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29 th Annual ENERGY BUYERS’ CONFERNCE

29 th Annual ENERGY BUYERS’ CONFERNCE. Combustion Turbines & Alternate Fuels Mike Zampano. Discussion Outline. Fuel Selection Fuel Availability Product Specifications Quality Concerns Delivery Logistics Bottlenecks Delivery Example Working With Suppliers. Fuel Selection .

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29 th Annual ENERGY BUYERS’ CONFERNCE

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  1. 29th AnnualENERGY BUYERS’ CONFERNCE Combustion Turbines & Alternate Fuels Mike Zampano

  2. Discussion Outline • Fuel Selection • Fuel Availability • Product Specifications • Quality Concerns • Delivery Logistics • Bottlenecks • Delivery Example • Working With Suppliers

  3. Fuel Selection • Combustion turbines generally are designed to run a primary fuel and a backup fuel • Most times the primary fuel is natural gas and the backup fuel is a liquid distillate • Fuel choice is predicated on air permits and gas turbine manufacturer’s specification • Initially most liquid fuel was either low sulfur diesel or kerosene (500ppm max sulfur by weight) • Small aero derived jet packs ran kerosene • Frame units usually consumed low sulfur diesel • EPA’s Clean Diesel Program mandated much lower sulfur in road fuels, (from 500ppm max sulfur to 15ppm max sulfur) • Plan started to take effect ~ mid 2006 • Refiners reduced production of 500ppm sulfur fuel (80% of diesel output must be 15ppm max sulfur) • Many terminals shifted storage from low sulfur diesel to ultra low sulfur diesel • Eventually all diesel, including off road diesel will shift to 15ppm fuel

  4. Fuel Availability • As suppliers/marketers shifted focus from LSD to ULSD fuels power generators have faced shortages of 500ppm fuel • Most cases 500ppm fuel was not available • Forced generators to switch to ULSD fuels • Forward timeline for sulfur reduction in NRLM diesel (non-road locomotive & marine) • 6/1/2012 Most LM diesel must meet 15ppm max sulfur • 10/1/2014 Any wholesale purchasing/consumer plants must be 15ppm max sulfur • 12/1/2014 All NR diesel must be 15ppm • Essentially, at least in the northeast, there will be two possible sulfur grades for distillates • All diesels/on-road kerosene will be 15ppm max sulfur • Heating oils which right now range from 2000ppm to 5000ppm max sulfur • Two future outcomes are likely: • Elimination of 500ppm diesels will occur sooner than deadline • Distillate heating oils will drop in sulfur • There is a move among heating oil marketing groups to move to an ultra low sulfur heating oil • Some states may also push for mandates for inclusion of biofuels

  5. Product Specifications - Guidelines • Generally speaking refiners of 15ppm distillates are governed by ASTM D975-09 (the final “09” identifies the last year the specification was modified.) • Combustion turbine manufacturers, power plants with GTs, should be knowledgeable of both ASTM – D975-09 and ASTM D2880-03 • D2880-03 is the specification for gas turbine fuel oils • D975-09 is mainly focused on the diesel product specifications • D2880 is more concerned with product handling & contamination • D2880’s No. 1 GT corresponds to kerosene as defined by D975-09 • D2880’s No. 2 GT corresponds to No. 2 diesel as defined by D975-09

  6. Fuel Specifications – Quality Concerns • Sulfur levels • Sulfur can precipitate out in the gas path creating corrosive compounds • Should not be an issue anymore as fuel consumed in turbines will contain a maximum of 15ppm sulfur • Lubricity • Fuel additives to meet minimum lubricity standards • Approved tests have wide reproducibility results • Viscosity • Resistance to flow • May be an issue with slippage through fuel dividers & pumps • Can be an issue if switching from #2 diesel to #1diesel or kerosene and a plant’s fuel system is designed for a more viscous product (#2 diesel)

  7. Fuel Specifications – Quality Concerns • Ash • Can be evidence of formation of abrasive solids or soluble metallic soaps (Basically non petroleum constituents) • Can have a negative effect on buckets in the gas path • Higher than normal ash levels can be an indication of possible fuel contamination • Stability • Today the distillate refining process is more severe, (hydrocracking heavy fractions, catalytic cracking, etc.), and negatively effects fuel stability • Extended storage time, presence of oxygen, and heat can also lead to instability • Unstable fuel is the enemy • Premature filter plugging • Deposits at high temperature injection points during combustion • Additives can suspend further degradation but does not improve fuel stability

  8. Fuel Specifications – Changes to ASTM 975-09 • Biodiesel • In 2009 the ASTM 975 diesel specification allows up to 5% of biodiesel • All biodiesel blended in must meet ASTM 6751 • ASTM 6751 is the guiding specification for B100 (100%) biodiesel • Since 5% or less biodiesel meets ASTM 975 there is no requirement to report content • Once biodiesel is blended into fuel there is no way to determine if the bio blend stock met the ASTM 6751 specification • EN 14078 or ASTM D7371-07 can be run to determine % biodiesel • Uses Infrared Spectroscopy • Identifies % volume of Fatty Acid Methyl Esters (FAME) in a middle distillate • Presence of Fatty Acid Ethyl Esters (FAEE) will throw the test results off • Cannot be run in the field • Takes about 20 minutes to obtain results in the laboratory

  9. Biodiesel Quality Concerns • Stability • Like petroleum diesel unstable biodiesel can lead to gum & sediment formation • Stability is affected by biodiesel base stock & % biodiesel • Different bio base stocks can affect stability differently • Higher percentages of biodiesel, higher chance of stability problems • 5% or less biodiesel should not adversely effect stability • EN 14112 can be run to determine OSI, (Oil Stability Index) • EN 14111 can be run to determine Iodine Index • Iodine index measures the number of carbon double bonds in the fatty acid • The number of double bonds are an indication of the bio feed stock • Roughly the more double bonds, the less stable the fuel stock • Can be a length of storage determinant • Cold flow • Biodiesels have higher cold flow properties • Bio base stocks determine cold flow properties

  10. Delivery Logistics • Acquiring the alternate fuel is half of the solution to running; delivering the fuel to the plant is the other half of the equation • Understanding the delivery system • Terminal configuration • Capacity • Inventory on hand • Loading rack design • Alternate terminal location • Delivery • Carrier • Distance • Reliability

  11. Supply Chain Bottlenecks • Bottleneck factors • Terminal configuration • Carrier capacity • Distance to plant • Off loading capability

  12. Breaking Down Supply Chain Bottlenecks • Terminal Configuration • Loading positions for ULSD • Configuration of loading rack • Multiple products served through a bay can be a limit on potential volume loaded • Carrier capacity • Number of available trucks • Dispatch reliability/efficiency • Overall reliability • Distance – terminal to power plant • Road(s) configuration • Traffic congestion • Average turn around time

  13. Breaking Down Supply Chain Bottlenecks – cont’d • Power plant configuration • Number of off loading positions • Stationary pump availibility • Ease of ingress/egress • Ability to pump out of tank into truck • Length of hose required • Hours of operation (for receiving fuel) • Understanding the supply chain • Evaluating bottlenecks allows one to estimate the daily deliverable volume • Plant particulars allow one to determine daily fuel requirement • Together they allow one to estimate reliance on liquid fuel consumption

  14. Delivery Example 1 • Plant size: 70mwh • Plant type: Combined cycle • Liquid fuel: ULSD • Btu per gallon: 125,000 • Overall gross heat rate: 7,000 (on liquid fuel) • Distance from terminal: 50 miles • Average round trip time: 2.95 hours • Hourly plant fuel burn: 3,920 • Estimated trucks per 12 hour shift: 3 • Hours run: 8 • Total gallons burned: 31,360 • Minimum trucks required: 1

  15. Delivery Example 2 • Plant size: 550 mwh • Plant type: Combined cycle • Liquid fuel: ULSD • Btu per gallon: 125,000 • Overall gross heat rate: 7,000 (on liquid fuel) • Distance from terminal: 50 miles • Average round trip time: 2.95 hours • Hourly plant fuel burn: 30,800 • Estimated trucks per 12 hour shift: 25 • Hours run: 8 • Total gallons burned: 246,400 • Minimum trucks required: 8

  16. Selecting And Working With Suppliers • Know your supplier • Do they own or lease storage? • How much storage do they have? • Will they have sufficient fuel on hand and or a backup supply source? • How is quality control handled? • Does the supplier representative understand fuel chemistry and quality control? • Do they do their own testing? • What is their testing protocol? • Do they understand the delivery requirements? • Are they reliable? • Does your representative understand power plant operations?

  17. Conclusion • A good supplier will understand power plant operations power production/distribution • They will have a good understanding of combustion turbines as well as the relationship between natural gas & oil consumption operations in these plants • They will have a firm understanding of product quality control • Provide adequate product testing • Will be reliable • On spec product • Good delivery performance • Remember it’s not just price!

  18. Sprague Owned Terminal Network Sprague’s terminals hold over 300 million gallons of liquid storage

  19. Questions?

  20. Appendix 1

  21. Appendix 2

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