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Heating - Boiler - Multiple buildings / Canada
Case study assignment
A community in northern Canada has hired you to help them evaluate the financial viability of utilising the waste heat from diesel generators to heat buildings in their community. All buildings in the community are presently heated by oil. Electricity is supplied by the territorial government-owned electric utility's reciprocating diesel engines, located within the community. The concept is to install a small district heating system which would utilise the waste heat from the diesel generating plant. The community would like to know whether a waste heat recovery system would be a financially viable alternative to the existing oil-fired individual heating systems for five community buildings and a planned school in the downtown area.
Site information
Fort McPherson is a hamlet of approximately 900 people situated on the Peel River about 100 km north of the Arctic Circle. The community is approximately 110 km by air from Inuvik.
The six buildings that would be serviced by the proposed district heating system, as well as the proposed distribution pipe layout, are shown in the figure. The fuel consumption and heating system seasonal efficiency for these buildings have been determined in a prior survey and are listed in the table.
Case study assignment
A community in northern Canada has hired you to help them evaluate the financial viability of utilising the waste heat from diesel generators to heat buildings in their community. All buildings in the community are presently heated by oil. Electricity is supplied by the territorial government-owned electric utility's reciprocating diesel engines, located within the community. The concept is to install a small district heating system which would utilise the waste heat from the diesel generating plant. The community would like to know whether a waste heat recovery system would be a financially viable alternative to the existing oil-fired individual heating systems for five community buildings and a planned school in the downtown area.
Site information
Fort McPherson is a hamlet of approximately 900 people situated on the Peel River about 100 km north of the Arctic Circle. The community is approximately 110 km by air from Inuvik.
The six buildings that would be serviced by the proposed district heating system, as well as the proposed distribution pipe layout, are shown in the figure. The fuel consumption and heating system seasonal efficiency for these buildings have been determined in a prior survey and are listed in the table.
The distance from the proposed district heating pipe to the arena and pool are estimated to be 5 m and 10 m, respectively. The soil conditions are good and there are no interfering services in the areas selected for the distribution pipes. The community wants to install a low temperature distribution system. The electric utility has estimated that 330 kW of waste heat is available.
Financial information
Typical financial figures for the analysis are provided by the community (inflation of 2.0%, debt ratio of 80%, debt interest rate of 6%, discount rate of 9%, and a debt term of 20 years). The community, as a public organisation, does not pay taxes. The electric utility indicated that they would be willing to sell their waste heat for $7.50/MWh. The local price of electricity is $0.50/kWh, and the delivered cost of oil is $0.60/L.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.
Financial information
Typical financial figures for the analysis are provided by the community (inflation of 2.0%, debt ratio of 80%, debt interest rate of 6%, discount rate of 9%, and a debt term of 20 years). The community, as a public organisation, does not pay taxes. The electric utility indicated that they would be willing to sell their waste heat for $7.50/MWh. The local price of electricity is $0.50/kWh, and the delivered cost of oil is $0.60/L.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.
Solution
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
Results
Heat from the operation of diesel electric generators is a by-product that can be tapped and sold to buildings near power plants in many Arctic communities. The first such commercial operation started in Fort McPherson in 1995, with a business partnership between the Gwich'in Development Corporation and the Northwest Territories (NWT) Power Corporation.
Located north of the Arctic Circle, the community of 900 people was using individual oil-fired heating systems in their downtown buildings, with electricity being supplied by the NWT Power Corporation's reciprocating diesel engines located nearby.
A Company, Aadrii Ltd., was formed to manage the project. The district heating system was constructed to recover waste heat from the diesel generating plant and distribute it to five customers, including a school, a water treatment plant, a Tent and Canvas Shop, a community office and, on a seasonal basis, the community swimming pool. The customers were not required to make any capital contributions to the system and were not charged a connection fee.
The project has been successful in reducing the community's overall fuel requirements by 12%, and over the long term, will reduce electrical rates as a result of the additional revenue stream. The system was expanded in 1998 to provide heat to more customers.
System description
In 1997, the first full year of operation, the district heating system delivered approximately 1,715 MWh of heat, thereby displacing approximately 251,000 L of heating fuel. Due to the difference between peak electrical demand and peak heat demand, the system was not able to provide 100% of the customers' heating energy demand. Peak heating load is met by the customers' existing oil-fired boilers. The district heating system was designed to provide approximately 75% of the heating energy load.
The initial pricing strategy adopted by Aadrii Ltd. focused on providing some benefit to the customers in the first year, while at the same time allowing the majority of the energy savings to go towards recovering the capital costs. The heating rates charged to the customers are tied directly to the avoided cost of heating oil. The customer's avoided heating fuel cost is calculated given the prevailing cost of heating oil and the average annual efficiency of their oil-fired heating system.
Lessons learned
More than 30 other locations in the NWT could be viable for the sale of heat, and would also see substantial reductions in community greenhouse gas emissions.
The community's heating fuel is supplied by the Government of the Northwest Territories Petroleum Products Division (PPD). PPD's pricing structures do not necessarily reflect the full cost of providing fuel to the customer. Developing waste heat recovery systems in conjunction with district heating is feasible; accounting for the full cost of providing fuel would make renewable energy and energy efficiency projects more attractive financially.
Photo
Power plant - Fort McPherson, Northwest Territories, Canada
References
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
- The peak load system capacity has been set to 600 kW, far in excess of the 127 kW suggested by RETScreen. This 600 kW is an estimate of the combined capacity of the individual heating systems already existing in the buildings. Since the existing system is capable of meeting the total peak heating load of 432 kW, we know that its capacity will be in excess of this; 600 kW is a rough guess. Since these boilers already exist, they have been assigned zero cost in the initial costs for the balance of plant.
- The domestic hot water load estimate is likely low since the pool is not used during the winter; it has been estimated that it represents 10% of the annual heating energy load.
- The "Heating load for building cluster" was not provided, but the annual oil consumption was. Use the "Goal Seek" button on the RETScreen Toolbar to set the heating load for each building to the value that equates the calculated annual fuel consumption and the values specified in the table in the assignment.
- The fuel consumption for a building can vary by up to +/- 25% from year to year, depending on the weather. When fuel consumption is estimated on the basis of a single year's metered data, an accurate estimate of the consumption in an average year would require accounting for differences in the weather between an average year and the metered year.
- Despite the low ambient temperatures, the supply temperature has not been set to the maximum of 95 ºC suggested by RETScreen for plastic pipes. At higher supply temperatures, the waste heat that can be recovered is reduced.
- Since it is desirable that the return temperature be as low as possible, for new buildings the system would be designed with a return temperature of 45 ºC, as suggested by RETScreen. When dealing with existing buildings, the existing heating equipment in the building may dictate a high return temperature. In North America, a 70 ºC return is typical when the buildings and their heating systems exist prior to the installation of the district heating system.
- The pipe cost factors are set to 1.20 to account for higher costs due to the remote location.
- The 400 hours allotted for equipment installation is less than the RETScreen suggested minimum of 500 hours; the WHR system is only additional equipment in the plant and not a completely new installation.
- A large spare parts inventory has been included in the cost worksheet to minimise the risk of a prolonged shutdown.
- A waste heat recovery system capacity of 330 kW is near optimal in terms of financial viability. The internal rate of return falls off sharply below 200 kW and above 330 kW (assuming more waste heat were available). At 330kW, or 76% of the peak heating load, nearly 99% of the heating energy demand is satisfied with waste heat.
Results
Heat from the operation of diesel electric generators is a by-product that can be tapped and sold to buildings near power plants in many Arctic communities. The first such commercial operation started in Fort McPherson in 1995, with a business partnership between the Gwich'in Development Corporation and the Northwest Territories (NWT) Power Corporation.
Located north of the Arctic Circle, the community of 900 people was using individual oil-fired heating systems in their downtown buildings, with electricity being supplied by the NWT Power Corporation's reciprocating diesel engines located nearby.
A Company, Aadrii Ltd., was formed to manage the project. The district heating system was constructed to recover waste heat from the diesel generating plant and distribute it to five customers, including a school, a water treatment plant, a Tent and Canvas Shop, a community office and, on a seasonal basis, the community swimming pool. The customers were not required to make any capital contributions to the system and were not charged a connection fee.
The project has been successful in reducing the community's overall fuel requirements by 12%, and over the long term, will reduce electrical rates as a result of the additional revenue stream. The system was expanded in 1998 to provide heat to more customers.
System description
In 1997, the first full year of operation, the district heating system delivered approximately 1,715 MWh of heat, thereby displacing approximately 251,000 L of heating fuel. Due to the difference between peak electrical demand and peak heat demand, the system was not able to provide 100% of the customers' heating energy demand. Peak heating load is met by the customers' existing oil-fired boilers. The district heating system was designed to provide approximately 75% of the heating energy load.
The initial pricing strategy adopted by Aadrii Ltd. focused on providing some benefit to the customers in the first year, while at the same time allowing the majority of the energy savings to go towards recovering the capital costs. The heating rates charged to the customers are tied directly to the avoided cost of heating oil. The customer's avoided heating fuel cost is calculated given the prevailing cost of heating oil and the average annual efficiency of their oil-fired heating system.
Lessons learned
- Potential district heating customers must be taught to understand and accept the district heating system and be prepared to assist in making the system work.
- If space is not available inside an existing electric power plant, housing the heat exchangers and pumps will raise the project cost.
- The presence of an interested local development group adds to the economic benefits of a small district heating system.
More than 30 other locations in the NWT could be viable for the sale of heat, and would also see substantial reductions in community greenhouse gas emissions.
The community's heating fuel is supplied by the Government of the Northwest Territories Petroleum Products Division (PPD). PPD's pricing structures do not necessarily reflect the full cost of providing fuel to the customer. Developing waste heat recovery systems in conjunction with district heating is feasible; accounting for the full cost of providing fuel would make renewable energy and energy efficiency projects more attractive financially.
Photo
Power plant - Fort McPherson, Northwest Territories, Canada
References
- Farrell, T, "Performance of a residual Heat Distribution System," Prime Power Diesel Inter-Utility Conference, Thunder Bay, Ontario, September 1998.
- Natural Resources Canada, Impact of subsidies on RET investments in remote communities, March 2000.
- Northwest Territories Power Corporation Annual Report, 1997-1998.
- Ziegler, Urban, "Personal communication," PEMtec, 2000.
