Is it worth connecting a biogas Cogeneration power plant to the grid?
Many farmers and businesses ask me, “Is it worth connection a biogas CHP to the utility grid and the exporting excess power?”
The answer depends upon your:
- generator type and the required grid connection hardware,
- the cost of CHP generator maintenance and
- relatively of electrical and thermal loads. (Don¹t underestimate this.)
Grid connection costs
Connecting to the mains power grid for exporting can be a long, expensive and difficult process. Especially with traditional synchronous (or fixed speed) generators with their high fault currents, typically 10 times their rated current. This can be a cause of great frustration for owners and installers alike. The power utility often demands expensive grid protection hardware and grid stability studies which can send return on investment down very quickly. You need to start your project well aware and prepared for this the grid connection step.
However, there is hope. With the proliferation of solar PV power on domestic rooftops across the country, the power utilities have created a more streamlined process for approvals for connecting embedded power generation to the grid.
Generators such as synchronous fixed speed generators can be connected and run in parallel with the grid and push excess power out to the grid as allowed, but the pathway for approval is longer and more expensive with more elaborate electrical engineering applied to protect the grid.
So, the first step is to utilise an inverter CHP to reduce the cost of connection.
Maintenance costs compared with the power selling price
Next is the cost of maintenance. Typically, the power utility will purchase the power you produce at the same rate that you buy power from them.
Sounds fair but, there is more to it. This ‘fair’ purchase price is excluding network charges, service charges, government fees for renewables, etc. So that while you may find you are buying power for say 18 cents per KW hr, you may find that the actual power cost, without these extra charges, is only 8 cents per kW hr. If your cost of maintenance is 6 cents per KW hour, then you may decide it is simply just not worth exporting the power for a net gain of 2 cents per kW.
If your cost of maintenance is much lower, something like 2.5 cents per kW hr such as using inverter CHP, then your gain is 8 cents (grid purchase) – 2.5 cents (maintenance) = 5.5 (credit) cents per KW hr. This is a much better option for your business. The key to exporting power is to have a low and predictable maintenance program.
It’s nice to have the maintenance cost less than half the power selling price. This allows the income you derive from off excess power to cover all of your maintenance costs.
Relative electrical and thermal demands
Many customers have combined heat and power generators (CHP) in which both heat and power are utilised. The example above of selling power to the grid included only the value of the power, however, the value of the heat is more than that of the power.
If your business needs heat but you do not really want to export power, then a CHP inverter generator is the way to go. They are designed to produce power and recover the heat available. The Inverter CHP will actually adjust the relative outputs of heat and power to match what you require as closely as follows. This is a rethink of CHP generators to help customers get what they need.
If you do not want to export excess power but you still have a higher thermal energy demand, simply run the generator in thermal priority mode to produce as much heat as possible with a reduced amount of power this is made possible by de-coupling the engine speed, with power and heating outputs. In this mode, you can produce the maximum heat and minimum power and optimise your return on the fuel. Some clients have produced heat without any power for months as this is what their business required.
Our experienced team can help review your business to find out if it is worth connecting your biogas cogen system to the grid and selling excess power back to the mains.