How Much is Steam Worth?

Abstract

Abstract This paper introduces how to accurately calculate steam cost through Combined Heat & Power (CHP) systems modeling. The major consumption of energy in industry takes place in the form of heat and power for the process plant(s). Optimizing the CHP system can lead to immense savings in the energy consumption of the plants thereby largely reducing the operating costs. This paper provides a step-by-step construction of a CHP model and illustrates the fluctuation of steam production cost as each component of the CHP system is added or the operating mode is changed. In addition, it will highlight how to use the opportunity value of steam as an alternative to steam production cost for energy targeting purposes. The cost of power can be easily linked to the Electricity Tariff since electricity is a common commodity. Steam cost, however, cannot be directly linked to any common commodity (including Fuel) and has to be calculated independently for each application to account for all operating factors and limitations that may impact steam production cost. Steam can be produced directly from burning fuel in boilers, making its cost very high. It also can be produced as a byproduct form waste heat recovery which makes its cost minimum. Most industrial applications will have a combination of boilers and waste heat recovery systems which makes steam cost calculation very hard without robust modeling. The inclusion of power recovery in the steam system through steam turbines will make the calculations of steam cost even more complex and varying with almost every operating mode. This analysis is applicable to both existing plants and new projects. In existing plants, this analysis will help as a KPI for energy monitoring and an accurate measure to calculate the actual production cost in each process area as well as pinpoint areas of potential improvement. On the other hand, for new project it will help to properly size energy-efficient utilities systems to match process demands with minimum operating and capital cost. It can also help in doing what-if analysis to examine different expected operating scenarios and design change considerations.