Subsidies make sense for Munich

In Munich, located in the heart of Bavaria and with a population of nearly 1.3 million Germany’s third largest city, the combination of power generation and district heating has a long tradition. As early as 1908 a municipal hospital was supplied with district heating from a nearby power plant using the heat rejected by power generation. Nowadays the Munich municipal utility, Stadtwerke München GmbH (SWM), is operating one of Europe’s largest district heating networks with a length of about 548 km and a total capacity of 2566 MWt. Its input to the net in 2002 was 4015 GWh.

Modernisation

In recent years, SWM has been modernising in stages the generation equipment installed in its plants, in line with a new energy concept taking into account the liberalisation of the electricity market.

This energy concept implied transfer of electricity generation to its main sites, North CHP station and South CHP Station, while taking smaller electricity generating facilities out of service, such as the combined heat and power plants at Müllerstrasse, Sendling and Theresienstrasse – the latter was transformed to a purely district heating station – and at the same time transferring coal-fired electricity and heat generation to the North CHP site.

SWM’s energy concept also included the replacement of the utility’s oldest CHP station, the high pressure steam plant HP4/5 at the South CHP site. In connection with complete modernisation of South CHP, which currently accommodates a combined cycle plant (CC1) and HP4/5 as well as a retired waste incineration plant, a replacement for HP4/5 itself is to be erected which will also cover the retired Müllerstrasse and Sendling plants.

Deciding on the concept of a successor for HP4/5 reflected the uncertainties arising from liberalisation of the energy market, and the unknown extent to which combined heat and power plants would be subsidised, in the period before the new Law on Cogeneration was enacted, a matter fully considered at the time the decision was being made. SWM had to decide between retiring the HP4/5 plant without a successor cogeneration plant or modernising the South CHP site by constructing a new state-of-the-art cogeneration unit.

Abandon district heating?

Retirement of the HP4/5 plant without a successor cogeneration plant would have meant over the medium term that Munich abandoned district heating and replaced its DH network with a large number of boiler installations on individual premises. Judged by purely economic criteria, this would have been the logical outcome if no cogeneration subsidies were to be paid out, as construction of cogeneration plant requires comparatively high investment costs. However, once ecological aspects were taken into account, such a decision would have been unacceptable.

Under the German law on cogeneration (“Gesetz für die Erhaltung, die Modernisierung und den Ausbau der Kraft-Wärme-Kopplung”), enacted on 19 March, 2002, the capital cost burden of constructing a CHP plant can be reduced somewhat. Under certain conditions, this law stipulates a surcharge of up to 1.74 rct/ kWhe on the grid operator for electricity from modernised cogeneration plants with a power capacity exceeding 2 MWe. The surcharge is passed on to the end-user. Additionally, cogeneration plants able to verify an annual fuel utilisation factor above 70% benefit from a reduced tax rate for mineral oils and gas.

Some 1600 MWe of power capacity will be installed in the form of modernised medium and large cogeneration plants in Germany during the next year or so, mainly owing to this regulation. In 2003 and 2004 the total investment by municipal utilities to modernise existing cogeneration plants is expected to exceed r1.7 billion (source: Zfk Spezial – Stadtwerke im Interesse Europas, supplement to ZfK – Zeitung für kommunale Wirtschaft, September 2003, page 25). SWM has in any case an environmentally aware and customer friendly policy but the new law has justified and supported the decision to erect a new cogeneration plant at the South CHP site.

Investigations conducted by SWM showed that, owing to its high efficiency, especially in cogeneration operation, a combined cycle power plant with gas and steam turbines was the optimum solution for replacing the HP4/5 plant. SWM therefore decided to erect at the South CHP site a second, modern, combined cycle plant (CC2) to generate electricity and heating water, with low environmental impact, on the cogeneration principle, so as to continue the tradition of cogeneration at the site.

Because electricity has been generated at the South CHP location since 1899, with regular upgrading, the existing infrastructure offered ideal conditions for the proposed modernisation, the CC2 project, for the following reasons:

• A high-capacity tie-in to the natural gas network and an existing large distillate oil tank farm licensed in 1978 for CC1

• linkages to three extensive district heating networks

• a strong link to the 110 kV electrical grid

• adequate supply of cooling water through a canal fed by the River Isar

• adequate plot area

• good transport connections (road and rail).

Planning and construction

Scheduled to go online at the end of 2004, the CC2 plant will generate electricity at 417 MWe when fired with natural gas, at the same time making available 463 MWt of heat for district heating. When purely gas firing, the fuel heat release rate is 1004 MW while if the gas turbines are fuelled with light distillate oil the figure goes up to 1046 MW.

In close co-operation with SWM, conceptual design and planning of the CC2 plant was begun in late 2000 by Fichtner GmbH & Co KG, one of Germany’s major engineering companies, which also took responsibility for the conceptual study. It supported SWM during permitting proceedures and contract and procurement negotiations, and took on design review and site supervision during the construction phase.

The first step in construction of the new plant came in spring 2002 with the clearing of the construction area in the southern section of the South CHP plot. At that time a major part of the proposed area was still occupied by buildings and facilities of the retired waste incineration plant. Except for the flue gas cleanup building and the waste pit these buildings had to be demolished and cleared away. The flue gas cleaning building itself was kept intact and integrated into the new plant as a physical and noise barrier during the construction of the CC2 plant, and to close off the Schäftlarnstrasse after construction finished. The former refuse incineration plant waste pit will be integrated in the CC2 plant, and at some point in the future will serve as the basement area for the district heating plant.

By January 2003, following completion of site clearance and on schedule with the tight completion deadline, all approval procedures had been negotiated and construction started. The overall construction process of the new CC2 plant had been divided into at least 15 packages of varying complexity, the main one being construction of the heat and power island which included two gas turbines and one steam turbine in a 2+1 configuration, together with the heat recovery steam generators, district heating extraction and balance of plant. In line with EPC contract practice, this major block is being erected by the consortium VA Tech Hydro, its Combined Cycle division and MAB Anlagenbau Austria (soon to be renamed MCE Energie Technik). The remaining lots of the modernisation work and the adaptation to existing facilities included inter alia demolition, water treatment and switch gear facilities.

Plant details

The plant consists of two GE Frame 9E gas turbines each with a capacity of 140 MWe installed in November and December 2003. The intention is for the CC2 gas turbines to be fuelled by natural gas and, as a substitute, distillate oil for up to 1000 hours per year. To boost gas pressure to the level needed for operation of the GTs, a natural gas compressor station will be provided. Adjacent to the gas turbines two heat recovery steam generators from MAB are installed. Each provides 310 t/h high pressure steam at 116 bar and 535 °C and 39 t/h low pressure steam at 7 bar and 204 °C. They are equipped with a supplementary firing system on natural gas to raise district heating output at times of low ambient temperature or high heat demand. The steam provided runs a Siemens single casing back pressure extraction steam turbine, completing the combined cycle block with another 140 MWe. Site constaints at the South CHP allowed only a multi-shaft arrangement, therefore there are three electrical generators, type ELIN A09 115 TS, installed, producing power at 11.5 kV.

The permitted emission loads of the CC2 plant can be reliably met through combustion performance measures alone and do not need any downstream flue gas treatment. The flue gas of the CC2 plant will be discharged via two stacks 90 m in height, installed in September 2003. Each of the stacks was delivered in four main sections, welded on-site and mounted with a 1100 ton heavy-lift crane.

Owing to the urban location of the South CHP site, special emphasis is laid on urban environmental criteria. To meet these requirements the turbine housing was erected by the Munich architect group fcg as a triple-aisled building with a height of about 25 m. The housing for the heat recovery steam generators is about 40 m in height.

Connection

The electricity generated by the plant will be fed into SWM’s 110 kV system. In connection with the construction of the plant, the electrical and I&C systems of the other plant facilities on the South CHP site will be refurbished and extended to allow electrical tie-in of the new CC2 plant. To ensure continuity of the electricity supply to Munich, the construction of new 110 kV switchyards and the laying of 110 kV cables will be carried out during operation of the CC1 and HP4/5 plants. In addition, to bring together all the site information flows required for operation, monitoring, signalling and recording, a new central control room will be installed. In due course this control room will become the central control site for the operation of all plants and facilities located at the South CHP site, including plants CC1 and CC2.

By March 2004, only 14 months after the construction process started, all major components had been installed. The scheduled date set for final inspection, October 2004, looks likely to be met. The next two key landmarks are the first firing of the gas turbines and the boil-out of the heat recovery steam generators, scheduled for spring 2004.