Combined heat and power: cost effectiveness, prospects and technology for Malaysian pulp and paper industry

Abstract

Combined heat and power (CHP) systems (also known as CHP) generate electricity (and/or mechanical energy) and thermal energy in a single, integrated system. This contrasts with common practice in this country where electricity is generated at a central power plant, and on-site heating and cooling equipment is used to meet non-electric energy requirements. Because CHP captures the heat that would be otherwise be rejected in traditional separate generation of electric or mechanical energy, the total efficiency of these integrated systems is much greater than from separate systems. Recent technology developments have "enabled" new CHP system configurations that make a wider range of applications cost-effective. The significant increase in efficiency with CHP results in lower fuel consumption and reduced emissions compared with separate generation of heat and power. As part of its strategy for reducing greenhouse gas emissions, the Government is committed to encouraging the growth of CHP as part of the Energy Efficient Programs. This thesis is based on identifying the potential of CHP programs in Malaysian Industry, mainly in Pulp and Paper sub-sector and to rank the best CHP technologies available to be implemented and then to device strategies to attract industrial sector to consider CHP in their plants. A thorough understanding of the industrial process flow is necessary in order to plan a CHP model. Literature reviews, study of energy audit report by PTM and software based analysis were critical aspects of the methodology used in this project. The analysis on the cost effectiveness of CHP will be performed to three case studies using software called RETScreen. The priority of available CHP options were weighed according to the pay back period (PBP), internal rate of return (IRR), net present value (NPV) and also the greenhouse gas (GHG) emission reduction cost. As a conclusion, industries with similar facilities as the case studies can apply the CHP options to view the potential of CHP in Malaysian Industry. This thesis also forwarded recommendations and suggestions that will be required to improve the CHP scenario in Malaysia