How to Estimate a correct Buyback Rate from Diesel Cycle and Gas Turbine Cogeneration and the Appropriate Measures to Protect the Environment in Thailand

Abstract

The Electricity Generating Authority of Thailand (EGAT) has drawn up regulations for the purchase of electricity from Small Power Producers (SPPs). Diesel cycle and gas turbine cogeneration can produce electricity to sell to EGAT and steam to use in manufacture.

There are two ways in which EGAT purchases electricity from SPPs; the firm and the non-firm pattern. The levelized electricity costs in the firm pattern (capacity cost plus energy cost plus energy cost) over 10, 15, 20 and 25 years are 0.045, 0.047, 0.049 and 0.054 US$/kW-h respectively [1]. The levelized electricity costs in the non-firm pattern will not be shown in this paper.

The price of 14 MW of diesel cycle cogeneration generated electricity if sold to EGAT is sold at a loss. (The useful life-time is 10 years if using distilled oil or natural gas or fuel oil. Every fuel makes a loss. In a useful life-time of 15 years distilled oil still makes a loss. The Internal Rate of Return for natural gas is 11% and for fuel oil 9%). So steam produced can be used in a factory to greater advantage and so reduce the loss.

Gas turbine cogeneration of 90 MW produces electricity sold to EGAT. I a useful life-time of 10 years distilled oil make a loss. The IRRs are 7% and 2% when using natural gas and fuel oil. In a useful life-time of 25 years, the maximum IRRs are 16.88%, 33% and 29% using distilled oil, natural gas and fuel oil respectively.

Cogeneration uses fossil fuel and produces CO₂, CO, NO_x, and SO₂  emissions will accumulate in the atmosphere and help create the Green-house effect. This effect directly strikes the world environment, nature and mankind.

Using a scrubber to reduce costs 0.063 US$/kW-h [3], a controlled complete burn will reduce CO, NO_x and HC.

There are two ways to establish a carbon tax to protect the environment: Firstly, to directly tax emissions in order to promote the technical reduction of the pollutant, which, today, is neither realistic nor attractive to the energy producer. Secondly, an estimation can be based on the difference in cost between the capital investment in a cogeneration plant (US$/kW-h, low but polluting) and in a hydroelectric plant (US$/kW-h, high but pollution-free). In this paper only the second method is examined.

As a result CO₂ taxes of 6.643 – 7.829 US$/ton CO₂ ; 26.492 – 38.66 US$/ton CO₂ and 12.566 – 18.254 for distilled oil ; natural gas and fuel oil were obtained respectively.