A couple of years ago, San Diego’s 238-bed Veteran’s Administration (VA) hospital was all set to replace an aging, derated 600-kW turbine, looking at buying two new reciprocating engines (REs).

Whether by serendipity or just good luck, a remarkable alternative just suddenly showed up: a significantly improved 4.2-MW recuperated gas turbine capable of cogenerating heat and power (CHP) in a perfect fit for the VA’s loads.

Although technically still a pre-production model, it had undergone several years of multiple trial installations and extensive testing.

The DOE--backed research and development at Solar Turbines Inc. (a Caterpillar subsidiary) is located practically next door. The VA just happened to be in the right place, literally, to become the first full-fledged commercial adopter.

Looking at the engine as a solution, right away the recuperated design appeared to suit the facility’s energy needs almost perfectly---this, despite the fact that predecessor turbine models produce notoriously high heat, which is often difficult to utilize. The VA’s overall contracting officer and technical representative, Tom Olsen, recalls that when the Sempra Energy Services’ (SES) design team who were assisting him had previously explored a turbine upgrade, “it looked like it was just going to generate way too much steam for us,” he recalls. Hence, SES had advised him to go with two REs. These seemed the only alternative, but in truth they were not really ideal for this application, he says, as “they would have been crammed into a very tight location,” and necessarily decked out with expensive pollution control gear. The latter would have also incurred long-term higher maintenance and upkeep.

These drawbacks were neatly resolved, though, by the arrival of the new Mercury 50 model turbine with its “breakthrough” recuperator, making it, Olsen says, “a really good match for the heat load and electrical load that we had.”

Solar was also eager to enlist a good showcase demonstration site, and the VA San Diego Health Care System would make a perfect showcase. “It looked like a win-win for everybody,” and the go-ahead was given for SES to redesign, using the Mercury.

First-of-its-Kind Heat Utilization
Turbines have their pros and cons, but a frequent competitive challenge when matched against REs for commercial CHP jobs---as opposed to industrial ones---is how to use all of their searing exhaust. Thus, turbines have traditionally found their niche in industries, explains Solar Turbine product manager Chris Lyons, “with very large thermal loads, like refineries, chemical plants, and pulp and paper mills.” For commercial and light industrial work, turbines typically produced too much heat, and the economics, he says, “are not as compelling.”

That’s a hurdle for turbines because utilization of every therm is critical to making projects work financially. SES engineer Michael Moriarty notes, “There aren’t a lot of cogen opportunities for customers to take advantage of all that waste heat,” and so the power plant of choice is usually the recip engine. Moriarty is regional director of project delivery in the Western and Gulf area of the US---a role that has given him exposure to countless actual and proposed CHP projects---and he was a participant on the VA design team.

Now, however, thanks to the Mercury’s recuperated design---and resulting gains in electrical efficiency, reduction in exhaust heat, and greatly reduced emissions---the technological advantage for certain heat recovery applications appears to have shifted in favor of turbines. Lyons says, “It’s opened up another whole market segment that we can now pursue”---not that the Mercury will so much compete directly “against” REs, but, rather, he says, “It kind of fits in the middle, for light industrial applications, like food processing, pharmaceutical plants, metal fabrication facilities, painting and finishing plants,” or other sites needing winter heat but limited summer thermal loads—and hospitals,” he adds. The recuperated Mercury “is a perfect product for many of those applications.”

As noted previously, Solar conducted extensive R&D and field testing on the Mercury, having done seven field demos on it since 2000, before shipping the first production models, beginning with the VA in 2004. Lyons notes that more sales have followed to customers both domestically and in Europe. In San Diego another Mercury was recently sold to Qualcomm and will be installed this year. In Austin, TX, Burns & McDonnell will use one for a cogeneration application to be installed at the new Children’s Hospital. Three more are anticipated to be ordered for an SES project in White Oak, MD. Says Lyons, “We’re excited about this product. It’s already had quite a bit of success.”

Major Design Changes, Performance Improvements
What most accounts for the Mercury’s appeal and value is how its recuperator neatly tames the exhaust heat and yields electrical efficiency at about 38.5%. Moreover, this improvement comes packed in a 12% smaller footprint.

Comparatively, here’s how the new turbine matches up with the previous generation Solar 4.6-MW Centaur 50, which has been around since 1985, and of which thousands are now in operation.

• Heat rate has been improved from the Centaur 50’s rating of 11, 630 Btu/kWh down to 8,863 Btu/kWh.
• Exhaust flow is down from 151,410 lb/hr to 141,430 lb/hr.
• Exhaust temperature goes from 950†F down to 705†F.
• Resulting steam output drops from a range of 24,000 lb/hr to 108,300 lb/hr down to 12,300 lb/hr to 105,000 lb/hr, the latter being readily scalable to useful cogen applications.

Again, the key to it all---and what enables the all-important exhaust heat reduction---is the recuperator or primary surface heat exchanger. This captures the exhaust and channels some of it to pre-heat the incoming turbine air after it has gone into the intake compressor. That particular achievement, as SES engineer Jim Reese (who worked on the VA design team) observes, “is not an easy thing to do.” The reason is, the inlet air should be kept cool initially for highest compression efficiency. Heat needs to be injected at just the right instant “into what we call an ultra-lean premix combustion process” unique to this product, says Lyons. As noted previously, Solar’s R&D and its ability to make this breakthrough under “Project Mercury” was undertaken cooperatively with the DOE, under its Advanced Turbine Systems (ATS) program, which was aimed at developing high efficiency and significantly reduced emissions without sacrifice to cost or sustained performance.

At any rate, the recuperator and ultra-lean pre-mix enable the Mercury to reach the highest electrical efficiency of any gas turbine in its size range. In doing so, the steam flow drops to about 13,000 lb/hr of 150 psig saturated steam---a rate, says Moriarty, “that’s nice for steam applications for commercial cogen, because it’s not the full turbine heat rejection seen in conventional gas turbines.” Hence, payback curves start looking, he says, “very competitive with [reciprocating] engines in a mid-range of commercial CHP heat-to-power ratios.” Another benefit, in Moriarty’s view, is a turbine’s lower maintenance cost and high service availability, which can save on operational costs.

Minuscule Emissions
Equally significant is the recuperator’s impact on pollutants. The Mercury 50 slashes NOx and CO far below anything attainable with other multi-megawatt combustion systems, Solar claims; for example, resulting NOx is trimmed “to just 5 ppmv, guaranteed,” says Lyons. This means the Mercury can qualify for many more jobs within air-quality-sensitive and emission-restrictive regions like southern California, where the Mercury has already been given the green light for permitting “on a case-by-case basis, in what is probably the most stringent region in the world,” he notes.

Especially pleasing to regulators is the fact that the engine accomplishes this reduction without SCRs [selective catalytic reducers], or CEMS (continuous emissions monitoring systems), or urea. Removing the latter means eliminating potential ammonia slip. Meanwhile, says Lyons, Solar Turbines “will continue to develop these capabilities to probably even lower emissions levels in the future.”

Removal of the need for pollution equipment also saves potentially tens of thousands of dollars in first costs (depending on the application), not to mention the savings and reduced hassles on annual ammonia and maintenance, Reese points out.

In addition, by virtue of the ultra-lean-mix combustion technology, the Mercury has now set a new standard for best engineering and emission control practices. Other turbine makers have applied emission controls, of course, but, Lyons points out, such equipment imposes limitations and constraints. By comparison, the Mercury design provides flexibility to “turn down the load 40% to 100%, and still guarantee the same emissions,” he says. “So, we have a much broader control capability over a much wider load range than any other manufacturer has. This is a unique product, and there is no other manufacturer with this level of technology on the market.”

VA Hospital Getting Combined Heating, Power and Cooling
Choosing the Mercury 50 made sense at the VA largely for the good mutual fit on the exhaust heat output and hospital requirement. This Mercury’s therms amount to something approximately halfway between a similar reciprocating engine and a traditional “industrial” gas turbine as typified by the rest of Solar’s product line. This made the heat-to-power ratio a perfect match for the hospital’s energy requirements. The Mercury 50’s recuperator channels a portion of the exhaust jet to a conventional heat-recovery steam generator (HRSG), deftly recycling some of the heat there. Moriarty explains, “We’re just dumping the heat into the hospital’s steam header [i.e., boiler steam] right now,” he says, “leaving enough reserve on one of their boilers so it’s on hot standby.” Thus, he says, “In the remote chance we go down, the boilers are ready to fire if needed.”

Hospitals typically use steam for space heating, autoclaves, domestic hot water and, in the summertime, to drive an absorption chiller. Along with the Mercury 50, SES installed a new, higher-efficiency 500-ton Trane centrifugal Horizon model chiller. This took over for an obsolete 360-ton Trane that Olsen says, was on its last legs anyway. “We upsized to a 500 to make it match not only our cooling demand, but to match it with the low-profile heat coming off of that turbine.”

In sum, the Mercury is doing classic heating, cooling, and power trigeneration.

Power-wise, the 4.6-MW output handles nearly all of the hospital’s load, more than 90% of the time. Loads generally track up or down with the season, as is common with hospitals. If there’s a brief need to purchase a bit more power, the cost impact is proving to be minimal. Leaving this small balance of purchase power satisfies the interconnection tariff requirement for a 200-kW buffer. This must be drawn from San Diego Gas and Electric to prevent inadvertent export. The rules do permit black-start islanding, notes Reese, so that if SDG&E goes down, hospital operations continue “and we pretty much can maintain the entire hospital load right now,” he says.

Olsen appreciated SES’ overall electrical design work, which allows both islanding and a black start, he notes, “so if something happened and we lost SDG&E power, we’d be able to go ahead and operate the turbine,” especially since, unlike many hospitals, the VA has only one feeder. “Even though this is not true emergency power, it does give us a lot more secure onsite generation in case there’s a utility failure.”

Novel Financing and Instant Payback
Next comes one of the best parts yet in the story, although it’s something of a fluke for this particular project. The VA’s net, out-of-pocket came to a grand total of zero.

Under more typical circumstances, a project of this size and complexity could run as much as $1,575 per kilowatt installed.

[secondary subhead]How’s a “Zero Cost” Deal Possible?
Essentially, the VA project was largely financed with NOx reduction environmental credits. Over its lifespan the recuperated turbine’s lower emissions will save an estimated 40 tons of pollution annually. These benefits were quantifiable and translatable into so-called “offset credits,” which, in this case, are now enabling construction to proceed on a 500-MW combine-cycle plant in nearby Escondido. SES brokered the credits for $4.2 million. This was admittedly an extraordinary situation, because the Palomar plant urgently needed the credits. In other localities the offset-credit values would likely work out far differently.

In any case the VA was the big beneficiary, and they opted to take it as a kind of rebate. Reese (who specializes, among other things, in handling some regulatory and permitting issues for SES) explains, “We just gave them basically a $4.2 million dollar discount on the project.”

Besides getting this seven-figure buy-down, there’s another $1.3 million per year being realized and guaranteed to the VA in annual savings for 10 years---all thanks, again, to the Mercury’s higher cogeneration efficiency. This savings will help pay for the turbine’s maintenance costs, finance costs, and capital recovery payment for the 10-year term. Olsen amplifies that, thanks to the savings and credits received, “We were actually able to add capital back into the project,” including the bigger absorption chiller, a new cooling tower; boiler controls, building automation systems, a state-of-the-art medical/dental clinic, high-performance air compressors, and variable frequency drives (VFDs) on all supply and exhaust fans facility-wide. These and other future improvements are being made possible, says Olsen, because the Mercury “was actually a more cost-efficient solution to our needs out here.”

On top of all this, the VA has also insulated itself against electric rate uncertainties.

The annual $1.3 million in guaranteed savings under the ESPC (Energy Services Performance Contract), notes Moriarty, is even a bit “conservative.” Actual cost-avoidance could well reach $1.4 million a year, or more, especially in later years.

After 10 years of this arrangement, the project will be entirely paid for, and the VA will own the plant outright. Thus, starting after 2015, the hospital will still be lopping off about $1.5 million or so each year, along with gaining the full value of 4.6 MW of energy and cogenerated steam.

As for resulting natural gas consumption and dealing with the volatility of fuel prices, uncertainties on this matter do tend to torpedo some otherwise worthy CHP proposals, but, in this case the Mercury was basically an upgrade of an existing plant and, hence, the efficiency gains made the investment a sure bet in terms of overall benefit. Olsen points out, too, that a long-term fuel purchase contract was already in place. US government purchasers obtain decent prices at the wellhead. “Obviously,” he adds, “our gas consumption has gone up quite a bit,” but, due to the cumulative savings accrued, the impact on the gas bill “hasn’t been a problem.”

Design, Permitting, Construction in Record Time
The green light to build came in mid-March 2004, and immediately triggered a period of considerable pressure on participants to finish the construction by December 31—that being the cutoff date for a utility commission waiver on $1.4 million in standby charges, which would otherwise be incurred if the work went on into 2005.

Thus, with the clock ticking, permits had to be expedited, along with everything else. Again, thanks to the Mercury’s low emissions profile, a permit approval process that might ordinarily have required months, was greatly expedited. As part of the air-quality compliance rules, Solar Turbines will do periodic emissions data-logging, and the Air Pollution Control District will continue annual source-testing.

In late November, just a few weeks before the rate tariff deadline, the turbine was fired up for the first time. Emission tests followed, and in mid-December SDG&E approved the grid-parallel connection.

Moriarty sums up, “People worked long hours to get this project done.” Management team participants included Ajaz Lateef, who is SES’ VP of engineering and construction; Jorge Ortiz, SES’ director of construction; and for day-to-day onsite construction management, James Kerr, who also has 25 years experience in cogeneration applications and energy efficiency projects.

On the VA San Diego Healthcare System side, besides Olsen, the project management team included Bill Dias and Barney Oldfield.

All share in the credit for the project’s timely completion under rush circumstance, and its eventual success, says Moriarty, who adds that there’s some pride to be taken in the predominance of locally based and California businesses and individuals, all contributing to meeting the state’s very stringent air-quality standards.

Says Moriarty, “We had a lot of great local subcontractors, and at the end of the day, Solar’s engineers, and the firm we used for the detailed engineering—PID Engineering of San Diego—were definitely a great team.”

After the turbine hit the 2,000-hours mark in operating hours, the VA project earned a provisional Energy Star award from the DOE. As of June, the Mercury had already accumulated more than 4,000 hours.

DAVID ENGLE, a writer based in La Mesa, CA, specializes in construction-related topics.

DE - July/August 2005