INTRODUCTION
Combined Heat and Power (CHP) is a term used for the industrial or commercial use of a fuel source to produce electricity as well as heat energy, in the form of hot gases for direct use, or in the production of steam, cooling or electricity. On the whole, the aim is to achieve the most efficient use of the available energy for these outputs – in a way where the combined efficiency is greater than could be attained by producing them independently. Of course emissions, costs and downtime reduce concurrently.
The power generation component is traditionally a modular gas turbine or gas engine (“gas” meaning it is the products of combustion that drive the turbine blades or reciprocating engine) whereas the steam production component is typically a customized heat recovery boiler. Fuel sources could be gaseous (natural gas, propane, hydrogen, CO, landfill gas, biogas, coal bed methane) or liquid (diesel, paraffin, light distillates, oils). The most likely CHP projects to succeed are ones that have access to clean, affordable fuel, and supply facilities with sufficient scale in terms of baseload power and steam/heat needs. Better chance still if the project will substitute expensive municipal power.
CHP IN SOUTH AFRICA TO DATE
Considering a history of cheap electrical energy in South Africa, and limited environmental and governance pressure, CHP has become a serious consideration in industry only over the last 10-15 years as prices in the energy basket have run up, along with regulations, and reliability of supply has plummeted. Energy Group’s estimate of installed CHP capacity in South Africa is currently less than 200MW whilst it has identified more than 80MW of real projects, albeit mostly constrained by fuel and economic conditions. Due to the lack of familiarity in the industries of CHP technology, the most simple configurations have been the most practicable, for example, where an existing supply of natural gas is available, on a site that demands significant power and steam, as depicted in the schematic below.
An industry example is the 5MW Solar Turbines (Caterpillar) CHP plant supplied by the Energy Group team, to the AB Inbev site in Roslyn (image below), which provides power as well as steam out of a waste-heat boiler, and hot water for brewing. This is a clean application and beautiful to witness in operation, a jet engine in a modular container, churning out cleaner electrons and steam day after day.
CHP BENEFITS AND OPPORTUNITIES
The economics stack up, massively. Especially when incentives, carbon tax savings and other potential benefits are layered. A typical energy cost shift on a paper mill might look like this (COD during 2018) with 10 year project returns between 30-45%.
Taking the clear financial benefits into consideration, there’s a question as to why there haven’t been more CHP projects completed to date. The reason is that there are very few scale industrial companies in the paper and pulp, brewing, alcohols and chemicals industries that have appreciable quantities of piped Sasol natural gas available. With Sasol’s Pande-Temane fields in decline, the piped gas system is constrained and Sasol has no option but to limit users rather than sign up new volumes. Additionally, unless environmental pressures and carbon taxes play the role they should, most CHP plants are competing economically against dirty and cheap coal steam.
There is such a thing as free fuel however. Whilst conventional fuels tend to be cheaper, fuel coming as a by-product of an industrial process (eg furnace gas) is effectively free. Yet low reliability, clean-up and fuel prep requirements make the perceived technical risk hard for most investment committees to stomach. Also off-putting is the poor track record of CHP.
The Ferrochrome industry is one of the segments that is late to the CHP party. RFP’s go nowhere due to perceived technical risk. Also reticence owing to the failure of a few furnace gas-to-power projects in which gas engines, specified against a promised CO/H2 feedstock, struggled to reach performance targets, or operate at all, due to high variability of supply and quality. There is an 8MW, 3rd party-owned, furnace gas plant operating at Glencore’s Boshoek, Rustenburg plant, however, an agreement signed between Swedish Sterling and Glencore in April 2021 to provide 10MW of gas engine capacity at their Steelpoort operation, to offset 500,000T of carbon dioxide emissions, ran out of steam in December 2022 because of “required terms” (which reads contractual misalignment). Other smelters are working on solutions – considering that South Africa has the highest concentration of ferrochrome producers, with an estimated combined 200MW of recoverable energy currently being flared to atmosphere, the CHP nut must be cracked. Same with the ilmenite and manganese smelter operators although these come with additional technical challenges of their own.
FINAL THOUGHTS
The Chinese have got it down and we should look there. Caterpillar’s Solar Turbines, alone, have a long list of Chinese producer-gas operators successfully running its turbines on CHP applications and there are well established clean-up and compression technology available in the South African market. We need less hot air and more heat-and-power…
