HDC Energy News: November 2013 - page 2

Energy
News
| November 2013
CHP – is it still a good energy efficiency
solution for greenhouses?
Gas fired combined heat and power (CHP) is commonplace
on nurseries in Holland, and you’d probably struggle to
find a Dutch tomato, cucumber or pepper grower who
doesn’t have a CHP unit. A significant number of Dutch
ornamentals growers also have the technology.
In contrast, uptake in the UK has been somewhat less dramatic.
Several large edibles nurseries have installations but, compared
to Holland, very few growers have CHP. The biggest barriers
to uptake in the UK have been the high capital cost of the
equipment, on-going maintenance costs, and uncertainty about
the financial returns from an installation. The government has
also recently removed Levy Exemption Certificates (LECs) from
CHP. This, in addition to the new Carbon Price Support (CPS)
tax has increased the cost burden on CHP operators.
The advantages of CHP are well known. It is very energy efficient
and the CO
2
from the flue gases can be used for greenhouse
enrichment. On the other hand, successfully running a CHP
requires careful management which can be very time consuming.
So, do the positives still outweigh the negatives, and now that
there are new developments in areas like renewable energy, is
CHP still worth considering?
Energy and cost saving?
CHP simultaneously generates heat and electricity from a single
machine and, compared to a separate boiler and electricity
supply, a CHP is typically 35% more efficient. But, to be of
commercial interest to a grower, this needs to translate into
energy cost savings.
CHP owners and operators often talk about “spark spread”.
This is the measure of the difference between the cost of the
gas needed to run the CHP and the value of generated electricity.
Spark spread goes towards paying for operating costs and
spares and maintenance, which are significantly higher than
with a conventional boiler.
So long as the CHP unit is correctly sized, a nursery will be
able to use all of the heat it generates. On the other hand,
it’s unlikely that the generated electricity will be used on site.
So, for most greenhouse applications, most of the electricity
is exported off site and sold through an export contract to
an electricity company. The price obtained for the electricity
is determined by the market at the time of sale and careful
contract management is needed to make sure the maximum
value is obtained.
To see how this all stacks up, GrowSave has been monitoring
the gas and electricity markets throughout 2013 to see how
current price changes and trends are affecting viability. A model
tomato greenhouse has been used to calculate the annual
energy cost for boiler only and boiler plus CHP heating system
configurations. The assumptions made in the model are:
• Annual heat consumption is 385 kWh/m
2
. This equates
to 465 kWh/m
2
of gas input to a typical boiler only
heating system.
• The CHP unit size is 600 kW of electricity generation
capacity per Ha. This is a size that meets the summer heat
and CO
2
demands of a typical tomato production greenhouse.
• Operation and maintenance costs for the CHP are £10/MWh
of electricity generated.
With respect to the energy price inputs, the prices are based
on annual gas purchase and electricity sales contract prices
that could have been secured to start on the first day of each
calendar month through 2013. For example, contract prices
are fixed on the 31st December for a 12 month contract
starting on the 1st January and contract prices are fixed on
31st January for a 12 month contract starting on the 1st
February. This purchasing model continues for every month
of the year.
In addition to income from the volumes of electricity exported,
allowance has also been made for likely income from other
electricity sales benefits. These include Triad and generation
distribution use of system (GDUOS) payments.
The results of the energy cost modelling are given in the graph
which shows:
1. If a 1st January start date gas contract had been chosen for a
nursery with a boiler only heating system, the annual energy
cost would have been £112,573/Ha. In contrast, if a 1st
September start date contract had been chosen, the cost
would have risen to £122,641/Ha. This is 10% higher.
2. The most expensive contract start date for a boiler only
arrangement was 1st April; which was 14% higher than
for a 1st January start date.
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