating boilers; High-
CHP installation with a high-efficiency boiler Only minor changes to the existing hydraulics and the regulation effi- CHP Buffer
ciency
Boiler CHP
unit
Buffer
Domestic
and buffer and control are permitted. boiler
unit Domestic
hot water
hot water
In the event of a high-efficiency boiler, the CHP installation is The CHP installation will provide the basic heat demand and be Heat
meter
Heat
groups
Heat meter Heat
groups integrated in parallel, as shown in Figure 4. The CHP installation geared to the heat demand. 5 1 4
1 5
can be used if electricity is demanded but not heat. Pump 4 and There is the possibility of covering the peak load in the demand Non-return valve
Non-return valve
the CHP installation operate together and the buffer is filled. The for electricity with the CHP installation;
CHP installation switches off when no more electricity is needed In the boiler room there are two standard central-heating boilers,
or when the buffer is full. The system works in the same order two heat buffers, one CHP unit, two heat consumers, an expan- Figure 5 Indirect integration of a CHP installation with heat buffer
Figure 3 Pre-heating with a CHP installation with heat buffering. when heat is needed: the buffer is emptied, the heat from the sion tank with automatic fill system and accessories. The CHP and a standard central-heating boiler.

134 135
Heat and Power Appendix 1 | The hydraulic and steam-side integration of CHP

Summer situation recovery boiler in combination with the existing steam turbine
In summer the CHP installation has sufficient heat capacity to meet an integrated STAG installation is created based on a back pres-
demand and therefore the boilers are shut down hydraulically. The sure turbine. From an exergetical and/or energetic point of view
CHP installation operates a few hours per day during peak hours it is usually better to have the steam pressure of the CHP instal-
to partially fill the heat buffer. The buffer must maintain a margin lation at a higher level (> 40 bar) and to bring the steam to
Heat production Heat consumption in order to draw on the CHP installation during peaks in electricity the required MP or LP level end pressure via a steam turbine.
demand. The CHP installation has a mixing control with which the The diagram would then resemble Figure 9. This integration
2 3
=M supply temperature can be adjusted at the set point (according to is also possible with a condensing steam turbine whereby the
Boiler Boiler CHP
a heating curve). drain pressure is adjusted to the pressure of the MP or LP steam
High- MP network ~ 30 bar network. It is important to check the capacity of the various
effi-
ciency
CHP
unit
Buffer
Domestic
Winter situation steam networks during the integration.
boiler hot water Consumers
In winter the CHP installation pre-heats the central-heating system
Heat Heat
meter groups
LP network ~ 40 bar
and the boilers are used to raise it to the final temperature. The If a CHP installation is designed to meet a growing demand for
5 1 4
CHP installation is used directly during peak hours and indirectly steam, the pipe diameters of the steam network must be geared
Non-return valve
Consumers during off-peak hours via the heat buffers. to that increase. This will be no issue if the installation replaces
existing boilers. The overall control of the CHP installation and the
Steam-side integration of CHP boilers is also important. Steam production is usually controlled
Figure 6 Indirect integration of a CHP installation with heat buffer Figure 8 Simplified steam diagram with MP network and LP network. In a way it is less complicated to use CHP in an existing steam on the basis of the steam pressure by means of a cascade control
and a high-efficiency boiler.
network than in a hydraulic integration. CHP installations are system.
always connected in parallel to the desired pressure level at
which other boilers may possibly be connected as well. However, The CHP installation must provide the base load and therefore be
the design and the control of the installation must take several situated first in line in the cascade. The steam pressure of a 4-bar
Summer by-pass
Weather dependent TIC 0 Release/block boiler aspects into account to ensure the installation functions properly network, for example, varies between 3.5 and 4.5 bar. The CHP
supply 70 / 95 C BT Heat consumers
Summer Supply CHP and safely. installation is the first to produce steam. When the demand for
operation TIC 3 + buffer TIC 1
Winter Ontladen East West
operation Laden

Empty at 70 C
Many large industrial sites have both a medium pressure (MP)
TIC CHP unit in
15 m3 network and a low pressure (LP) network. There are no clear
1.750 1.750 Buffer 1 Buffer CHP
kW kW
Discharge 520 kWth, definitions of these steam pressures, but low pressure steam CHP
boiler boiler 320 kWe
generally varies between 2 and 10 bar and medium pressure
Fill HP network ~ 80 bar
Buffer
steam between 10 and 30 bar. Boilers usually produce the steam
Filled at 90 C
15 m3
at medium pressure, from which the required LP steam is made
TIC
CHP unit out via a steam turbine. This steam turbine subsequently generates Boiler Boiler
1.500 litres 1.500 litres
Buffer 8 Expansion electricity, but it can also drive a boiler feed water pump. MP network ~ 30 bar
tank
Softening
To incorporate sufficient reliability and/or redundancy in the Consumers
Closed Recycled max 70C Dosage Water treatment
system, there are usually two boilers at 100% capacity or three
LP network ~ 80 bar
Hydraulische inpassing van een W/k unit in een bestaand ketelhuis boilers at 50% capacity and a bypass-reducer is often included
in addition to a steam turbine. The diagram is then roughly as Consumers
Figure 7 P
 ractical example of the integration of a CHP installation provided in Figure 8. Obviously the design of a CHP installa-
into an existing heating installation.
tion can be adjusted to the pressure of the existing MP steam
network, in which case the installation is connected in paral- Figure 9 S
 implified steam diagram with CHP on a HP network and a
lel to the boilers. Actually, by adding a gas turbine with a heat steam turbine between HP and MP networks.

136 137
Heat and Power Appendix 1 | The hydraulic and steam-side integration of CHP

steam increases and the pressure drops below a certain value (for
example 4.3 bar) the first boiler kicks in. When the pressure drops
lower (for example under 4.1 the bar) the second boiler kicks in,
and so on.

Another point that requires attention is a load that is below the

minimum load of a CHP installation. In that case a boiler will still
need to take over the production. However, experience shows
that the base load in the industrial sector is rather high and con-
stant so that this situation occurs only in exceptional situations
such as during a maintenance stop or during the start-up cycle.
The CHP system must also be integrated on the boiler feed water
side. The steam in the processes gives off heat and condenses and
returns entirely or partially as condensate. This condensate is sub-
sequently supplemented with fresh (demineralised) water, condi-
tioned and conducted to the degasser. The dissolved gases such
as harmful oxygen are removed in the gas extractor after which
the boilers are filled by means of the boiler feed water pumps.

It is easiest to integrate a new CHP installation if it is fitted with

its own degasser and boiler feed water pumps. If a CHP installa-
tion replaces an existing boiler, the capacity of the existing gas
extractor usually suffices. These boiler feed water pumps must be
set to the maximum steam output via the blow-off valves on the
boiler at blow-off pressure (generally 125% of the normal pres-
sure). These boiler feed water pumps can therefore seldom be
shared. In an expansion situation the capacity of the condensate
tank, the condensate pumps, the demineralised water installation,
the conditioning and the degasser for the new CHP installation
must also be expanded.

138 139
 Appendix 2 | Determining the size of a CHP installation

Appendix 2

Determining the size

of a CHP installation
The size of cogeneration installations is related to the actual heat requirement, which differs
per user. The heat requirement of a welding factory differs radically from that of an office
building. The size of a CHP installation is determined on the basis of several criteria among
which is the actual heat requirement.

Actual heat requirement
The actual heat requirement is by definition the thermal capacity
expressed in thermal kW (kWth) required to keep a building
or a process in design conditions at the required temperature.
An example of these conditions for buildings is an outdoor tem-
perature of -10 C and a wind velocity of 8 m/sec. An example
for processes is the desired temperature of the process as
compared to its environment. The heat requirement is also
expressed in kWhth per year, in other words the heat consump-
tion per year.
There are two ways to determine thermal capacity and/or annual
consumption:
1. for existing buildings by using historical annual consumption
data.
2. for new buildings by assessing the heat loss of the outer
facade of the building. This heat loss must then be multiplied
by the operating time that applies to this type of building.
1. Existing buildings
The gas consumption in existing buildings has usually been estab-
lished over a number of years. Users see this information on their
annual energy statement. Subsequently, one can take the average
consumption per year, corrected by the number of degree days
(DD) for each year. Degree days are an indicator of how cold the
year has been. They are measured and provided by the KNMI
(Royal Netherlands Meteorological Institute) in De Bilt (NL). A
degree day is a day whose average temperature is 1 C below 18
C. The higher the number of degree days the colder the year. It is
also important that the user has information on all energy-saving

141
Heat and Power Appendix 2 | Determining the size of a CHP installation

measures that have been taken. Any deviations in the annual con- and profitable application, the CHP installation must supply a
sumption pattern can be explained and evaluated on the basis of large portion of the annual heat requirement. This can only be
this information. achieved if the installation has a long operating time.

Step 1 If a CHP installation is too large it must stop and start many 100 uur
1.0
Before determining the size of the CHP installation one must inves- times depending on how the heat demand is regulated, greatly
tigate whether there are any feasible energy-saving measures that increasing the risk of malfunctions and losses in the heat

Actual thermal capacity P

can be taken. Only then can one have a good impression of the generation. If a CHP installation is too small its operation will 0.75 150 uur

Capacity P
energy consumption and what role a CHP installation can play in be repeatedly disrupted, because the existing boilers with their
this respect. If energy-saving measures are taken after the CHP relatively large heating capacity will be switched on too often by 0.5
360 uur

installation is installed, there is a good chance they will have a the temperature regulator (after all the building must be heated
negative impact on the installations operating hours (see below). within a certain period of time) and therefore take up a large part 0.25
3,990 hours

of the CHP installations operating hours.

Step 2
Dividing the average annual consumption (in Nm3/year 2. New buildings 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
adjusted by the number of degree days) by the installed thermal Users of new buildings do not have annual data at their disposal Hours/year Hours/year

capacity results in a figure which is referred to as operating time.
This figure is often much too low for most heating systems, in which
case too much thermal heating capacity (generally boiler capacity)
has been installed. This can be for reasons of high reliability or for
ensuring the process or building requires only a short warming up
time, or the desire to have a built-in reserve. In practice the installed
thermal capacity is often two to three times too large.
Several measurements taken at consumer sites and historical
consumption data have shown that reliable operating time figures
for office buildings, industrial buildings, schools and government
institutions are between 1,000 and 1,250 hours. The operating
time is lower for swimming pools, churches, sports facilities, etc.,
namely between 400 and 800 hours. CHP installations are often
not feasible in these categories, with the exception of indoor
swimming pools.
Step 3
By dividing the annual consumption by a reliable operating time
one arrives at a thermal capacity that gives an indication of the
actual thermal capacity required to enable a process or building to
reach the afore-mentioned design conditions.
Step 4
The thermal capacity of a CHP installation may not exceed 20%
to 25% of that calculated thermal capacity because, for a reliable
and must therefore make a rough estimate of their annual
consumption. Energy-saving measures are already incorporated in
the new buildings.
Step 1
The heat loss of a building is determined by calculating the heat
loss of the outer facade. This value can be derived from the
heating and ventilation fitters transmission calculation.
Step 2
The estimated annual consumption is calculated by multiplying
this value by the anticipated operating time (by 1,250 hours for
offices, for example). If this annual consumption matches that of
similar office buildings the estimate can be based on the loss via
the outer facade. If the calculated annual consumption differs
too much it is advisable to base ones estimate on the annual
consumption figures of the comparable buildings.
Other criteria for determining the size of a CHP
installation
The thermal size is the most important factor in determining the
size of a CHP installation as it also determines the number of
operating hours, the number of CHP units and the integration into
the central-heating installation, irrespective of the size of the CHP
installation. The afore-mentioned definition applies to all sizes.
This is made clear by means of the annual load duration curve of
Figure 1 Example annual load duration curve.
a consumers heat consumption. Figure 1 contains an example of
an annual load duration curve.
The annual load duration curve reflects the number of hours in
which a certain heat capacity is demanded. The duration curve
can be made by recording all required thermal capacities per hour
during an entire year.
This is a time-consuming matter. Often the annual load dura-
tion curve of a similar existing building is used to derive the con-
sumers curve while taking the expected year consumption into
account. The curve can be made using the following division:
Maximum required thermal capacity = P
100 hours full capacity per year = 100P
150 hours 0.75 capacity per year = 113P
360 hours 0.5 capacity per year = 180P
3,990 hours 0.25 capacity per year = 998P
The numbers 100, 150, 360 and 3,990 are empirical figures distilled from various
measurements. All in all it is assumed that the heating system operates 4,600
hours. The total annual consumption for heating in this instance is 1,390P. P
equals the annual consumption (in kWhth) divided by 1,390.
Figure 2 Hypothetical annual load duration curve.
The capacity P intended here is the actual capacity required to
meet the heat requirement in design conditions (not the installed
capacity, which in most cases is much too large).
If the capacity P is positioned on the vertical axis at the highest
point of the curve at time zero and the duration is positioned on
the horizontal axis 4,600 hours in this instance the annual load
duration curve is created by drawing a line through the middle
of the upper horizontal line of the relevant block 100 x 1P, 150 x
0.75P, 360 x 0.5P, 3990 x 0.25P.
In this curve the heat capacity of one or more of the selected CHP
installations can be positioned by plotting the thermal capacity
of the selected installation on the vertical axis and then drawing
a horizontal line far enough to intersect the drawn curve. This
method clearly shows that the larger the thermal capacity of a
CHP installation, the lower the number of full load hours becomes
per year.
It is important that the CHP installation runs as many operating
hours as possible in order for it to be technically as well as finan-
cially feasible. In many cases a heat buffer can be useful. By install-
ing a heat buffer the CHP installation will run more operating

142 143
Heat and Power Appendix 2 | Determining the size of a CHP installation

hours and less use will be made of the existing boilers, which has
a positive effect on the exploitation of the CHP installation.
Appendix 1 (Hydraulic integration of CHP installations in the
heating installation) contains diagrams of several examples
showing the position of the heat buffer.
It is very important that the correct point of departure is used
(generally the heating system) when integrating a CHP installation
into an energy system, so that optimum use can be made of the
heat released from the installation. If it is not carefully integrated,
the use of CHP will fail.
Step 2 The number of expected operating hours can now be deduced
A value of 1,175 hours is taken in this instance. The required from the curve; it amounts to 3,900 hours, which is a satisfac-
boiler capacity (K) would be 248,000 (2 x K (0.85 x 35.17 tory value since efficient use is reached at around 4,000 full load
3.6)) = 1,175 hours, each resulting in 876 kWth. hours.
Step 3
The correct CHP installation in this instance may have a maximum
of 20% to 25% of the remaining capacity of 2 x 876 kWth. There-
fore the heat capacity may be between a minimum of 0.20 x 2 x
876 = 350 kWth cogeneration capacity and a maximum of 438
kWth cogeneration power. This corresponds with a CHP installa-
tion of between 237 kWe and 337 kWe.

The main points requiring attention in this respect are the Step 4
amount of circulating central-heating water, the temperature of A MAN E 2842 E312 unit, for example, producing 237 kWe and
the central-heating water and the place of the hydraulic connection 372 kWth is selected from a list of available CHP installations. Its
in the central-heating system. To ensure that the CHP installation total efficiency, electricity plus heat, amounts to 80% (at higher
can deliver its heat reliably to a heating installation, the hydraulic calorific value).
connection must be made at the point where the water is at
its lowest temperature. That is generally in the return circuit The hypothetical annual load curve, of which the maximum
to the boilers or by means of a connection to the buffer. capacity P is now known, is 1,752 kWth and is shaped as shown
in Figure 3.
Calculation example: Determining the size of a CHP
installation
Gas consumption over the past five years: 248,000 Nm3/year
on average and adjusted by degree days. Thermal capacity: in
the boilerhouse are 2 x 1,700 kWth gas-fired boilers both fitted
with a high-low control (100%, 50%). The fuel efficiency of 1,752
both boilers is 0.85 (at higher calorific value). 1 Nm3 natural
Actual required thermal capacity P

gas of Groningen quality has a higher calorific value of 35.17

kJ/Nm3.

Step 1
First calculate the current operating time of the existing heating
3,990 hours
installation.
372
The operating time in this instance is:
248,000 (2 x 1,700 (0.85 x 35.17 3.6)) = 605 hours.
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
This value is too low for a full load operating time and therefore Hours/year

the installed thermal capacity is too large. Experience shows that Figure 3 Annual load duration curve with calculated CHP installation.
a full load operating time of between 1,000 and 1,250 hours is a
better value.

144 145
 Appendix 3 | CHP and protection of interests

Appendix 3

CHP and protection

of interests
The Vereniging Cogen Nederland (Cogen Nederland Association) protects the interests of
CHP in the Netherlands. Cogen Nederland represents suppliers of CHP installations and
CHP plant owners. CHP produces approximately 50% of the generated electricity in the
Netherlands.

As an interest-representation organisation Cogen Nederland
focuses on a number of important topics, among them market
conditions, market structures, legislation and subsidy schemes
for CHP in the Netherlands. The CHP Platform chaired by Cogen
Nederland confers with authorities such as the Ministry of
Economic Affairs, the Ministry of Housing, Spatial Planning and the
Environment, and the Ministry of Finance. Cogen Nederland also
consults advisory organisations such as the Sociaal-Economische
Raad (SER / Socio-Economic Council), AER (Algemene Energieraad
/ General Energy Council in the Netherlands) and with parties
such as TenneT (National Grid Operator) and DTe (Dutch energy
regulator).
European Commission in Brussels. Vereniging Cogen Nederland
(Cogen Nederland Association) developed through Projectbureau
Warmtekrachtkoppeling (PW/K / CHP Project Office) which has
strongly promoted and stimulated CHP in the 1990s. In 1998,
when the liberalisation of the energy markets was imminent, PW/K
was split up into Vereniging Cogen Nederland (for the protection
of interests) and in Cogen Projects b.v., an independent consul-
tancy agency where the advisory services were accommodated.
Cogen Projects is presently managed by Stijn Schlatmann. Cogen
Projects continues to provide advisory services with respect to
energy saving and decentralised energy generation.

On a European level CHP plant owners are represented by Cogen

Europe. Cogen Europe focuses entirely on the legislation of the

147
Heat and Power Index

Bibliography Index

Bloemen, H., Federatie Aandrijven & Automatiseren (Power and Automa- Absorption Chiller 22, 43, 120-125 CO2 8, 11-13, 15, 16, 18, 19, 21, 23, 29, 48, 51, 54, 62, 78, 82, 83, 96,
tion Federation), Zoetermeer: PDM, 2008. AFC 42-44 99, 104-106, 109, 122, 129, 130
Air preheater 35 Coal 6, 8, 11, 12, 15, 18, 21, 64
Stijn Schlatmann, Nieuwe ontwikkelingen voor WKK-systemen in de glas- Air Quality Act 81 Codinox 130, 131
tuinbouw (New developments for CHP systems in glasshouse cultivation), APX 19, 67-70, 130 Cogen 4, 147
Driebergen: Cogen Projects, 2003. Back pressure steam turbine 20, 35 COGEN Nederland 4, 106, 147
Balancing market 67, 68, 130 Cogen Projects 4, 7, 147, 148
Jan Grift, TVVL course, Driebergen: Cogen Projects, 2007. Base load 36, 48, 60, 137, 138 Cold air operation 38, 41
BEES - Decree on Emission Standards for Burners for Environmental Commodity price 59, 60, 70
M. van Gastel, Peter Steenbergen. R.J. van Hasselt, Co-generation in the Management Part A 79, 80, 81, 83 Condensate tank 138
Netherlands DTE, Driebergen: Cogen Projects, 2001. Biogas 13, 20, 99, 101 Contract phase 93
Biomass 16, 81 Contract types 5, 90, 91, 148
Duinkerken, N.D., Het Ketelhuis: productie en gebruik van stoom in de Black start 54 Control strategy50, 51, 103
Praktijk (The boilerhouse: Production and use of steam in practice). Dieren: Blow-off valves 138 Cooling 13, 15, 30, 33, 40, 43, 44, 46, 77, 86, 101, 109-111, 115, 120-
Adviesbureau SAM BV, 2006. Boiler feed water pumps 34, 138 123, 125
Built environment 20, 27 Cooling-water 16
A. J. Appleby, F. R. Foulkes, Fuel Cell Handbook. Seventh Edition, Morgan- By-pass 40, 41 Conversion technology 4, 13, 18, 29, 30
town, West Virginia, VS: EG&G Technical Services Inc., 2004. Calculation example 59, 70, 73-75, 144 Converter29, 50, 52
Carnot 15, 40 Cross-border 85
William E. Liss, Natural Gas Power Systems, Liss: GRI, 1999. Central-heating boiler96, 100, 101, 104, 113, 127, 128, 133-135 Decree on Facilities and Installations 78-80
Central-heating systems 133 Degree days 141, 142, 144
Noort, J., Duurzame samenwerking door betere contractvorming (Sus- CHP design 4, 44 Demineralised water installation 138
tainable collaboration through improved contract types), Driebergen: CHP potential 4, 21-23 Designated authority 78-81, 87
Cogen Projects, 2007. Determining the size 5, 141, 142, 144

148 149
Heat and Power Index

District heating 4, 18, 20, 22, 23, 35, 38, 78, 109, 126 Green funding 72 Natural gas reserves 8 Silencers 52, 127, 128
Double-pressure boiler 40, 41 Green gas 99, 107, 126 NEa (Dutch Emissions Authority) 82 SO2 11
DTe (Dutch Energy Regulator) 147 Groningenveld 8 Network rates 62, 64, 66 Space heating 16, 44, 96, 101-103, 106, 118, 120
Due diligence 83 Heat buffer 50, 73, 127, 129, 131, 134-136, 143 Noise requirements 76, 78, 81 Spark spread 19, 20, 70, 71, 84, 116
Economic analysis 4, 28, 52, 56, 84 Heat discharge 19 Non-residential buildings 4, 21, 22 SPF 105
EIA - Energy Investment Deduction 71-73 Heat loss 47, 127, 141, 142 To no significant extent 81 SPOT 19, 47, 58, 59, 72
Electricity price 19, 62, 67, 69-71, 129 Heat recovery boiler 12, 34, 35, 37, 38, 40, 70, 72-74, 80, 109-112, 115- NOx 11, 15, 18, 19, 23, 24, 31, 38, 48, 80, 81, 83, 84, 115, 130 STAG 39, 41, 58, 72-74, 101, 106, 109, 137
Emergency cooler 48, 127 117, 123-125 NPV method 72 Steam side 133, 137
Emergency power 19, 30, 33, 40, 44, 46, 50, 52-54, 58, 103, 109, 120, Heat pump 16, 47, 110 Nuclear energy 12 Stichting Energie Prestatiekeur 106
121 Heat requirement 30, 46, 97, 119, 123, 129, 141-143 Operating time 21, 30, 47, 48, 63, 64, 141, 142, 144 Stichting Slim met Gas 105, 118
Emergency power 19, 30, 33, 40, 44, 46, 50, 52-54, 58, 103, 109, 120, High efficiency boiler 12, 13, 49, 98, 99, 105, 106, 118 Operation phase 93, 94 Stirling engine 13, 30, 97-99, 101, 102, 109, 118, 119
121 High temperature heat 15, 33 ORC 13, 30, 40, 42, 43, 98, 101, 102 Stirling technology 23, 97, 99, 102
Emission Authority 82 High-quality heat 101 Outsourcing 5, 19, 59, 64, 91, 92, 94, 95 Subsidy 58, 59, 72, 87, 147
Emission reduction 11-13, 106 Horizontal cooler 33, 40 PAFC 42-44, 100 Summer situation 137
Energy tax 59, 62-64, 67, 74, 75 Hybrid system 43, 45 Parallel integration 51 System services tariff 62, 63
Energy contracts 4, 67 Hydraulic 5, 29, 49, 50, 52, 126, 133, 135, 137, 144 Part load 37, 39, 72 TenneT 20, 63, 68, 70, 147
Energy consumption profile 29, 44 Indirect integration 135, 136 PR - Party with Programme Responsibility 19, 68, 70 Termination phase 92, 94
Environmental impact 4, 6, 23, 79 Industry 4, 12, 22, 27, 30, 47, 83, 93, 98, 115 Peak heat demand 47 Thermal 30-32, 34, 38, 40, 46, 64, 70, 73-75, 79, 80, 82-84, 90, 97,
EOS -Energy research subsidies 72 Inlet temperature 33, 37, 39 Peak demand 8, 12, 29, 118, 121, 125 107, 112, 114, 115, 119, 120, 122, 126, 128, 129, 131, 141-144
Excess air 34, 37 IPPC 79 PEFC 42-44 Transition 6, 8, 9, 11, 13, 19, 81, 94, 106, 152
Exploitation calculation 52 IRR method 72 Permits 5, 19, 28, 66, 76, 78, 79 Trias energetica 16, 17
Feasibility 44, 46, 47, 56-58, 79, 109 Joint ventures 20, 64, 84, 105, 106 Planning 5, 23, 28, 72, 81, 86, 93, 147 Trigeneration 30, 43
Feasibility calculations 4, 72 KPIs 91 Platform Nieuw Gas - New Gas Platform 106 Tubular stack 42
Fermentation 13 Leasing 85 Power plant 4, 5, 12, 15, 16, 17, 20, 23, 24, 30, 38, 64, 83, 101, 103- Turnkey 65, 77
Fiscal benefits 4, 71 Legionella bacteria 127 106, 109-112, 121, 123, 126, 127, 131 UPS 54
Forward prices 62, 63, 68, 70, 73 Legislation 28, 44, 66, 72, 76, 79, 81, 86, 147 Preheating 22, 50 Usage aspects 4, 29, 52
Flue gases 18, 30, 31, 34-38, 40, 42, 43, 48, 52, 101, 110, 111, 113, LNG 48 Prime mover 65 Virtual power plant 103, 104
123, 130 Load duration curve 44, 46, 47, 92, 142-144 Profitability 4, 21, 56, 58, 59, 72, 84, 91, 116 Decentrale Gastoepassingen 106
Flue gas condenser 35, 52, 111, 133 Long-term market 67, 68 Programme Responsibility 19 Wind energy 13, 104
Fossil fuel 6 8, 11l,13, 16, 23 Low pressure steam 20, 30, 34, 137 Regulator 62, 64, 65, 94, 142, 147 Winter situation 137
Fuel 4, 6, 8, 11-13, 15, 16, 18, 23, 24, 29-31, 35-37, 40, 50, 54, 56, 59, LP steam network 137 Realisation phase 86, 93
65, 79-83, 86, 90, 92, 93, 97, 99, 101, 102, 107, 111, 123, 125, 144 Maintenance interval 64, 89, 90 Recuperating 39
Fuel cell 13, 16, 23, 30, 40, 42-44, 97, 98, 99, 108, 148 Maintenance requirement 5, 89, 96, 102 Reference situation 19, 56-58, 72
Fuel mixture 16 MCFC 42-45 Schoon en Zuinig Work Programme 23
Fuel oil 18, 23 Mechanical complete 86 Security of supply 91
Full load 44, 46, 50, 59, 86, 113, 124, 134, 143-145 Medium pressure steam 137 Selection phase 92, 93
GasTerra 3-9, 19, 67, 113, 114, 119, 152 MEP - Environmental Quality of Electricity Production Act 74, 75 Serial integration 50
Gas heat pump 9, 13 MER - Environmental Impact Report 77-79, 87 Short-term market 67, 68
Gasification 13 Micro CHP 5, 12, 13, 21-23, 27, 28, 30, 96-107, 109, 118, 119 Smart Power Foundation 23, 105
Gas reserve 6, 13, 152 MP steam network 137 Slochteren 11
Glasshouse cultivation 4, 12. 18, 20-22, 27, 44, 51, 52, 62, 84, 85, 99, Monitoring system 54, 91, 127 SOFC 30, 42-45, 100
109, 148 National Allocation Plan 82 Solar energy 13, 106

150 151
Heat and Power

Corporate statement GasTerra

GasTerra is an international company trading in natural gas. It operates on the European energy
market and has a significant share of the Dutch gas market. It also provides gas-related services. The
company has a strong purchasing position and has over 40 years experience in purchasing and selling
natural gas.

GasTerra fulfils a public role regarding the implementation of the Dutch governments small fields
policy. The aim of this policy is to promote the production of Dutch natural gas from the smaller
gas fields. GasTerra is customer-oriented and strives to maintain long-term relationships with market
players and to put in place sales contracts which express the market value of the natural gas and
related services.

GasTerra is committed to sustainable development as a guiding principle for its strategy and actions.
The economic and social value of natural gas as a source of energy gives the company an important
role in utilising the domestic gas reserves and in energy supply in the Netherlands and the EU. GasTerra
promotes the safe and efficient consumption of natural gas and takes active steps to develop further
applications. The company recognises the great importance of energy transition to sustainable energy
supplies and initiates projects in that context.

Our actions are based on our code of conduct, the cornerstones of which are integrity and respect.

152
The world of natural gas

The world of natural gas is an initiative of GasTerra, the Netherlands largest company trading in natural
gas and the third largest supplier in the EU. A series of books on the significance, usage and future of
natural gas will be published under this title. It is a timely publication in view of the urgency of the debate
on climate change, the impact of CO2, energy use, energy reserves and technical possibilities. GasTerra
wishes through these publications to keep those employed in the energy sector or who are interested in
the subject informed of the facts and the situation of natural gas.

Heat and Power

Heat and Power is the second book in The world of natural gas series, after the publication of Natural
gas as a transition fuel. This book discusses in detail the combined heat and power process, technology,
equipment and economic factors. It shows that combined heat and power fits in this day and age that
for a variety of reasons requires the efficient and purposeful use of energy. Other books in the series will
be published shortly, among which a book about the history and future of natural gas in the Netherlands.

Knowledge is power. Power GasTerra wishes to share.