"Hi there. We're from the Texas Commission on Environmental Quality [TCEQ]. Your factory's NOx emissions probably won't meet future air-quality standards. What are you going to do about it?"

Sometimes a visit from government regulators can bring unexpectedly positive results. The following tale of cogen adoption will be a case in point.

BP Solvay receives its onsite power from four 5-megawatt Solar Turbines also yielding steam production, air compression, and water treatment.

In 2000 plastics manufacturer Solvay Polymers Inc. (SPI) of Deer Park, TX, got wind that tougher air emissions standards, particularly on nitrous oxide, were looming ahead. The work of making tons of plastic—pelletizing, molding, and melting it—requires thousands of pounds of steam pressure and a lot of continuous heat. This necessitates burning billions of Btus of fuel, yielding NOx and other pollutants, and attracting government oversight.

At that time, SPI's inventory of steam boilers ranged in age from five years old to 50. Several were clearly obsolete in terms of efficiency and emissions output. Although SPI's NOx still fell within acceptable levels for that period (which was prior to the EPA's State Implementation Plan expectations), higher, rigid air-quality standards were inevitable.

What's the price tag for the latest and greatest clean-burning boilers? SPI's purchasers estimated the cost likely would top $5 million. That figure "seemed like a lot of money just in order to comply with environmental regulations," plant process engineer Oliver Schneider remembers. For roughly the same amount, SPI could invest in combined heat and power (CHP) cogeneration turbines. The resulting exhaust heat could be ducted to high-efficiency new boilers as well, thereby generating lots of steam, low NOx emissions, and some free electric power in the bargain.

SPI had explored the cost benefits of CHP many times during the 1990s, but each time had ultimately shied away, largely because the power grid in Texas is known for cheap and reliable power. So why gamble on cogen? However, as the decade began, the need to invest in cleaner combustion seemed to be unavoidable. Moreover, with assorted energy-market deregulation measures under way, the financial case for owning cogen was becoming more appealing. SPI thus decided it was time for the hardware upgrades, even though higher air-quality standards were still some years off. As Schneider recalls, the company "wanted to get ahead of the regs, and not find ourselves stuck when they took effect," as well as wanting to be good citizens improving the environment. Solvay engineers began exploring their options.

Thermal Load, Reliability Are Key Considerations

As noted, heat is the critical element in the production of high-density polyethylene pellets. Tons of Solvay's products are poured into railcars daily for customer delivery and eventual fabrication into everything from milk jugs to piping and fuel tanks. Heat—generated from electricity—is needed by BP Solvay Polyethylene (BPS PE, a joint venture with parent companies Solvay and BP, now operating the former SPI assets), mainly for melting and extruding the pellets. Steam from heat is also used to recover the processing solvents and for assorted other work. In typical plant operation, BPS PE needs from 150,000 to 200,000 pounds of steam pressure per hour. If this supply should fail, the result, says Schneider, is a large shutdown and costly downtime. Heat generated from electricity is important too—but again, it has always been readily available in Houston. Hence, the key concern for this cogen design would be reliable steam.

In a typical CHP configuration, exhaust heat from gas turbines will be utilized, and in SPI's proposed plan, the turbine exhaust would be ported directly to specially fitted steam boilers. Moreover, in order to increase the steam output five-fold, that exhaust first would be channeled into heat-recovery steam generators (HRSGs), supplemented with natural gas, and re-ignited. Such re-burning increases efficiency and yields minuscule NOx—bringing a smile to air-quality inspectors and yielding plenty of heat for steam.

One further element in the design consideration is worth noting: redundancy and backup, for added reliability. One or two turbines with HRSGs are great—but to ensure near-constant uptime, it's even better to divide your resources, in this case, into four. That way, if any generator or train needs to shut down for maintenance—and a second fails simultaneously—the remaining two are still able to provide plenty of heat and power. Although four power trains reduce the overall efficiency a bit, the tradeoff in added reliability is well worth it. As Schneider recalls, "We decided to go with more redundancy."

Having settled on a fourplex system, Solvay next began shopping for providers. Bid requirements were pretty standard, and major CHP developers were invited to submit offers. All of the resulting proposals appeared to be technically competent and reasonably priced; several were even bid on identical hardware.

One notable and welcome innovation SPI found in several proposals was creative financing. A frequent hurdle for many would-be cogen adopters is the fairly steep up-front costs, especially for corporate managers needing a high return. CHP investments rarely lose money—but payback may not always meet aggressive goals of, say, a 20% return on investment. Adding to this obstacle is the volatility of energy markets with unpredictable long-range pricing; even an attractive power investment begins to look "iffy." In response, CHP developers may try to make the numbers work by offering easy lease-purchasing deals, shared equipment ownership, very long-term payment plans, or other partnering options. One way or another, the capital outlay can be trimmed down and made affordable.

The financing turned out to be one of several attractive features in the bid that SPI ultimately selected, which came from Solar Turbines in San Diego. Solar—a subsidiary of heavy-equipment giant Caterpillar—is a global leader in gas-turbine manufacturing for the power and oil/gas industry, and for power generation in the 5- to 25-megawatt range. As such, it hasextensive experience in all facets of cogen design, installation, and operation. Solar proposed putting in four Solar Turbines Taurus 60 models with proprietary low-NOx combustion systems that would easily comply with foreseeable emissions standards for years to come. Each Taurus 60 is rated at about 5.5-megawatt output (21.2 megawatts total) and touts a compact, integrated design, microprocessor controls, automatic power synchronization, and an HRSG with supplemental duct-firing units.

On the last point, the Taurus' ability to discharge 906°F (486°C) exhaust heat from each engine ducted to an HRSG would yield 20,000 pounds of steam per hour—along with, of course, that 5 megawatts or so of electric power. Adding four Nebraska Boiler HRSGs and supplemental firing would multiply the steam output about five-fold per unit—or to about 120,000 pounds per hour each. As noted earlier, the BPS PE plant needs a constant 150,000 to 200,000 pounds of steam (and runs continuously day and night). Four CHP trains, then, could easily produce this with plenty to spare, even if one were to fail or be shut down for maintenance.

In fact, the four trains, as envisioned, can be operated either to produce steam from exhaust heat alone or with the HRSGs, depending on what's needed. As it has turned out, the plant usually runs with two of the four HRSGs being supplemental duct-fired on natural gas, and two generating steam with gas-turbine exhaust only—that being the most efficient way to meet the plant's steam demand. As turbine operations manager Jay Dee Dodson notes, "The unfired units are running about 20,000 to 24,000 pounds per hour, and, making up the rest of plant demand, we're using two natural-gas fired [HRSG] units," typically yielding about 110,000 pounds per hour of steam each.

To feed the water to these high-efficiency boilers, Solar's design called for adding several hundred yards of new piping, along with installation of water tanks for reverse-osmosis filtering pre-treatment. In the package, Solar also provided assorted utility instrumentation, an air-compression system with nitrogen backup, and switchgear operating from 12.5 kilovolts to 480 volts alternating current. The total capital outlay for SPI came to just over $5 million—a figure, Schneider notes, "not significantly higher than what we would have had to pay" for new low-NOx boilers and the assorted infrastructure needed to meet those pending air regs alone. In fact, he suggests, $5 million for the latter alternative "may have been on the low side." So, instead of making that outlay and getting "nothing" back except EPA compliance, he says, "We entered into a cogeneration system where we anticipated having a significant financial payback" in terms of lowered natural gas consumption and the benefits of 20-plus megawatts of power—with financing to boot.

Groundbreaking began in 2001. System commissioning followed rather rapidly in August of that year. Even that timing turned out to be fortuitous, as Schneider recalls: Energy deregulation was being phased in then, making some utility customers nervous about future energy charges; the ownership of onsite power was becoming even more desirable.

Full-Service Maintenance, Operation Provided

After installing the four turbine trains, Solar was signed up to provide operation and maintenance (O&M) for them—thus making the project a truly "full-service, turnkey" arrangement, as Dodson points out. Schneider and SPI especially liked this aspect, because it meant that SPI (again, now BPS PE) would concentrate entirely on plastics-making and leave the complexities of energy production up to Solar. And the polyethylene plant managers wouldn't have to listen to their own operators carp about third-party equipment.

For the O&M work, a half-dozen Solar Turbines employees man the equipment round-the-clock, resulting, as Solar's Dodson reports, in 98% availability. Dodson also notes that, because his technicians are all trained in multiple tasks, six people can handle work that otherwise would probably require two or three times that number for year-round operation. Dodson directly supervises the crew and oversees the BPS PE contract performance, which includes ensuring proper water treatment; emissions compliance, monitoring, and reporting; balancing of plant equipment, generators, and boilers; and of course, the maintenance, servicing, and repairs on the cogen facility. All in all, he says, "We're taking care of two areas—a cogen facility and associated balance of plant equipment—with minimum manpower, plus operating and maintaining all associated ancillary equipment." From a lean staffing standpoint alone, the O&M contract, he says, is a good deal for clients. "We're so varied, and have so many disciplines at our disposal, we can pretty much walk in the door and run anything that anybody has," he says, including other manufacturers' equipment.

Meeting Payback Goals

All, in all, how has the cogen experience panned out at BP Solvay Polyethylene?

After three years of operation, Schneider says, the system "has met or exceeded" original expectations. BPS PE is now realizing annual net savings in excess of $2 million per year, he reports, compared with purchasing the same power on an industrial contract. Installed in mid-2001, the project "has already recouped all of our capital investment."

It looks very sweet indeed. There is, however one caveat: For a more cautious analysis, one might wish to compare this CHP fourplex with a comparable investment in various best-in-class low-NOx boilers, absent the generators. Also, the net savings might work out differently under other circumstances. In any case, regardless of all the "what ifs," the actual result of running four Taurus gas turbines and HRSGs, he concludes, "is certainly a vast improvement in savings and efficiency over what had existed previously."

Besides which, the 21-megawatt power output is really $2 million in "gravy," in a sense, because the system's main purpose was to produce reliable, inexpensive steam. "This was the crucial part," Schneider says. "In that respect alone it has been wonderful—far better than the old boilers." Even though the turbines burn plenty of fuel, their consumption is still "far less, for steam production, than what we were using before," because the older boilers were running at a relatively inefficient 60%–75%. By comparison, the turbines' exhaust and the lean Nebraska Boilers are now attaining an estimated 80% efficiency. The turbines are churning out, he estimates, "between a 4 and 5 heat rate." So, he says, "We've been very happy."

Moreover, natural gas prices in the Houston channel are relatively quite low. BPS PE's future fuel costs will tend to rise or fall in sync with grid power, because it, too, is largely natural gas­fired. Additionally, one of BPS PE's parent companies, BP, is a major natural gas supplier. Schneider says he thinks that the cost of grid power might even rise in relation to natural gas, due to strained electric transmission and distribution capacity. If that happens, SPI's investment will look even better.

Two Minor Setbacks

Operationally, Schneider and Dodson note that a couple of glitches have come up. In one, the system initially showed oversensitivity to "islanding," or disconnecting itself from the local grid for self-protection. Circuit breakers trigger automatic isolation to shield against incoming surges, disruptions, frequency drops, outages, and such on the grid nearby. This function needed some fine-tuning.

Also, in mid-2004 one of the four generators appeared to be fouled or suffering lower-than-rated kilowatt output as a result of some unknown environmental element in the high-traffic plant area. Dodson's crews decided to remove it for refurbishing. He hired an outside rigging crew to lift the 16-ton generator, but other than that, he says, the regular staff accomplished the entire replacement effort in just four days. The plant suffered no major disruption. Although the cause of the fouling wasn't determined, Dodson and staff plan to continue monitoring the equipment closely.

Summing up, Schneider says, "Our relationship with Solar is very good. We're very happy, and the system has worked extremely well."

And no hard feelings, either, for the TCEQ's tough environmental standard: "It forced us to make a decision which ultimately was smart economically," he says.

There's a further irony here: those TCEQ standards that were looming in 2000 were eventually postponed after all. The latest indications suggest they'll be enforced sometime in 2005; SPI's timing worked out perfectly.

In any event, Solvay is now easily complying with current and anticipated NOx emissions standards, to the extent that, in 2004, the company received an EPA Energy Star award for contributing dramatically to cleaner air. The commendation noted specifically that the CHP system and related upgrades are saving a remarkable 69,000 tons in carbon dioxide greenhouse gas emissions yearly—"the equivalent," as the EPA noted, "to the removal of 12,000 cars from the road."

More Upgrades Pending

BPS PE is now well-positioned to meet all its energy needs for the foreseeable future, but the plastics maker and Solar are still looking for ways to save. One recent accomplishment is notable here. In mid-2004 Solar made a proposal showing BPS PE how it could cut costs significantly by manufacturing its own brine at the plant. Brine is needed to regenerate the resin beds in the water-softening units, which maintain both the HRSG feed-water tanks and the reverse-osmosis units. For years, BPS PE had paid a Houston supplier to truck in large loads of it. Dodson received preliminary approval from BPS PE to install a skid-mounted US Filter brine tank, which he'll connect to the water-softening system to supply 99.9% pure brine for the Zeolite water softeners. Rock salt in the tank will be agitated with the plant's compressed air—which also is maintained and operated by Solar. The two firms are sharing the cost of installation, says Dodson. Their investment should be quickly recouped by avoiding those costly tanker deliveries.

On a final note, Schneider points out that the system's documented success may also have influenced recent decisions by parent BP to install cogen trains at other plants, especially in Texas. Most recently, a huge 770-megawatt cogen system was commissioned in 2004 at BP's Texas City facility—one of the largest refineries in the United States (and also under the gun to reduce its NOx and carbon dioxide by 2005). Plant cogen power output will more than double, providing enough power to supply BP and export some profitably to the local grid. (BPS PE's 21-megawatt output, by contrast, was designed solely for onsite use, and BPS PE decided to forego the headaches involved in exporting energy.) Texas City's low-emissions exhaust-heat-fired plant and boilers (installed by Ohio-based Cinergy Solutions Inc.) will also eliminate a dozen big, pollution-spewing outdated pieces. Fuel input for the new hardware will include petroleum waste products that were previously being flared as more greenhouse gas. Not surprisingly, the EPA is pleased with the changes. In mid-2004 the agency awarded BP an Energy Star commendation for this site, too.

Schneider sums up: "The biggest moral of the story is, if you're considering how to comply with air-quality standards for low-NOx emissions, an electric turbine and HRSG make an ideal solution." Rather than simply purchasing a clean-burning boiler, he says, "We really profited by looking at another way of complying, which also provided a nice economic payback."

La Mesa, CA—based writer David Engle specializes in energy-related topics.

DE - November/December 2004