Cost analysis for electrically powered furnace
Parameters
Fuel-fired furnace
Electrical furnace
Fuel-fired with carbon cost
(100% fuel gas firing)
(100% fuel gas firing)
Absorbed heat duty in Gcal/h Total units of input energy
15
15
15
11,856 tonne/annum of fuel
14,3840 MWh per annum of electrical power
11,856 tonne/annum of fuel
required per year
Total energy Opex in
470 million/annum
640 million/annum
470 million/annum
millions of Rs/annum Carbon cost in Euros/tonne
–
–
€50/tonne (For conversion purpose, €1 = Rs.80)
Total carbon cost in
–
–
140 million/annum
millions of Rs/annum Net Opex including carbon cost
470 million/annum
640 million/annum
610 million/annum
in millions of Rs/annum
Table 6
important initiative. Efficiency improvement projects have traditionally been evaluated solely based on payback in terms of fuel cost benefits. In many cases, this has not yielded the desired economic benefits, and projects have been shelved. However, with the upcoming carbon mar - ket scenario and cost of carbon allocated to each tonne of CO₂ emitted, former set standards may call for a revisit. Case Study 1 gives a very clear picture of how the inclu - sion of carbon cost in evaluating APH systems can enhance the IRR of a project by an impressive margin. In many cases, it may even transform the project from infeasibility to profitability. Even the choice of fuel firing can have a stark reversal when carbon cost is included, as demonstrated in Case Study 2. The long-standing assumption of firing fuel oil, especially in parts of Asia and Africa, for a lower operating cost, needs to be revisited by refiners considering the car - bon cost. If done so, fuel gas firing will have an advantage over fuel oil firing, owing to lower carbon emissions from fuel gas. For refineries with the flexibility to reduce fuel oil pro - duction by diverting vacuum residue to bottom of barrel units (for example, the delayed coking unit [DCU]), this can be a major step towards decarbonisation without the need for any immediate additional investment. Thus, fuel substitution for cleaner gases may seem optional today due to higher costs. However, they may soon become the mandate in near future. CO₂ pricing is slowly and steadily gaining momentum in all parts of the world, and the insight presented here will help refiners rethink their operating and revamp strategies. In Case Study 3, it was shown that blending green hydrogen is indeed a viable alternative for carbon footprint reduction. However, to justify the measure economically, a drastic reduction in green hydrogen cost is warranted. In Case Study 4, it was shown that electrically powered furnaces, which were prohibitive with respect to opera - tional and capital costs previously, can come into the reck - oning if carbon cost is included in the calculations. Fired equipment as a major carbon emitter requires a
700
600
0 100 200 300 400 500
Fossil fuel red
Electrically powered
Fossil fuel with carbon cost included
Energy cost
Carbon cost
Carbon cost
Figure 5 Operational cost economics for electrical furnace scenario
thorough review of design and operational practices with respect to carbon cost. In countries where carbon credits are not yet in operation but are rapidly emerging, former design practices may need to be changed to favour the greener initiative, and carbon cost will play an important role in that direction. Shilpa Singh is General Manager in Engineers India Limited’s Heat Transfer department, leading a team of chemical engineers involved in grassroots designs, revamp studies, and capacity and efficiency improvement projects for fired heater systems. She holds a bachelor’s degree in chemical engineering from I.I.T. Delhi and has more than 26 years of experience in this field. Email: shilpa@eil.co.in Rupam Mukherjee is Sr. Manager in Engineers India Limited’s Heat Transfer department. He has more than 15 years of experience in design and engineering, performance improvement, and troubleshoot - ing of fired heater systems. He holds a post-graduate degree in energy and environment management from I.I.T. Delhi. Email: rupam.mukherjee@eil.co.in
75
PTQ Q3 2024
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