Combined Heat & Power (CHP) Payback Period
If
a domestic CHP system is to be installed in a new house, calculate the annual
cost savings and payback period for the equipment.
Compare
energy savings with using an oil-fired heating system.
DATA:
CHP heating output = 12 kW
CHP electrical output = 5.5 kW.
Annual energy consumption for heating = 17,808 kWh
Annual energy consumption of electricity = 7000 kWh
Electricity (Ordinary Rate) cost in 2006 = 11.57 p/kWh
Assume CHP can meet all heating demands.
CHP plant uses natural gas at 4.30 p/kWh (This
is the Oct.2006 figure before efficiency is considered see Fuel Cost section)
Oil-fired boiler uses oil at 4.0 p/kWh (Oct.2006)
Neglect maintenance costs.
Gas engine mechanical efficiency = 30% (Gas to shaft power at full load)
CHP generator efficiency = 80%
(Shaft to electric.)
Overall efficiency (Gas to Electric.) = (30% x 80%)/
100 =
24 %
Initial capital cost of CHP = £6000
Installation cost of CHP = £1500
Total Installation cost of CHP = £7500
Initial capital cost of Oil-fired boiler = £1000
Installation cost of Oil-fired boiler = £ 500
Total Installation cost of Oil-fired boiler = £1500
Annual cost savings = (
Heating cost savings using oil + Electrical cost savings from grid ) - Gas
costs from CHP
The payback period = Extra
Installation cost / Annual Cost savings
Heating cost savings using
oil
Heating cost using oil-fired
boiler = Annual energy consumption for heating x Cost
for oil heating (p/kWh)
Heating cost using oil-fired
boiler = 17,808 kWh
x 4.0 p/kWh = £712 / year
Electrical cost savings
from grid
Cost to buy electric from
grid = Annual energy consumption of
electricity x Cost to purchase from NIE.
Cost to buy electric from
grid = 7000 kWh x
11.57 p/kWh = £810 / year
Gas costs from CHP unit
If the CHP unit can meet all
the heat demands then the operational running time is; 17.808 kWh / 12kW heat output = 1484
hours / year.
The overall efficiency of the
unit (Gas to electric) = 24%
The power input in the gas
(kW) = Electrical power output (kW)
/ efficiency
The power input in the gas
(kW) = 5.5 kW / 0.24
The power input in the gas
(kW) = 22.92 kW
The energy input in the gas
per year (kWh) = 22.92 kW x 1484 hours operation / year
The energy input in the gas
per year (kWh) = 34,013 kWh / year
Gas costs from CHP unit (p) = The energy input in the gas per year
(kWh) x Gas cost (p/kWh)
Gas costs from CHP unit (£) = 34,013 kWh / year x
4.3 p/kWh / 100
Gas costs from CHP unit (£) = £1463
/ year
Annual cost savings = (
Heating cost savings using oil + Electrical cost savings from grid ) - Gas
costs from CHP
Annual cost savings = (£712 + £810 )
- £1463
Annual cost savings = £1522 - £1463
Annual cost savings = £59 / year
The payback period = Extra
Installation cost / Annual Cost savings
Extra Installation cost = Total Installation cost of CHP - Total
Installation cost of Oil-fired boiler
Extra Installation cost = £7500 - £1500 = £6000.
The payback period = £6000 /
£59
The payback period = 101 years
This
means that a Micro CHP plant is not suitable for a building where the load is
only used during the day-time.
Calculate
the annual cost savings and payback period for a CHP unit to be installed in a
Nursing home.
Compare
energy savings with using an oil-fired heating system.
DATA:
CHP heating output = 44 kW
CHP electrical output = 20 kW.
Hours of operation at full load to meet electricity demand = 12 hours per day, 7 days per week = 4380 hours / year
Hours of operation at 50% demand for electricity = 12
hours per day, 7 days per week = 4380
hours / year
Assume the heating demand is more than 44kW at all times during
the winter heating season (35 weeks).
Electricity (Ordinary Rate) cost in 2006 = 11.57 p/kWh (
assume flat rate)
CHP plant uses natural gas at 4.30 p/kWh (This is the Oct.2006 figure before efficiency is
considered see Fuel Cost section)
Oil-fired boiler uses oil at 4.0 p/kWh (Oct.2006)
Neglect maintenance costs.
Gas engine mechanical efficiency = 35% (Gas to shaft power at full load)
CHP generator efficiency = 80%
(Shaft to electric.)
Overall efficiency (Gas to Electric.) = (30% x 80%)/
100 =
28 %
Initial capital cost of CHP = £30,000
Installation cost of CHP = £2,500
Total Installation cost of CHP = £32,500
Initial capital cost of Oil-fired boiler = £2,200
Installation cost of Oil-fired boiler = £ 800
Total Installation cost of Oil-fired boiler = £3,000
Annual cost savings = (
Heating cost savings using oil + Electrical cost savings from grid ) - Gas
costs from CHP
The payback period = Extra
Installation cost / Annual Cost savings
Heating cost savings using
oil
Heating cost using oil-fired
boiler = Annual energy consumption for heating x Cost
for oil heating (p/kWh)
= (4380
hours/ yr x 44 kW) +
(4380 hours /yr x 44 kW x 50%)
= 192,720 kWh +
96,360 kWh
= 289,080 kWh x (35 week heating season / 52 week total)
= 289,080 kWh
x 0.673
= 194,551 kWh
= 194,551 kWh x 4.0 p/kWh /
100 = £7,782 / year
Electrical cost savings
from grid
Cost to buy electric from
grid = Annual energy consumption of
electricity x Cost to purchase from NIE.
= (4380 hours/ yr x 20 kW)
+ (4380 hours /yr x 20 kW x 50%) x 11.57 p/kWh
= (87,600 kWh +
43,800 kWh) x 11.57 p/kWh
= 131,400 kWh x 11.57 p/kWh
= £15,203 / year
Gas costs from CHP unit
The operational running time
is; 4380 hours / year at full load and
4380 hours / year at 50% load
The overall efficiency of the
unit (Gas to electric) = 28%
The power input in the gas
(kW) = Electrical power output (kW)
/ efficiency
The power input in the gas
(kW) = 20 kW / 0.28
The power input in the gas
(kW) = 71.4 kW
The energy input in the gas
per year (kWh) = (71.4 kW x 4380 hours operation / year) +
(71.4 kW x 4380 hours operation / year x 50%)
The energy input in the gas
per year (kWh) = 312,732 + 156,366 kWh / year
The energy input in the gas
per year (kWh) = 469,098 kWh / year
Gas costs from CHP unit (p) = The energy input in the gas per year
(kWh) x Gas cost (p/kWh)
Gas costs from CHP unit (£) = 469,098
kWh / year x 4.3
p/kWh / 100
Gas costs from CHP unit (£) = £20,171
/ year
Annual cost savings = (
Heating cost savings using oil + Electrical cost savings from grid ) - Gas
costs from CHP
Annual cost savings = (£7,782 + £15,203 )
- £20,171
Annual cost savings = £22,985 - £20,171
Annual cost savings = £2,814 / year
The payback period = Extra
Installation cost / Annual Cost savings
Extra Installation cost = Total Installation cost of CHP - Total
Installation cost of Oil-fired boiler
Extra Installation cost = £32,500
- £3,000 = £29,500.
The payback period = £29,500 /
£2,814
The payback period = 10.5 years
Notes:
This
is a better payback period compared to the previous example.
If
we neglect the heat output of the unit, the electricity cost is;
Gas cost 2,017,100 pence / year /
131,400 kWh elec. production
= 15.4 p / kWh.
Electricity from the grid
cost 11.57
p/kWh.
This
means that the unit is not as efficient as a CCGT (Combined Cycle Gas Turbine) power station at 54% efficient.
Therefore
the overall efficiency (Gas to Electric.) of 28 %
is an important figure in these calculations.
If
this efficiency is increased in a better designed machine then the amount of
gas usage is reduced and the economics are better.
One
of the major problems with CHP plant is to utilise all the heat and all the
power throughout the whole year.
If
the plant is running at full electrical and heating load for long periods then
this helps.
Careful
sizing helps to overcome initial mistakes.
Choice
of appropriate heat to power ratio is
another design element.
The
overall fuel efficiency of the above unit is very good and is;
Heat
output + Electrical Output / Energy
input = 44kW + 20kW / 71.4 kW
= 90%