part 1: overview of cogeneration and its status in asia - Fire

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176 Part3: Summary of country studies – Bangladesh and Viet Nam Reciprocating engine The configuration of reciprocating engine with heat recovery boiler, using heavy fuel oil as fuel, appears to be best suited as it leads to very high IRR; moreover, the availability of fuel supply is not a problem at any of the sites. The IRR of the different projects varies in a wide range, from 20 per cent to 44 per cent (see Table 4.11). Table 4.11 Summary of results for reciprocating engine cogeneration Reciprocating Engine Factory Excess heat Excess power Elec. Price IRR (TJ/year) (MWh/year) Textile (VND/kWh) ( per cent) Textile mill “A” -143 0 800 26.4 Textile mill “B” -50 65,541 800 20.1 -192 1,210 800 27.7 Textile mill “C” -282 3,884 800 25.2 Paper Paper mill “D” -342 0 800 29.4 Paper mill “E” -1,738 0 800 40.5 Others Rubber factory “H” 0 105,751 780 21.2 -234 0 780 20.5 Hotel “F” -5 114,199 1,540 29.6 -259 0 1,540 27.5 Building “J” 16 2,473 1,540 23.1 19 3,845 1,540 17 29 8,102 1,540 30.6 16 2,473 1,540 44.4 The attractiveness of this option also varies with industrial sub-sectors. In textile industry, IRR is around 26 per cent. In paper industry, IRR is high ranging from 29 to 40 per cent. In the commercial sector, with diesel oil fuelled engine, IRR varies from 23 to 30 per cent; but with engines using heavy fuel oil, the IRR is much higher, varying from 30 to 45 per cent. 4.3.9 Sensitivity Analysis Following the techno-economic analysis of the different sites, sensitivity analysis is carried out to identify the impact of some of the important parameters on the economics of the project. The hurdle rate for accepting a project is assumed as 17 per cent. Increase in the investment cost Here, the investment is increased (from zero to 15 per cent) to see at which point the IRR reaches the hurdle rate. The results are given in Table 4.12. With steam turbine alternative, the coal fired boiler option always has IRRs higher than the hurdle rate. In many cases, the IRR of the fuel oil fired boiler option reaches the hurdle rate when the investment is increased by 15 per cent.
Summary of country study – Viet Nam With the option of reciprocating engine operating with heavy fuel oil, the IRR is generally above the hurdle rate for the industry sector. This can be explained by the low price of heavy fuel oil. In some cases, the hurdle rate is reached with 11 to 15 per cent increases in the initial investment. Due to the high price of electricity charged to the commercial and service sector, the changes of investment cost do not have much effect on the IRR. Table 4.12 Impact of the increase (up to 15 per cent) in investment on IRR Steam turbine Site Alternative Fuel type Elect. Price (VND/kWh) % Increase in investment (a) 177 IRR % Textile mill “A” S.T.(TM) H.F.O. 800 15.0 19.9 Textile mill “B” S.T.(TM) H.F.O. 800 15.0 20.0 Textile mill “C” S.T.(TM) Coal 800 + 31.7 Paper mill “D” S.T.(TM) H.F.O. 800 15.0 19.8 Paper mill “E” S.T.(TM) Coal 870 + 37.1 S.T.(PM) Coal 870 + 34.9 S.T.(TM) H.F.O. 870 + 24.6 Rubber factory “H” S.T.(TM) Coal 780 + 30.9 H.F.O. 780 + 21.2 Reciprocating engine Textile mill “A” R.E.(PM.) H.F.O. 800 11.8 26.4 Textile mill “B” R.E.(TM.) H.F.O. 800 15.0 20.1 R.E.(PM.) H.F.O. 800 + 27.7 Textile mill “C” R.E.(PM) H.F.O. 870 + 25.2 Paper mill “D” R.E.(TM.) H.F.O. 800 + 29.4 Paper mill “E” R.E.(PM) H.F.O. 870 + 40.5 Rubber factory “H” R.E.(TM.) H.F.O. 780 + 21.2 R.E.(PM.) H.F.O. 780 15.0 20.5 Hotel “F” R.E.(TM) D.O 1,540 + 29.6 R.E.(PM) D.O 1,540 + 27.5 Note: (a): It is the percentage increase when the IRR value reaches the hurdle rate (17 per cent) (+ means the IRR always remains above the hurdle rate; and – means the IRR always remains below the hurdle rate) TM: Thermal match; PM: Power match. Fuel price escalation In this analysis, the escalation of fuel price is varied from zero and 15 per cent per annum to see its impact on the IRR. The results are given in Table 4.13. With steam turbine cogeneration, the escalation rate of fuel price does not have any adverse effect the financial attractiveness of the coal fired boiler option. This can be explained by the low price of coal. On the other hand, when fuel oil is used in the boiler, an escalation rate of over 8 per cent will tend to lower the IIR below the hurdle rate. At the fuel price escalation rate of 9.5 per cent, the oil fuelled boiler option does not seem to be acceptable. With reciprocating engine cogeneration, although heavy fuel oil is much cheaper than diesel, many projects have IRRs below the hurdle rate with more than 10 per cent increase in the fuel price escalation rate. In the textile “B”, even an increase of 6.6 per cent in fuel price escalation rate can render the project unfeasible. Diesel as a fuel for reciprocating engines is acceptable only for applications in the commercial sector where the purchased price of electricity can be as high as 1,500 VND/kWh.
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PART 1: OVERVIEW OF COGENERATION AN
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4 Part I: Overview of cogeneration
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State of art review of cogeneration
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Policy framework for promoting coge
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Cogeneration in Asia today 49 1.1 I
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Cogeneration in Asia today 51 4,000
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Cogeneration in Asia today 53 1.3 T
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Cogeneration in Asia today 55 1.3.3
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Cogeneration in Asia today 61 1.7 R
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Cogeneration in Asia today 63 Every
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Cogeneration in Asia today 65 Cogen
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68 Part II: Cogeneration experience
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Cogeneration experiences around the
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PART 3: SUMMARY OF COUNTRY STUDIES
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98 Part3: Summary of country studie
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100 Part3: Summary of country studi
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Sample case study in a pulp and pap
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