Energy Efficiency and Security:

Still Important in a World With

Low-cost Fuel

E360 Forum • Chicago, IL • October 5, 2017

Tom Hoopes Alan Simchick

Director, Marketing and Business Development District Sales Manager

Vilter Manufacturing Vilter Manufacturing

Food and Beverage Industry: 8% of all U.S. Manufacturing Energy Use

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• Process heating consumes five times the energy of cooling

• Only 36% of energy purchased is fully applied

• Momentary loss of any one energy source can cost millions

36%

64%

487

750

600

Energy Consumed vs. Lost (TBTUs)

Applied Energy

Lost Energy

Spark Spread: A Tale of Three States

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Utility-Provided Electricity Is Subject to Both Seasonal Cost Variances and Demand Charges.

• Natural gas prices have declined 35% since 2011

• Electricity prices have increased 17% since 2011

• Tri-state area spread varies by 3% in Illinois, up to 15% in Wisconsin

Waste Heat Recovery

Heat Pumps

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Heat Pumps Transform Lost Energy to Useable Energy

Waste Heat Sources

Compressors

Condensers

Other

Heat Uses

Hot Water

Hot Air

Other

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Industrial Heat Pump Technology Is Dependent on High-Pressure

Compressors; the Vilter™ Single Screw Is Proven to 1,500 PSI

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Ammonia Heat Pumps

Ammonia is suitable to provide hot water to 195 °F.

One heat pump can save as much as 7 million gallons/year of water lost to evaporation.

Compressor technology is available to use CO2

for hot water.

Two (2) VSSH-1201s at 14 °F suction,

delivering 350 GPM water at 129 °F,

saving more than $300,000/year

Examples of Typical Installations

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VSSH-451 at 66 °F to 86 °F suction,

delivering 170 GPM water at 145 °F,

saving more than $250,000/year

Global Food Processing Company, U.S.Poultry Processing Facility, Chile, S.A.

Industrial Heat Pump Heats Drammen, Norway, Using North Sea Water

Drammen Central District Heat Pump Plant

• Port city of 60,000; 200 buildings

• seeking sustainability, reduce water use and

CO2 emissions; drive down energy costs

Customer Challenge: reduce dependency on oil and biomass

fuels to lower carbon emissions

Project Results:

Startup: 2011, providing 90 °C water

Aggressive Emissions Regulations

Increasing Fuel Costs, Reduce GHG Emissions

Improve Operational Sustainability

Ammonia Heat Pump Solution

Saving €4M/year and 6.7M liters fuel

Providing 14 MW heating capacity, 85% of city requirements

COP: 3.0, reduction of 12.5 M tons of CO2e

Emerson Vilter Ammonia Heat Pumps

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CHP

On-site Power Options

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Energy Efficiency of CHP

40%Useful Energy Produced

for Electricity

Combined Cycle/CHP

Simple Cycle

35%Useful Energy

Produced for Electricity

100%Fuel Input

40%Useful Energy Produced

for Hot Water/Steam

20%Waste Heat Rejected

65%Waste Heat Rejected

• Not common over 500 kW

• Applications:–Standby Power

–Offices

–Storage

• Facilities and processes requiring heat and power

• Applications:–Food and beverage

–Pharma

–Chemicals

–Steel, pulp and paper

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What Is Cogeneration (aka CHP)?Simultaneous production of electricity and useful heat and/or cooling from a single fuel source

Combustion Gas Turbine (GTG) Boilers or Heat Exchangers

Typical in installations less than 3 MW

Internal Combustion Engine (ICE)

Typically biomass fuel and steam to process and turbine

Steam Turbine Generators (STG)

Typical where large amounts of process steam required

Good solution for more than 4 MW and where pipeline gas is available

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Who Should Consider CHP?

High, year-round demand for steam, hot water or hot air (or chilled water in summer months)

(or 800,000 BTU/hour of heat)

Focused on reducing GHG emissions

Energy cost is significant percentage of operating cost (> 5%)

About to install new boiler or genset

“Energy champion” on staff (who is empowered to do the right thing)

Use at least 30 m3/hour of natural gas to produce thermal energy (heat) weekdays from 7 a.m. to 11 p.m.

Use at least 250 kWe of electricity during these same hours

Steady demand for process chilled water (60 tons) is great too.

Struggles with electricity supply reliability

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Typical System Diagram of an ICE

Considerations:

• Up to 80% efficient

• Good source of hot water (from water jacket) and steam (from exhaust stack)

• Typically lower installed cost than turbine, but higher maintenance

• Low (15 psi) gas pressure under 2 MW

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Examples of ICE Installations

800 kWe ICE-based CHP system 8 MWe ICE-based CHP system (3 x 2.67 MWe)

Requirements for Steam and Hot Water

• Acoustic weather-proof enclosure

• Complete with SCR and hot water heat recovery

• Steam production from exhaust gas circuit

• Hot water production from jacket water circuit

Packaging CompanyFood Processing

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Typical Gas Turbine Plant Structure

Vilter Fuel Gas Booster

Gas turbines have precise fuel

requirements; a fuel gas

booster is often necessary to

assure proper performance.

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Examples of Gas Turbine Projects

3.9 MWe GTG-based CHP System

• “O”-type HRSG

• Excess electric power wheeled to another sister facility through the utility grid

• Proven electrical islanding system

4.8 MWe GTC-based CHP System

Typical Installations

Food Manufacturer

• Provides steam and hot water

• Provides ~90% of facility peak-load power requirements

• Eliminates wasted product caused by power outages

Container Manufacturer

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4.8 MW CHP System December 2015 Completion

GTG with HRSG up to 90,000 lbs/hour of steam

Total project: $12.4M

Available incentives for this project: $5.1M

• CO-GEN 15-Year IRR 21% (after-tax, before financing, with incentives)

• Projected annual savings: up to $1.8M

• 100% funding available for detailed engineering study

• Savings = 100 manufacturing hours + lost product

• Potential steam savings in the process equipment:

$97,000 per year

• On average, 12 power interruptions occur per year

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Global Food Producer Story

Getting Buy-In

• Fits into global food producers’ environmental road map and aligns with vision, mission, goals

• Needed to put a convincing story together before proposing to any stakeholder (ultimately approved by Corporate/Board of Directors)

• Craft the right message to sell

• Answer all questions (“why’s”) and worst-case scenarios in your proposal, e.g., building out best and worst cases for fuel costs, electrical costs, out for 20+ years

• Get the right buy-in from all stakeholders across the company (full support received by management and senior executive team at world headquarters)

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Reduced energy costs:

• 75–85% isentropic efficiency

• Compare invested capital, fuel and maintenance under a CHP system with the costs of purchased power and thermal energy (hot water, steam, chilled water) in the base case

Protection of revenue streams:

• On-site generation and improved reliability allow businesses and critical infrastructure to remain online in the event of a major power outage

Hedge against volatile energy prices:

• Allows end users to supply own power when prices for electricity are very high

• CHP can accept a variety of feedstocks (e.g., natural gas, biogas, coal, biomass); therefore, a facility can build fuel-switching capabilities to hedge high fuel prices

Offset capital costs:

• CHP can be installed in place of boilers or chillers in new construction projects

• Replace when major HVAC equipment needs to be replaced or updated

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Questions?

DISCLAIMER

Although all statements and information contained herein are believed to be accurate and reliable, they are presented without guarantee or warranty of any kind, expressed or

implied. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments, and the user assumes all risks and liability for

use of the information and results obtained. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such

use is free of patent infringement and are not recommendations to infringe on any patents. The user should not assume that all toxicity data and safety measures are indicated

herein or that other measures may not be required.

Thank You!

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