Opportunities for integration of biofuel gasifiers in natural-gas combined heat-and-power plants in district-heating systems

Abstract

As political pressure to improve efficiency and reduce CO 2-emissions increases, natural gas combined cycle (NGCC) combined heat-and-power (CHP) technology is an increasingly attractive option for district-heating systems. However, as CO 2-emissions reduction targets become more ambitious, it is expected that there will be pressure to reduce CO 2-emissions from such units well before they reach the end of their useful lifetime. One way to achieve this goal is to integrate a biofuel gasification unit at the plant site. After clean-up, the produced syngas can be co-fired in the CHP unit. This paper discusses the economic performance of this type of retrofit, with specific emphasis on the impact of the following parameters: (i) the original NGCC CHP plant’s power-to-heat ratio; (ii) the size of the district-heating system’s annual heat-energy demand; (iii) the fuel mix in the district-heating system; and (iv) the availability of low-cost waste-heat that can be delivered to the district-heating system. The economic performance of the retrofitted CHP unit is measured as the overall cost of electricity production (COE). COE is analysed for four different energy-market parameter sets (referred to as Scenarios), including fuel prices, costs associated with energy and climate change policy instruments, and market electricity prices. The results indicate that even relatively high costs associated with CO 2 emissions are insufficient to motivate retrofitting an NGCC CHP unit with an integrated biofuel-gasification unit. To promote this type of retrofit, an additional premium value for electricity generated from renewable fuel sources is required (such as the Swedish REC renewable energy certificate system). An unexpected result of this study is that the required value of REC is essentially independent of the energy market scenario considered.