A comparative study of sustainable industrial heat supply based on economic and thermodynamic factors

In the first step, a process model of the chosen heat supply processes is set up using the process simulation software IPSEpro. Based on mass and energy balances, a system of equations is generated and solved using a Newton-Raphson-type root-finder. The process simulation allows for concise calculation of all needed specific thermodynamic data, like the specific thermo-chemical energy (based on lower heating value and temperature-dependent heat capacity) and the specific exergy (based on an equilibrium reference environment by (Ahrendts, 1979), which has been recommended by Baehr and Kabelac (2012) of the process streams). For the simulation of the heat supply processes, some assumptions are necessary, which are shown in Table 1. Heat exchanger pressure drops are not considered in the calculations. The parameters of the gas turbine depend on the performance data of the Siemens SGT-800 (53.0 MW) gas turbine (Siemens, 2016).

Table 1

General performance assumptions for key process components

Tabelle 1. Leistungsangaben und Wirkungsgrade wichtiger Prozesskomponenten

The process and working parameters are fixed according to Table 2 in order to compare the alternative technologies on a fair basis. The scope of all technologies is to produce heat for a typical industrial production process in the paper industry. The minimum outlet temperature to the heat sink is assumed with 141.8°C and a pressure level of 3.8 bar.

Table 2

Technological setting for the heat supply processes for a paper mill

Tabelle 2. Technische Parameter zur Prozesswärmebereitung in der Papierindustrie

The following chapter explains the considered process types of thermodynamically efficient low-temperature heat generation, which will be further analyzed in the present study. A broad used technology for process heat supply are boiler systems, but because of high exergy losses, this technology is not examined in detail. For the basic comparisons, a boiler efficiency of 90% for calculating the costs of heat is assumed.

The economic calculations were made to compare the economic performance of the heat supply processes. The calculations include, firstly, the consumption related costs of the three systems. The formulation in equation (8) holds for the pre-existing gas-turbine based systems and equation (9) reflects the consumption related costs of the HTHP system. Secondly, investment costs for a newly installed HTHP are to be considered, because in our methodological approach, we assume that either a GT or a GT-CC system is already in operation while the HTHP system requires installation of additional technology. For consumption related costs of heat for GT and GT-CC systems, the costs for fuel and the revenue for the produced electricity are considered. As electricity price, the purchase price for electricity based on the day ahead data from EEX is assumed. Taxes are not considered. The resulting setup comprises two parallel heat generation options and the operator can flexibly choose between a gas-powered and an electricity-powered heat supply system dependent on the energy price situation. GT and GT-CC systems are state of the art to produce process heat, so it is assumed that one of these systems is still installed. So, only acquisition costs for a heat pump system has to be considered.

CoHGT&<!-- & -->GT−<!-- - -->CC=PFuelCGas−<!-- - -->PelCElQ˙<!-- ? -->Process$$\begin{array}{} \displaystyle CoH_{GT\&GT-CC}=\frac{P_{Fuel}\,C_{Gas}-P_{el}\,C_{El}}{\dot{Q}_{Process}} \end{array} $$(8)

CoHv,HTHP=CElCOP$$\begin{array}{} \displaystyle CoH_{v,HTHP}=\frac{C_{El}}{COP} \end{array} $$(9)

The collected industrial energy prices for both, electricity and gas prices, refer to E-Control and serve as foundation for the calculated consumption related costs. In order to get a precise picture of the economic performance of an HTHP, the investment costs are converted into EUR/kW_Q and include capital costs as well as service and personal costs. When it comes to investment, capital costs C_Capital are to be considered as well. The approach therefore considers costs for depreciation D_C, shown in equation (10) and interest costs I_c shown in equation (11). Costs for annual interests are calculated with the average cost method according to Schneider (Schneider, 2006). Since the costs for investment are very high, we assume total debt financing and chose an interest rate of 5% p.a.

DC=I0−<!-- - -->RWn$$\begin{array}{} \displaystyle D_C=\frac{I_0-R_W}{n} \end{array} $$(10)

IC=I0+RW2$$\begin{array}{} \displaystyle I_C=\frac{I_0+R_W}{2} \end{array} $$(11)

CCapital=DC+IC$$\begin{array}{} \displaystyle C_{Capital}=D_C+I_C \end{array} $$(12)

For allocating the total costs into EUR per MWh, additional costs for capital, salary and service are to be summed up and divided by Q_Process, as shown in equation (13). Because either the GT/GT-CC or the heat pump is running, the service costs are assumed as fixed. Finally, total costs for heat production in EUR per MWh can be calculated for the HTHP system (equation (14)).

CoHf,HTHP=CCapital+CPersonnel+CServiceQProcess$$\begin{array}{} \displaystyle CoH_{f,HTHP}=\frac{C_{Capital}+C_{Personnel}+C_{Service}}{Q_{Process}} \end{array} $$(13)

CoHHTHP=CoHv,HTHP+CoHf,HTHP$$\begin{array}{} \displaystyle CoH_{HTHP}=CoH_{v,HTHP}+CoH_{f,HTHP} \end{array} $$(14)

Table 3 gives an overview of the included parameters. With respect to uncertainties about precise investment costs, we consider four levels of specific investment costs and study the impact of HTHP system erection costs on the total CoH. According to (Zhang et al., 2016) and data from several manufacturers, the estimated installation costs of HTHP range between 250 EUR/kW_Q and 750 EUR/kW_Q, although further decline in the future due to serial production is expected.

Table 3

Assumptions and calculations for modelling the economic model of the capital related costs of heat production

Tabelle 3. Annahmen und Kalkulationen für das ökonomische Model zur Berechnung der Kapitalkosten der Prozesswärmebereitung

Table 4 and Table 5 summarize the energetic and exergetic parameters. The results show that the exergetic efficiency of the HTHP, even if a moderate COP of 3 is assumed, is higher than for the GT and the GT-CC process. In practice, the COP will depend on the temperature level of the waste heat reservoir used as heat source by the HTHP system. In paper industry, for instance, humid exhaust air is available from drying and can be used as heat source. If such a stream is available at 90°C, a three-stage HTHP system can be operated using 90°C/75°C, 75°C/60°C and 50°C/35°C, and resulting in COPs of approximately 5, 4 and 3, respectively. In average, a COP of 4 can be obtained in such a case.

Table 4

Thermodynamic results of the simulation of the industrial heat supply for gas turbine and gas and steam turbine combined cycle processes

Tabelle 4. Thermodynamische Ergebnisse der Simulation der industriellen Prozesswärmebereitung mit Gasturbine und Gas- und Dampfturbine

Table 5

Simulation results for the industrial heat pump system assuming three different COP situations

Tabelle 5. Simulationsergebnisse für die industrielle Wärmepumpe bei drei unterschiedlichen COP’s

Figure 1 shows the consumption related costs of heat production (CoH_GT&GT__CC and CoH_vHTHP) depending on the electricity price. For electricity prices below 45 EUR/MWh_el and a gas price of 25 EUR/MWh (based on lower heating value), the HTHP is the economically best way of heat production. Higher electricity prices favor the GT-CC and the GT process. Additionally, a boiler system with a boiler efficiency of 90% is shown. So, the costs of heat production of the boiler system amount 28 EUR/MWh, if a gas price of 25 EUR/MWh is assumed.

Figure 1

Figure 2 shows the total costs of heat production of a newly installed HTHP in comparison to other available heat supply systems for a period from January 2013 to June 2016 (with energy prices as shown in Figure 3). The graphs of the conventional systems are based on equation (8). Furthermore, a boiler system (boiler efficiency = 90%) is shown. The graph of the HTHP is calculated at a COP of 4 and investment costs of 500 EUR/kW_Q are assumed. The results show that in the period between February 2013 and May 2014, as well as in the period between August 2014 and September 2015, economic conditions for replacing conventional heat supply systems would have been favorable. From October 2015 onwards, CHP-based CoH decrease as a result of decreasing natural gas prices and increasing electricity prices. The CoH of HTHP range in the considered time window between 12 EUR/MWh and 18 EUR/MWh.

Figure 2

Figure 3

It is evident from Figure 2 that the GT-CC system is in direct competition to the HTHP system. In price situations where the GT system would be superior to the GT-CC system, the HTHP system is always more economic than GT. Figure 4 shows the switching schedule between GTCC and HTHP operation in a tentative plant where both technologies are available in the investigated time window. Since the CoH of the HTHP system depend on operational costs as well as investment costs, the calculation is done for the four different levels of specific erection costs of the HTHP system.

Figure 4

The share of the heat production technologies, based on the examination of Figure 4, is shown in Table 6. The results obtained again show that the HTHP and the GT-CC process are most economic. The share of the heat pump system on heat production varies from 45% to 76% depending on the specific investment costs. Lower investment costs favor the operation of the HTHP, and the share of heat production for HTHP with specific investments of 750 EUR/kW_Q, 500 EUR/kW_Q, and 250 EUR/kW_Q, is higher than 50%. A switch of between the systems increase the fixed costs per unit, but these results give the first overview about the economic operation range of HTHP.

Table 6

Share of each heat production technology depending on the specific investment costs for the HTHP system in the period January 2013 to June 2016

Tabelle 6. Erzeugungsrate der einzelnen Wärmebereitstellungsmethoden in Abhängigkeit unterschiedlicher spezifischen Investitionskosten der Wärmepumpe von Jänner 2013 bis Juni 2016

A sensitivity analysis of the consumption related costs is done for these two technologies. Figure 5 depicts the effects of changing electricity and gas prices on the costs. The first picture (a) shows the correlation of COH of a GT-CC and a HTHP process by varying the gas price +/- 10%. In the second picture (b), the electricity price is varied +/- 10%. The change of the consumption related costs for the GT-CC process in connection with changing energy prices is more distinct than for the HTHP. The diagrams for the gas-fired systems show that changing gas prices have more impact on the costs of heat production than changing electricity prices. For HTHP systems changing gas prices are not relevant.

Figure 5

Since economic considerations in industry always include the factor pay-back time, a breakdown of it for the four considered heights of investment is brought into play and illustrated in Figure 6. The payback time for every case of investment heights is shown for every month and refer to the left axis. It is calculated under the assumption of the given price conditions and are expected to be constant, which of course is not accurate for reality. The outcome of the graph shows that in case of low investment costs, thus 250 EUR/kW_Q or 500 EUR/kW_Q, payback time would have been clearly below ten years most of the time.

Figure 6

Figure 6 also depicts the monthly savings for substituting a GT-CC with a HTHP system. For the calculation of monthly savings, it is assumed, that the annual process heat Q_Process is distributed equally for all twelve months. This graph should give an overview about the possible payback times, if in past years an HTHP would have been installed on site. Over the whole period, the trend shows decreased savings. From March 2013 until June 2013, the payback times would have been below 10 years. In contrast, from October 2015 until June 2016, no savings could be achieved, which is a sign that the best times for investing into HTHP technology were from January 2013 until August 2015. After this period, the economic benefits are reduced and the future development of energy markets needs to be evaluated in order to decide about potential investment in HTHP systems.