Fuel cell plant - a proposed analysis for economical feasibility of

FUEL CELL PLANT - A PROPOSED ANALYSIS FOR ECONOMICAL FEASIBILITY OF IMPLANTATION
A . G . Amendola & M . C. Rocha
Brazil
SUMMARY
The present paper has for objective to present a
methodology to allow an accomplishment analysis of
the economical feasibility of the implantation of a fuel
cell plant .
In the same way of the DSM actions and reduction of
electric losses, the effect of the installation of a
generation distributed in areas assisted by systems of
Distribution is “seen " by the segments of the electric
system located in a higher tension level of the
installation point, as a load reduction. In other words,
when another entity accesses the nets in the sense of
generating a certain demand/energy, the whole system
feels the influence of that access.
In consequence, this installation postpones investments
and expenses previously programmed in the expansion
of these segments. The earnings of this postponement
are the avoided costs, that are numerically same to the
cost of supplying an additional unit of load in the point
of the installation. As we walk along the electric system
from the generation to the final consumers of low
tension, these costs begin to grow, for the successive
incorporation of new segments. A good measure to
evaluate these avoided costs is the use of long term
marginal costs, considered the same to the incremental
medium costs of capacity and energy, that are calculated
with base in the expansion plans (capacity) and
operation (energy) of the systems located in a higher
points .
The economical feasibility of the distributed generation
justifies itself when its cost goes smaller or equal at the
cost avoided in the installation point, both yearly and
expressed in R$/kW or R$/MWh.
Although it has implicit character of located solution,
which sends to the need of more detailed information,
the distributed generation, approached in the present
paper, adopted a medium consideration for the whole
concession area, seeking, just, to provide an order of
greatness of this viability.
Of course, for the areas where the technicianoperational situation of the segments to amount goes
more critical with the levels of service quality violated,
certainly the distributed generation will be viable. The
marginal costs of a load increment in these areas (equal
at the avoided cost) they can have extremely high
values, because the programs of expansion of these
segments, besides they incorporate the service of the
growth of the market, they will, also, consider the need
of the recovery of service quality.
It is where justified, priority, the installation of the
distributed generation. The opposite will happen for the
areas supplied through idle systems .
For the effects of the calculations developed in this
paper, it was limited, in beginning, that the installation
happens in the low tension bus of the Distributing
power stations. With that, they the costs of the
expansion of the segments from the Distribution
substations to the generation would be avoided (or
moved), according to the Figure 1, below.
PRODUCTION
losses
T
TRANSMISSION
los ses
Power,Energy
losses
M edi um and Low Te ns ion
Consum ption
Figure 1 - Distributed Generation
Of course, in theory, the distributed generation, can be
installed in any point of the Distribution nets, as, for
instance, in feeders. As mentioned, the more we walk
towards the low tension consumers , the more this
generation type is made possible, in terms of R$/kW or
R$/MWh. However, is important to verify its technicaloperational feasibility.
In this sense, it is proposed an analysis for distributed
generation implantation, in a expedite way, considering
the limits of actual values ( Investments + Fuel ) .
At the end, the paper presents practical applications for
important Brazilian utilities – CEEE and CEMIG .
FUEL CELL USINE - UN PROPOSÉ ANALYSE POUR ÉCONOME FAISABILITÉ DE IMPLANTATION
A . G . Amendola & M . C. Rocha
Brèsil
RESUMÉ
Actuel article a pour objectif présenter une
méthodologie qui permettre accomplissement analyse
de économe faisabilité de implantation de fuel cell
usine.
Dans même chemin de DSM actions et réduction de
électrique pertes, l´effet de installation de génération
distribué dans régions aidai par systèmes de Distribution
voit par segments de électrique système localisai dans
haut tension aplanis de installation darde, as charge
réduction. En des autres mots, quand another entité
accès gagne dans sens de engendrant certain demande,
ou énergie complet système sent influence de ce accès.
In conséquence, ce installation ajourne investissements
et dépenses précédemment programmed dans expansion
de ces segments. earnings de ce ajournement évitent
coûts, cette sommes numerically same à coûté de
fournissant supplémentaire unité de charge dans point
de installation. que nous marchons par électrique
système de génération à final consommateurs de low
tension, ces coûts commence grandir, pour successif
incorporation de nouveau segments. bon mesure à
évaluer ceux-ci évité coûts est usage de longtemps term
marginal coûts, considéré même à incremental moyen
coûts de capacité et énergie, cette calculons avec base
dans expansion planifie (capacité) et opération (énergie)
de systèmes localisé dans haut points.
service de croissance de marché, ils aussi, considérerai
besoin de récupération de service quality.
Est où justifie, priorité, l´installation de le distribué
génération. opposé passerai pour régions fournis
through inactif systèmes.
Pour effets de calculs développai dans ce article, il
borna, dedans commençant, cette installation passe dans
bas tension bus de Distribuant centrales. avec cette, ils
coûts de expansion de segments de Distribution
substations à génération éviterais (ou déplaçai,) selon
Figure 1, au-dessous.
PRODUCTION
losses
PERTES
T
TRANSMISSION
Puissance, Enérgie
los ses
PERTES
Power, Energy
PERTES
losses
M edi um and Low Te ns ion
Consommation
des Clients
Consum ption
Moyenne et Bas Tension
Figure 1 - Generation Distribué
L´économe faisabilité de le distribué génération justifie
quand son coût va petit ou paritaire à coût évité dans
installation darder, both annuel et exprimai dans
US$/kW et US$/MWh.
Quoique il a implicite personnage de localisé solution,
quels sends to besoin de détaillé information, le
distribué génération, approcha dans actuel article,
adopté moyen égard pour complet concession région,
cherchant, justement, fournir commande de grandeur de
ce viability.
Naturellement, pour régions où technician-operational
situation de segments à équivaloir va critique avec
niveaux de service quality enfreignis, certainement le
distribué génération sera viable. marginal coûts de
charge increment dans ces régions (égalent à évité coût)
ils ont extrêmement haut valeurs, because programmes
de expansion de ces segments, de ailleurs ils incorporent
Naturellement, dans théorie, le distribué génération,
installe dans en point de Distribution filets, quant
instance, dans feeders. aussi mentionnai, nombreux
nous marchons pour bas tension consommateurs,
nombreux ça génération caractère fait possible, en
termes de US$/kW ou US$/MWh ou. cependant, est
important vérifier sien technique faisabilité.
Il est proposé un analyse pour l´implantation de la
generation distribué dans une form vite em considerant
les limits pour les actuells valeurs ( Investissements +
nsidering the limits of actual values ( Investments +
Fuel ) .
À la fin, l´article présente pratique demandes pour
important Brésilien concéssionaires – CEEE et CEMIG.
FUEL CELL PLANT - A PROPOSED ANALYSIS FOR ECONOMICAL FEASIBILITY OF IMPLANTATION
A . G . Amendola & M . C. Rocha
Brazil
ABSTRACT
smaller or equal to the cost avoided in the installation
point, both expressed in US$/kW or US$/MWh.
When we settle a distributed generation in Distribution
systems, the other segments above the “injection point”
notice this installation as a load reduction, relieving all
to the demand requested by this system. The
implantation of the distributed generation justifies itself
when its implantation cost goes smaller or equal at the
cost avoided in the installation point, both expressed in
US$/kW or US$/MWh. Such evaluation can be
translated correctly with the aid of the long term
marginal costs .
Although the implicit character of a located solution,
which sends to the need of more detailed information,
the distributed generation, approached in the present
paper, was addressed for a medium focus for the whole
concession area, just seeking to provide an order of
greatness of this feasibility.
The present paper has for objective to present a
methodology to allow to accomplish, in an expedite
way, an analysis of the economical feasibility of the
implantation of plants the cell of fuel.
At the end, the paper presents practical applications for
an important Brazilian utility .
1. PROPOSED METHODOLOGY
1.1. Conception of the Problem
Of course, for the areas where the operational and
technical situation of the segments above is more
critical, with the levels of service quality violated,
certainly the distributed generation will be viable. The
marginal costs of a load increment in these areas (equal
to the avoided cost) can have extremely high values,
because the programs of expansion of these segments,
besides incorporating the growth of the electric market,
they should also consider the need of the recovery of the
quality of service. It is where is justified in a priority
way the use of distributed generation. The opposite will
happen for the areas supplied through systems which
operates with no load restrictions .
For the effects of the calculations developed in this
paper, it was limited, that the installation happens in the
bus of low tension of the distributing substations,
according to Figure 1, as follows.
In the same way that the actions of DSM and reduction
of electric losses, the effect of the installation of a
distributed generation in areas assisted by distribution
systems is noticed by the segments of the electric
system, located above of the installation point, as A load
reduction.
In consequence, this installation postpones investments
and expenses previously previewed in the expansion of
those segments. The earnings of this postponement are
the avoided costs, that are exactly the same of the cost
of supplying an additional unit of load in the point of
the installation. As we walk along the electric system,
from the generation to the final low tension consumers,
these costs grow, for the successive incorporation of
new segments. A good measure to evaluate those
avoided costs is the long term marginal costs, admitted
the same of the medium incremental cost of capacity
and energy, that are calculated with base in the
expansion plans (capacity) and operation (energy) of the
systems above. The economical feasibility of the
distributed generation justifies itself when the cost goes
PRODUCTION
losses
TRANSMISSION
losses
Power,Energy
losses
Medium and Low Tension
Consumption
Figure 1 - Distributed Generation
With that, it would be avoided ( or “moved”) the costs
of the expansion of the segments from the distributing
substations to the generation, according to outline
below. Of course, in theory, the distributed generation
can be installed in any point of the distribution network,
as, for instance, in specific feeders. As mentioned, the
more we walk towards the low tension consumers, the
more this generation type is made possible in terms of
US$/kW or US$/MWh. however, it is important to
verify its technical feasibility .
the distributing substations, will be given by the
following formula:
CEVC = CMCG + CMT + CMSE
(1)
CEVE = CMEG
(2)
1.2. Avoided Costs
where:
In this way, the generated power locally to supply part
(or totally) of the growth of the maximum demand
assisted by distributing power substations, will postpone
investments to be done, not only, in the segments above,
as well as, in own substation, (new enlargements and/or
new substation). The earnings of this postponement are
equal at the marginal cost of capacity (in US$/kW) until
the point of installation of the plant, cost that is
calculated with base in the marginal costs of each level
and in the responsibility of the kW avoided in the
Distribution on the maximum demands of the loads
seen by each segment.
For the evaluation of the impact of the reduction of the
maximum demand at Distribution level in the costs of
capacity of all of the segments above, it is necessary to
verify the responsibility of this reduction is verified in
the maximum demands of each segment and its
participation in the power flow in each segment above.
For that, it is necessary to know the load curves in
distributing SE’s and in each one of the considered
segments and the power flow between tension levels,
that are established through load-flow studies.
In the present paper, it was considered that the
maximum demands were coincident, besides the one of
the load avoided in the Distribution, because, in almost
all of the segments, the period of the maximum demand
is always dictated by the load of the Distribution. In
located specific cases, however, they can happen
diversities among the periods of those maximum
demands.
CEVC - avoided cost of capacity in US$/kW
CEVE - avoided cost of energy in US$/MWh
CMCG – generation marginal cost marginal of capacity,
in R$/kW
CMT - transmission marginal cost of capacity,
in R$/kW
CMSE – power substation marginal cost of capacity,
in R$/kW
CMEG – generation marginal cost marginal of energy,
in R$/MWh
To express CEVC and CEVE together through an
annual value, it comes:
CEV = CEVC x1000/(FC x 8760) + CEVE
(3)
where CEV is expressed in US$/MWh
or:
CEV´ = CEVE x FC x 8760 / 1000 + CEVC
(4)
where CEV´ is expressed in US$/kW
2. SOME RESULTS OBTAINED
The responsibility for the establishment of the marginal
cost of capacity of the kW avoided in the Distribution
was determined only by the evaluation of the flows
among tension levels.
2.1 Marginal Costs of the Distribution Suppliers
Systems - CEEE
The energy generated locally will avoid the production
of energy for the plants of the segments above. So,
without considering the efficiency improvement for the
reduction of the losses (in power and energy) in the
transmission systems of those segments, the avoided
cost of energy will be the same of the marginal cost of
energy of the suppliers systems and expressed in
US$/MWh / year. For the transmission and, subtransmission and distribution networks, marginal costs
of energy are not calculated. In that way, the annual cost
avoided by the installation of a plant the cell of fuel in
The calculations were developed (in preliminary
estimation) for CEMIG and for CEEE (before the
dismemberment). It was taken by base available
information in ELETROBRÁS on the flows among
tension levels, as established by the Marginal Costs
Studies of Sub-Transmission and Transmission
Networks, developed in 1999. In this paper we will
show, in details, the results for CEEE For this utility,
we still, assumed the medium marginal costs of the
levels, for the South region . For CEMIG, we will show
only the main results .
For CEEE, the marginal costs in US$/kW-year used for
the levels were the following ones:
For the generation, the value of 40 R$/MWh was
adopted, incorporating the marginal costs of capacity
and energy. In this sense, considering this supply
hypothesis, it results:
A1(230 kV or higher) = 32
CEEE = 40 + 10,06 = 50 US$/MWh
A2 (138 kV) = 48,3
A3 (69kV) = 28,35
For the level A1, we assume medium marginal costs for
the SOUTH region . Figure 2 shows the flows in % for
CEEE .
CEEE
If we imagine the additional supply for a gas thermal
plant like Uruguaiana (30 US$/MWh), supplying the
systems of those companies directly, without buying
from Furnas and nor from Eletrosul , it comes:
CEEE = 30 + 10,06 = 40 US$ /MWh
MARGINAL COSTS IN UTILITY NETWORKS
ITAIPU or ELETROSUL
27,5%
ELETROSUL
29,7%
42,8% GENERATION
A1
GENERATION
45,4%
72,4%
2,6%
GENERATION
2.1.1 Distribution Power Stations. With base in the
expansion programs for CEEE Distribution power
substations, we calculated the long term medium
incremental cost of capacity (LTIMC), in agreement
with the formula:
25,0%
54,6%
A2
A3
10,1%
H
∑
t=1
75,8%
Others ( 14,1%)
Distribution
Level
A4+B
I (t)
(1+a)t
LTIMC =
(5)
H ∆ M (t)
∑
t=1 (1+a) t
Figure 2 - The Flows Among Levels For CEEE
The main data, for CEEE, is shown in Figure 3, below:
Considering the flows established among tension levels
for the studies mentioned, we obtained the following
values for the Distribution marginal costs of demand
which passes through the segments of Transmission and
Partition. For marginal cost in transmission networks
("seen" by Distribution) :
CEEE
INCR EM ENT AL M ÉDIUM COST
( Investiments Program Period : 8 y ears)
y ear
CMR’ = 0,101 * [48,3 + 0,454 * 32] + 0,758 *
[28,35 + 0,724 * 32 + 0,25 * (48,3 + 0,454 * 32)] =
57,30 US$/kW.year
Expressing in US$/MWh, it comes :
CMR (US$/MWh) * FC*8760 = CMR’ (US$/kW-year)
*1000
where FC (Charge Factor - year) ≅ 0,65
CMR = CMR’ * 1000/(FC * 8760) = 10,06 US$/MWh
0,55
0,1
Charge Factor A4 (55 %)
Actualization Rate (10 %)
A4’+B’
(GWh)
1997
1998
1999
2000
2001
2002
2003
2004
2005
4.412
4.706
4.954
5.214
5.465
5.770
6.080
6.401
6.734
y ears
Inv est.
1998
1999
2000
2001
2002
2003
2004
2005
(R$)
8.434.190
10.253.150
6.617.600
600.000
1.200.000
1.400.000
2.300.000
1.500.000
Incr
Energy
(GW h)
0
293
248
260
250
306
309
322
332
Incr
Deman d
(GW)
0
0,060883354
0,051550436
0,054027812
0,051941469
0,063459112
0,064194479
0,066777709
0,06898983
Delta
Energy
(GW h)
293
248
260
250
306
309
322
332
Delta
Deman d
(GW)
0,060883354
0,051550436
0,054027812
0,051941469
0,063459112
0,064194479
0,066777709
0,06898983
VA1
VA2
(R$)
7.667.445
8.473.678
4.971.901
409.808
745.106
790.264
1.180.264
699.761
(GWh)
267
205
196
171
190
175
165
155
VA3
CIM LP
(GW )
(R$/M Wh)
0,055348504
28,75
0,042603666
34,20
0,040591895
31,63
0,035476723
25,67
0,039403116
21,66
0,03623611
19,17
0,034267523
17,72
0,032184265
16,37
CIM LP
(R$/kW)
138,53
164,79
152,39
123,68
104,34
92,36
85,37
78,89
10 yers period :
CIMLP (R$/MW h)
CIMLP (R$/kW )
16,37
78,89
Value per year:
Value per year:
2,46
11,83
US$/MW h
US$/kW
Figure 3 - Data For The For LTICM Calculation
being obtained: CEEE = 79 US$/kW or 16,37
US$/MWh
The differences between CEEE and CEMIG results are
due the Ao level in CEMIG costs .
In the formula above, I(t) and ∆M(t) are, respectively,
the investment and the increment of the load (in kW and
MWh) in the year t. H is the period of the expansion
plan considered.
This value in terms of US$/MWh comes :
If we apply a factor = 15% (remuneration + depreciation
+ operation expenses and maintenance), it results, per
year :
CEMIG = 17,77
For generation, we adopted 40 US$/MWh, considering
marginal costs of capacity and energy .. So :
CEEE = 11,83 US$/kW or 2,45 US$/MWh
CEMIG = 40 + 17,77 = 57,77
2.1.2 Costs in the Above Systems Due to the
Additional kW Demanded by Distribution . In this
sense, the marginal costs in US$/MWh of the above
segments will be:
Hypothesis I
≈ 58 US$/MWh
Considering the supplying from Uruguaiana (30
US$/MWh), we will have :
CEMIG = 30 + 17,77 ≈ 48 US$ /MWh
Hypothesis II
2.2.1 Distribution Power Stations. With base in the
expansion programs for CEMIG Distribution power
substations, we calculated the long term medium
incremental cost of capacity (LTIMC), according to
formula (3) :
CEEE = 2,45 + 40 ≈ 42,5
CEMIG = 200 US$/kW ou 41,6 US$/MWh
CEEE = 2,45 + 50 ≈ 52,5
2.2 Main Results For CEMIG
For CEMIG, the marginal costs in US$/kW-year used
for the levels were the following ones :
If we apply a factor = 15% (remuneration + depreciation
+ operation expenses and maintenance), it results, per
year :
CEMIG = 30,04 US$/kW or 6,23 US$/MWh
Ao(Generation) = 51,0
A1(230 kV or higher) = 84,2
A2 (138 kV) = 41,7
2.2.2 Costs in the Above Systems Due to the
Additional kW Demanded by Distribution . In this
sense, the marginal costs in US$/MWh of the above
segments will be:
A3 (69kV) = 35,5
Hypothesis I
For the A0 and A1 levels , we assumed values for
SOUTHEAST/CENTER WEST region .
Considering the flows among levels, we obtained the
following value for marginal cost of demand :which
passes through Transmission and Sub-Transmission
networks :
.
CEMIG = 101,98 US$/kW-year
CEMIG = 6,23+ 58 = 64,23 ≈ 64,2
Hypothesis II
CEMIG = 6,23 + 48 = 54,23 ≅ 54,2
3. ESTIMATE OF COSTS TO THE FUEL CELL
PLANTS
M a r g in a l C o s ts
T = 1 0 ye a r s
T = 1 3 ye a r s
T = 1 5 ye a r s
H yp o th e s is I:
4 2 ,5
U S $ /M W h
875 US$ /
kW
1 000 US$ /
kW
1 075 US$ /
kW
H yp o th e s is II:
5 2 ,5
U S $ /M W h
1 075 US$ /
Kw
1 250 U S$ /
kW
1 325 US$ /
kW
CEEE
The first evaluations on the costs of those plants
resulted in values that can vary between 120 US$/kW
and 1800 US$/ kW, with useful life between 10 and 15
years and already incorporating the costs per year of
fuel, updated.
Figure 5 – Final Results For CEEE
Considering the updating tax of 10% and three
hypotheses of useful life (10, 13 and 15 years), capacity
factor equal 70% and load factor 55%, the values per
year, in US$/MWh (tariffs) are presented in the Graph
1, below, as a function of plants costs mentioned in the
previous paragraph.
Cost of Energy per Year
(US$ / MWh-year)
100,0
Just as general reference, if we consider a 15 year-old
useful life for the plants and marginal costs of the
systems (from generation to Distribution power
substations) near 43 US$/MWh - year, the feasibility
will be proven for cost of the investment of the plant
(added of the updated values of the annual costs of fuel)
up to 1100 US$/kW.
As, in practice, the appeal to the use of local generation
will be larger in areas with supplying problems and, for
that, with larger marginal costs, the feasibility will be
guaranteed even for values above 1100 USS/kW.
80,0
60,0
40,0
20,0
0,0
0
500
1000
1500
2000
Investiments + Fuel
(US$ / kW)
Graph 1 - Tariffs For 3 Hypothesis of Useful Life as a
Function of Costs per Year
4. CONCLUSIONS
Taking into account the results of the above items, and
considering the hypotheses of the several useful lives,
the plants to cells of fuel are made possible for CEMIG
and CEEE if the current values of their costs are, at the
maximum, the same of the ones, according to Figures 4
and 5, below :
M a r g in a l C osts
T = 1 0 y ea r s
T = 1 3 ye a r s
T = 1 5 ye a r s
H yp oth e sis I:
5 4 ,2
U S $ /M W h
1 100 US$ /
kW
1 300 R$ /
kW
1 375 US$ /
kW
H yp o th e sis II :
6 4 ,2
U S $ /M W h
1 325 US$ /
kW
1 525 R$
/k W
1 625 US$ /
kW
If we admit, for hypothesis, a value limits of 65
US$/MWh -year for the marginal costs of the systems,
the value to the plant would be of 1650 US$/kW, for 15
years of useful life.
Although the process described is specific for 2
important Brazilian utilities , like CEEE and CEMIG,
with the values presented above, it is possible to
generalise the same method for any others cases .
In this sense, we proposed a feasibility analysis for
distributed generation implantation, in a expedite way,
considering the limits of actual values ( Investments +
Fuel ) .
It is convenient to reaffirm that the present paper
proposes an economics analysis for distributed
generation
implantation,
without
considering
operational feasibility aspects, like power stations loads,
tension drop, limits of demands, and so on .
REFERENCES
C E M IG
1. Amendola, A.G., 1992, "Distribution Marginal
Costs", Eletrobrás, Brazil
This work is in the Public Domain
Figure 4 – Final Results For CEMIG