CHP in a cold climate - What Russia's on-site power sector needs to succeed
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January - February 2015
CHP in a
cold climate
What Russia’s on-site power sector
needs to succeed
CHP’S FUTURE IN A SUSTAINABLE ENERGY MARKET n GAS TURBINE-BASED CHP SYSTEMS MARKET OUTLOOK n EFFICIENCY
BENEFITS OF EXHAUST GAS CONDENSATION n STRATEGIES FOR BOILER AND HEAT EXCHANGER MAINTENANCE
In Association With
WORLD ALLIANCE FOR DECENTRALIZED ENERGY
Gas Turbines
Business unusual
Even in today’s changing energy landscape, it is tempting to believe that the future will be business as usual
for manufacturers of gas turbines for CHP systems, given the substantial market growth predicted for the
sector. However, there are still potential challenges on the horizon.Tildy Bayar investigates
Over 48,000 gas turbines will be manufactured by 2028
Credit: MAN Diesel & Turbo
G
as turbine- smooth ride for gas turbine to near-continual uncertainty.
based systems makers. We spoke with several Martin Westerhoff, technical
lead the to fnd out how they see the journalist with MAN Diesel &
industrial CHP global market, and how they Turbo, notes: ‘The market is,
feld, and it is predicted plan to deal with a changing to a certain extent, driven by
that over 48,000 industrial energy economy and the political visions. The political
gas turbines, valued at potential for change in the and economic framework
almost $620 billion, will CHP market. must be right to trigger new
be manufactured by investments in CHP, which have
2028. Substantial market A changing market to compete with existing and
growth is predicted as new brings changing risks depreciated capacities in the
environmental regulations, While the benefts of CHP are market.’
increased energy effciency inarguable, it is still under- Jim Crouse, executive
goals and changing represented in most countries’ vice-president of sales and
national resources energy profles. One reason for marketing at Capstone
encourage the uptake of this, policy risk, is a perpetual Turbine, adds: ‘One challenge
gas-based CHP systems. concern, subjecting many in the US is that we don’t
Nevertheless, the coming investors, project developers have a national energy policy
years may not be an entirely and turbine manufacturers that truly drives CHP. Really
22 Cogeneration & On–Site Power Production | January - February 2015 www.cospp.com
Gas Turbines
it’s the states that are left to – very, very little,’ he says. ‘There based on its boundary But from a currency/fnancing
implement – or not – policies was clearly a peak before conditions, namely the perspective [Russia] was
that help either incentivise the fnancial crisis, but then, availability of plentiful low-cost already a challenging and
through rebates or cash of course, there has been a gas and a very high need for diffcult place to get fnancing
incentives, or regulations that signifcant drop in demand’. CHP for DH. When you put this and do CHP projects, and now
help end users make buying However, Savic sees gas all together you would expect with the currency devaluation
decisions around CHP.’ turbine-based CHP as a bright Russia to be leading – but this it’s become even more
Regine Mowill, marketing spot in Europe’s gas power has not happened so far.’ challenging.’
director at OPRA Turbines, plant troubles. ‘What helps’, He cites a ‘lack of interest’, Crouse also raises an
outlines some of the current he explains, ‘is those operators and the fact that ‘[Russians] interesting issue in relation
market risks: ‘There are who have an additional have to pay for western to emerging markets. ‘Where
obviously some geopolitical source of revenue due to heat equipment because they do labour is relatively inexpensive,
risks in certain areas,’ she says produced, for example district not have advanced industrial our microturbines give up
– for example, gas supply from heating [DH] applications. We gas turbine products of their some competitive advantage
Russia and US sanctions there. see that these operators can own. This is a pity because [over engines] from a
‘In Europe we have uncertainty still operate to provide heat today they are burning gas lifecycle perspective,’ he says.
on where the legislation will go, because they are getting in atmospheric boilers with ‘In the US or Europe where
while in other regions there are revenues for that, even though effciencies of 10%–15% to technicians and engineers are
currency risks and fuctuations possibly on the electricity side provide district heating. $100/hour, versus a market
– in Southeast Asia recently, the they are struggling. Instead they could invest a where it’s dollars per hour, then
Japanese currency has fallen, ‘The heat market did have little more money [in gas-fred the cost of changing the oil,
and so have the Indonesian some problems on industrial
and Malaysian currencies.’ generation because industrial
Crouse adds: ‘As a demand has reduced,’ he
US manufacturer, the adds. ‘However, those who
strengthening of the US dollar have CHP duty do have an
is challenging for us; we have authentic source of revenue.
to watch very closely and see ‘China’s market, by all
how it will impact our business accounts, is going strong,
in the near-to-medium term.’ especially since the nation’s
gas deal with Russia last year.
National markets The deal will help the Chinese
‘The US is a bit fragmented gas turbine market,’ Savic says,
and there are a lot of different ‘and in the last two to three
utilities whose rates aren’t the years we have already seen a
same, so it’s been challenging,’ signifcant rise in the number
says Crouse. However, in of new projects for gas-fred Gas turbine-based systems lead the industrial CHP feld
Credit: MAN Diesel & Turbo
general his view of the US generation. I believe China in
market is positive due to particular has a lot of industry
trends such as low gas prices, cogneration and also district CHP plants], use their gas spark plugs or flters is relatively
increasing utility rates, aging heating requirements, so it in a more environmentally low. The difference can range
infrastructure and a national should be a signifcant CHP and economically effcient from several thousand dollars
and local response to natural market.’ manner, use it in a much per year on a small cogen
disasters. But Sasha Savic, ‘In the Middle East there better arrangement and system to a thousand dollars
CEO of Swiss frm SS&A Power is an abundance of gas at make additional proft. There per year.’ This is an issue in
Consultancy GmbH, injects low prices and this will be is however currently a lack of markets such as India, China
a note of caution. ‘The US is the case for many years incentives.’ and Africa.
on the verge of a booming ahead,’ he says. ‘In the stable Crouse adds that, ‘being
[gas-fred power] market, but environment of the Gulf we see US-based, Capstone has Technical challenges
how much of that is CHP is desalination and CHP for water the current [US] sanctions There are still some technical
another story,’ he says. production, and because of [on Russia] to deal with; challenges involved in
In Europe, ‘the CHP market such cogeneration needs most of the companies developing gas turbine-based
seems to stagnate with few combined with low gas prices listed in the sanctions are gensets for use in CHP systems.
new projects,’ MAN’s Westerhoff the Middle East market is our customers. Fortunately OPRA’s Mowill says: ‘In our
says. Savic agrees: ‘In the last perfect for CHP.’ the sanctions were targeted power range, the important
two to three years, there has ‘Russia is an interesting enough for specifc markets or thing is to think about heat as
been virtually no [gas-fred market,’ he continues, adding technology applications that well as power, so the heat-to-
power] market in Europe that it is ‘also ideal for CHP we haven’t been impacted. power ratio. This needs to ft the
www.cospp.com Cogeneration & On–Site Power Production | January - February 2015 23
Gas Turbines
client’s needs; if it does, they modular package that can be than natural as gas turbine where these independent
get high overall effciency and confgured to the customer’s fuel,’ says Westerhoff. providers are dominating a
savings.’ Oil and gas customers, requirements. ‘It’s the same Among other challenges, little more and putting pressure
she says,‘are not so concerned core turbine,’ she explains, Westerhoff notes that ‘CHP’s on costs for users.’
about overall effciency; they’re ‘with maybe different flters focus is not only on gas turbine This shift in maintenance
more concerned with reliability and different fuel systems, effciency like for mechanical practice is happening ‘right
and having power on-site, such and it might use a different drive applications. In general, now’, he says. ‘Because
as sites where they need power combustor if people use low electrical power has a European markets are under
for production and heat is less calorifc value fuels which higher importance for the pressure to reduce generation
important.’ need a larger combustor. If the development; nevertheless costs, they’re looking into
Savic believes that some customer needs low emissions the exhaust heat, mainly the all possible alternatives on
technical problems remain for we have a low-emission exhaust gas temperature, the maintenance side. Gas
gas-based CHP. ‘Every project combustor.’ should be at a certain turbines are probably the most
will have its own challenges,’ One example of a fuel- minimum level for an effcient expensive technology when it
he says, but ‘one or two fexible system is a CHP heat process in the waste heat comes to maintenance, so any
situations need to be carefully plant in Turkey which runs on recovery system.’ effort that can reduce those
examined.’ syngas. Another, a gypsum Crouse says Capstone is costs will be welcomed by the
One such situation is the plasterboard manufacturer, currently working with the market.’
growing number of CHP currently has a CHP system US Department of Energy to
desalination plants in the running on natural gas, but develop a more effcient, larger A coming challenge
Middle East. ‘I see a bit of a Mowill says the customer’s microturbine. The so-called from gas engines?
challenge in winter,’ he says, requirements included a 370 programme ‘will end up The traditional distribution
‘because desalination plants potential upgrade to a dual- with a 250 kW turbine as the of gas turbines for larger
have to provide a more or fuel system if and when an frst phase, which will produce cogeneration/CHP projects
less constant amount of affordable, nearby syngas 2%–3% more electrical and gas engines for smaller
water. However, there is less supply becomes available. effciency than the current projects may be about to
of a requirement to generate ‘Customers are always 200 kW product,’ he explains. change.The gas turbine versus
electricity because nobody is looking for fexibility,’ says The second phase will aim gas engine question is ‘a hot
using air conditioning. So now Crouse, adding that to produce a 370 kW turbine topic’ at the moment, says
gas turbines have to produce Capstone’s microturbines with ‘on the order of 40%–42% Savic: ‘What we have seen
enough exhaust energy to are tolerant of different fuel electrical effciency’. Crouse is recently is some development
create enough steam for types and can run on ‘low- ‘optimistic’ that these products in gas engine technology.
desalination plants and, on BTU fuel, from landfll up to will be commercialised within Wärtsilä, and GE with their
the other hand, they have to propane or butane’. Examples the next four years. Jenbacher engines, have
reduce their load. This can be are a Hawaiian resort and a Looking to the future, Savic realised they can compete
quite a challenging situation Caribbean CHP plant, both expects ‘a race‘ in terms of both with turbine generation
and while there are solutions, of which run on propane, as effciency and dollars-per-kW against the small to medium
they have to be carefully well as ‘quite a few’ projects attractiveness. He believes that sized gas turbines.’
looked at to see that they are running on biogas, including a technology development in ‘The size of the project
not too costly.’ Russian chicken farm. future will not focus on higher doesn’t matter; it is just about
Another challenge involves MAN is also looking effciency – which, he says, ‘is the heat-to-power balance,’
changing fuel requirements, into fuel fexibility for future not going to bring that much. says OPRA’s Mowill. She
making confgurability a key developments. ‘One market Gas turbines will probably explains: ‘Gas engines have
concern. In response, Mowill tendency is to investigate the be developed more in terms higher electrical output but
says OPRA has developed a possibility of using other gases of operational fexibility and tend to have lower-grade heat,
better response to changing so if you want hot water and
market conditions, and this quite a lot of power engines
is where developers should are a better choice, but for
focus.’ higher-grade heat or steam
‘On the other hand,’ he production or direct drying in
adds, ‘the maintenance addition to power, gas turbines
side of gas turbines will are better.’
also experience some shifts She continues that ‘the
and changes. From being maintenance cost is higher
undertaken largely by OEMs, for reciprocating engines.
maintenance has shifted to They have a bigger footprint,
The gas turbine market will be valued at independent service providers, higher emissions, lower overall
$620 billion by 2028 especially in the Middle East effciency, higher losses,
Credit: OPRA Turbines
24 Cogeneration & On–Site Power Production | January - February 2015 www.cospp.comGas Turbines
more vibrations, etc.’ And be more effcient. If high load- proceedings. The provisions success, he adds, is in projects
she notes that time before change velocities or even therefore exclude possibility for that require black start capa-
overhaul must be considered: operation in start/stop mode contribution from providers of bility/black grid restoration
‘Gas engines involve a lot are required, which is typical alternative solutions, including capability. ‘For these projects
of constant maintenance, for electricity driven systems, engines offered by Wärtsilä.’ gas turbines are normally
whereas our gas turbines engines are likely to be Risto Paldanius, vice- not suffcient to perform the
have maintenance after benefcial. president Europe & Africa, task; you would need a diesel
40,000 hours (approximately ‘Available fuel quality is Wärtsilä Power Plants, said: generator to restore the island
fve years), and one annual of course important; gas ‘We frmly believe that there is and then the grid. Gas engines
inspection.’ turbines might, in principle, no suffcient reason to discard are similar to diesel engines so
Another advantage of have some more fexibility. But the engine technology, they can start in that moment,
gas turbines is fuel fexibility. most projects are still based especially since such solutions with no additional cost. Just
Operators of waste-to-energy on natural gas, with which have already been proven in getting X number of gas
applications ‘care about both gas turbines and engines practical large scale projects engines would be suffcient for
whether we can run on the have no problem to operate. which have been successfully black start,’ he concludes.
fuel and whether they need With engines the required gas operating for many years all According to Capstone’s
fuel cleaning, because this admission pressure is lower, over the world.’ Crouse, ‘engines are going to
can be very expensive,’ she which reduces infrastructure Wärtsilä’s internal modelling be here for quite some time.
says. ‘If they can put their fuel costs for gas compression. So of CHP and district heating They won’t be replaced by
into our turbine without fuel which technology to choose systems, Laitinen says, microturbines; there are niches
cleaning, that’s an advantage. really needs to be decided on ‘constantly get the result that where we’re better and niches
Municipal waste sites gasify a detailed case analysis.’ engine power plants by us – where they’re the better solu-
things and generate lots of However, Wärtsilä smart power generation plants tion.’ He also doesn’t see other
contaminants which can be communications manager – are 30% cheaper than the technologies such as fuel cells
damaging for engines.’ Jussi Laitinen says: ‘Gas turbine option, and operational stepping up for CHP as there
MAN’s Westerhoff adds that turbines are the business- costs are cheaper. Turbines are ‘still a lot of challenges with
‘gas turbine-based systems as-usual option, but we’re tend to cost from €1100/kW, the them’.
provide more heat potential challenging the “big guys” in engine option from €600–700/ The importance of fexibility,
at a higher temperature level this game and capturing many kW.’ Savic says, ‘depends on trends
than engine-based systems projects as the size of engine SSA’s Savic says attempts in terms of distributed genera-
and have their advantages for power plants has grown very to open up the CHP market tion. How quickly are we going
projects where this is important, fast in the past few years. The to gas engines are ‘exactly to get to point where we rely
e.g., steam production. An only problem is that often what we are seeing. From an less and less on remote power
engine-based system, on tenders are tailored for turbines environmental regulations generation facilities and focus
the other hand, can reach a only’ – something Wartsila is perspective, there isn’t any on some combination of local
higher overall energy effciency working to change. In fact, the difference between a gas utility and household genera-
level of up to 90% and is frm recently fled an appeal reciprocating engine and tion?’ But, he says, ‘this will
less sensitive with regards to over a tender for a new unit at a gas rotating turbine,’ he potentially be a good storyline
ambient temperatures. Poland’s Zeran CHP plant, with says. ‘Whichever is better for for gas engines.’
‘The operational mode a capacity of 420–490 MWe the client, if there’s no nega- Crouse believes that micro-
is also essential to decide and over 250 MWt. tive environmental impact, turbines can be competitive
whether to choose an engine In its appeal, the frm should be considered.’ But, he with gas engines. ‘For us to
or a turbine,’ he continues. ‘In said the tender’s provisions cautions, ‘this is very diffcult to grow,’ he says, ‘we’re looking
heat-driven systems, which ‘state that only companies generalise – it depends on the to take market share away
tend to operate on constant offering turbine technology specifc project requirements.’ from Cummins, Caterpillar, GE,
loads, the turbine is likely to may participate in the And he adds that ‘every- MAN, MTU – engine competi-
where you have large indus- tors.’ In terms of gas turbines,
Microturbines are predicted to gain a 24% market share by 2028
Credit: Capstone Turbine trial-frame combined-cycle ‘as the market expands there’s
projects, I simply cannot see plenty of room for growth for
gas engines taking that share everyone. In the multi-billion
of the market – it is economi- dollar market that is CHP,
cally and in CAPEX/OPEX there’s lots of room for us to
terms not favourable. However, grow without our competitors
for peaking applications there being too impacted,’ he says.
is a good opportunity for gas
engines to take market share.’ This article is available
Another area where gas on-line. Please visit
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