Electrical capacity and distribution problems in Russia are proving to be the primary cause for the adoption of CHP schemes at a range of applications from industrial sites to district heating schemes, mostly fuelled by what is, locally, highly-affordable natural gas. Francois Xavier-Saury and Nick Kelsch from Caterpillar Electric Power look at the technology and business issues.

Bogorodskoe Industries operates a local plant that provides electrical power and heat for a major natural gas pipeline centre in the northern Khabarovskiy Kray, Russia

The market for combined heat and power (CHP) solutions in Russia and the Commonwealth of Independent States (CIS) is surging, but not always for the same reasons that motivate project developers in Western Europe and North America. Government agencies in Russia and CIS – unlike many government agencies in Western Europe – offer no electrical rate subsidies for grid-exported energy from high-efficiency power systems. Instead, the development of CHP is driven by a need for electric power, while the ability to capture and utilize waste heat is an additional benefit.

Fuelled by development of its abundant natural resources, particularly oil and natural gas, Russia is enjoying an era of rebirth. With access to new-found capital, investment in other industries has also flourished. In turn, these new industries have spurred growth in the middle class, which has contributed to a boom in the residential construction industry.

Unfortunately, Russia’s electrical infrastructure has had difficulty keeping pace with the growing residential and industrial appetite for electricity. The Russian Federation attempts to provide every residence with electric power from the grid, but too little power is available for commercial operations of any significant scale to take it for granted. With the wait for an interconnection to the grid typically lasting from many months to years, and steep interconnection fees hovering around US$1000 per kW of capacity, builders of new facilities regularly elect to install their own power plants to supply the additional power they need.

With power the primary motivator, CHP installations offer attractive benefits beyond the pressing need for electrical power. Regardless of the kind of facility under construction, heat is a basic necessity for most of the year throughout the region. Most established metropolitan areas have an existing municipal heat distribution grid that has been fed by centralized steam turbines for decades. It is a simple matter to connect a new CHP system into this grid to supply heat to the owner’s facility or the local district heating system.

As in some established European metropolitan areas, heat distribution systems in Russia are ageing. Many old boiler and turbine systems have degraded to the point where they are less than 25% efficient in converting gas fuel into heat. Given the low cost of fuel in Russia, this may not seem significant. But the Russian government is beginning to apply some efficiency standards for new systems installed to replace ageing equipment, which in effect mandates the use of higher-efficiency CHP systems.

Areas of new residential and industrial development lack a district heating system infrastructure, so many developers and building owners have to create their own heat distribution systems to deliver the needed heat. Traditionally, this heat would be generated by a centralized steam turbine plant or boiler but, with reciprocating engine generators already part of most large construction projects, the additional investment to include a CHP system is an extremely attractive way to generate both electricity and heat through a single solution.

NATURAL GAS, THE FUEL OF CHOICE IN RUSSIA

Prices for natural gas in Russia are among the lowest in the world, about 75% to 80% less than in Western Europe, making it the fuel of choice for most CHP installations and about half of electric power generated in Russia as well. The price for natural gas is about $100 per 1000 Nm3 in Russia, compared to about $450 in mainland Europe. Russia’s natural gas reserves are estimated to be about twice as large as any other country, and the Russian economy in second only to the US in the amount of gas consumed.

Natural gas prices have been low for a long time, so that the percentage of power generated from gas has risen from 42% in 1990 to 51% in 2006.

Over the long term, experts believe domestic natural gas price inflation in Russia will remain fairly flat. While the US Energy Information Administration (EIA) forecasts similar stability for natural gas prices in the US, where massive shale gas resources are being developed, Russia’s long-term gas price outlook is driven much more by known traditional gas plays.

This bodes well for a long-term spark spread – the difference between the cost of grid electricity and the cost to generate electricity using natural gas – that will continue to make natural gas a popular fuel choice for power generation. In fact, users of CHP systems in the Moscow metropolitan area quite often report simple payback on their systems in three to five years.

The fuel quality provided throughout Russia’s pipeline distribution system is also very high and conducive to the production of electricity and heat in a reciprocating gas engine. The methane number (MN) measures the ability of gas to resist detonation or ‘knock’ while it is being ignited inside an engine’s combustion chamber. The Lower Heating Value, or LHV, provides a measure of the energy content inside a given unit volume of fuel. The typical Cat high-efficiency lean burn generator set accepts natural gas fuel with an LHV from 32–47 MJ/Nm3 and a methane number of 70–100, which aligns very well with typical Russian pipeline gas at 35 MJ/Nm3 and 90 MN.

When applying a CHP generator set on lower methane number fuels, such as wellhead gas readily available at oil and gas production and processing facilities across Russia, lower compression engine arrangements are implemented to provide the appropriate combustion controls.

CHP CONFIGURATIONS

Public sector funding and incentives for power generation are extremely limited, so the vast majority of CHP installations are financed through private sector investors. As a result, these investors are willing to invest in CHP technologies that provide the highest and quickest return.

From a technological perspective, the least costly heat can be derived from the engine’s jacket water though simple plate and frame heat exchangers. A typical gas generator set delivers an electrical efficiency of 35–45% without heat recovery, and recovering the full available jacket water heat raises a generator set’s operating efficiency by 15–20% at a relatively low installed cost to the user. This is particularly true where there is an established water or steam heat distribution infrastructure. In these cases, the infrastructure costs of installing facility-side systems become negligible to the project’s economics, which is particularly true throughout most of Russia, where district heating infrastructure abounds.

A second means of recovering heat comes from the engine’s exhaust system. With exhaust gas temperatures up to 500°C, a reciprocating engine can safely provide recoverable heat down to 120°C without the need to address condensation in the exhaust. Exhaust gas-to-water heat exchanges are incorporated into the exhaust system to boost system efficiency by an additional 20–25%. While a basic jacket water system can increase system efficiency to 50–65%, adding an exhaust heat recovery circuit can bring total system efficiencies up to 85%. Further heat can be recovered from the engine’s aftercooler and through secondary exhaust heat recovery, but the investment costs rise incrementally.

Ultimately, the decision between extracting the next incremental amount of heat energy is weighed against the cost to install, operate and maintain the relevant equipment. In Russia and CIS, basic heat recovery with jacket water heat exchanges often pass basic payback tests, while more expensive incremental heat recovery systems depend upon closer examination of exact fuel pricing, existing boiler efficiencies, the type and quality of heat required, and specific application requirements.

For installations up to 50 MWe, gensets are typically employed in multiple units and paralleled together electrically. For these types of installations, the building blocks are typically 1–6 MWe machines. When these facilities operate detached from the electric grid, the use of multiple units allows machines to be taken off line when the power demand is low. An emergency diesel-fuelled standby generator set is often used to carry the emergency load if the primary gas-fuelled plant is down for service.

When the demand for a CHP system grows to more than 50 MWe, economies of scale often favour industrial gas turbine technology such as Solar Turbines. Turbines tend to favour CHP installations where heat is the driving need over electricity, since they tend to have lower electrical efficiencies but produce more high quality heat than a reciprocating genset.

RUSSIAN APPLICATIONS FOR CHP

Since natural gas is widely available in Russia and installations are relatively quick and cost-effective, CHP is commonly used across a wide variety of applications from new residential buildings, remote oil and gas production facilities, and small industry, to capital projects and commercial applications such as hospitals and shopping malls.

Greenhouse CHP

CHP systems are becoming increasingly popular in greenhouses, which require heat and power for lights that extend the region’s short growing season. Given the high cost to import food and flowers from outside the country, investors have spurred the construction of greenhouses that can grow these crops domestically. Compared with similar facilities in Europe, greenhouses in Russia requires much more electricity for lighting and heat for melting snow and keeping the facility warm. In fact, greenhouses in Russia can require up to twice as much energy per hectare as elsewhere.

By requiring a 100 W lamp for every square metre of growing space, the typical 25-hectare Russian greenhouse can consume 25 MW of power. Greenhouses in the Netherlands require about half this power for the same area.

Food production and flower cultivation are greenhouse industries seeing tremendous growth in Russia. A large rose growing operation outside of Moscow recently opted for a 30 MWe CHP system from Caterpillar to provide de-icing, heating and lighting.

European greenhouses tend to incorporate exhaust aftertreatment systems that reduce contaminants to the point that the exhaust is nearly pure carbon dioxide. This carbon dioxide can then be used as a fertilizer that is distributed throughout the greenhouse to the plants’ roots. Russian growers tend to defer on the complexity and cost of these systems and simply use containerized carbon dioxide for fertilization.

Industrial CHP

Bogorodskoe Industries runs a local power plant that provides power and heat to a major natural gas pipeline centre in the northern Khabarovskiy Kray, Russia.

In 2007, looking to upgrade a power plant with worn-out equipment that might break down at any time, Bogorodskoe Industries sought a stable and efficient source for heat and power generation that their dated equipment could no longer provide. It was also important that the delivery and setup of new generator sets progressed quickly, since a renovation of the power installation was urgently required.

Amur Machinery, the local Cat dealer, supplied three Cat G3516B gas gensets that deliver 1000 kW of power each, as well as a remotely operated supervisory control and data acquisition (SCADA) system to take advantage of the plentiful natural gas supply in the region. Amur Machinery overcame many logistical and environmental challenges while installing the power plant. The severe climate in the Russian Far East meant project engineers had to work within a very narrow timeframe to allow enough time for transporting and installing equipment.

With the Beijing Olympics taking place in the same period, most shipping vessels going to the Far East were used to send cargo to China, delaying the shipment of the Cat equipment by a full month. The shipment was further delayed by customs clearance and a damaged crane in Vanino, the final destination port. Caterpillar overcame these obstacles by supplying a modular CHP system with sections that could be taken apart and shipped inside standard shipping containers. This allowed for lost time to be made up during the installation and commissioning process, and the project was ultimately completed on time.

The open protocol engine control that is SCADA-compatible provides integrated management of major functions and includes comprehensive safety shutdowns andlf-diagnostics, allowing technicians to easily integrate the genset switchgear controls and gensets with the facility control system.

Industrial CHP – one of three Cat G3516B gas generator sets that each deliver 1000 kW of power to Bogorodskoe Industries

Amur Machinery provided training and local support, including component repairs, overhauls, scheduled maintenance and inspections. To do so, Amur Machinery deployed several 6×6 off-road trucks equipped with lifting equipment, filter carts, oil pumping stations, tools and an independent power supply to conduct complex repairs and maintenance in the remote reaches of its territory.

Soon after the power plant start-up, Bogorodskoe Industries signed a customer support agreement (CSA) with Amur Machinery to ensure the constant readiness of the power plant and minimize downtime. Regular inspections track the technical condition of the equipment, and dealer technicians are prepared to go to the site on request.

District heating

Sphera LLC is a major construction and development company in the Russian Federation that has been commissioned to supply heat and electricity to new residential housing and neighbourhood facilities in an area on Sakhalin Island called Grushevie Gardens. With more than 500,000 inhabitants, the island has seen an inrush of domestic and foreign investment for building the infrastructure to support the mining of abundant nearby oil and gas reserves.

Sphera built a 7.2 MWe power plant using three Cat G3520C gas-powered continuous generator sets as well as a Cat 3512B diesel-powered standby generator set. The system was designed to provide both continuous heat and power to 200 residents as well as a 100-room hotel, spa and ski resort nearby.

Heat recovery systems were designed to use heat from jacket water, oil cooler, aftercooler and exhaust gases, while a master control system manages electrical load settings and heat recovery. Caterpillar supplied the generator sets, heat recovery and controls, while all the equipment sales, installation and service support were provided by Sakhalin Machinery, the local Cat Dealer and the only source for complete power system solutions on Sakhalin Island.

BRIGHT LONG-TERM OUTLOOK

Combined heat and power solution providers including Caterpillar continue to develop products that not only deliver electricity but also capture and deliver useable heat energy. While natural gas remains the primary fuel for these applications, new fuel systems designed to handle various other gases have been developed. For example, renewable fuels such as landfill gas, sewage gas, biogas, coke-oven gas and other by-product gases have been demonstrated widely for use in reciprocating engine technology.

Pre-engineered solutions are often offered to ease the decision to execute a CHP project. These solutions go beyond the typical heat transfer equipment and controls to include enclosures and exhaust aftertreatment as well. Success in maintaining and servicing CHP equipment will play an important role in the long-term viability of these operations. Local factory-trained technicians should be employed whenever possible to provide the parts and product support services required for preventive maintenance, planned maintenance, or long-term customer support agreements for CHP systems.

The long-term outlook for efficient CHP in Russia is very bright in the face of electrical capacity and distribution challenges. With an electric grid covering only 30% of Russian territory and 80% of the population, Russia’s economic growth will continue to be dependent on the delivery of reliable electric power to commercial operations, agriculture, mining, petroleum industries, and the growing middle class. The most efficient use of Russia’s abundant natural resources will fuel development by freeing up capital for investment into other core industries, and CHP will continue to act as a catalyst for continued economic expansion.

Francois Xavier-Saury is the CHP Business Development Manager with Caterpillar Electric Power. Email: saury_francois-xavier@cat.com Nick Kelsch is the Gas Marketing Manager, also with Caterpillar Electric Power.

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