Q$1$

CHP

A process plant has an annual electricity bill of $69,645$ and an annual gas bill of $71,857.$

The owners of the plant are considering installing a CHP $($combined heat and power$)$ unit

comprising a six$-$cylinder Mercedes gas engine with waste heat recovery $($WHR$)$ to meet the

heat and electricity demands.

Data:

Existing gas boiler efficiency $=80\%($LHV$)$

Nominal electric output of CHP unit $=103k{W}_e$

Net electric LHV heat rate of CHP unit $=12,233k\frac{J}{k}Wh$

Usable heat output from $CHP$ unit $=763\mathrm{.}2M\frac{J}{h}$

Electricity tariff $=134\mathrm{.}24\frac{}{M}W{h}_e$

Natural gas tariff $=15\mathrm{.}39\frac{}{G}J(LHV)$

Installed cost of CHP unit $=129,780$

O&M $($operating and maintenance$)$ cost of CHP unit $=18\mathrm{.}93\frac{}{M}W{h}_e$

Discount rate $=10\%$ per year

The economic life of the CHP unit $=10$ years

Annual escalation rate $($for gas, electricity and O&M$)=5\%$ per year

Draw a labelled 'heat balance diagram' for the CHP unit. Prepare an annual 'balance of energy

demand' diagram comparing the existing and proposed energy supply options and hence

determine the annual capacity factor for the CHP unit. Given the above techno$-$economic data

assess the engineering economic viability of the project and based on your analysis, make a

recommendation.

$(40$ marks$)$