Jonathan Walker, MAN Diesel SE, Germany
Choloma power plant in Honduras exemplifies the highly entrepreneurial forms of project financing that are possible in economies that have a deregulated power sector. In a power purchase agreement (PPA), for example, a government or state organization contracts an independent power producer (IPP) to supply electricity to the national or regional grid at a contracted price per kilowatt-hour. The IPP can then arrange financing of a suitable power generation facility that is based on foreseeable revenue. In the case of Choloma, the Honduran national energy agency ENEE signed just such a PPA with Energie Renovable SA (Enersa), which develops, constructs, operates and maintains energy projects in the country, and Empresa de Mantenimiento, Construcción Y Electricidad (EMCE). The government had determined that power shortages were impending, in part because of the low water levels at the country’s major hydro facility following low rainfall. The PPA would meet the immediate shortfall and long-term demand. It would also reduce dependence on imports of power and the widespread use of small, less efficient emergency generator sets.
Fast track project
Under the PPA, the construction of the 230 MW power station in the north of Honduras had to progress at a rate which would see the first 90 MW go online within six months of the agreement coming into effect. To emphasize the urgency of the project, ENEE awarded the PPA under an emergency Presidential decree in what was one of the first instances of independent power production in the country.
The power house of the first phase of the Choloma power plant in Honduras. The tank farm for the autonomous supply of residual fuel oil is visible behind it
Enersa placed a turnkey contract for the project with a consortium led by MAN Diesel. To guarantee the installation of generating capacity at the rapid rate needed, Enersa and MAN B&W Diesel devised a fast-track solution based on 13 gensets powered by MAN Diesel’s 18 cylinder, V configuration 18V48/60 residual fuel engines. The project installed the 17.78 MW gensets that run at 514 rpm in two phases, the first of which involved five units of total output 89 MW and the second a further eight units with a total output of 142 MW.
As part of the fast track approach, Enersa and MAN Diesel cooperated in an interim financing arrangement that ensured that the power plant went online in time. On the one hand, Honduras required electrical power urgently, while on the other, expectations were that arranging finance for the 230 MW project with the Central American Bank for Economic Integration would take up a great part of or even more than the six months lead time that Enersa had under the PPA. So, based on the guarantee of income from the Honduran government under the PPA, a bridging loan was arranged that allowed work onsite to begin promptly.
The temporary loan covered 50 per cent of the project’s 90 MW first phase until long-term financing of the complete project was in place. Enersa financed the remaining 50 per cent of the cost out of its own resources. The bridging finance was covered by a guarantee from Germany’s export credit agency Euler-Hermes, with whom MAN Diesel cooperates on a regular basis in its export business. By the completion of the first phase, long-term finance for the complete project, to which Enersa contributed a further 24 per cent for the second phase, had become available, and the bridging loan was repaid.
To execute the project, MAN Diesel recruited reliable, proven consortium partners and subcontractors. The complete civil works including the construction of buildings and mechanical and electrical erection was covered by El Salvador civil, mechanical/electrical engineering contractor Proyectos de Ingeniería Electromecánica SA (PRINEL), while the Chicago Bridge & Iron Company supplied and installed the tank farm for the residual fuel supplies.
German specialist Alfred Kuhse handled the electrical portion of the contract, which included the systems for medium and low-voltage, control and monitoring. ABB supplied the generators for the gensets and Finncoil the step-up transformers and heat exchangers for the engine and generator cooling systems. Alfa Laval supplied the separators for the residual fuel oil and lubricant conditioning.
The commissioning of the Choloma project made Enersa the largest private supplier of electrical power to the Honduran government. To increase its revenues from the plant, the group has installed a 14th genset, powered by an 18V48/60 engine, and operated on a merchant basis outside the PPA. It covers demand peaks to further alleviate Honduras’s power shortages. Its addition emphasizes how readily such a power plant can be extended,
Enersa is now further increasing the efficiency of the Choloma power plant by installing a combined cycle system in which the exhaust heat of the engines raise steam to power an 8 MW steam turbine.
View of the 17.78 MW generator sets inside the power house of the completed Choloma diesel engine power plant
Choloma is a prominent example of the way the world is using large, modern power plants that employ medium-speed diesel and heavy fuel oil engines to meet its growing demand for power. Others examples include four plants with outputs ranging from 120 to 225 MW that are planned for Pakistan.
MAN Diesel SE and the Pakistani Atlas Group have begun work on one of these turnkey plants in the north of the country, at Sheikhupura. Its total capacity of 225 MW will come from 11 MAN 18-cylinder, 18V48/60 heavy fuel oil, V engines and a 16.45 MW steam turbine driven by steam generated from the engines’ exhaust gases.
Plans are for this plant to be followed by two further 11-engine power plants with steam turbines at Narowal and Taxila and one 120 MW plant based on six 18V48/60 engines and an 8.8 MW steam turbine at Shahuwala.
Benefits of diesel engines
Diesel engines are the most fuel efficient combustion engines. Their efficiencies approach 50 per cent, and they offer excellent fuel economy, which helps to keep emissions low. The potential also exists to increase total energy use to 90 per cent or more by recovering heat from the lubricant, charge air, engine coolant and exhaust gases. For example, in cogeneration or trigeneration systems, if the power plant is near a site such as a cold store or office block, thermal energy can provide process heat, space heating, district heating, absorption cooling for air conditioning and hot water. Exhaust heat can also generate steam in a boiler to drive a turbine. This can increase engine power output by up to 10 per cent.
The construction time of such power plants can also be extremely rapid, allowing IPPs to start earning revenue quickly and meet obligations under PPAs to go on grid by a specífic date. Indeed, experience shows that, if needed, the first engine of a project can be feeding power to the local grid in a matter of months. In addition, by using a liquid fuel stored in a tank farm on site, diesel power plants are independent of fixed infrastructures like gas pipelines and not so affected by supply fluctuations.
Looking at the economic aspects of engines, the heavy fuel oil (HFO) commonly used in diesel power plants is traditionally cheaper than distillate diesel fuels. However, running large engines on HFO requires a range of technical measures to be taken. HFO also know as residual fuel oil is the tar-like mass remaining at the crude oil refinery after more valuable fractions have been removed. Before combustion in a piston engine it is stored in settling tanks to separate out large and medium particles by gravity. It is heated to reduce its viscosity so that it can be pumped and injected and then conditioned in centrifugal separators and filters to remove small solid and liquid particles. It remains, nonetheless, more abrasive than distillate fuels and requires the use of special wear-resistant coatings, especially on fuel injection components.
MAN Diesel 48/60B
The most popular engine from MAN diesel for HFO-burning power, cogeneration and diesel-steam turbine combined cycle plants is the four-stroke 48/60B, which has a maximum mechanical rating of 1050 kW per cylinder at 500 and 514 rpm.
It comes in nine-cylinder inline versions and 12, 14, and 18 cylinder V configuration versions and covers a power range from 9200 to 18 400 kW. The V engines are MAN Diesel’s most powerful four-strokes.
Although designed primarily for operation on HFO, these MAN Diesel engines operate on a wide range of fuels, including crude oil at one end of the spectrum and standard diesel fuels at the other. Significantly, the 48/60 platform is well proven on liquid bio-fuels, including palm oil and waste oils such as rendered animal fats, used cooking oils and various combinations of these.
To add further fuel flexibility, MAN Diesel has recently introduced advanced dual-fuel technology on the 48/60 platform that can be retrofitted so that existing HFO-burning engines can be converted to run on natural gas ignited by a liquid fuel micro-pilot when gas supplies become available or where clean air legislation prescribes substantial reductions in NOx emissions. Dual-fuel capability also provides redundancy by allowing seamless switchover between gas and 100 per cent diesel fuel operation according to fuel availability.
Upgrading of the 48/60 in 2003 included an increase in engine efficiency, reduced emissions of smoke and NOx, reduction in engine width and thus centre-to-centre distances in power houses, improvement in reliability and ease of maintenance, enhanced robustness and greater simplicity, including a reduced component count, and the use of only one turbocharger. As well as an increase in specific output, attention to component weight resulted in further improvements in weight-to-power ratios.
The 48/60B is based on a rigid monobloc engine frame in grey cast iron, reinforced by vertical and horizontal tie-bolts. It employs thick-walled cylinder liners to resist deformation transmitted from the engine frame and so give excellent piston running and sealing characteristics. To promote low piston extraction height without disturbing the big-end bearings, the 48/60B’s connecting rods are split below the small-end eyes.
Combustion chamber geometry is optimized for heavy fuel combustion, including atomization of the injected fuel.