Green Power Engineering Corporation was founded on April 1, 2004 to develop a high efficient Micro Gas Turbine and its applications through internal research and expertise. In the same year, a proposal for a testing facility was presented to the National Taiwan Science Council and it was given approval. Currently GPE is in the development and testing phase of 150kW Micro Gas Turbine.
4.9: Introduction to the MGT 150MW Generator’s technical specifications
Figure 4.3: Flow diagram of Gas Turbine Generator and its subsystem- heat exchanger.
Figure 4.4- Heat Energy usage (Note: a total of 80% of energy is utilized for output, with an addition of a recuperation system the efficiency is enhanced even further.)
The Product- MGT150
The MGT150 Micro Gas Turbine provides a reliable and environmental-friendly combined heat and power (CHP) generator system. With its optional waste heat recovery heat exchanger, it provides a thermal efficiency of 76%. The system outperforms
competitive equipment through:
• Its high reliability/service life.
• Its low cost.
• Its high thermal efficiency.
• Its low maintenance cost.
4.9.1: MGT-150 Product technical specification:-
Table 4.4: MGT-150 Product technical specification
Engine- Model MGT150 CHP
Engine Speed 60,800 RPM
Compressor Stage Type Axial & Centrifugal
Turbine Stage Type Axial
Pressure Ratio 6 to 1
Fuel
Fuel Mass Flow Rate 1.38 kg/min
LHV of Fuel 46,982 kJ/kg
Exhaust System
Exhaust Gas Mass Flow Rate 90 kg/min
Exhaust Gas Temperature 1068 oF / 576 ℃
Thermal Output (Hot Water)
Hot Water Inlet Temperature 59 oF / 15 ℃
Hot Water Outlet Temperature 176 oF / 80 ℃
Exhaust Gas Temperature 230 oF / 110 ℃
Hot Water Flow Rate 150 l/min
Output Water Heat Rate 40,950 kJ/min
Engine- Model MGT150 CHP - Electrical Output & Efficiency
Voltage Output 240/480 VAC
Amps 260 Max
Frequency 60 Hz
Output Circuit 3 Phase 4 Wire
Electrical Output Power 150 kW
Engine Package Efficiency*Not Including
Recuperator 13.7 %
Thermal Efficiency 76 %
Dimensions & Weight
Length 2.8 m Width 1.8 m
Height 1.8 m Weight 2,800 kg
Emissions, Maintenance & Noise
Emissions, Maximum NOx < 7 ppm
Emissions, Maximum CO < 20 ppm
Noise < 75 dBA@1m
Design Life 120,000 hours = 13.7 years
Overhaul Period 40,000 hours = 4.5 years
# of overhauls needed About 3
Oil System
Oil Type ISO32
Oil Filter 10 Micron
4.9.2: Product Features- The features of the product- MGT150 are:
(1) Stable Source: The MGT-150 provides a stable energy source without the worries of utility black-outs. This technology is best suited for large facilities and public areas such as office and residential high-rises, airports, military bases, hospitals, IT departments, medium-load factories, and laboratories.
(2) Dual Solution: With the optional heat-exchanger system, the Micro Gas Turbine is capable of producing heated water with an overall system thermal efficiency of 76 percent. This is an efficient hot water supply system for those businesses that need it the most, such as hotels, public bathrooms, spas, recreational facilities, and residential areas.
The facility gets a reliable source of heating or hot water at a low electricity bills.
(3) Environmentally Friendly: As opposed to a diesel engine generator, that has a high emission level of NOx and other gases that are harmful to the environment, the MGT150 has a low emission level of less than 20ppm of CO and less that 7ppm of NOx, and very small traces of other unburned hydrocarbon gases.
(4) Long Operation Life & Low Maintenance: The MGT150 is designed to deliver a consistent power supply for 120,000 hours, and the first overhaul period is not required until after 40,000 hours. Also, the MGT150 utilizes high speed gearing technology rather than a high speed alternator. This not only lowers the cost, but also adds reliability to the MGT150 CHP system.
4.10: Cross comparison of Micro Gas Turbine with oil based generator sets- Specific features and comparison with alternative system
When compared to diesel engine, Gas Turbine has a faster signal/output response which only takes 6-40 seconds to load full speed and it is much more stable.
With a high speed engine of 60,000 rpm, the engine is made much more light and compact than other engines. When compared with other same output engines, Micro Gas Turbine engine only weights one third of its traditional engines. MGT150 can be installed on top of buildings to minimize the use of space this can also prevent problems such as flooding in the monsoon season of India.
Table 4.5 Micro Gas Turbine, Piston-Used-Engine generator and Steam Turbine comparison.
Micro Gas Turbine is more environmentally friendly. The burning temperature is lower than diesel engine therefore, the two main gases released, NOx and Co, is much lower than diesel engine and produces NOx level of <7ppm (relatively low when
compared to a typical reciprocating engine which can produce up to 50ppm) and Co level of <20ppm.
Types of systems Gas turbine Piston engine Steam engine
Fuel
Natural Gas, liquefied petroleum gas (LGP), gasoline, diesel fuel, coal oil,
ethanol/ methanol, biomass
Diesel fuel, gasoline,
Natural Gas Several Hours Suitable range 25~300,000kW 15~10,000kW 1,000~300,000kW
Power Efficiency 15~50% 30~44% 30~35%
Cogeneration
efficiency 85~90% 70~80% 80~85%
Price/kW of power 500~1,000 USD/kW 150~500 USD/kW 1,000~2,000 USD/kW
Maintenance fee extremely low high Low
Noise level
Vibration small large small
NOx <25~100ppm 800~1300ppm 100~400ppm
Space required for
installation small small extremely large
Quality of electricity
Table 4.6: Advantages and disadvantages of Micro Gas Turbine and Diesel-Fueled System21
Types of system Gas turbine Diesel- fueled system
Space
Availability light weight, compact, Small space Heavy, large size, large space
Sound Insulation low noise, no extra insulation needed high noise, insulation need to be added
Foundation Unnecessary small vibration Necessary; big vibration Vibration
Resistance superior no resistance
Capital Cost expensive cheap
Cooling System not necessary necessary
Factory and
small wear and tear, small maintenance, long-life, cheap and low
maintenance cost
Many parts ,high maintenance cost
MGT150 has a very high thermal efficiency when it is packaged with alternator and heat exchanger; it can create CHP (combined heat and power) and CCHP (combined chiller heat, and power) at the overall efficiency over 76 percent. This technology can is best suited for hot and cold climates. In hot climates, a system that provides both cooling and electricity, but in cold climate, a system that provides both heating and electricity is needed. In both situations, Micro Gas Turbine can provide both situations.
21 Source: Green Power Engineering Corporation
http://www.gpe.com.tw/cubekm19/front/bin/ptdetail.phtml?Part=English_103&Category=9
Many of the alternative sources of energy such as renewable energy that are available today are expensive and capital intensive but, MGT150 is not only an economical alternative but also an eco friendly one.
Advantages of MGT-150 gas turbine generator.
1. Fast start up- thus it is able to eliminate problems due to sudden power failure (grid power)
2. The CHP system has a high thermal efficiency, thus generated energy is cheaper.
3. Eco friendly technology- low emission.
4. Instant startup and stop and is also capable of operating for long period.
5. The MGT150 itself is independent electricity generator, with proper alteration it is capable of producing heated water or chilled water. GPE’s customer service helps their client to choose the appropriate parts needed for their MGT150.
6. Flex-Fuel technology is also capable of using different types of fuels, such as Natural Gas, propane and methane.
Now that, with the help of technological feasibility analysis, we have established the fact that MGT-150 is the right choice to satisfy our project target, one more factor stands in front of our way to success. And that factor is feasibility with respect to government policies.
Chapter 5: Feasibility with respect to Government Policies and Regulations:
An Introduction to Power policies and regulations, Introduction to Natural Gas policies and regulations
________________________________________________________________________
5.1 Section I. Feasibility with respect to Electricity Policies
Pre-2003 Era- Government Owned Vertically Integrated Monopoly. Prior to year 2003, central and state governments had shouldered the entire burden of the entire value chain from generation to distribution and billing to installation of power infrastructure.
However in the light of liberalization and privatization a lot of that changed hands. A lot of power infrastructure was privatized. A lot of deregulation came into effect and the energy sector saw a sea of change.
5.1.1 Post-2003 Era- EA2003
For sake of our project I have ignored the cumbersome red tape ridden,
bureaucratic framework of policies and regulation that existed in pre 2003 era and have decided to analyze the current sets of regulation that came into effect in year 2003 and called as Energy Act 2003 or EA 2003. The institutional framework as per EA 2003 are-
• Unbundled Utilities- generation, transmission, distributing and trading were unbundled.
• Privatized Distribution- throwing open the distribution sector to private
investment and operation, expecting increased capital investment, infrastructure up-gradation and increased efficiency in the use of existing distribution network.
• Multiple Distribution Licensees- thus ending the era of utility monopolies.
• Non-discriminatory Open Access- domestic and foreign firms treated at par
The expected outcomes (due to EA 2003) of reform in power sector are:
• Reduction in losses- losses incurred due to distribution and transmission, but also from uncollected bills and reduction in power theft.
• Regulated cost reflective tariff- unlike before tariffs were fixed irrespective to the cost of generation.
• Phasing out cross subsidies- farming subsidies or rural power subsidies leading to loss of revenue as well as inefficiency.
• Competition in generation and retail supply- as private players are now allowed.
• Internal resource generation
• Private sector resource mobilization
• Improved Reliability and Quality of Supply
EA 2003: A range of fiscal incentives were introduced to facilitate Mega Power Policy restructuring
• Exemption from Custom duties, excise & central levies: making investment more attractive.
• Section 10(23) G benefit on fund raising: Like other sectors of industries, power sector was also allowed to raise capital directly from market by issuing debt.
• Increased ECB capital limits.
• State Implementation support: State governments extended support to implement projects in hope to achieve faster power sufficiency.
• Decreased import duty on fuel i.e. coal & liquid fuel.
• 100% FDI allowed in Indian Power Sector (except Nuclear)
Policy discussion: Of the above incentives exemption from custom duties, excise and central levies and decrease in import duty on fuel are the most beneficial ones for this project.
EA 2003: Multiple Investment Opportunities- Foreign Investment:
• 100% FDI is allowed in all segments of power sector including trading
• No discrimination between domestic or foreign investors
EA 2003: Fiscal incentives:
• Zero customs duty on import of capital goods for Mega Power Projects
• Income tax holiday for generating plants for 10 years
Policy discussion: Tax holiday for ten years as well as zero import duty make great incentives.
EA 2003: Multiple Investment Opportunities
• Impressive progress in project execution:
• Public sector investment also stepped up to supplement the private sector 40,000 MW of generation capacity already under execution and US$ 43 bn already committed
• Financial closure of 4400 MW capacity in generation projects in private sector
• Financial Closure of another 2200 MW is in advanced stage
• Another 10000 MW being appraised by Financial Institutions
EA 2003: A range of generation opportunities exist
Policy and Regulation Enablers
• Generation De-licensed: This resulted in a massive cut in red tape.
• Clear and transparent tariff setting principles: Saving the investors guess work and providing a transparent set of rules.
• Competitive bidding for power procurement by licensees: fairness in allotment procedure.
• Open access: to information and status of various projects in pipeline.
• Captive policy
• Incentives for Rural Electrification: various financial incentives are given to facilitate easy loans and reduced tax burdens.
• Evolution of power markets: Trading of power is allowed, making power easily tradable as per party to party agreement.
De-licensing of generation is one major hurdle cleared as this project doesn’t have to undergo all the red-tape hassles.
EA 2003: A range of generation opportunities exist-
Opportunities exist in: IPP (Independent Power Projects) and CPP (Captive Power Projects).
EA 2003: Transmission opportunities due to EA 2003.
• Independent Power Transmission Company- private players can construct, operate and maintain transmission lines.
• Interregional Link Operations- Private transmission facilities may either take the form of an independent power transmission company or a joint venture with the state-owned transmission utilities.
EA 2003: Transmission opportunities due to EA 2003
Merchant Transmission Capacity for Open Access Customers- Transmission licensees to allow non-discriminatory open access to their network on payment of
- Transmission charges
- Surcharge for cross subsidy, applicable to direct consumers only
EA 2003: Changes in power sector investment and development-
• Regulatory Commissions constituted in 22 states
• Tariff orders, performance standards, terms and conditions of supply and tariff notified
• Unbundling of the State Electricity Boards (SEBs)
• Distribution reforms initiated
• Orissa and Delhi distribution privatized
• Recovery from SEBs regularized after securitization
• Principles of multi-year-tariff (MYT) regime proposed for further privatization
• Stability of past contracts (except Dabhol Power)
5.2: Section II. Feasibility with respect to Natural Gas Policy
5.2.1: Natural Gas Policies & Regulations
The Indian government has enacted the Petroleum and Natural Gas Regulatory Board Act, 2006. (PNGRBA 2006).
The aim of the act is to- promote competition among entities, avoid in-fructuous investment, maintain or increase supplies, secure equitable distribution and ensure adequate availability of petroleum, petroleum products and natural gas nationwide.
The act is to provide for the establishment of the Petroleum and Natural Gas Regulatory Board (the ‘board’) in order to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and
natural gas, excluding production of crude oil and natural gas. This is to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas, and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country whilst
promoting competitive markets.
Foreign Direct Investment
The Ministry of Finance, Government of India, now permits up to 100% foreign direct investment (FDI) into the petroleum and natural gas sector, under the automatic approval route of the Reserve Bank of India. The caps on FDI are as follows:
1. FDI up to 100% is permitted on the automatic route on petroleum product marketing. FDI for this sector would be permissible subject to the existing sectoral policy and regulatory framework in the oil marketing sector.
2. FDI up to 100% is allowed on the automatic route in oil exploration in both small and medium-sized fields, subject to and under the policy of the government on private participation in: (1) exploration of oil and (2) the discovered fields of national oil companies.
3. FDI up to 100% is permitted on the automatic route for petroleum product pipelines subject to and under the government policy and regulations thereof.
4. FDI up to 100% is permitted for natural gas/ liquefied natural gas (LNG) pipelines with prior government approval.
5. FDI up to 100% is permitted in, other than refining and including market study and formulation; investment/financing, setting up infrastructure for marketing in petroleum and natural gas sector subject to sector-wise regulations, issued by the Ministry of Petroleum & Natural Gas, and in the case of actual trading and marketing of petroleum products, divestment of 26% equity in favor of Indian partner/public within five years.
6. FDI up to 26% are permitted in the refining sector in case of public sector undertakings (PSUs), with prior approval of the Foreign Investment Promotion Board (FIPB) and up to 100% in case of private companies under the automatic route.
Policies and Procedures
A number of policy initiatives have been taken by the Government of India for facilitating the inflow of foreign capital and for encouraging entrepreneurs to invest in India, such as:
1. Equity participation in commercial and industrial ventures, which has been freed from all restrictions, FDI is now permitted up to 100% in different activities in the petroleum sector.
2. Rupee convertibility on the current account.
3. Deregulation and de-licensing of various petroleum products in the country.
4. Gradual decontrol of pricing and distribution.
5. Freedom to form joint venture companies (JVCs) for the development of infrastructure and for marketing and refining activities.
6. Procedure for obtaining industrial licenses has been simplified by making an application to the Secretariat for Industrial Approvals (SIA), Department of Industrial Policy & Promotion, Ministry of Industry. Approvals will normally be available within six to eight weeks under a fast time-bound schedule.
Policy discussion: regulation number 2 and 6 are of relevance to this project.
Convertibility of Rupee is important if capital is raised in Taiwan or outside of India for this project. SIA’s fast track approval system is also encouraging from the project’s perspective.
5.3: The Petroleum and Natural Gas Regulatory Board22 (PNGRB) (regulations amendment in effect from 19th March, 2008) states that:-
1. Petroleum and natural gas regulatory board authorizes entities to lay, build, operate or expand city or local natural gas distribution networks.
2. Petroleum and natural gas regulatory board entitles business entities the freedom of determination of network tariff for city or local natural gas distribution
networks and
3. Petroleum and natural gas regulatory board entrusts business entities of exclusivity for city or local natural gas distribution networks.
22 Source: www.pngrb.gov.in/public_notice.pdf
Policy discussion: PNGRB regulation 2008 deregulates the distribution and networking of natural gas. This is in particular is beneficial for this project. It also streamlines tax and tariff issues and makes investment in power sector more attractive by incentivizing import of fuel for power projects.
Policy Conclusion-
The above analysis concludes that the project is feasible with respect to Indian
Government’s policies and regulation on electricity as well as natural gas. There are no obstacles on the way of this project; moreover the policies have been of advantage to this project (like 10 years tax holiday).
Chapter 6: Financial Feasibility
6.1: Financial Feasibility
After having obtained encouraging results from feasibility analysis with respect to policies this project needs to seek the permission of financial feasibility for it to see the light of the day. So in this section this report lays down the project parameters as we have discussed before we stated the feasibility study.
Table 6.1: Project parameters and financial implications
Project Parameters Financial Translation
MGT-150 capacity= 150W
150 unit (KWHr)of power produced /hour
∴150*24*365= 131400 units/Yr
∴ Revenue/Yr= 131400 * 0.28= US$367,920.00/Yr
Fuel intake/minute = 1.38 Liters
Cost per Liter of CNG/NG in India= 0.84$
Cost of fuel/year = cost of operation =
USUS$$660066,,331122..2299 //YYr Cost of (just) Electricity (ignoring H/C)
per unit = 0.46$/unit
Cost of Electricity off Grid= 0.28$/unit
We choose Grid tariff rate to sell our power
i.e. Cost/Unit= 0.28$/unit Cost of Cooling 1 home (with one 2 ton
AC)/Yr =
0.7unit/Hr*8hours*365*0.28$/unit
=$1,144.64
Revenue from C/H service/Yr =
(from 400 rooms)= $1144.64*400 = $457,856.00
6.1.1: Project operational factors consideration-
1. The operation life of MGT-150 is thirteen years. It requires its first overhauling at the end of fifth year.
2. The capacity of the generator is 150KW. So it generates 131,400 units per year.
3. The fuel usage rate is 1.38 liters per minute which accounts to US$.606, 312.26 per year.
4. Working out the cost of fuel divided by the units of electricity produced nets to US$.0.46 per unit. Where as power bought off the grid is cheaper at US$.0.28 per unit.
5. The hot water flow rate is 150 liters per minute which is a good flow rate for any residential or business setup. It guarantees continuous supply of hot water or heating or cold water or cooling.
Table 6.2: MGT-150 parameters.
MGT-150- Parameters Translation
MGT-150- Parameters Translation