Spot market boosts inlet cooling developments

The deregulation of power supply and pricing in the United States is forcing new technology demands on power generation equipment. Inlet cooling technologies, once largely overlooked, are maturing into a viable economic force in this market. The growing acceptance of inlet cooling has provided the incentive for companies to develop and market improved versions of existing technologies. The spectrum of choices is not only growing, but is modifying the way that power plant engineers and financiers approach the analysis of options. This growing sophistication on the part of both the manufacturers and users of inlet cooling technologies is leading to a significant improvement in gas turbine operations to meet the growing need for summer electrical capacity.

Power demand

In the recently deregulated regions of the United States the spot financial market for electricity has suffered some troubling growing pains. The once-cherished reserve margin held by former utilities has been eroded by several factors, to the point that most electrical transmission systems are operating on nearly insufficient margins. When an unusually hot period of summer weather arrives, or if too many power plants are unexpectedly down for repairs, spot electricity prices have occasionally pushed well past $1000 per megawatt-hour this summer, as they have for the past three summers. Unfortunately, this trend looks as if it's going to get even worse for a few more years before it gets better.

One of the factors leading into this situation is the economics of reserve peaking plants. Many grid administrators of deregulated regions are cutting back or eliminating payments based on capacity, preferring instead to rely more on real-time commodity payments. Therefore, there is little incentive for a power plant owner to maintain an older project that is called on for only a few hours a year. Moreover, it is impossible to finance a new merchant peaking plant that will have an unreasonably low capacity factor.

Another factor that has led us to this situation is the boom/bust cycle of power plant construction. The bust years in the United States between 1992 and 1996 were the result of both an economic recession and market transition. As utilities learned that they would no longer hold monopoly status, and as independent power producers waited for new legislation (so that they could attain financing for new merchant power projects), relatively fewer new power plants were built. The robust US economy in the latter half of that period caught the power producers behind in new power supply, a condition they have been desperately attempting to remedy since 1998.

The pent-up demand for power plant equipment has caused the backlog for gas turbines to reach unprecedented levels, exceeding three years for some turbine manufacturers. Larger independent power developers are ordering turbines in blocks that are simply staggering in their scope and cost. This trend started when these companies began ordering gas turbines a dozen at a time. However, the power industry is now simply astonished at the recent orders exceeding 30 units at a time, and one order exceeding 100 turbines. For power producers that don't already have power generation equipment on order, and who are caught short on summer peaking supply in the near-term, there are few options for large-scale power projects that can be quickly brought on line to meet the crisis.

Electricity pricing trends

Under the past rules for power plant financing and pricing, there was little incentive for a project owner to optimise the output of a plant specifically for summer operations. Under most power purchase agreements, the amount of money earned for a MWh was either a fixed value, or was partially tied to the price of fuel. However, under new spot pricing rules, the price of electricity during hot summer weather can reach many multiples of its average price during normal weather. Interestingly, the price of electricity in very cold weather does not demonstrate quite as much volatility, as shown in Figure 1.

There are several reasons why the price of power can be so high in the summer compared to the winter. First, in a number of Western industrialised countries summer brings on high usage of air conditioning still largely supplied through electric motor driven technologies. Winter is predominantly a heating season, where the typical choice for heat is through thermal technologies producing hot water and steam directly from fossil fuels. Second, the growth of the air conditioning market is faster than that of the heating market – urbanisation and demographic trends imply that population growth in hot and humid climates is increasing the demand for comfort cooling. The largest impact, which we mustn’t overlook, is the burgeoning use of computers, which require year round cooling and further differentiate the summer peak.

A third reason is that most utility systems in the United States are summer peaking. A shortage of electrical power in the winter is rare, and occurs only in the very coldest hours. Moreover, the price of electricity in the winter is largely coupled to the price of fuel, with the spot price of natural gas pushing up the price of electricity. Of course, the spot price of natural gas can be rather high in the winter compared to the summer. However, this doesn't drive up the winter prices as much as might be expected; rather it tends to cut into the profit margins, or “spark spreads," of most producers. Contrarily, the spot price of peaking electricity in the summer is largely decoupled from the price of natural gas fuel, with only a minor upward "pull" effect that electricity has on gas.

Now that the gas turbine has been accepted as the power generation technology of choice in this era, power suppliers are facing a growing dilemma. Gas turbines are highly susceptible to hot weather conditions, suffering greatly in both output and efficiency when faced with hot ambient air temperatures. The irony is that these gas turbines are needed most when the weather is hot. To date, most plant owners thought that the only way to solve the problem was to install more and larger gas turbines, a solution that only exacerbates the problem.

Currently, installing more and larger gas turbines is not an option for any power producer that doesn't already have turbines on order. With a wait of three years or more, and a construction period of at least six months to a year after that, producers now need a more immediate solution. Accordingly, they are turning to their installed fleet of gas turbines to maximise the power output of existing assets.

Gas turbine inlet cooling

Power plant owners are now re-examining gas turbine inlet cooling. The cooling of inlet air is hardly a new technology, but the field as we know it is less than 10 years old. There are no big companies specifically devoted to inlet cooling, but several small engineering companies and mechanical contractors have grown their inlet cooling businesses in this tidy niche market. The major gas turbine manufacturers are about five years behind the after-market suppliers in their cooling technology acceptance, but are increasingly offering some form of inlet cooling as an option for their products, a positive indication for the market While there will likely never be truly universal acceptance of inlet cooling, it appears that most new power projects are being built with at least some form of cooling .

There has been enough written about inlet cooling to ensure that most readers will be familiar with the basic premise. Suffice it to say that cold air is denser than hot air, and that gas turbines are constant volume machines. Therefore, denser air allows more mass flow through the gas turbine, allowing a greater power output.

However, what most turbine owners still don't fully appreciate is the enormous scope of choices that face them in the inlet cooling technologies. At the lower end of the price scale are the evaporative cooling systems, while at the upper end are the refrigeration systems, with several viable versions of each existing technology.

Technology options

The biggest news in the past five years has been the growing popularity of "fogging" systems. In fact, fogging has become nearly synonymous with inlet cooling for many owners.

Evaporative cooling systems were first installed in the form of "wetted media" projects in turbine filter houses. These systems can typically achieve approximately 85 per cent effectiveness, measured as the drop in dry bulb temperature relative to the spread between ambient dry bulb and wet bulb temperatures. These systems require more maintenance, and have a few other drawbacks, as compared to the newer fogging systems. Therefore most after-market companies have largely dropped media systems.

Newer evaporative fog cooling systems have appeared in the last ten years. The most typical system consists of a series of fog nozzles that are fed by very high pressure water. Early problems with water quality, controls and clogging appear to be solved. The low parasitic electrical loads and the nearly imperceptible air-side pressure drop associated with these systems have made them the choice for budget-minded operators. Such systems are now even appearing on new construction, being offered by some gas turbine manufacturers.

At the other end of the inlet cooling spectrum (Figure 2) are the large refrigeration systems. This technology usually includes a cooling coil in the air stream, and a refrigeration source, thus approximating an enormous air conditioner. The source of the refrigeration can be from a compression technology, or from a "thermal" technology such as a lithium-bromide absorber. Thermal energy storage, as ice or chilled water, can also be incorporated. In all refrigeration technologies, there is a larger investment in pumps, controls, cooling towers, etc, than with the simpler fogging systems.

If fogging is so much less expensive and complicated compared to refrigeration, then why is refrigeration gaining in popularity? The simple reason is that refrigeration systems will provide up to 3 to 4 times as much cooling, as measured on a hot day. Moreover, the refrigeration system will provide cooling during extremely humid weather, where the benefits of a fogging system would be reduced. However, there is no single correct answer as to which is preferable. As with most other technology choices, it all depends on the site and its power contract.

Financial implications

Fogging has been preferred for "back-fit" to existing power plants because it is simple to install. More importantly, it has a payback period, of only one or two years. The drawback is that the relatively low cooling capability, with inlet air temperature depressions typically around 20°F (11°C) in all but the most arid locations, translates into lower amounts of incremental power generation, and therefore lower marginal revenues.

Refrigeration systems are preferred when a contracted capacity is called for. Refrigeration systems can be designed to deliver much more cooling, with less (yet still significant) performance degradation from high humidity weather conditions. Although refrigeration systems have longer payback periods, the higher revenues they generate will result in higher free cash flows for a project. The net present value (NPV) method of financial analysis would be preferred for refrigeration systems, as opposed to the payback method of analysis for fogging systems (Figure 3).

With all cooling technologies it is difficult to determine the financial implications of the investment. Most are rated at a single performance point, such as 95°F (35°C) and 40 per cent relative humidity (rh), corresponding to ARI standards. For refrigeration systems, this is analogous to a gas turbine's ISO rating point of 59°F (15°C) and 60 per cent rh These rating points are valuable only when comparing one system to another on paper; they offer very little meaningful assistance in predicting financial performance over the course of an entire year's operation. Therefore, most engineers and operators have developed operating pro forma analyses for scrutinising gas turbine performance both before and after the installation of inlet cooling. Most pro forma to date have been crude, offering very few operating points, and relying on linear interpolation of data to estimate yearly performance. In our practice, we have developed a 288 hour model (12 months by 24 hours) of weather data that served us well in our analyses before the widespread deregulation of power. But the non-linear response of power cycles to inlet cooling, and the even more non-linear response of power prices to air temperatures (Figure 1), have forced us to develop a full 8760 hour analysis for our own pro forma documents.

Once such an analysis is performed, it is readily apparent how many incremental MWh will be produced by any studied inlet cooling technology over the entire course of a year. It has been our practice to divide this number by 8760 hours to determine a power output capacity based on this form of capacity factor analysis.

Such pro forma analysis has led us to the realisation that technologies that produce lower air temperatures are favoured financially, despite higher first costs. Intuitively, design engineers know that increasing performance of some engineered system usually occurs with a decreasing unit price, until the optimum performance point is located.

With fogging systems, optimum performance had been pursued through a greater level of effectiveness, up to the point of 100 per cent saturation. Most plant operators did not wish to increase effectiveness beyond full saturation, for fear of reducing compressor life caused by the inevitable carry-over of small water droplets. However, several installations of "over-spray" fogging systems have been installed, with water fog sprays much greater than what would be required to simply achieve saturation. Field experience has shown that compressor longevity is unlikely to be affected by fine mists of unevaporated water. Over-spray fogging systems dramatically improve the financial performance of fogging systems, at a low unit cost.

With refrigeration systems, optimum performance is achieved through ever lower air temperatures. There does not yet appear to be a minimum air temperature value (within the scope of currently available technology) at which point the optimum performance is achieved. Colder air temperatures, while requiring larger refrigeration plants and greater amounts of parasitic electrical requirements, will pay for themselves with higher electrical revenues. Of course, while there doesn't appear to be a minimum air temperature that would define maximum financial benefit, the very real potential of icing provides the technological barrier to cold air temperatures.

Early refrigeration systems for inlet cooling sought to achieve air temperatures of 50°F (10°C). Current offerings by most practitioners are seeking temperatures as low as 41°F (5°C). This appears to be the approximate safe limit for inlet cooling. The reason is that the air leaving a cooling coil is usually at saturation with respect to water content. Knowing that there will be as much as a 5 to 9°F (3 to 5 °C) drop in air temperatures in the turbine bellmouth precludes producing air temperatures any lower than this limit.

Our own pro forma analysis of typical fogging and refrigeration systems has shown that new over-spray fogging systems can achieve nearly half of the incremental annual power output of the much larger and much more expensive refrigeration systems. Realising that a fogging system can be perhaps 10 to 15 per cent of the cost of an equivalent refrigeration system, one has to question whether the added power from the refrigeration technologies is worth the added expense. In most cases, in the type of power market typified by Figure 1, the answer to that financial question would be "yes," although it takes a sophisticated kind of analysis to support that determination.

Emerging trends

We know that fogging systems continue to increase in performance. We do not yet know the maximum practical limit for over-spray systems, as newer and more aggressive strategies are constantly being employed. On the other hand, we do know the maximum capabilities of refrigeration systems, as these systems are up against a fundamental thermodynamic barrier. The result is that fogging technology is encroaching on the capabilities of refrigeration technology. While fogging systems will never likely produce as much incremental power as do refrigeration systems, it does appear that the increasing financial benefits of fogging systems may one day result in the decline of the refrigeration application as we know it (Figure 4).

Just as fogging technology has finally leapt over the self-imposed operational limit of 100 per cent effectiveness through the application of over-spray systems, refrigeration technologies must now break through the thermodynamic limitations of the icing problem, if refrigeration is to remain a competitive alternative technology. Therefore, with the assistance of the Gas Research Institute, Polar Works has embarked on a technology solution that dries the air of most of its moisture in a new desiccant cooling process. The use of desiccant technology has grown significantly in commercial air handling applications in the past decade. While there are several commercial desiccant technologies available today, they all have substantial limitations in unit cost, scalability to power generation-size airflows, and safety to equipment.

Polar Works has designed a desiccant cooling technology using a "clean-sheet" process unencumbered by previous solutions. Most commercial desiccant systems dry and cool the air in separate and distinct processes. These systems also provide only a single stage of drying. While multiple stages are technologically feasible, the high expense and air-side pressure drop would preclude such an arrangement in power generation applications. In contrast, the system under development by Polar Works is a multiple stage design of simultaneous cooling and drying.

The resultant technology will allow refrigeration systems to break through the thermodynamic barrier imposed by the potential freezing of water. By providing cold and very dry air (less than 65 per cent rh), virtually any low temperature can be achieved for air. However, most gas turbines have a diminishing point of performance where colder air will not yield greater performance. This temperature is typically between 0° and 20°F (-18° to -7°C). Therefore, our earliest research efforts are concentrating on this range of temperatures. Desiccant technology (Figure 5) developments will increase the spectrum of available cooling technologies by at least 20°F (11°C), to as much as 50°F (10°C) below current inlet air temperatures.

Prototype proves successful

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