While energy efficiency seems like it is nibbling at the edges of energy policy, the big guys know it takes a lot more than dimming a few light bulbs.
Of course, eliminating wasted energy can provide substantial savings. But there are larger opportunities for energy efficiency in the production of secondary energy, which is energy produced by the consumption of other forms of energy. Examples include hydrogen, electricity, and transportation. Electricity is used to produce hydrogen. Power plants and engines transform fuel into electricity and horsepower.
Ever wonder why every car, truck and bus has a giant radiator positioned in front of the engine? Ever wonder why many power plants have giant cooling towers? It turns out only 20% to 40% of the primary energy consumed by engines and power plants results in secondary energy. The balance, 60% to 80%, is wasted. Most of that waste is in the form of heat.
This is why power plant efficiencies are rated in terms of "heat rate." A lower heat rate is an indication of a higher efficiency. A 10,000-heat rate, or 10,000 British thermal units per kilowatt-hour, is much better than a 14,000-heat rate because less waste-heat is created to make the same amount of electricity.
A simple engine connected to a drive train will produce horsepower. The same engine connected to a generator will produce electricity. In both cases, the energy invested in the form of fuel is far greater than any secondary energy produced, sometimes by a factor of 4 to 1.
Blame the losses on the second law of thermodynamics. Lord Kelvin said it best, "No process is possible in which the sole result is the absorption of heat from a reservoir and its complete conversion into work."
Kelvin may be right. But when it comes to energy conversion, there are degrees of efficiencies. To that end, engineers have spent decades thinking about how to eke out greater efficiencies.
In power production, the answer has been to use a heat recovery steam generator, or HRSG. The main idea behind the HRSG is to capture waste heat, convert that heat into steam, then convert the steam into electricity using a second turbine generator. Like the main power plant, the HRSG reconverts energy twice and that reconversion comes at a cost.
Higher efficiencies and cleaner plants have higher capital costs. According to ICF International (ICFI), the economics of heat recovery systems, like the HRSG, costs somewhere between $2.5 million to $3.5 million per megawatt.
When engineered as a tight system and scaled up for large production, the capital costs per megawatt will drop. This is what General Electric (GE) and Siemens (SI) have accomplished with their incredibly efficient combined cycle gas turbines. Some of these turbines are reaching efficiencies up to 60%.
GE is taking energy efficiency a step further under its ecomagination program. GE's newest energy efficiency technology is called ORegen, short for Organic Regenerator. According to Energy Daily, GE's new system boosts power plant efficiencies by as much as 25% while eliminating more than 38,000 tons of CO2 from the atmosphere annually and avoiding the consumption of more than 11,000 cubic meters of water per year.
Like HRSGs, the ORegen is expensive. It costs $54 million to build 14 megawatts, or $3.8 million per megawatt. At these prices, investors would never see a return if an ORegen were to be built in any of the nation's deregulated power markets.
It is therefore not surprising to see GE's ORegen systems installed at compressor stations on interstate pipelines. In fact, the first ORegen will be installed at Alliance Pipeline, owned by affiliates of Enbridge (ENB).
Alliance is joining other pipeline companies that are seeking greener efficiencies. According to the Interstate Natural Gas Association of America, approximately 25 heat recovery systems have been installed on North American pipeline systems in the last decade, representing approximately 130 megawatts of new generating capacity. Those systems include the Northern Border Pipeline, owned by TC Pipelines (TCLP) and ONEOK (OKE); the Spectra Pipeline, owned by Spectra Energy (SE); and the TransCanada Pipeline, owned by TransCanada (TRP).
Currently, some regional transmission operators are rewarding electric utilities who undertake energy efficiency programs with cash. As those cash payments grow, expect to see more utilities add HRSGs and ORegens to existing gas turbines.
In the meantime, engineers continue pushing back against the second law of thermodynamics. While it may be the law of nature, it need not be so greedy.