
                                  MEMORANDUM

Tetra Tech, Inc.
10306 Eaton Place, Suite 340
Fairfax, VA 22030
phone	703-385-6000
fax	703-385-6007

DATE: 		January 14, 2009

TO:			Paul Shriner and Jan Matuszko, EPA
	
FROM:		Kelly Meadows, Tetra Tech

SUBJECT:	Cogeneration

Cogeneration is "[t]he production of electrical energy and another form of useful energy (such as heat or steam) through the sequential use of energy" (DOE 2009) and is most commonly found at industrial sites or manufacturers.  The creation of a secondary product from heat that is normally rejected as waste increases the efficiency of the expended fuel.  EPA directed Tt to explore the viability of cogeneration as a potential component of increasing the efficiency (and thereby possibly reducing the volume of intake water) of Phase II facilities.

Background

The process of electricity generation is inherently inefficient.  "[C]onventional generation of electric power throws away much of the heat generated in production, and conventional thermal energy generation often misses an easy opportunity to generate power" (USCHPA 2008).  Schaper (2008) stated that "[r]ecent EPA and DOE studies suggest U.S. industries waste enough heat to generate an estimated 200,000 megawatts of power  --  nearly 20 percent of what this nation uses.  That's enough electricity to replace up to 400 coal-fired power plants."

Cogeneration provides a way to recapture this waste heat and turn it into electricity.  A vendor's website provides a very thorough description of the technologies used in cogeneration and the configuration for cogeneration facilities:

      "A typical cogeneration system consists of an engine, steam turbine, or combustion turbine that drives an electrical generator.  A waste heat exchanger recovers waste heat from the engine and/or exhaust gas to produce hot water or steam. 

There are two main types of cogeneration techniques: "topping cycle" plants, and "bottoming cycle" plants.  A topping cycle plant generates electricity or mechanical power first (usually for its own use) and can then sell any excess power to a utility.  There are four types of topping cycle cogeneration systems, with each using a slightly different generating process, fuel, or technology.  Bottoming cycle plants are much less common than topping cycle plants and usually exist in heavy industries such as glass or metals manufacturing where very high temperature furnaces are used.  A waste heat recovery boiler recaptures waste heat from a manufacturing heating process, using it to produce steam that drives a steam turbine to produce electricity.  Since fuel is burned first in the production process, no extra fuel is required to produce electricity" (Cogeneration Technologies 2009).

Cogeneration accounts for approximately 8-10% of the electricity generation in the US.  Secondary uses (i.e., the byproducts of power generation -- heat or steam) might include process steam, hot water heating, space heating, and other thermal needs.

The fuel efficiency of cogeneration facilities is approximately double that of a standard fossil fuel electric generator.  A modern cogeneration facility typically has a fuel efficiency of 55-60%, but can exceed 60% under commonly attainable conditions and even reach efficiencies of 80-90% under optimal conditions (USCHPA 2008).  Similarly, cogeneration produces a given amount of electric power and process heat with 10% to 30% less fuel than it would take to produce the electricity and process heat separately (Cogeneration Technologies 2009).  

Cogeneration is more widely used in some European nations (especially those in northern climates), where the percent of electricity produced by cogeneration can exceed 50%.  As a whole, however, the European Union averages about 11%, which is comparable to U.S. production.  European governments also appear to be moving towards enacting policies to encourage increased use of cogeneration.

History of Cogeneration

Historically, many industrial sites produced their own electricity, largely due to the lack of widespread electric generating facilities and transmission systems.  As electric utilities grew and the cost of power fell, industrial facilities more frequently purchased all their electricity from a utility instead of using on-site generation.  Industrial sites that still needed the heat or steam for other processes would simply use fuel oil or natural gas to produce heat as a separate process (i.e., not through cogeneration).  However, as the cost of energy rose in the 20[th] century, the economies of scale provided by centralized electricity production decreased and cogeneration became more popular.  Various statutory and regulatory programs continue to affect the feasibility and cost-effectiveness of cogeneration (Cogeneration Technologies 2009).

Typical Uses of Cogeneration

Cogeneration systems can be designed for many facilities, but have typically focused on manufacturing and industrial sites, as well as large commercial buildings.  In fact, 90% of all cogeneration systems are owned by manufacturers.  Preferably, cogeneration systems are built at or near the site of the end user of the steam, negating the need for extensive piping and making the delivery much simpler (Cogeneration Technologies 2009).

Cogeneration Technologies (2009) provides two characteristics where installing cogeneration is most likely to be economically viable:

   * Coincident demand for electricity and thermal energy (i.e., steam, heating, or cooling) during most of the year.
   * Access to fuels, including natural gas, biomass, and/or by-product fuels).

Limitations

While cogeneration offers some logical (and potentially significant) increases in efficiency, the applicability to Phase II facilities may be limited for several reasons:

   * Most power plants looking to capture waste heat would instead install a combined cycle system.
   * Lack of a "customer" for the secondary product -- if a power plant were able to capture waste heat or steam, a partner industrial site would need to be located nearby.  While possible for some Phase II facilities, many are not located near potential partner industries.
   * Depending on the configuration of the system, removing steam may be detrimental to the electricity generation process, as additional energy must be expended to operate the boiler and steam loop at the appropriate temperature.
   * Difficulty to integrate into 316(b) -- as with repowering, cogeneration is associated with the generation process and not the cooling water intake structure.  It may be difficult to incorporate rule provisions to address cogeneration.
   * Market structure -- the current regulatory structure often limits the ability of power plants to sell excess electricity (Schaper 2008).
   * New Source Review -- under the Clean Air Act, installing cogeneration equipment would likely be considered a major modification and trigger stricter emissions requirements (Schaper 2008).

Ultimately, there may be opportunities for Phase II facilities to improve fuel efficiency through cogeneration, but is unlikely to be common.  The Phase II rule could encourage facilities to employ cogeneration by developing flow credits or amending the scoping criteria for Phase II facilities (e.g., by classifying water associated with cogeneration as process water instead of cooling water).  Cogeneration may, however, be a much more integral part of the Phase III regulation.



References

Cogeneration Technologies. 2002. http://www.cogeneration.net/Cogeneration.htm.

Eurostat. 2005. Combined Heat and Power (CHP) in the EU and Turkey - 2005 data. http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-08-002/EN/KS-QA-08-002-EN.PDF

Schaper, D. 2008. 'Recycling' Energy Seen Saving Companies Money. For National Public Radio, May 22, 2008. http://www.npr.org/templates/story/story.php?storyId=90714692. 

USCHPA. 2008. CHP Basics. http://www.uschpa.org/files/public/CHP%20Basics.pdf. 

US Department of Energy (DOE), Energy Information Administration (EIA). 2009. Glossary. http://www.eia.doe.gov/glossary/glossary_c.htm. 


