Geothermal Proposal

Technical Committee

 

Technical report

 

 

March 23, 2009

 

 

 

Index

1       Acronyms  2

2       Background  2

3       ’s technical alternatives  3

3.1      elGTHPsh  3

3.2      ngGTHPsh  3

3.3      elGTHP   4

3.4      ngGTHP   5

4       Assumptions: 6

5       Conclusions  8

5.1      Energy Consumption  8

5.2      GHG emission  11

5.3      Energy Efficiency  13

5.3.1      Residential efficiency  13

5.3.2      Provincial efficiency  14

5.4      Energy Bill 15

5.4.1      Energy bill today  15

5.4.2      Energy bill trend  16

5.5      Business  16

5.6      Provincial revenue  17

6       Summary  17

 

 

 

 

1      Acronyms

AB: Alberta

NG: Natural Gas

$: in Canadian dollar

GT: Geothermal

elGTHP  = GTHP: GT Heat Pump (based on electric pump)

ngGTHP  = NGHP: NT GT Heat Pump (based on Natural Gas pump)

elGTHPsh: GTHP with solar heating

ngGTHPsh: NGHP with solar heating

GHG: Greenhouse Gases

tGHG: metric tonne of GHG

SH: solar heating

/y: per year

GJ/y: Giga Joules per year

kWh/y: thousand of Watts hour per year

NGSC: Natural Gas Simple Cycle

NGCC: Natural Gas Combined Cycle

COP: coefficient of performance

RRP: Regulated Rate Provider

 

2      Background

According to Statistic Canada and Alberta Energy Statistic, the average household in AB:

·         It has an average energy consumption of 7,000 kWh/y of electricity and 125 GJ/y of NG which represents 41,700 kWh/y (150 GJ/y).

·         The GHG emission is 14.3 tGHG/y.

·         The cost of the energy depend of the area, the RRP or retailer contract; the range varies between 3,000 and 3,200 $/y.

 

 

3      technical alternatives

3.1    elGTHPsh

 

This proposal is based on two main components:

-        provide a solar heating with a capacity of 10 GJ/y plus a GTHP replacing NG consumption, and

-        the energy bill for customers will remain the same.

 

The profile for this change in the average AB’s house is:

-          average energy consumption of 13,550 kWh/y of electricity and 0 GJ/y of NG which represents 13,550 kWh/y (49 GJ/y). The solar heating is not taken in consideration because it is not a utility energy input.

-          The GHG emission is 13.7 tGHG/y.

-          The cost of the energy depend of the area, the RRP or retailer contract; the range varies between 1,900 and 2,100 $/y.

 

The following figure summarise cost, emission and energy use:

 

 

 

3.2    ngGTHPsh

This proposal is based on two main components:

-        provide a solar heating with a capacity of 10 GJ/y plus a NTHP replacing NG consumption, and

-        the energy bill for customers will remain the same.

 

The profile for this change in the average AB’s house is:

-          average energy consumption of 6,300 kWh/y of electricity and 85 GJ/y of NG which represents 30,000 kWh/y (108 GJ/y). The solar heating is not taken in consideration because it is not a utility energy input.

-          The GHG emission is 11.3 tGHG/y.

-          The cost of the energy depend of the area, the RRP or retailer contract; the range varies between 2,300 and 2,500 $/y.

 

 

 

3.3    elGTHP

This proposal is based on the classical GTHP installation and it matches with the case where solar heating could not be installed. The profile for this change in the average AB’s house is:

·      average energy consumption of 14,300 kWh/y of electricity and 0 GJ/y of NG which represents 14,300 kWh/y (52 GJ/y).

·      The GHG emission is 14.5 tGHG/y.

·      The cost of the energy depend of the area, the RRP or retailer contract; the range varies between 2,000 and 2,300 $/y.

 

 

3.4    ngGTHP

This proposal is based on Natural Gas Absorption Heat installation. There is only one provider today, based on USA market. The smallest NGHP has the size is 10 Tonnes (4 to 6 tonnes is used for the average house in Alberta). The profile for this change in the average AB’s house is:

·       average energy consumption of 6,350 kWh/y of electricity and 93 GJ/y of NG which represents 32,300 kWh/y (116 GJ/y).

·       The GHG emission is 11.9 tGHG/y.

·       The cost of the energy depend of the area, the RRP or retailer contract; the range varies between 2,400 and 2,600 $/y.

 

 

4      Assumptions:

 

1.      Based on 2006/2007, the following data was assumed:

a.       NGCC: efficiency 50% ± 3%, emission 420 KgGHG/MWh

b.      NGSC: efficiency 32% ± 2%, emission 650 KgGHG/MWh

c.       Average AB electric system: efficiency 32% ± 2%, emission 930 KgGHG/MWh

d.      Electricity Transmission and distribution efficiency: 92% ± 0.5%

e.       NG Transmission and distribution efficiency: 99% ± 0.5%

f.       SEER Air conditioning: 12

g.      Furnace and hot water: EFUE 80%, emission 58.3 KgGHG/GJ

h.      Electricity consumption for HVAC base case: 1320 kWh/y

i.        COP GPHP: 3.75 ± 0.15%

j.        COP NGHP: 1.25 ± 0.25%

k.      NG use for housing (of the total in AB): 11.08%

l.        Electricity use for housing (of the total in AB): 16%

m.    Percentage installation with solar heating: 10%

n.      Customer with retailer contract for electricity and NG: 27%

o.      Rate of household increment in AB: 1.25% per year

p.      Minimum scenario: the equivalent to 1.5% of the new houses will use GTHP

q.      Maximum scenario: the equivalent to 5% of the new houses will use GTHP

r.        scenario: the equivalent to 10% of the new houses will use elGTHP

s.       scenario: the equivalent to 15% of the new houses will use ntGTHP

 

2.      We work with a household increment of around 1.25% each year. The following figure shows this evolution over the years.

 

 

 

3.      We work with three different scenarios, minimum (the equivalent to 1.5% of the new houses will use GTHP), maximum (the equivalent to 5% of the new houses will use GTHP) based on the market evolution forecast, and  scenarios (the equivalent to 10% of the new houses will use GTHP and 1% for NGHP) scenarios. We suppose that customers have the opportunity to choose this technology and  do not offer special consideration more than the technical to do it. The following figure shows the evolution of installation over the time.

 

 

4.      GT technology is expensive nowadays and the growth is strongly limited for this constraint. The  scenario is based on that the installation of GT doesn’t represent more energy cost for the customer. This approach will produce a higher GT installation than if we allow to the market work by itself. For that, the technology will be promoted as well as it will be necessary some kind of extra incentive. It is necessary to stress that without this increase in GT application in relationship with natural market development, the  proposal does not have sense.

5.      The solar heating technology will not be possible to install in everywhere, physical and subjective constraints should be taken in consideration. The percentage of installations that  will be able to install its proposed technology will be defined as 10% for GTHP and 15% for NGHP. The mix between  proposal with SH and without SH we call  average and it is used to present the results. For those sites where it is not possible to install the solar heating, the classical GTHP and NGHP will be taken. The results of variation in this percentage do not change significantly the outcomes because as we could see, both technologies have similar outcomes in money, GHG emission, electricity consumption. The different between is inside the error margin of this analysis.

6.      Natural Gas forecast price was taken of NG report. The energy bill under  proposal will change for the equivalent portion of NG price component.  forecast in short time plus Chase Energy Canada Limited and EDC Associated Ltd forecasts was taken in consideration. The following figure shows this price variation for both scenarios minimum and maximum. The price is in $/GJ final cost including distribution, fees, tax, etc. for residential area.

 

 

5      Conclusions

5.1    Energy Consumption

 

All cases show energy consumption reduction in comparison to the base case. GTHPsh presents the higher reduction, followed by GTHP, NGHPsh and NGHP.

Between  proposals, el presents more reduction (very close to GTHP).

 

The following table presents the energy consumption for the analysed cases.

 

 

And for ’s cases:

 

 

We will have a reduction in NG consumption for residential sector due to GT use evolution; the following figure shows this evolution over the time:

 

 

 

The following figure shows the impact in NG industry

 

 

We have an increment in the use of electricity; the following figure shows the three scenarios as percentage of base case variation for residential sector.

 

The following figure shows the impact in the electricity generation industry in Alberta

 

 

The following figure shows the required power plant face to the increase of electricity consumption.

 

 

So, we cannot expect a significant impact in electricity and NG due to the use of GT technology.

 

The switch in energy consumption from NG to electricity present important advantages face to the current and forecast price and production of NG in relationship to electricity.

 

5.2    GHG emission

 

For residential sector in average analysis, the use of GT technology strongly increase the use of electricity; in AB, the GHG emission intensity for electricity sector is around 930 KgGHG/MWh (NRCan and AENV, 2006); this emission intensity does that the use of GTHP increases the GHG emission in the average household in Alberta.

’s proposal use of solar heating providing around 10 GJ of energy helps to reduce the GHG emission for GT technology and produce, today, a neutral effect in GHG emission variation.

 

The following table presents the GHG emission per household today.

 

 

And ’s cases:

 

 

Over the years, the GHG emission intensity for electricity sector will decrease according to the Provincial Climate Change Strategy. In this way, and in opposition to nowadays, GT technology will help decreasing the GHG emission for residential sector. The following figure shows the trends for the average household based on GTHP (around 7% GHG emission reduction by 2015, 13% by 2020, 25% by 2025 …)

 

 

The following figure shows the impact in the residential sector GHG emission reduction.

 

 

Special consideration could be done if we consider that the saved NG for heating the houses, we use it in a NGCC or NGSC power plants.

NGCC power plant produces an intensity GHG emission of around 420 Kg/MWh; NGCC power plant produces an intensity GHG emission of around 650 Kg/MWh;

To get the figure before, the GHG intensity emission of 650 Kg/MWh is around 2021 and the GHG intensity emission of 420 Kg/MWh is around 2031.

So, until 2021 any scenario save more GHG emission is we consider the use of the saved NG in a NG power plant; if it is a NGSC power plant, at this point the emission is higher; if it is a NGCC power plant, the saving will continue until 2031.

The following table presents the GHG emission per household considering that the saved NG is used in a NGSC and NGCC power plant, today.

 

 

And for ’s cases:

 

 

5.3    Energy Efficiency

 

The energy efficiency is the key issue in the use of GT: to use other kind of energy source that we don’t use today help strongly with the efficient use of the energy. A depth analysis is necessary due that the energy efficiency commonly exposed has a lot of mistakes in real comparison of the energy use. Here we expose two different points of view, for residential sector and in a global context for the province of Alberta.

5.3.1     Residential efficiency

All cases show an increase in energy efficiency in comparison to the base case. GTHPsh presents the higher increase, followed by GTHP, NGHPsh and NGHP.

Between  proposals, el presents the higher increase (very close to GTHP).

 

The following table presents the variation in energy use for housing.

 

 

And ’s cases:

 

 

The following figure shows the increase in energy efficiency under the three scenarios in Alberta residential sector.

 

 

5.3.2     Provincial efficiency

 

The analysis of the efficiency in a whole content will be presented; the power plants have an average efficiency of 32%, NGSC around 33% and NGCC around 50 %. Transmission losses are around 8% in AB.

 

The following table presents the energy use before to be convert into electricity or to be dispatched into pipelines:

 

 

And ’s cases:

 

 

Again, all alternatives improve the use of the energy, the different between them is lower that the residential efficiency improvement; the order change and NGHP technology shows the better energy efficiency.

 

5.4    Energy Bill

 

Energy bill issue is very sensitive because ’s proposal is based on maintain the same energy bill to the customers who GT system is installed.  is responsible also for the maintenance of the equipment.

 

In AB we have different situation that we need to take in consideration. The NG bill has less variation through customers and areas, but the electricity cost presents more difficulties. We have RRO based tariff that we can see important differences for areas, basically rural and urban. Also we have a deregulated market and each retailer could have different electric tariff. For this case we develop the following table. The last four items correspond to RRO and the first six items to the deregulated market. In this calculus are include all cost for energy delivery, fees, etc.

 

5.4.1     Energy bill today

 

 

The following table presents an average considering that the 27% of customers signed a contract with any retailer and the 73% remain with the RRO. Also, rural areas are  and Fortis.

 

 

 

The following table presents the summary for the difference between the base case and the  proposal:

 

5.4.2     Energy bill trend

 

Under the described NG trend, the average difference between the base case and both ’s proposal are:

 

 

5.5    Business

 

The average turn-key cost for GT installation in AB for housing is between 25,000 and 35,000 $CAD for GTHP and between 20,000 and 35,000 for NTHP. This means a payback period between 17 and 30 years for a customer. This cost means a huge barrier in the use of GT for the average Albertan.

In this whole context, for a customer who wants to install a GT equipment, the  proposal means a huge opportunity; but for customer point of view, it lacks the incentive to choose the  option.

 

The financial estimation for the trend showed in the figure before is:

 

 

The mechanism to recover money for  shows a similar payback period for a customer that high scale business could decrease.

 

5.6    Provincial revenue

Due to the saved NG could be sold to the market, we can expect a increase in provincial revenue. This effect is small and it could be hidden by the decrease in NG production as well as NG price variation.

 

6      Summary  

-          According to NRCan, Alberta has the worst indexes in efficiency in residential sector across Canada; GT technology helps increasing the energy efficiency in AB for both point of view residential and global energy use in the province.

-          GT technology not only does use of other kind of source of energy (considered renewable), also it help to move from NG to electricity consumption. For medium and long terms it is seen as the correct direction in energy use/switch taken in consideration the decrease in NG production in AB since 2002.

-          GHG emissions increase slightly or remain stable in the short term due to the use of GT technology. In the medium term help decreasing the GHG emission in residential sector as well as in long term.

-           proposal helps to increase the use of GT technology in AB, stressing the remarked benefit. It is extremely important for ’s proposal:

o   To increase the use of GT technology n-times faster than the market could do it by itself.

o   To provide incentive to customers to choose this option; the move to green sources of energy argument looks very weak in the current context.

o   To provide free choose to the customers;

o   To develop an all-win scenario (, customers, GT technology, Government, etc) with multiple pro-active actions

§  To increase yearly the numbers of certificate installers in the province.

§  To use different GTHP providers solutions.

§  To find support in micro-companies for developing the installation and maintenance in communities;

§  To develop a big scale market, decreasing cost and producing a positive spiral for GT technology in AB.

§  etc