Despite a rise in gas prices and a decline in support from state and federal policy, trigeneration has still been a solid investment for the City of Sydney.
This week council announced that its Town Hall trigeneration plant is now fully commissioned and providing electricity, heating and cooling for the Sydney Town Hall, Town Hall House and the St Andrew’s Arcade.
There has been a three-month phase in for the gas-powered capstone micro-turbine plant, which was partly funded by a $3.05 million grant from the federal government’s Community Energy Efficiency Program.
The 1400 kilowatt system was expected to cut carbon emissions by more than 40,000 tonnes over its 30-year lifetime, equivalent to 1500 small cars.
“Installing trigeneration power at Town Hall is already helping us reduce our reliance on coal-generated energy hauled in from the Hunter Valley and allows us to power, heat and cool our buildings from a clean, local supply,” Lord Mayor Clover Moore said.
According to Chris Collins, council’s manager green infrastructure implementation the rise in gas prices had been factored in during feasibility studies, and the business case still held up.
The commercial aspect of savings due to the relative price of mains electricity and the electricity generated by the gas turbines was only one objective, he said.
Other objectives are not affected by the price of gas, he said.
These include demonstrating the feasibility of installing district-wide trigeneration in the CBD. This had particular challenges compared to a greenfields site, such as needing to lift heavy plant 23 stories up.
The technology is also giving the city cost-effective carbon abatement, Mr Collins said.
The carbon abatement cost has been benchmarked against the price of purchasing Green Power from the grid. Mr Collins said the trigeneration will result in a saving of 1400 tonnes of CO2 annually at a “good [cheaper] price” compared to Green Power.
Another element of the business case is that there is still a saving even with higher gas prices, as trigeneration makes more effective use of its fuel by producing electricity, heating and cooling for the whole building, plus electricity for the other two buildings, and when it generates surplus council is paid for what is exported to the grid,
Generating electricity also helps shave peak demand, Mr Collins said.
That has quite an impact on the energy bills in terms of reducing supply charges, he said.
“These are all mutually compatible objectives,” he said.
Good in a blackout
Another objective that is getting close consideration is investing in the switchgear that would make it possible for the precinct to operate in island mode during a blackout.
Mr Collins said the recent widespread loss of power in South Australia has shown that trigeneration could be a hedge against mains electricity loss and make the buildings more resilient.
The switchgear is neither overly expensive nor very sophisticated he said.
It does, however, need to be absolutely reliable, as if the building were to inadvertently export to the grid during a blackout event it could pose a safety risk for line workers trying to restore power.
Mr Collins said there had been a substantial amount of investigations with Ausgrid during the planning phase for the project to ensure the exporting of energy into the grid during normal operation would not compromise the stability of it.
What the exporting can now achieve, he said, is reducing costs for Ausgrid in terms of ramping up supply as the CBD densifies and demand potentially grows.
“Embedded or local generation reduces the need for extra grid infrastructure,” Mr Collins said.
Council is now in the process of planning and implementing a number of cogeneration projects for the Ian Thorpe Aquatic Centre, Cook and Phillip Park Aquatic Centre and Gunyama Park Aquatic and Recreation Centre – at Green Square.
This was a topic for heated debate during the recent elections, and it was controversial from the start.
See our article, Sydney’s chiller trigen plans hit a roadblock
Mr Collins said cogeneration is “very beneficial” for aquatic centres, as it can provide electricity and also heat pools.
He estimated that each aquatic centre project could result in around 500 tonnes of CO2 abatement. Added to the 1400 tonnes from Town Hall, and that is just under 3000 tonnes a year of emissions reductions.
“It all adds up.”
He said other buildings in the city are now being investigated to see if they have a sound case for trigeneration or cogeneration.
“Trigeneration is part of our practical portfolio of sustainability programs to cut carbon emissions by 70 per cent based on 2006 levels, along with building retrofits for energy efficiency, installing solar panels on the buildings we own and offsetting carbon emissions,” Ms Moore said.
City of Sydney considering carbon in the business case for its trigeneration is a contrast to the wider market, according to Derek Simons, chief executive of Simons Green Energy.
His company did not supply or install the Town Hall plant but has has installed numerous other trigeneration plants including at Swinburne University in Melbourne, Frankston Arts Centre, 1 King William in Adelaide, East Village Shopping Plaza in Sydney and Crown Plaza in the Hunter.
Mr Simons said the current market for cogeneration and trigeneration has “slowed down compared to the Gillard days”.
This is due to a combination of lack of government support, high exchange rates, relatively high gas prices on the east coast and an oversupply of electricity to the grid, he said.
“However the current consensus is that the gas price has plateaued, and that mounting pressure on electricity companies is leading to some of the dirtiest generators, such as Hazelwood, being led to a long overdue retirement.”
Mr Simons said the general factors that affect the business case for cogeneration or trigeneration aside from gas prices include the type of system, correct sizing, efficiency and effectiveness of the delivered system, type of electricity metering and government grants.
“Invariably large scale co and trigeneration systems do save significant amounts of money for clients, but achieving the commonly accepted commercial three to five year payback period [or greater than 20 per cent ROI] is often difficult and unrealistic to achieve without government grant assistance,” he said.
“With the current government’s anti-green schemes and anti-carbon tax rhetoric, it is difficult for many projects to achieve the accepted commercial return on investment criteria.
“This is coupled with Australia having some of the cheapest electricity on the planet due to our heavy reliance on cheap and dirty coal fired power. “
He said the market for new trigeneration or cogeneration is also being impacted currently by a “waning” of the environmental kudos of the system.
Commercial entities now “simply don’t care” about where the energy might come from or what affect it might have on the environment, Mr Simons said.
“Cleaner energy initiatives that used to have an equal weighting between carbon dioxide savings and commercial viability, unfortunately now are analysed purely on the financial benefits they provide.”
Mr Simons said most cogeneration and trigeneration systems are now being purchased by “forward thinking councils and companies who realise that a five to eight year payback period is actually not a terrible result considering the vast carbon dioxide saving.”