Natural Gas applications

Fertilzers
Nitrogenous Fertilizers
In the ammonia synthesis, nitrogen is combined with hydrogen in a stoichiometric ratio of 1:3 to give ammonia with no by-products. Ammonia itself is used as a fertilizer. About 85% of ammonia consumption is used for the manufacture of fertilizer. Air contains 79 % (volume) of nitrogen. So, nitrogen needed for the reaction can be obtained from air. Now the difficulty lies in separating the hydrogen needed for the reaction from its source. Hydrogen production method is the main source of distinction between the various ammonia production routes. Most of the improvements in the technology regarding the ammonia synthesis over the past four decades were concerned with the hydrogen production step. Hydrogen can be produced by steam reforming, partial oxidation and water electrolysis. The bulk of the world ammonia production is based on steam reforming. The major hydrogen sources are natural gas, naphtha and coal. Most of the steam reforming plants use natural gas as feed stock. Natural gas contains fewer impurities, high hydrogen to carbon ratio and less percentage of higher hydrocarbons. So natural gas is superior when compared with other feed stocks. Synthetic Ammonia (NH3) Synthetic ammonia, from natural gas, is produced by reacting hydrogen with nitrogen. Six processing steps are required to produce synthetic ammonia using the catalytic steam reforming method as follows: 1. Natural gas desulfurization 3 In this operation, the sulfur content (mainly as H2S) is reduced to below 280 micrograms/ m to prevent poisoning of the catalyst used in steam reforming step. Desulfurization takes place by adsorption of H2S gas on the surface of zinc oxide or active carbon. The adsorbent is reactivated o by stripping with super heated steam. The feed gas is preheated to 350-400 C and then treated in a desulphurisation vessel where the sulphur compounds are hydrogenated to H2S using cobalt molybdenum catalyst (CoO and MgO3) and then adsorbed on palletized zinc oxide. Catalytic steam reforming o The desulfurized natural gas is preheated by mixing with superheated steam (to 500- 600 C) then enters the primary reformer and passes over the Ni catalyst where it is converted to hydrogen, CO and CO2 according to the following equation: CH4 + H2O CO + H2O CO2 + H2 The reaction is highly endothermic and additional heat is required to raise the temperature to 780o 830 C at the reformer outlet. Only 30- 40 % of the methane feed is reformed in the primary reformer. The gas from the primary reformer is then sent to the secondary reformer, where it is o mixed with compressed hot air at around 600 C and passed over nickel catalyst. Sufficient air is added to produce a final synthesis gas having a hydrogen to nitrogen mole ratio of three to one. The gas leaving the secondary reformer (H2, N2, CO, CO2 and H2O) is cooled to 360C in a waste heat boiler before being sent to carbon monoxide shift. Ni Catalyst CH4 + O2 + 2N2 CO + 2H2 + 2N2 3. Carbon monoxide shift CO + 3H2
Ni

2.

790- 820o C

After cooling, the gas, which contains 12- 15 % CO dry gas base, enters high temperature CO shift converter (350-400C) where CO converts to CO2 using iron oxide catalyst and chromium oxide initiator. The following reaction takes place: CO + H2O CO2 + H2

The exit gas is then cooled in a heat exchanger before being sent to a low temperature shift converter, where CO is converted to CO2 by a copper oxide/ zinc oxide catalyst. The residual CO content in the converter gas is about 0.2-0.4 % (dry gas base) CO content is important for the efficiency of the process. 4. Carbon dioxide removal The gas from the shift is cooled from 210 to 110 C and steam is condensed and separated from the gas. The shift gas is purified from CO2 in a chemical or a physical absorption process. The solvents used in chemical absorption are mainly aqueous amine solutions (Mono Ethanolamine (MEA), Di Ethanolamine (aMDEA) or hot potassium carbonate solutions. Physical solvents are glycol dimethylethers, propylene carbonate and others. V2O5 is used as a corrosion inhibitor. The MEA process has a high regeneration energy consumption and is not regarded as a BAT process. The condensed steam contains ammonia and methanol, and small amount of amines, formic acid, acetic acid, sodium, iron, copper, zinc, aluminum and calcium. This condensate is sent to the stripper. Trace metals remaining in the process condensate can be removed in waste water treatment plant by ion exchange. The solvent is regenerated by preheating and steam stripping. In the BAT processes the stripped condensate is recycled. Methanation Residual CO2 and CO, in the synthesis gas, must be removed by catalytic methanation by using Ni catalyst at 400-600C according to the following reaction: CO2 + H2 CO + 3H2 CO + H2O CH4 + H2O

5.

Methane is an inert gas with respect to ammonia catalyst, while CO 2 and CO can poison the catalyst.

6.

Ammonia Synthesis Exit gas from the methanator is almost a pure. Three to one mole ratio of hydrogen to nitrogen is converted to ammonia according to the following reaction N2 + 3H2 2NH3 First the gas is compressed from 30 atm to a pressure 200 atm, heated against exit gas from converter and entered the converter containing iron promoted catalyst. This results in a portion of the gas being converted to ammonia (15 %), which is condensed and separated in a liquid vapor separator and sent to a let-down separator. The unconverted synthesis gas is further compressed and heated to 180C before entering the converter containing an iron oxide catalyst. A newly developed ammonia synthesis catalyst containing ruthenium on a graphite support has a much higher activity per unit of volume and has a potential to increase conversion and lower operating pressures. Ammonia gas from the converter is condensed and separated then sent to the letdown separator where a small portion of the overhead gas is purged to prevent buildup of inert gases such as argon in the circulating gas system. Ammonia is flashed to get rid of dissolved gas. These gases are scrubbed to remove the traces of NH 3 in the form of ammonium hydroxide and the gases are used as part of the primary reformer fuel. The liquid ammonia can be either stored in pressure storage or in atmospheric double insulated refrigerated tank. Major Hazards

The major accidents in ammonia plants are explosions and fires. In addition, there is also the potential for toxic hazard due to the handling and storage of liquid ammonia. The credible major hazards identified in an ammonia production plant are: fire/explosion hazard due to leaks from the hydrocarbon feed system, fire/explosion hazard due to leaks of synthesis gas in the CO removal/synthesis gas compression areas (75 % hydrogen) toxic hazard from the release of liquid ammonia from the synthesis loop. In ammonia storage the release of liquid ammonia (by sabotage) is a credible major hazard event. Fires and explosions are usually not a hazard or only a minor hazard to the local population although potentially most severe for the plant operators. Appropriate precautions to protect both the operators and the local population are considered in the design and operation of the plants. The toxic hazard of a potential large release of liquid ammonia (i.e. from a storage tank) may be much more serious for the local population. An emergency plan for this event, covering the operators and the local population must be maintained.

Outside China, most ammonia plants use the same form of energy, natural gas or naphtha or fuel oil, as feedstock and as fuel for heating and for driving compressors. The compressors are then driven by gas turbines or steam turbines. In certain countries, India particularly, the boilers generating the steam for the turbines and for heating, often use a different form of energy: naphtha, fuel oil or coal while natural gas is used as feedstock for the ammonia synthesis. Worldwide, 73% ammonia capacity operates on NG, 4% on naphtha, 6 % on fuel oil, 14% on coal and 1 % on hydrogen from electrolysis of water. The naphtha-based capacity is essentially located in Asia (97%), in India particularly (58%).This Indian naphtha-based capacity is somewhat understated. Indeed, many recent ammonia urea plants have dual feedstock capability (natural gas, naphtha) and use naphtha to a large extent due to a shortage of natural gas. These dual feedstock plants are included in the natural gas category, not in the naphtha category. They will probably shift to LNG (Liquefied Natural Gas) in a couple of years. 98% coal based ammonia capacity is located in China. India China and India are the only countries where a rapid expansion of the ammonia and fertilizer capacity took place in spite of a limited availability of natural gas. A feature of the Indian industry is the presence of many modern ammonia plants with dual Feed stock capability: natural gas and naphtha. This reflects a growing shortage of natural gas in India where gas demand is increasing for various uses and where priority also includes power generation. As a consequence, the dual feedstock plants have to use naphtha to complement the declining deliveries of natural gas. The delivered price of naphtha has reached USD 20/MMBTU recently, compared to less than USD 5/MMBTU for feedstock natural gas. As regards the plants entirely based on naphtha or fuel oil, they are also expected to switch over to LNG, if possible. The total capacity of these naphtha-based and fuel oil-based plants is about 21 million t/yr of urea.

Prospects for new Indian plants For the first time in many years, no new Indian ammonia-urea plant is currently under construction. Nitrogen demand is expected to further grow. In order to avoid excessive dependence on imports, new investments are therefore anticipated for the coming years. The question is where should these new plants be built? They could be built in India, using imported LNG, or in gas-rich countries in the form of jointventure companies such as the Omifco project in Oman : a joint-venture of the Oman oil company with 2 Indian fertilizer producers. Rough calculations shown in Table 1 show that LNG-based projects face the additional costs of liquefaction of the gas, of its transportation in expensive LNG carriers, and of the regasification of the LNG. These additional costs amount to about 2.6 $/MMBTU or about 52 $/t urea. It therefore appears that the building of new plants in gas-rich countries may be preferable. However, other factors such as the frequent port and railway congestions, must also be taken into consideration. Plants located close to consumption areas do not face these problems. Moreover, the comparison is only based on estimated costs. Actual prices may not necessarily reflect these costs. Indeed, LNG prices will be negotiated. Increased LNG availability from many projects may drive prices down. Fertilizer prices will also depend on various factors, particularly the future supply/demand balance for urea. UREA SUPPLY TO INDIA ESTIMATED CASH COSTS COMPARISON USD CASE 1 Urea Production in the Middle East (New Plant) (New Plant) Gas Price 0.80/MMBTU Gas consumption/t urea (2) 20 MMBTU Gas cost 16 Other costs (3) 48 Production cash cost 64 Ship loading & transport to India 16 Unloading & port handling 6 Delivered cash cost/t urea 86 CASE 2 Urea Production in India

Gas Price/Middle East 0.80/MMBTU Liquefaction (4) 1.4 LNG transport to India 0.6 LNG regasification 0.6 Delivered gas cost/India 3.4/MMBTU Gas consumption/t urea 20 MMBTU Gas cost 68 Other costs 48 Total cash cost/t urea 116

(1) excludes capital related charges, depreciation and commercial margins for the ammonia and fertilizer plants. (2) assumes normal operations and granular urea. (3) includes labour, utilities, overhead, insurance, taxes, etc. For simplification, these other costs are assumed equal in Middle East and in India. Labour costs are obviously lower in India but other cost items are probably higher, electricity particularly. (4) assumes no grass-root LNG plants.

CONCLUSIONS The economic, environmental and technical advantages of natural gas as a feedstock for ammonia production are such that the world ammonia production will be increasingly based on natural gas. The world resources of natural gas are huge. Ammonia and fertilizer productions account for a rather small percentage of the total use of natural gas. The availability of natural gas for the production of fertilizers will therefore not be a constraint on a world basis. On the other hand, the locations of the main resources of low cost natural gas are becoming increasingly distant from the main ammonia and fertilizer consuming areas. This will lead to further increases in ammonia and fertilizer trade. However, in certain cases, long distance gas transportation by pipeline or as LNG will be the preferred alternative to ammonia and/or fertilizer transportation. Indeed, large fertilizer consuming countries cannot be supplied entirely through imports.
FEEDSTOCK OPTIONS FOR THE PETROCHEMICAL INDUSTRY Primary petrochemicals are divided into three groups depending on their chemical structure: Olefins includes ethylene, propylene, and butadiene. Ethylene and propylene are important sources of industrial chemicals and plastics products. Butadiene is used in making synthetic rubber. Aromatics includes benzene, toluene, and xylenes. Benzene is a raw material for dyes and synthetic detergents, and benzene and toluene for isocyanates MDI and TDI used in making polyurethanes. Manufacturers use xylenes to produce plastics and synthetic fibers. Synthesis gas is a mixture of carbon monoxide and hydrogen used to make ammonia and methanol. Ammonia is used to make the fertilizer urea and methanol is used as a solvent and chemical intermediate.

Tthe major hydrocarbon sources used in producing petrochemicals are: Methane, ethane, propane and butanes: Obtained primarily from natural gas processing plants. Naphtha obtained from petroleum refineries. Benzene, toluene and xylenes, as a whole referred to as BTX and primarily obtained from petroleum refineries by extraction from the reformate produced in catalytic reformers. Gas oil obtained from petroleum refineries.

Methane and BTX are used directly as feedstocks for producing petrochemicals. However, the ethane, propane, butanes, naphtha and gas oil serve as optional feedstocks for steam-assisted thermal cracking plants referred to as steam crackers that produce these intermediate petrochemical feedstocks: Ethylene Propylene Butenes and butadiene Benzene

In 2007, the amounts of ethylene and propylene produced in steam crackers were about 115 Mt (megatonnes) and 70 Mt, respectively. The output ethylene capacity of large steam crackers ranged up to as much as 1.0 1.5 Mt per year.

Steam crackers are not to be confused with steam reforming plants used to produce hydrogen and ammonia. A variety of feedstocks are used for petrochemicals production. Petrochemical feedstocks are generally produced from the refining of crude oil or the processing of natural gas. The figure below illustrates the conventional sources of petrochemical feedstocks. Recently, alternative process routes utilizing coal, biological hydrocarbons and unconventional natural gas, particularly shale gas, have gained more attention as potential feedstock sources. Other emerging sources include unconventional natural gas, predominantly from shale gas, and bio-based commodity feedstocks. Conventional Petrochemical Feedstock Sources

+ Click image to enlarge

The main sources of chemical feedstocks are obtained from crude oil and natural gas, and consist of methane, ethane, LPG, naphtha, and heavier streams such as gas oil and residual fuels. Crude oil and natural gas are extracted from underground reservoirs, while downstream refining of crude oil produces LPG, naphtha and various other fractions such as gasoline, kerosene and diesel. Coal has continued to be a significant alternative feedstock in comparison to liquids and gas feeds, with China leading the world in this respect due to its substantial and widespread coal reserves and production. Due to growing supplies of unconventional sources, United States natural gas prices have fallen below crude oil equivalent which has resulted in a strong incentive to extract ethane from cheap natural gas. Reduced prices have also resulted in improved ethane and propane derived ethylene margins relative to naphtha which has restored some degree of cost advantage to the Gulf Coast region. A few years ago, minimal ethylene capacity additions were expected in North America, particularly in the United States where no new capacity developments were projected. However, with the anticipated amount of NGLs-rich shale gas, a number of chemical companies have announced their desires to take advantage of the new feedstock supply. Many have already switched their steam crackers to crack lighter feedstocks while some are proposing building new ethane-based steam crackers to handle the projected supply. Much research and investment has been focused on bio-based fuels and chemicals, so that many applications are now well-understood for the various bio-feedstocks. Over the past decade, ethanol has been used as transportation fuel, mainly blended with gasoline. Light olefins can however also be commercially produced from ethanol to give ethylene, a major feedstock for other chemicals such as high density polyethylene, ethylene oxide, polystyrene etc. The ability to use alternative feedstocks is one key

factor to achieve the lowest cost of chemicals production especially where feedstock prices have become highly volatile. However, continued large investments, advanced research and government support will be needed to enable commercial green chemicals production. The petrochemical industry continues to be highly cyclical and commoditized, therefore finding ways to optimize production and minimize cost is important for success. The ability to use alternate feedstocks is one of the key elements in achieving the lowest cost of production, especially in an environment where feedstock prices have become highly volatile. Feedstock Outlook Naphtha continues to dominate the mix of feedstocks consumed in the production of olefins, aromatics and methane-based petrochemicals, especially in Asia. The refined product represented 51 percent of the estimated 653 million tons of global feedstock consumed in 2010 followed by methane and coal which had 14 percent and 11 percent, respectively. Global feedstock consumption is projected to rise through 2025 with the greatest proportion coming from naphtha and coal, increasing about 100 million tons and 70 million tons by 2025, respectively. Naphtha will remain the main feedstock for petrochemical production since the feed provides the greatest versatility as a feedstock and supply is expected to continue to be available from refineries operated to produce transportation fuels. Global Feedstock Consumption by Region Percentage by Region 2010

+ Click image to enlarge Nexants Petrochemical Market Dynamics: Feedstocks report addresses the feedstock requirements for basic chemical production and looks at each resource base in turn against its potential to provide feedstocks which will be important to the industry going forward. Ethylene process has been optimized for various feeds - gas crackers working with ethane, propane, butane - liquid crackers consuming feedstock like naphtha, LPG, AGO, HGO dual feed crackers being flexible to handle 100% gaseous or 100% liquid feedstocks or any mixtures of the two. Concerning plant size, steam cracking technology has been successfully applied for small plants with 200 KTA ethylene production up to mega plants with more than 1500 KTA ethylene production. Extensive

design studies have been performed for mega olefin plants with capacities as high as 2000 KTA ethylene which proved that the technology principles of the steam cracking technology must not be compromised due to safety, mechanical or constructability reasons even at high plant capacities.

The block flow diagram shows the typical process sequence which is further individually optimized depending on the existing design basis. The main highlights of the Linde process are: Proven Cracking Furnace Design Front End Deethanizer Front End Hydrogenation or Raw Gas Hydrogenation Integrated Cold Train and Demethanizer Heat pumped low pressure C2 Splitter with open Ethylene Refrigeration Cycle

The cracked gas is cooled down to a temperature of -15 C to -30 C after compression in the cracked gas compressor. Non-condensed cracked gas and collected condensates are fed to the deethanizer, where the total cracked gas stream is separated into a C2 minus and a C3 plus fraction. The C2 minus stream is fed to the hydrogenation, where acetylene reacts with part of the hydrogen still present in the cracked gas. The acetylene-free cracked gas is further cooled and partially condensed in the low temperature section until the non-condensed gas has achieved the required hydrogen product and/or tailgas purity where the C2 content is reduced to zero. The collected condensates are fed to the demethanizer, where methane is separated from the C2 fraction. The bottom product of the methane column, consisting of the pure ethylene/ethane stream, is fed to the C2 splitter after vaporization and recovery of chilling duty, where the ethylene product is separated from ethane. Since the C2 fraction fed to the C2 splitter is not contaminated with methane or hydrogen, the C2 splitter can be operated via a heat pump. The heat pump compressor is integrated into the ethylene refrigeration cycle, where it is combined with the third compressor stage. All heavy hydrocarbons present in the cracked gas stream are separated upstream of the low temperature section. Thus the low temperature section and the demethanizer are not loaded with these components. This is of special importance from a safety point of view, if the cracked gas contains traces of NOx introduced by off gas which is fed between the cracked gas compressor stages to the ethylene

process. This means that the reaction of NOx with butadiene or C5-dienes, which would result in the formation of explosive resins, can be practically excluded. Because of the more favorable partial pressure conditions of acetylene and hydrogen, the hydrogenation that is used in this process in the total C2 minus stream leads to a catalyst cycle length of 5 years and more, compared with a cycle length of 6 to 12 months in a tail end hydrogenation. In addition, the formation of green oil is greatly reduced. The hydrogenation does not require the addition of purified hydrogen, so that the start-up of the plant can be performed more quickly. There is no need for the removal of methane from the C2 fraction, which results in the saving of one process step.

Electric Generation Using Natural Gas

Natural gas, because of its clean burning nature, has become a very popular fuel for the generation of electricity. In the 1970s and 1980s, the choices for most electric utility generators were large coal or nuclear powered plants. However, due to economic, environmental and technological changes, natural gas has become the fuel of choice for new power plants built since the 1990s. In fact, the Energy Information Administration (EIA) estimates that between 2009-2015, 96.65 gigawatts (GW) of new electricity capacity will be added in the U.S. Of this, over 20 percent, or 21.2 GW, will be natural gas additions. The graph below shows how, according to the EIA, natural gas-fired electricity generation is expected to account for 80 percent of all added electricity generation capacity by 2035. There are many reasons for this increased reliance on natural gas to generate our electricity. While coal is the cheapest fossil fuel for generating electricity, it is also the dirtiest, releasing the highest levels of pollutants into the air. The electric generation industry, in fact, has traditionally been one of the most polluting industries in the United States. Regulations surrounding the emissions of power plants have forced these electric generators to come up with new methods of generating power, while lessening environmental damage. New technology has allowed natural gas to play an increasingly important role in the clean generation of electricity.. Steam Generation Units Source: EIA Annual Energy Outlook 2010

Natural gas can be used to generate electricity in a variety of ways. The most basic natural gasfired electric generation consists of a steam generation unit, where fossil fuels are burned in a boiler to heat water and produce steam that then turns a turbine to generate electricity. Natural

gas may be used for this process, although these basic steam units are more typical of large coal or nuclear generation facilities. These basic steam generation units have fairly low energy efficiency. Typically, only 33 to 35 percent of the thermal energy used to generate the steam is converted into electrical energy in these types of units. Centralized Gas Turbines Gas turbines and combustion engines are also used to generate electricity. In these types of units, instead of heating steam to turn a turbine, hot gases from burning fossil fuels (particularly natural gas) are used to turn the turbine and generate electricity. Gas turbine and combustion engine plants are traditionally used primarily for peak-load demands, as it is possible to quickly and easily turn them on. These plants have increased in popularity due to advances in technology and the availability of natural gas. However, they are still traditionally slightly less efficient than large steam-driven power plants. Combined Cycle Units A Centralized Gas Many of the new natural Turbine Generation gas fired power plants Station are known as 'combinedcycle' units. In these Source: National Energy types of generating Technology Laboratory, facilities, there is both a DOE gas turbine and a steam unit, all in one. The gas turbine operates in much the same way as a normal gas turbine, using the hot gases released from burning natural gas to turn a turbine and generate Reciprocating Engine System electricity. In combined-cycle plants, the waste heat Source: EnergySolutionsCenter.org from the gas-turbine process is directed toward generating steam, which is then used to generate electricity much like a steam unit. Because of this efficient use of the heat energy released from the natural gas, combined-cycle plants are much more efficient than steam units or gas turbines alone. In fact, combined-cycle plants can achieve thermal efficiencies of up to 50 to 60 percent. Distributed Generation Until recently, methods of generating power have been discussed in the context of large, centralized power plants. However, with technological advancements, there is a trend towards what is known as 'distributed generation'. Distributed generation refers to the placement of individual, smaller sized electric generation units at residential, commercial, and industrial sites of use. These small scale power plants, which are primarily powered by natural gas, operate with small gas turbine or combustion engine units, or natural gas fuel cells. Distributed generation can take many forms, from small, low output generators used to back up the supply of electricity obtained from the centralized electric utilities, to larger, independent generators that supply enough electricity to power an entire factory. Distributed generation is attractive because it offers electricity that is more reliable, more efficient, and cheaper than purchasing power from a centralized utility. Distributed generation also allows for increased local control over the electricity supply, and cuts down on electricity losses during transmission. Below is a discussion of the various forms of natural gas-fired distributed generation.

Natural gas is one of the leading energy sources for distributed generation. Because of the extensive natural gas supply infrastructure and the environmental benefits of using natural gas, it is one of the leading choices for on-site power generation. There are a number of ways in which natural gas may be used on-site to generate electricity. Fuel cells, gas-fired reciprocating engines, industrial natural gas-fired turbines, and microturbines are all popular forms of using natural gas for on-site electricity needs. Industrial Natural Gas Fired Turbines Industrial natural gas-fired turbines operate on the same concept as the larger centralized gas turbine generators discussed above. However, instead of being located in a centralized plant, these turbines are located in close proximity to where the electricity being generated will be used. Industrial turbines - producing electricity through the use of high temperature, high pressure gas to turn a turbine that generates a current - are compact, lightweight, easily started, and simple to operate. This type of distributed generation is commonly used by medium and large sized establishments, such as universities, hospitals, commercial buildings and industrial plants, and can achieve efficiency up to 58 percent. In contrast with distributed generation the heat that would normally be lost as waste energy can easily be harnessed to perform other functions, such as powering a boiler or space heating. This is known as Combined Heat and Power (CHP) systems. These systems make use of heat that is normally wasted in the electric generation process, thereby increasing the energy efficiency of the total system. In addition, on-site natural gas turbines can be used in a combined cycle unit, as discussed above. Due to the advantages of these types of generation units, a great deal of research is being put into developing more efficient, advanced gas turbines for distributed generation. Microturbines Microturbines are scaled down versions of industrial gas turbines. As their name suggests, these generating units are very small, and typically have a relatively small electric output. These types of distributed generation systems have the capacity to produce from 25 to 500 kilowatts (kW) of electricity, and are best suited for residential or small scale commercial units. Advantages to microturbines include a very compact size (about the same size as a refrigerator), a small number of moving parts, light-weight, low-cost, and increased efficiency. Using new waste heat recovery techniques, microturbines can achieve energy efficiencies of up to 80 percent. Natural Gas-Fired Reciprocating Engines

Natural-gas fired reciprocating engines are also used for on-site electric generation. These types of engines are Source: National Energy Technology also commonly known as combustion engines. They convert the energy contained in fossil fuels into Laboratory, DOE mechanical energy, which rotates a piston to generate electricity. Natural-gas fired reciprocating engines typically generate from less than 5 kW, up to 7 megawatts (MW), meaning they can be used as a small scale residential backup generator to a base load generator in industrial settings. These engines offer efficiencies from 25 to 45 percent, and can also be used in a CHP system to increase energy efficiency. Fuel cells are becoming an increasingly important technology for the generation of electricity. They are much like rechargeable batteries, except instead of using an electric recharger, they use a fuel, such as natural gas, to generate electric power even when they are in use. Fuel cells for distributed generation offer a multitude of benefits, and are an exciting area of innovation and research for distributed generation applications. Cogeneration From Wikipedia, the free encyclopedia Cogeneration (also combined heat and power, CHP) is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat. All thermal power plants emit a certain amount of heat during electricity generation. This can be released into the natural environment through cooling towers, flue gas, or by other means. By contrast, CHP captures some or all of the by-product heat for heating purposes, either very close to the plant, or especially in Scandinavia and eastern Europeas hot water for district heating with temperatures ranging from approximately 80 to 130 C. This is also called Combined Heat and Power District Heating or CHPDH. Small CHP plants are an example of decentralized energy. Cogeneration was practiced in some of the earliest installations of electrical generation. Before central stations distributed power, industries generating their own power used exhaust steam for process heating. Large office and apartment buildings, hotels and stores commonly generated their own power and used waste steam for building heat. Because of the economies and high cost of early purchased power, these combined heat and power operations continued for many years after utility electricity became available. Cogeneration is still common in pulp and paper mills, refineries and chemical plants. By-product heat at moderate temperatures (212-356F/100-180C) can also be used in absorption chillers for cooling. A plant producing electricity, heat and cold is sometimes called trigeneration or more generally polygeneration plant. Cogeneration is a thermodynamically efficient use of fuel. In separate production of electricity, some energy must be rejected as waste heat, but in cogeneration this thermal energy is put to good use. Low-Grade Fuel for Turbines: Gas turbines burn mainly natural gas and light oil. Crude oil, residual, and some distillates contain corrosive components and as such require fuel treatment equipment. In addition, ash deposits from these fuels result in gas turbine deratings of up to 15 percent. They may still be economically attractive fuels however, particularly in combined-cycle plants. Sodium and potassium are removed from residual, crude and heavy distillates by a water washing procedure. A simpler and less expensive purification system will do the same job for light crude and light distillates. A magnesium additive system may also be needed to reduce the corrosive effects if vanadium is present. Fuels requiring such treatment must have a separate fuel-treatment plant and a system of accurate fuel monitoring to assure reliable, low-maintenance operation of gas turbines.

Gas Fired Reciprocating Engine

Cost of electricity by source

From Wikipedia, the free encyclopedia

The cost of electricity (typically cents/kWh, Euro/kWh, Euro or $/MWh) generated by different sources is a calculation of the cost of generating electricity at the point of connection to a load or electricity grid. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type of calculation assists policy makers, researchers and others to guide discussions and decision making.

Cost factors
While calculating costs, several internal cost factors have to be considered. (Note the use of "costs," which is not the actual selling price, since this can be affected by a variety of factors such as subsidies and taxes):

Capital costs (including waste disposal and decommissioning costs for nuclear energy) - tend to be low for fossil fuel power stations; high for wind turbines, solar PV; very high for waste to energy, wave and tidal, solar thermal, and nuclear. Fuel costs - high for fossil fuel and biomass sources, low for nuclear, and zero for many renewables. Factors such as the costs of waste (and associated issues) and different insurance costs are not included in the following: Works power, own use or parasitic load - that is, the portion of generated power actually used to run the stations pumps and fans has to be allowed for.]

To evaluate the total cost of production of electricity, the streams of costs are converted to a net present value using the time value of money. These costs are all brought together using discounted cash flow.

Calculations
Levelized Energy Cost (LEC, also known as Levelised Cost of Energy, abbreviated as LCOE) is the price at which electricity must be generated from a specific source to break even over the lifetime of the project. It is an economic assessment of the cost of the energy-generating system including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, cost of capital, and is very useful in calculating the costs of generation from different sources. It can be defined in a single formula as:

where

= Average lifetime levelized electricity generation cost = Investment expenditures in the year t = Operations and maintenance expenditures in the year t = Fuel expenditures in the year t = Electricity generation in the year t = Discount rate = Life of the system

Typically LECs are calculated over 20 to 40 year lifetimes, and are given in the units of currency per kilowatt-hour, for example AUD/kWh or EUR/kWh or per megawatt-hour, for example AUD/MWh (as tabulated below).

System boundaries
When comparing LECs for alternative systems, it is very important to define the boundaries of the 'system' and the costs that are included in it. For example, should transmissions lines and distribution systems be included in the cost? Typically only the costs of connecting the generating source into the transmission system is included as a cost of the generator. But in some cases wholesale upgrade of the Grid is needed. Careful thought has to be given to whether or not these costs should be included in the cost of power. Should R&D, tax, and environmental impact studies be included? Should the costs of impacts on public health and environmental damage be included? Should the costs of government subsidies be included in the calculated LEC?

Discount rate
Another key issue is the decision about the value of the discount rate . The value that is chosen for can often 'weigh' the decision towards one option or another, so the basis for choosing the discount must clearly be carefully evaluated. A more telling economic assessment might be the marginal cost of electricity. This value would serve the purpose of comparing the added cost of increasing electricity generation by one unit from different sources of electricity generation.

Estimates
US Department of Energy estimates
The tables below list the estimated cost of electricity by source for plants entering service in 2017. The tables are from a January 23, 2012 report of the Energy Information Administration (EIA) of the U.S. Department of Energy (DOE) called "Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012".

Total System Levelized Cost (the rightmost column) gives the dollar cost per megawatt-hour that must be charged over time in order to pay for the total cost. Divide by 1000 to get the cost per kilowatt-hour (move the decimal point 1 place to the left to get the cost in cents/kWh).

These calculations reflect an adjustment to account for the high level of carbon dioxide produced by coal plants. From the EIA report:
"a 3-percentage point increase in the cost of capital is added when evaluating investments in greenhouse gas (GHG) intensive technologies like coal-fired power and coal-to-liquids (CTL) plants without carbon control and sequestration (CCS). While the 3-percentage point adjustment is somewhat arbitrary, in levelized cost terms its impact is similar to that of a $15 per metric ton of carbon dioxide (CO2) emissions fee. ... As a result, the levelized capital costs of coal-fired plants without CCS are higher than would otherwise be expected."

No tax credits or incentives are incorporated in the tables. From the EIA report (emphasis added):
"Levelized cost represents the present value of the total cost of building and operating a generating plant over an assumed financial life and duty cycle, converted to equal annual payments and expressed in terms of real dollars to remove the impact of inflation. Levelized cost reflects overnight capital cost, fuel cost, fixed and variable O&M cost, financing costs, and an assumed utilization rate for each plant type. The availability of various incentives including state or federal tax credits can also impact the calculation of levelized cost. The values shown in the tables below do not incorporate any such incentives."

Incentives, tax credits, production mandates, etc. are discussed in the overall comprehensive EIA report: "Annual Energy Outlook 2012". Photovoltaics (solar PV) can be used both by distributed residential or commercial users and utility scale power plants. The costs shown are for utility scale photovoltaic power plants.
Estimated Levelized Cost of New Generation Resources, 2017 U.S. Average Levelized Cost for Plants Entering Service in 2017 (2010 USD/MWh) Variable Capacity Levelized Fixed O&M Factor Capital O&M (including (%) Cost fuel) 85 65.8 4.0 28.6 Total System Levelized Cost 99.6

Plant Type

Transmission Investment

Conventional Coal

1.2

Estimated Levelized Cost of New Generation Resources, 2017 U.S. Average Levelized Cost for Plants Entering Service in 2017 (2010 USD/MWh) Variable Capacity Levelized Fixed O&M Factor Capital O&M (including (%) Cost fuel) 85 85 75.2 93.3 6.6 9.3 29.2 36.8 Total System Levelized Cost 112.2 140.7

Plant Type

Transmission Investment

Advanced Coal Advanced Coal with CCS Natural Gas Fired Conventional Combined Cycle Advanced Combined Cycle Advanced CC with CCS Conventional Combustion Turbine Advanced Combustion Turbine Advanced Nuclear Geothermal Biomass Wind1 Wind Offshore1 Solar PV1,2 Solar Thermal1

1.2 1.2

87 87 87 30

17.5 17.9 34.9 46.0

1.9 1.9 4.0 2.7

48.0 44.4 52.7 79.9

1.2 1.2 1.2 3.6

68.6 65.5 92.8 132.0

30 90 92 83 34 27 25 20

31.7 88.8 76.6 56.8 83.3 300.6 144.9 204.7

2.6 11.3 11.9 13.8 9.7 22.4 7.7 40.1

67.5 11.6 9.6 48.3 0.0 0.0 0.0 0.0

3.6 1.1 1.5 1.3 3.7 7.7 4.2 6.2

105.3 112.7 99.6 120.2 96.8 330.6 156.9 251.0

Estimated Levelized Cost of New Generation Resources, 2017 U.S. Average Levelized Cost for Plants Entering Service in 2017 (2010 USD/MWh) Variable Capacity Levelized Fixed O&M Factor Capital O&M (including (%) Cost fuel) 53
1

Plant Type

Transmission Investment

Total System Levelized Cost 89.9

Hydro1

76.9

4.0

6.0

2.1

Non-dispatchable (Hydro is dispatchable within a season, but nondispatchable overall-limited by site and season)
2

Costs are expressed in terms of net AC power available to the grid for the installed capacity

O&M = operation and maintenance. CC = combined cycle. CCS = carbon capture and sequestration. PV = photovoltaics. GHG = greenhouse gas.

UK 2010 estimates
In March 2010, a new report on UK levelised generation costs was published by Parsons Brinckerhoff. It puts a range on each cost due to various uncertainties. Combined cycle gas turbines without CO2 capture are not directly comparable to the other low carbon emission generation technologies in the PB study. The assumptions used in this study are given in the report.
UK energy costs for different generation technologies in pounds per megawatt hour (2010) Technology New nuclear Onshore wind Biomass Natural gas turbines with CO2 capture Cost range (/MWh) 80105 80110 60120 60130

Coal with CO2 capture Solar farms Offshore wind Natural gas turbine, no CO2 capture Tidal power

100155 125180 150210 55110 155390

Divide the above figures by 10 to obtain the price in pence per kilowatt-hour. More recent UK estimates are the Mott MacDonald study released by DECC in June 2010 and the Arup study for DECC published in 2011.

French 2011 estimates

The International Agency for the Energy and EDF have estimated for 2011 the following costs. For the nuclear power they include the costs due to new safety investments to upgrade the French nuclear plant after the Fukushima Daiichi nuclear disaster; the cost for those investments is estimated at 4 /MWh. Concerning the solar power the estimate at 293 /MWh is for a large plant capable to produce in the range of 50-100 GWh/year located in a favorable location (such as in Southern Europe). For a small household plant capable to produce typically around 3 MWh/year the cost is according to the location between 400 and 700 /MWh. Currently solar power is by far the most expensive renewable source to produce electricity, although increasing efficiency and longer lifespan of photovoltaic panels together with reduced production costs could make this source of energy more competitive.
French energy costs for different generation technologies in Euros per megawatt hour (2011) Technology Hydro power Nuclear Natural gas turbines without CO2 capture Onshore wind Solar farms 20 50 61 69 293 Cost (/MWh)

Gas to liquids
From Wikipedia, the free encyclopedia Gas to liquids (GTL) is a refinery process to convert natural gas or other gaseous hydrocarbons into longer-chain hydrocarbons such as gasoline or diesel fuel. Methane-rich gases are converted into liquid synthetic fuels either via direct conversion or via syngas as an intermediate, for example using the Fischer Tropsch or Mobil processes. FischerTropsch process

GTL process using the Fischer Tropsch method This method starts with partial oxidation of methane (natural gas) to carbon dioxide, carbon monoxide, hydrogen and water, the carbon monoxide to hydrogen (H2) ratio is adjusted using the water gas shift reaction) and the excess carbon dioxide removal by aqueous solutions of alkanolamine (or physical solvents) the water is removed yielding synthesis gas (syngas) that is chemically reacted over an iron or cobalt catalyst to produce liquid hydrocarbons and other byproducts. Mobil process An alternative path starts by conversion of the natural gas to syngas, conversion of the syngas to methanol which is subsequently polymerized into alkanes over a zeolite catalyst. It was developed by Mobil in early 1970s. Methanol is made from methane (natural gas) in a series of three reactions: 1. Steam reforming: CH4 + H2O CO + 3 H2 rH = +206 kJ mol -1 2. Water shift reaction: CO + H2O CO2 + H2 rH = -41 kJ mol -1 3. Synthesis: 2 H2 + CO CH3OH rH = -92 kJ mol
-1

The methanol thus formed may be converted to gasoline by the Mobil process. First methanol is

dehydrated to give dimethyl ether: 2 CH3OH CH3OCH3 + H2O This is then further dehydrated over a zeolite catalyst, ZSM-5, to give a gasoline with 80% (by weight based on the organics in the product stream) C5+ hydrocarbon products. ZSM-5 is deactivated by a carbon build-up ("coking") over time in converting methanol to gasoline. The catalyst can be re-activated by burning off the coke in a stream of hot (500 C (930 F)) air; however, the number of re-activation cycles is limited. Commercial uses Two companies, SASOL and Royal Dutch Shell, have technology proven to work on a commercial scale. PetroSA completed semi-commercial demonstrations of gas-to-liquids used by the company in 2011. Using gas-to-liquids processes, refineries can convert some of their gaseous waste products (flare gas) into valuable fuel oils, which can be sold as is or blended only with diesel fuel. It may also be used for the economic extraction of gas deposits in locations where it is not economical to build a pipeline. This process will be increasingly significant as crude oil resources are depleted. Royal Dutch Shell produces a diesel from natural gas in a factory in Bintulu, Malaysia. Another Shell GTL facility is the Pearl GTL plant in Qatar, the world's largest GTL facility and there are reports that Shell is looking at the feasibility of a GTL facility in Louisiana, US. SASOL has recently built 34kb/d Oryx GTL facility in Ras Laffan Industrial City, Qatar. On 1 February 2008, an Airbus A380 flew a three-hour test flight between Britain and France, with one of the A380's four Rolls-Royce Trent 900 engines using a mix of 60% standard jet kerosene and 40% gas to liquids fuel supplied by Shell. The aircraft engine needed no modification to use the GTL fuel, which was designed to be mixed with normal jet fuel. Sebastien Remy, head of Airbus SAS's alternative fuel programme, said the GTL used was no cleaner in CO2 terms than standard fuel but it had local air quality benefits because the GTL portion contains no sulphur. On 12 October 2009, a Qatar Airways Airbus A340-600 conducted the world's first commercial passenger flight using a mixture of kerosene and synthetic GTL fuel in its flight from London's Gatwick Airport to Doha. One other proposed solution is to use a novel FPSO for offshore conversion of gas to liquids (methanol, diesel, petrol, syn-crude, and naphtha). Brazilian oil company Petrobras has ordered two small experimental GTL production facilities intended to be posted at offshore oil fields too distant or deep to justify gas pipelines to onshore GTL plant. In January 2012 Petrobras' Cenpes Research and Development Centre approved for commercial deployment the technology supplied by UK-based gas-to-liquids company CompactGTL. The World Bank estimates that over 150 billion cubic metres of natural gas are flared or vented annually, an amount worth approximately 30.6 billion dollars, equivalent to 25 percent of the United States gas consumption or 30% of the European Unions gas consumption per year, a resource that could be useful using GTL.