Conditions for establishing a combined heat and power station by using unutilized wood biomass

Abstract

The profitability of a biomass power station is low because its installation cost and fuel cost are high and its power generation efficiency, around 25%, is lower than the efficiency of an LNG power station, about 50%. On the other hand, the profitability of a combined heat and power (CHP) could be higher since it sells both electricity and heat. To prove the profitability of a CHP plant, we developed a tool for assessing profitability on a steam turbine CHP system using wood biomass. Then we assumed four plant sizes, i.e. maximum power output 1,200, 1,600, 1,999, and 5, 700 kW, and simulated the internal rate of return and other factors, under the following three scenarios: 1) stand-alone (without heat supply), 2) CHP with steam supply and 3) CHP with hot water supply. We decided two heat prices, 7.7 and 5.2 yen/kWh, referring to the heavy oil price. We found the following results: a) The profitability of CHP became higher than that of the stand-alone case. b) In the case of the 1,200 kW plant, the CHP project could not make a profit under the lower heat price because of its lower power generation efficiency. c) The profitability of CHP with hot water supply became higher than that of CHP with steam supply because the decrease of power output by steam extraction was smaller. d) Larger heat demand is necessary to make the profitability of CHP higher.