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Biomass Combined Heat and Power Catalog of Technologies

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Biomass Combined Heat and Power Catalog of Technologies ( biomass-combined-heat-and-power-catalog-technologies )

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EPA Combined Heat and Power Partnership Biomass CHP Catalog 7. Representative Biomass CHP System Cost and Performance Profiles A biomass-fueled CHP installation is an integrated power system that is comprised of the three main components described previously in this report: • Biomass receiving and feedstock preparation (Chapter 4). • Energy conversion (Chapter 5)—Conversion of the biomass into steam for direct combustion systems or into biogas for the gasification systems. This includes necessary environmental control equipment (cyclones, baghouses, acid gas removal, selective non-catalytic reduction, selective catalytic reduction, heat recovery, the boiler system or the biogas cooling, and cleanup section). • Power and heat production (Chapter 6)—Conversion of the steam or syngas into electric power and process steam or hot water. This chapter provides information about configurations, costs, and performance of typical biomass CHP systems, incorporating the information and data previously presented for each of the three primary components. Representative costs are developed for a series of typical biomass power generation systems and built up from the primary component costs developed in previous chapters of the report. System economics are presented on annual and net cost bases to generate power. The net cost to generate power is a function of the system cost and performance, the cost of biomass fuel, non-fuel O&M costs, the facility cost of capital, and the avoided cost of process steam for CHP configurations. Estimating the net cost to generate power is essentially a revenue requirements calculation. This methodology is typically used by utilities to calculate a required power price to achieve an allowed rate of return. This type of approach is useful in non-utility applications in that it estimates the cost of power from the system that would earn the owner/operator its cost of capital. In the calculation, the cost to generate power is the sum of the biomass fuel cost, non-fuel O&M cost, and a capital recovery cost, all on a per kWh-generated basis. In a CHP configuration, the unit also provides steam or thermal energy to the site that would have otherwise been generated by separate means, and displaces fuel that would have been consumed in generating this steam or thermal energy requirement. The net cost to generate power calculation credits that fuel savings against the other generating costs. Key economic assumptions are listed in Table 7-1. Capital recovery costs are based on assumptions of the cost of capital and project economic life; a cost of capital of 8 percent and a project economic life of 20 years was used for this analysis. A 20-year annuity at an 8 percent cost of capital results in an annual capital recovery factor of 10.2 percent. The annual capital costs that must be recovered to earn the required cost of capital over the 20-year life is then equal to the initial capital cost of a project multiplied by the 10.2 percent capital recovery factor. The per kWh unit capital recovery cost is equal to the annual capital payment (as determined by the calculation just described) divided by the annual kWh generated by the system. 7. Representative Biomass CHP System Cost 78 and Performance Profiles

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