off-grid power markets 26 may 2011
DESCRIPTION
Off-Grid Power Markets 26 May 2011. Off-Grid Markets. High fuel delivery costs – battlefield, remote locations, at sea. High maintenance costs – dangerous, harsh or remote locations, at sea, highly technical equipment, mission-oriented power systems. - PowerPoint PPT PresentationTRANSCRIPT
Off-Grid Power Markets
26 May 2011
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• The off-grid market consists of some of the largest industrial enterprises on the planet, operating in remote and often extreme environments
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Off-Grid Markets
High fuel delivery costs – battlefield, remote locations, at sea
High maintenance costs – dangerous, harsh or remote locations, at sea, highly technical equipment, mission-oriented power systems
High generator utilization rates – where gensets provide prime power, where engineers factor in excess capacity as a rule
Emissions restrictions/incentives – European markets tax carbon emissions, in-port vessels, harbor dredging
Silent and low vibration power – military operational security, luxury yachts, highly instrumented equipment
Clean, high quality power – sensitive instrumentation
Mission-critical power – uninterruptible power supplies
RELIABILIT Y RELIABILITY RELIABILITY
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Generator Dependency and InefficiencyFuel Consumption in Marine Diesels
100%
110%
120%
130%
140%
150%
160%
170%
180%
190%
200%
1 6 11 16 21 26 31 36 41 46
Load Factor (%)
Fu
el C
on
sum
pti
on
(%
of
Op
tim
al)
The area under this curve quantifies generator
inefficiency
0 5 10 15 20 25 30 35 40 45 50
• Electrical generators in off-grid power systems are highly inefficient, resulting in exponentially higher
• Fuel consumption• Emissions• Maintenance costs• Physical depreciation of the generator
• In off-grid markets, inefficiency is expensive and customers pay a premium for reliable power
• Fuel logistics• Maintenance• Equipment replacement• Emissions mitigation
Example - John Deere 60kW generatorAnnual Generator Power Output (kWh) 86,085 Cost of Power at Optimal Power Factor 0.30$ Annual Cost of Power at Optimal Power Factor 25,600$
Observed Cost per kWh (incl. fuel & maint.) 0.71$ Observed Annual Cost of Power 60,988$
Annual Cost of Generator Inefficiency 35,388$
Approximately 8,600 MW of small generator capacity in Iraq and Afghanistan today
Example - 60kW Tactical Quiet Generator (TQG) at $10 FBCFAnnual Cost of Generator Inefficiency 71,743$ • Approximately $3.7 billion
Market Size• 3,697 tank barges (U.S)• 3,932 tugs (U.S.)• 6,890 bulk carriers• 4,170 containerships• 18,982 general cargo • 1,600 drilling rigs• 1,083 offshore platforms
Annual Cost of Generator Inefficiency• $129 million• $137 million• $6.1 billion• $12.3 billion• $6.7 billion• $944 million• $638 million
Most operators think they operate
at 50-80% load
Most actually operate at 10-25% load, where energy
costs are 20-50% higher
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Expeditionary Market - Fuel Drivers
•Headquarters Marine Corps P&R, PA&E
• The U.S. military has established a price signal called the “Fully-Burdened Cost of Fuel” (FBCF) to stimulate development of alternative energy and energy efficiency systems on the battlefield
• The FBCF quantifies the costs associated with transporting and securing fuel in the battlespace
Delivery/Security to FOB (35Miles)
FBCF Fuel ($/gallon)*
FBCF Fuel ($/gallon/mile)
Convoy Delivery/Security $9.20 - $11.81 $0.26 - $0.34
Convoy Delivery/Air Security $15.63 - $18.59 $0.44 - $ 0.53
Air Delivery/Security $28.94 - $30.78 $0.82 - $0.88
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• Oversized power generation capacities for mission-critical systems and redundancy at sea• 24/365 utilization rates and generally low load profiles, especially while in port• Highly variable cost of generator maintenance depending on location of vessel and urgency of repair• Additionally, because the maritime industry is a heavy polluter, it has become the target of intense environmental regulations
from a variety of overlapping local, national and international regulatory bodies, particularly focused on air quality and emissions
Representative Regulatory Tightening• IMO MARPOL Annex IV, 2010 North American Emissions Control Area (ECA)
• In 2020, emissions from ships operating in the ECA are expected to be reduced annually by 320,000 tons for NOx, 90,000 tons for PM2.5, and 920,000 tons for SOx. The overall cost of the North American ECA is estimated at $3.2 billion in 2020, while its benefits are expected to include preventing as many as 14,000 premature deaths*
• California Harbor Craft Rule • Existing California Harbor Craft must repower with new diesel engines per a sliding
compliance schedule based on the age of the existing engine and home port• Operators may avoid repowering if they demonstrate that the engine operates
<300 hours per year• PA NY NJ Harbor Deepening Project
• Requires operators to offset all NOx emissions so that dredging in NOx net-zero
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Commercial Maritime Market – Emissions Drivers
* Designation of North American Emission Control Area to Reduce Emissions from Ships: Regulatory Announcement , EPA-420-F-10-015, March 2010
Area of the North American ECA*
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Why Now?• Renewables, energy storage, and large-scale power conversion technology have benefitted from 5+ years of significant government
and private investment resulting in lower costs and improved performance, reliability, and safety• In off-grid markets, the costs of hybrid power are now competitive with traditional power systems
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Increasing Operating CostsFuel Emissions Environmental RegulationsSafetyReliabilityMaintenance
Time
$
Hybrid power is economically compelling today in off-grid markets…
… and will improve in the future
Decreasing Hybrid Power CostsRenewablesEnergy Storage Power ElectronicsSpecialized Engineers
