Economic Model (Project Finance Model) for a CFB Power Plant (coal, biomass)

February 24th, 2016 No Comments   Posted in financial models

Economic Model (Project Finance Model) for a CFB Power Plant (coal, biomass)

I am pleased to announce the availability of a new project finance model for a CFB power plant that can burn both coal and biomass.

The model accepts the following information: More »

How to calculate power plant emissions – solution to problem of a reader

How to calculate power plant emissions – solution to problem of reader

Hi,

Please find on the next page a snippet of my spreadsheet showing the solution.  The model was calibrated to the above municipal solid fuel analysis at 80% excess air firing for combustion of municipal solid waste to meet the given SO2 emission of 15.75 mg/Nm3.

Assuming 26% thermal efficiency and given firing rate of 185,000 metric tons per year of 7018 hours (around 80% capacity factor), your plant must be generating over 52.41 MW of power with 9% plant own use (parasitic load assumed).

The fuel should have a sulfur analysis of 0.57% Sulfur (dry basis) in order to give such emission.

At 31.30% moisture in the wet fuel, this translates to 0.39% Sulfur (wet basis).

Once the sulfur in the wet fuel is known, the problem is solved:

kg SO2 per metric ton fuel (wet) = (0.39 / 100) x (mw of SO2 / mw of S) x (1000 kg / metric ton)

= (0.39 / 100) x (64.0648 / 32.0660) x (1000) = 7.806 kg SO2 per metric ton (tonne) of wet fuel More »

Sample data for calculating the levelized cost of energy and electricity

SAMPLE DATA FOR CALCULATING THE LEVELIZED COST OF ENERGY AND ELECTRICITY

Your favorite energy technology expert presents sample data for calculating the levelized cost of energy and electricity which could be applied on the NREL formula or implemented in a detailed project finance model.

The input data are summarized below. More »

How to calculate the levelized cost of energy – some updates

How to Calculate the Levelized Cost of Energy and Electricity – some updates and developments


The author is re-issuing this article in view of the tremendous interest worldwide on this article.  A number of readers have in fact ordered my technology articles, specifically on the cost of power generation technology (a spreadsheet containing the technology, rated capacity, overnight cost $/kW, capacity factor % of rated capacity, fixed O&M $/kW/year, variable O&M $/kWh, energy conversion efficiency % of fuel energy, fuel cost $/GJ, economic life years, construction lead time years, reliability % of operating hours, availability % of calendar days, and levelized cost $/kWh).


Using the NREL formula and a detailed project finance model, I was able to demonstrate that the results would be the same in calculating the levelized cost of energy or electricity.  The reader is adviced to email me if they would like to get a copy of the spreadsheet showing the two calculations.

With the passage of the Philippine Renewable Energy Act of 2009 (RE Law) and its implementing rules and regulations (IRR), it is imperative that financial models for renewable energy projects be revised accordingly.  This author and our group of experts would assist project proponents and investors in the Philippines develop an updated financial model for evaluating their RE project proposals for endorsement by the Department of Energy (DOE) and for the approval of their feed-in tariffs with the Energy Regulatory Commission (ERC). More »

How to Calculate Power Plant Emissions – a simplified procedure in a spreadsheet

PROCEDURE FOR CALCULATING POWER PLANT EMISSIONS

By: Marcial T. Ocampo

September 16, 2009

Basic steps:

1)         Input natural gas (fuel) analysis: % volume (same as % mol), molecular weights:

e.g. H2, CH4, C2H6, C3H8 … CO2, S, O2, N2, H2O moisture, ash.

2)         Convert % volume to ultimate analysis % mass or weight (%C, %H2, % S, % O2, %N2, %H2O moisture, ash)

3)         From the combustion equations;

C + O2 = CO2

S + O2 = S02

H2 + 1/2 O2 = H20

calculate the stoichiometric O2 in mols and lbs and that of N2 from air analysis. More »

Sample Levelized Cost of Energy – the cheapest and most expensive technology

Sample Levelized Cost of Energy – the cheapest and most expensive technology

As the third article of the  series on “How to Calculate the Levelized Cost of Energy”, the author is now ready to present the summary of levelized cost per technology group.  Please refer to the first article for the calculation formulas (US NREL and RP MTO) and the second article for the sample input data used in the calculations (rated capacity, overnight cost, fixed and variable O&M cost, fuel cost, efficiency, capacity factor, station use, taxes, economic life, etc.).

Levelized Cost by Technology Group (using RP MTO Formula)

The levelized cost for each technology of given rated capacity is given for the RP MTO formula (with taxes and depreciation).

Conventional Thermal Plants

Oil Thermal (fuel oil) – 300 MW, 0.1397 $/kWh

Orimulsion Thermal (orimulsion) – 100 MW, $0.1030 $/kWh

Gas Thermal (natural gas) – 100 MW, 0.0808 $/kWh

Pulverized Coal Thermal (coal) – 600 MW, 0.0665 $/kWh

Compression Ignition Engines

Reciprocating Diesel Engine (diesel, fuel oil) – 50 MW, 0.1605 $/kWh

Reciprocating Orimulsion Engine (orimulsion) – 50 MW, 0.1143 $/kWh

Gas Turbines (oil, natural gas)

Simple GT – 35 MW, 0.0755 $/kWh

Recuperated GT – 3 MW, 0.0739 $/kWh

Cascaded Humid Air Turbine (CHAT) – 11 MW, 0.0804 $/kWh

Cascaded Humid Air Turbine (CHAT) – 300 MW, 0.0584 $/kWh

Heavy Frame GT – 200 MW, 0.0875 $/kWh

Combined Cycle GT – 500 MW, 0.0607 $/kWh

More »

How to Calculate the Levelized Cost of Energy – a simplified approach

How to Calculate the Levelized Cost of Energy – a simplified approach

Calculating the levelized cost of energy is a fundamental principle in the energy and power industry. It basically allows the comparison of various technologies of unequal life times and capacities without resorting to developing a full-blown project finance model.

This simplified approach is particularly appropriate when doing a rough estimate on the cost of electricity given the various technologies in a country. By applying the formula on each power plant, as if it is continuously replaced to provide incremental power to meet new incremental demand, it provides a good estimate on the cost of electricity had a new plant been constructed to replace the old plant that became obsolete.

The weighted average levelized cost for the country is then estimated by using the electricity generation of each technology as weighing factor. For instance, the effect of injecting a nuclear power plant into the generation mix will be estimated quickly so that the country’s average levelized cost of energy could be compared with its neighboring competitor countries having nuclear power. Applying the same set of formulas and cost factors for each technology will yield a good index on our country’s competitiveness with respect to power costs.

Various Power Generation Technologies

I am sharing with you my own list and classification of the various power generation technologies, both existing and future technologies, that taken as a whole, would supply the ever growing needs of the peoples of our mother earth.

Levelized Cost of Each Power Generation Technology

The only way power generation technologies could be compared with respect to cost is to calculate the levelized cost of energy over its economic life. This involves obtaining data on rated capacity kW, overnigh costs $/kW, fixed Operating & Maintenance cost $/kW/year, variable O&M cost $/kWh, efficiency % or plant heat rate kJ/kWh, economic life years, availability %, load factor % or capacity factor %, fuel cost $/GJ or $/kg or $/L, fuel Gross Heating Value kJ/kg or kJ/L, fuel density kg/L, and construction lead time years.

The levelized cost allows comparison of different power generation technologies of unequal economic life, capital cost, risk and returns, capacity factor, efficiencies or plant heat rate, fuel costs and construction lead times.

The basic formula used is based on the US NREL formula for the levelized cost of energy (net):

Net COE = ICC * CRF / AEPnet + (LLC + O&M + LRC + MOE) – PTC, in US $/kWh

where ICC = Initial Capital Cost (total debt), $

CRF = capital recovery factor, 1/yr = int / (1 – (1 + int)^-Life)

AEPnet = Net Annual Energy Production, kWh/yr (net of plant own use)

= (kW capacity) * (capacity factor) * (hours/year)

LLC = Land Lease Cost, $/kWh

O&M = Levelized Operating & Maintenance Expense, $/kWh

LRC = Levelized Replacement/Overhaul Cost, $/kWh

MOE = Miscellaneous Operating Expense, $/kWh

PTC = US Production Tax Credit, $/kWh

In the case of the Philippines where the effect of income tax and depreciation needs to be considered, the RP MTO formula developed by Engr. Marcial T. Ocampo is shown:

More »

Energy Technology Expert – my expertise and services

Where to Get Assistance for Energy & Electricity Investment Opportunities in the Philippines

Marcial Ocampo provides a blog on issues and concerns regarding current and future fuel cycles and power generation technologies as they affect the environment, fuel supplies and power generation capacities, efficiency of utilization of fuel or energy resource, pollution & greenhouse gas emissions, and cost of power (overnight capital cost $/kW) and energy (levelized $/kWh).

He provides market, technical and economic feasibility studies and prepares project finance models for determining asset value (bid price), levelized price of energy or electricity, or equity returns (DCF IRR).

He is also familiar with investment opportunities in the Philippine energy and electricity sector (Philippine Energy Plan, Power Development Plan) and the regulatory framework (EPIRA and RE laws,  implementing rules and regulations, Distribution Code, Grid Code) for purchasing a power plant from PSALM/NPC or for putting up a new power plant (conventional, fossil or renewable).

He can guide you in securing incentives under the latest Philippine Renewable Energy (RE) law and its implementing rules and regulations (IRR).

In addition, he could guide you in securing the needed endorsement from the Philippine Department of Energy (DOE), permits and licenses from the Energy Regulatory Commission (ERC) and other government agencies (DTI, SEC, BIR, DENR, EMB, NWRB, PNRI, DOLE, NTC, BOC, PPA, ATO, PDEA, BOI, NCIP and LGUs) in order that the facility is duly licensed to operate as a power generation facility with an electricity tariff that is the “best new entrant” for the given location and application in order to balance the need of the customers for affordable electricity and the need of the investor to meet its investment return criteria.

Should you need assistance in preparing a project finance model and a feasibility study (market, technical, economic, financial) using Philippine oil, energy and electricity data, please don’t hesitate to contact Marcial.

email:    mars_ocampo@yahoo.com   and   energydataexpert@gmail.com

tel/fax: (632)-932-5530 More »

Is Advanced Clean Coal the Answer to our Global Power Problem?

Is Advanced Clean Coal Technology the Answer to our Global Power Problem?

Remaining Life of Fossil Fuels (oil, natural gas, coal)

Recent events have thrust lately renewed interest in “advanced clean coal” technologies to provide additional power generation capacity in view of dwindling and expensive oil supplies (remaining life 39 years), natural gas (61 years). World wide coal reserves are expected to last over 231 years (remaining life = reserves / extraction rate).

However, due to concerns arising from pollution (emission of sulfur as SO2, toxic ash and heavy metals) and climate change (emission of CO2 greenhouse gases), the utilization of coal for power generation has spurred researches leading to the development and commercialization of so called “advanced clean coal” technologies. More »

Large-Scale Project Finance Models

Large-Scale Project Finance Models:

  1. Oil Thermal Power Plant – 2,000 US$

  2. Pulverized Thermal Power Plant – 4,000 US$

  3. Advance Coal Thermal Power Plant – 6,000 US$

  4. Geothermal Power Plant – 8,000 US$

  5. Simple Gas Turbine Power Plant – 9,000 US$

  6. Combined Cycle Gas Turbine Power Plant – 10,000 US$

  7. Energy Storage Power Plant – 12,000 US$*
  8. Solar Thermal Power Plant – 14,000 US$*
  9. Fuel Cells Power Plant – 16,000 US$*
  10. Ocean Thermal Power Plant – 18,000 US$*
  11. Ocean Wave Power Plant – 20,000 US$*
  12. Tidal Power Plant – 22,000 US$*
  13. Nuclear Power Plant – 30,000 US$*

*Please inquire about payment options directly to me.


Contents:

1) Input (Assumption) Sheet

2) Report (Summary) Sheet

3) Project Cost Sheet (equipment cost, ocean freight, insurance, taxes & duties, brokerage & local shipping, erection & installation, land & right-of-way, project development & contract management, initial stocks & inventories, manpower mobilization & training, working capital, interest during construction, other capitalized expenses)

4) Construction Sheet (construction schedule, equity/loan drawdown, interest during construction)

5) Model Sheet (escalation of items, starting costs, capacity & degradation, heat rate & efficiency degradation, maintenance & overhaul scheduel, available hours, gross generation, plant use & net generation, transmission/distribution line constraints & losses, net electricity sales, revenue items, expense items, income statement, balance sheet, cash flow statement, project & equity IRR, project & equity payback, debt service cover ratio)

6) Depreciation Sheet (evolution of balance sheet accounts, working capital)

7) Loan Amortization Table (interest & principal repayment)

Small-Scale Project Finance Models

Small-Scale Project Finance Models:

  1. Diesel Genset Power Plant – 600 US$


  2. Biomass Power Plant – 800 US$

  3. Cogen Power Plant – 1,000 US$

  4. Hydro (Micro, Mini) Power Plant – 1,200 US$

  5. Solar PV Power Plant – 1,800 US$

  6. Wind Power Plant – 2,400 US$

  7. Biomass Gassifaction Power Plant / Anaerobic Digestion – 3,000 US$

  8. Hybrid Power Plant (Diesel, Biomass, Solar, Wind, Micro-Hydro) – 1,000 US$

Wind Energy

The file (697 KB) will cover the following topics:

WIND ENERGY

  • An indirect form of solar energy stored in kinetic form
  • Induced chiefly by the uneven heating of the earth’s crust by the sun.

Uses of Wind Energy

  1. Home owners may generate electricity, charge batteries, sell excess power to utility
  2. Large, modern turbines in wind farms can produce electricity for utilities
  3. Remote villages can generate power, pump water, grind grain, meet their basic energy needs.

Topics – Wind Energy

  • Wind Energy, Its Uses and History
  • Global Wind Resource Potential
  • Basic Principles of Operation & Components
  • Power Output and Maximum Efficiency
  • Types of Wind Mills and Examples
  • Cost of Wind Power (Capital, O&M, Levelized)
  • Applicability, Advantages, Disadvantages
  • Environmental Impact & Risks

History of Wind Turbines

  • Hero of Alexandria described a wind machine in the 1st century AD
  • Arabic texts of the 9th century talked of 7th century windmill.
  • Windmills spread to Europe from the Middle East for grinding grain, drainage, pumping, saw-milling, etc.
  • Post mills (rotated into the wind), were known in France and England in the 12th century. Tower mills (sails on top rotated), were introduced in France around the 14th century.
  • The first windmill to drive an electric generator was built by P. Lacour of Denmark in the late 19th century.
  • In 1931, a propeller-type windmill was built in Crimea for low-voltage electricity that fed into the local grid.
  • Experiments in 1940 led to a large Smith-Putnam machine, a twin-blade 55m diameter propeller-type rotor on a 34m tower rated at 1.25 MW ac power at 28 rpm.

Global Wind Resource

  • Wind is the movement of air in response to pressure differences within the atmosphere, caused primarily by uneven heating by the sun on the surface of the earth, exerting a force which causes air masses to move from a region of high pressure to a low one.
  • About 1.7 million TWh of energy each year is generated in the form of wind over the earth’s land masses, much more over the globe as a whole. Only a small fraction can be harnessed to generate useful energy because of competing land use.
  • A 1991 estimate puts the realizable global wind power potential at 53,000 TWh per year.
  • US, UK and China have vast wind resource potential. With only 6% of total land area available for wind, US could generate about 500,000 MW. Present US capacity is 2,500 MW.

Basic Principles and Components of a Modern Wind Turbine

  • Turbine rotor captures the wind energy and converts it into mechanical energy fed via a gearbox to a generator
  • Gearbox / generator housed in an enclosed nacelle with the turbine rotor is attached to its front
  • Combined rotor and nacelle mounted on a tower fitted with a yawing system keeps the turbine rotor facing into the wind always

Types of Modern Wind Turbines

  • Vertical-Axis Windmills – early machines known as Persian windmills; evolved from ship sails made of canvas or wood attached to a large horizontal wheel; when used to grind grain into flour, they were called windmills.
  • Horizontal-Axis Windmills –first designs had sails built on a post that could face into any wind direction, and were called post mills; evolved throughout the Middle Ages and was used for grinding grain, drainage, pumping, saw-milling.

Price: 56 USD


Energy Technology Road Map

March 12th, 2009 No Comments   Posted in power generation

The file (193 KB) will cover the following topics:

TECHNOLOGY ROADMAP: VISION – robust portfolio

In its “Electricity Supply Roadmap, January 1999”, EPRI clarified the ultimate goal or vision for the power generation industry worldwide:

A robust portfolio of technologies that provide reliable, affordable electricity, with capacity and resource flexibility to meet global market needs – on a sustainable basis – with acceptable environmental impacts.

Implementation will vary from developed and developing countries, from region to region, based on indigenous resources and on economic, environmental and political factors, hence, the need for a portfolio of solutions.

Power Generation Technology Roadmap : Two Destinations

The EPRI Roadmap suggests destinations and identifies R&D opportunities over two nominal time frames:

Twenty years from now (2020) – to assess near-term opportunities and the technical foundations we will draw upon to reach 2050 goals

Fifty years from now (2050) – to encompass truly new and innovative technologies, not simple extrapolation of today’s development efforts. 50 years is deemed to be long enough to allow for capital stock turnover and widespread adoption of new technology. It also provides milestone for gauging progress toward broader goals for energy use by 2100.

Price: 40 USD


Energy Storage Technologies

The file (806 KB) will cover the following topics:

STORAGE TECHNOLOGIES

Energy Storage – used to store and regenerate power for peak shaving and to even out generation fluctuations created by fluctuations in the resource being exploited

Allows greater use of intermittent renewable energy technologies – off-peak wind, solar, ocean wave, tidal power are stored in batteries, pumped storage hydro or stored hydrogen from electrolysis of water.

Topics – Storage Technologies

  • Energy Storage, Its Uses
  • Energy Storage Systems and Types
  • Hourly and Daily Power Consumption
  • Principles of Energy Storage
  • Cost of Energy Storage Technologies
  • Benefits from Energy Storage
  • Environmental Impact & Risks
  • Distributed Generation

Price: 56 USD


Solar Energy

The file (871 KB) will cover the following topics:

Solar energy has potential of supplying all our energy needs for: electric, thermal, process, chemical and even transportation; however, it is very diffuse, cyclic and often undependable because of varying weather conditions.

  • Sun – largest object in our solar system; outer visible layer called photosphere has temperature of 6,000 C
  • Sunlight or solar energy – main source of energy for wind, hydro, ocean and biomass.

Price: 34USD


Simple Gas Turbine (GT)

The file (525 KB) will cover the following topics:

Gas Turbines and Combined Cycle Power Plants

  • 130 BC – Hero of Alexandria’s reaction steam turbine
  • 1550 – Leonardo da Vinci’s “smoke mill”
  • 1629 – Giovanni Branca’s impulse steam turbine
  • 1791 – John Barber’s patent for steam turbine – “gas was produced from heated coal, mixed with air, compressed and then burnt to produce a high speed jet that impinged on radial blades on a turbine wheel rim”.

Topics – Simple Gas Turbines

  • Gas Turbines, Its Uses and History
  • Aero-Derivative Gas Turbine Developments
  • Operating Principle of a Gas Turbine
  • Ideal & Non-Ideal Brayton Cycle, Its Efficiency
  • Effects of Varying Compression Ratio
  • Modifications to Improve Efficiency
  • Gas Turbine Fuels
  • Gas Turbine Technologies
  • Advantages, Disadvantages of GT
  • Environmental Impact, Risks of GT

Price: 44 USD


Pulverized Coal

The file (1.59 MB) will cover the following topics:

TRADITIONAL COAL THERMAL

Coal is formed from plants by chemical and geological processes which occur over million of years.

First product of this process was peat (partially decomposed stems, twigs, bark), then transformed into lignite, bituminous, then anthracite.

Coal is the largest source of energy for power and other uses:

Primary Energy Electricity

World: 23%                        40%

US: 55%

Philippines: 13%                        38%

Topics – Traditional Coal Thermal

  • Coal Resource : Reserves, Extraction Rate, Life Time
  • Types of Coal and Reserves
  • Properties of Coal, Coal-Mixtures and Classification by Rank
  • Examples of Pulverized Coal Boilers & Plants
  • Basic Principle of Pulverized Coal Thermal Plant
  • Coal Mining, Preparation, Transport, Storage, Pulverization & Firing
  • Pollution Control Technologies in Coal Plants
  • Emissions from Coal-Fired Plants
  • Cost of Coal-Fired Plants and Treatment (Capital, O&M, Levelized)
  • Coal Plants in the Philippines
  • Applicability, Advantages, Disadvantages
  • Environmental Impact & Risks

Price: 64 USD


Piston Engines

The file (138 KB) will cover the following topics:

Piston or Reciprocating Engines

4-Stroke medium speed diesel engines are mainly used for power generation on small islands, in remote areas and for industrial purposes. Medium speed technology is competitive for intermediate and base load power plants up to 200 MW: high levels of reliability and availability, rapid construction and installation, competitive capital cost and delivery times, and total efficiency approaching 90% for CHP plants.

Topics – Piston Engine

  • Piston Engine, Its Uses, Fuels
  • Types of Diesel Engines and Applications
  • Compression Ratio and Efficiency of Engines
  • Turbo-Charging of Engines
  • Engine Heat Balance
  • Basic Engine Construction & Support Systems
  • Cost of Diesel Power
  • Environmental Impact & Risks

Price: 30 USD


Oil Thermal

The file (1.21 MB) will cover the following topics:

Oil Thermal Energy

Rock oil” was discovered in Pennsylvania in 1859 by a man drilling for water

Crude oil accounts for 40% of energy use worldwide: 3% of power comes from oil, 16% from natural gas.

High energy density, 43 MJ/kg (18,600 Btu/lb), and relatively clean burning, versatile.

Topics – Oil Thermal

  • Oil & Gas Resource: Origin, Reserves, Extraction Rate, Life Time
  • Properties of Liquid Fuels, Fuel Oils and Natural Gas
  • Basic Principle of Oil-Gas Thermal Plant
  • Ideal and Modified Rankine (Steam) Cycle Efficiency, Heat Rates
  • Oil-Gas Burners (Circular, S-type, Reduced NOx)
  • Reducing NOx Emissions (FGR, LEA, 2-stage air, Re-burning)
  • Emissions from Power Plants
  • Pollution Control Technologies used in Power Generation
  • Cost of Power Generation (Capital, O&M, Levelized)
  • Oil-Thermal and Diesel Plants in the Philippines
  • Environmental Impact & Risks

Price: 42 USD


Ocean Energy

The file (657 KB) will cover the following topics:

OCEAN ENERGY

Wave energy – winds generate large ocean waves that can be used to generate power from its potential and kinetic energy.

Ocean temperature energy conversion (OTEC) – temperature gradient between the surface and bottom of the ocean can be utilized in a heat engine to generate power

Tidal energy – caused by lunar and solar gravitational forces acting together with that from the earth on the ocean waters to create tidal flows manifested by the rise and fall of waters that vary daily and seasonally from a few centimeters up to 8-10 meters in some parts of the world. The potential energy of the tides is tapped to generate power.

Topics – Ocean Energy

  • Ocean Energy
  • Energy from Oceans (OTEC, Wave, Hydro, Tidal)
  • Efficiency & Types of OTEC (Open, Closed, Hybrid)
  • Ocean Waves: Potential, Progressive Wave Motion, Power Density
  • Devices that Convert Ocean Wave to Energy
  • Ocean Wave Power Plants
  • Tidal Energy, Its Potential
  • Types of Tidal Power Plants (Single-Pool, Modulated, Two-Pool)
  • Tidal Energy Power Plants
  • Cost of Ocean & Tidal Power
  • Benefits from Ocean & Tidal Energy
  • Environmental Impact & Risks

Price: 26 USD