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Engineering Phase 107 Feasibility Study Preliminary Engineering Environmental Permitting Utility Interface Detailed Engineering Design

Construction Phase 111 Bid Phase

Construction Contracts Construction Monitoring

Startup and Testing Phase 112 General Controls Training

Operation & Maintenance Manuals Operating & Maintenance Procedures

Checklist for Major Contracts for Cogeneration & Small Power Production 113

The project manager is faced with unique challenges when dealing with a cogeneration project. This chapter outlines the engineering, construction, and contractual considerations which must be taken into account.

Cogeneration is defined as the simultaneous production of electricity and usable thermal energy from a single primary fuel source such as natural gas. Due to the fact that cogeneration is more efficient than electricity generated by a utility company it is gaining in popularity. A recent survey illustrating the success of cogeneration projects installed is detailed in Figure 5-1.

Another factor influencing the growth of cogeneration is that the Public Utility Regulatory Act (PURPA) mandated utility purchase power obligations, fair standby rates supplemental service and guaranteed interconnection with the utility grid. There are many types of cogeneration plants utilizing combustion turbines or reciprocating engines or steam turbines. Refer to Table 5-1 for a summary of cogeneration basics.

There are several options for installing cogeneration at the user site. Third-party financing offers no investment from the user and guarantees electric rates below the local utility rates. Details of managing cogeneration projects are described in this chapter.

Cogeneration Project Management starts with a successful feasibility study.' This phase is followed by the preliminary engineering effort, which identifies basic plant configuration and cogeneration cycles, and results in sizing of major equipment. The effort continues through all of the engineering and permitting processes. When the project enters the construction phase, the major effort in the Project Management is then directed to construction management and supervision.

At the completion of construction, the Project Manager's attention is directed to the critical start-up and testing phase.

The Project Manager's responsibility is finished only after the operator training is complete and when the operating and maintenance procedures are in place.

Through the entire project management one of the major responsibilities is budgeting. The Project Manager is responsible for keeping the project on time and on budget.

1 Cogeneration Project Management by J.W. Egan, presented at 9th World Energy Engineering Congress, Association of Energy Engineers, Atlanta, GA 30340.

Figure 5-1. Survey of The Cogeneration Systems Installed. Survey Findings

• Overall cogeneration system performance:

42.8% Excellent 28.6% Good 25% Satisfactory 3.6% Poor

• Overall cogeneration savings are:

27.6% Better than estimated 37.9% Met estimated calculations 34.5% Less than estimated

• Overall total cogeneration system cost:

16.7% More than 10% over budget 70% Within budget 13.3% Under budget

• Would you recommend a second cogeneration system if the same need arose?

• How long from initial feasibility study to construction start-up? 19.3% Less than one year 9.7% 3-4 years

• What was the attitude of your state's energy regulator towards your project?

37.9% Helpful 41.4% Neutral 20.7% Not helpful

• What was the attitude of your electric utility towards your project? 29.6% Helpful 37% Neutral 33.4% Not helpful

• What was the attitude of your gas utility towards your project? 68.2% Helpful 27.3% Neutral 4.5% Not helpful

• Type of system installed:

3.1% Stirling cycles 9.4% Combined cycles (steam

3.1% Brayton cycles turbine & gas turbine)

9.4% Extraction steam turbine 37.5% Diesel and gas engines 12.5% Back pressure steam turbine 6.2% Other 18.8% Gas turbine

• For organizations planning to install a cogeneration facility in the next 12 months specify application:

23.7% Commercial 34.2% Institutional 42.1% Industrial

The survey is based on responses from members of the Cogeneration Institute._

Reprinted with permission: Cogeneration Institute of the Association of Energy Engineers, 4025 Pleasantdale Road, Suite 420, Atlanta, Georgia 30340 (404) 447-5083.

Table 5-1. Cogeneration Basics

Definition of Cogeneration

Cogeneration Efficiency

Impact of Public Utility Regulatory Policies Act (PURPA) of 1978

Cogeneration is the sequential production of electricity and usable thermal energy from a single primary fuel source such as natural gas, oil, coal, garbage, wood or agricultural waste.

Cogeneration is more efficient that electricity generated by a traditional electric power plant. The cogeneration facility is located near a user of heat (unlike a central power plant). The heat released from the exhaust gases or cooling water of the cogeneration unit is used to satisfy thermal load requirements. The overall efficiency of cogeneration systems may be 80% in converting fuel to useful energy compared to the delivered efficiencies of 30-35%of electricity-only plants.

PURPA mandated utility purchase power obligations, fair standby and supplemental service and guaranteed interconnection with the utility grid. Prior to PURPA, cogeneration facilities had to be oversized to insure 100% self sufficiency.

Type of



Financing& Ownership

There are three main types of cogeneration systems:

• Combustion Turbines systems include a combustion turbine which drives a generator to produce electricity. Hot exhaust gases from turbines can be used with a waste heat boiler which produces steam or hot water. Combustion turbines provide a higher thermal-to-mechanicalenergy ratio than reciprocating engines. Total efficiency of 90% is possible with a generating mechanical efficiency of 12% to 30%. These units can be used in conjunction with absorption cooling.

• Reciprocating Engines include an engine which drives a generator to produce electricity and hot water or steam (produced from the hot exhaust gases and engine cooling system. Used primarily in smaller applications.

• Steam Turbines are used primarily for large applications and use coal, solid fuels and biomass as the fuel source. The steam turbine is ideal for industries such as steel or paper that require large quantities of high pressure steam. Steam turbines produce the most heat per kilowatt of power.

There are several options available for installing a cogen-eration facility at the user's site. Third-party ownership requires no investment from the user and guarantees

(Table 5-1 continued)

electric rates below the local utility. The user may decide to finance the facility and take total ownership and risk as well as lower cost of electricity.

Reprinted with permission: Cogeneration Institute of the Association of Energy Engineers, 4029 Pleasantdale Road, Suite 420, Atlanta, Georgia 30340 (404) 447-5083.

In the engineering discipline, as well as others, the major problem in project management is communication. Communication is extremely important and without good communications a project is doomed to failure. There are several communication techniques which can be used on cogeneration projects whether these projects are small or large. A typical method used is the "Project Meeting." Meetings must be scheduled as necessary, during the very preliminary stages of the feasibility study and through the preliminary engineering, engineering design, construction, and startup phases. These meetings must be well organized, there must be an agenda for every meeting and prompt and detailed minutes must be prepared immediately after every meeting and distributed to all concerned parties.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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