Chemical Engineering July 2010 - 25

Department Editor: Scott Jenkins
Conservation economics:
Carbon
pricing impacts
eduction of greenhouse gas (GHG) emissions
continues to be a major issue in national and
international public policy, as well as a major focus
for companies in the chemical process industries (CPI).
Many countries are considering systems that place a
price on GHG emissions though a carbon cap-and-trade
system, for example.
In an environment where GHG emissions have a given
price, certain energy conservation measures that may
have provided a small or negligible internal rate of return
(IRR) based on fuel savings alone will be much more attractive
economically as GHG emissions prices increase.
Returns from efficiency projects
Example calculations that illustrate the impact of GHG
emissions prices on the economics of energy efficiency
projects are those for calculating the IRRs of several energy-efficiency
projects at a hypothetical 150,000-bbl/d
petroleum refinery with a range of GHG prices ($0 to
$100/metric ton (m.t.) CO2 equivalent). In general,
results demonstrate that incorporating the cost of GHG
emissions into project economics can improve the attractiveness
of previously marginal energy projects.
IRRs for the following projects are shown at GHG price
levels from $0 to 100/m.t. in Figure 1:
* Revamp crude-preheat exchanger train to increase the
crude-heater inlet temperature
* Replace the vacuum tower steam ejectors with a liquid
ring compressor (LRVP)
* Utilize diesel hydrodesulfurization (HDS) unit hot feed
for additional steam generation
* Recover power from fluid catalytic cracking (FCC)regenerator
hot fluegas.
If these four projects were combined, they would result
in a 9.5% reduction in GHG emissions for the hypothetical
refinery.
Example: Air pre-heat
An example of an energy efficiency improvement project
to consider is using combustion air preheat for fired heaters.
For this study, it was assumed that a heater without
this feature would have an overall thermal efficiency of
82%. The addition of air preheat will increase the heater
efficiency to approximately 92%. IRRs for the project at
various GHG emissions prices are shown in Figure 2.
Heaters with an absorbed duty of just over 150 million
Btu/h would achieve a 20% IRR with GHG emissions
valued at $15/m.t. and natural gas priced at $5.50/million
Btu. If natural gas is priced at $6.50/million Btu, the
20% IRR can be achieved with an absorbed duty of 100
million Btu/h.
Considerations
* Care must be taken to evaluate all energy usage; not
only in the process unit of interest, but also changes in
net energy usage in the entire facility
* A thorough review is needed to ensure that all appropriate
costs are included
* A facility-wide audit is recommended to identify all potential
energy conservation opportunities
* An energy-saving project not evaluated here, but worth further
study is improved heat exchanger duties with welded plate
exchangers, twisted tubes, tube inserts and/or helical baffles
R
Crude heater revamp
Energy efficiency projects economics
Hot feed for steam generation
100
80
60
40
20
20
40
60
Greenhouse gases price, $/metric ton
*bbl/d = Barrels-per-stream-day
FIGURE 1. Various energy efficiency projects with cost of GHG emissions
included.
80
100
Vacuum tower steam ejectors
Power recovery
Air preheat economics - revamp
45
40
35
30
25
20
15
10
5
50.0
100.0
150.0
$100
$90
$80
$70
$60
$50
$40
$30
$25
$20
$15
$0
200.0
Process absorbed duty, million Btu/h
FIGURE 2. Revamp heater air preheat economics with GHG emissions cost
included.
Reference
1. U.S. Energy Information Administration (EIA). Emissions of Greenhouse
Gases in the United States 2008, , U.S. Department of Energy, December
2009.
Note: Material for this " Facts at Your Fingertips " was supplied by I.M. Glasgow,
S. Polcar, E. Davis, T. Nguyen, J. Price, C. Stuecheli and R.E. Palmer
at Mustang Engineering LP, Houston.
250.0
Internal rate of return (IRR)
Internal rate of return,
150,000 bbl/d*
Chemical Engineering July 2010

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