More details about KWH cost

 

As an example a 10 MW genset is considered hereafter:

1 – Investment cost

The investment range is about 12 US $ millions for a 10 megawatt diesel engine driven genset.
Currently such investment is based on a 15 years pay-out.
15 years represent about 120 000 operating hours.
Producing at full capacity about: 1 200 000 000 KWH / 15 years.

The initial investment is: 0.01 US $ / KWH (financial costs excluded)

 

2 – Fuel cost

Two extreme cases: High cost (2008) and Low cost (2009):

April 2008:

Fuel consumption is about the same, burning fuel oil or diesel-oil.
The range is about 200 Gr / KWH
In april 2008, fuel cost was about:
Heavy fuel (FO180) : 545 US $ / T
Diesel-oil (MDO) :1040 US $ / T
This means a fuel cost range of:

Fuel cost with Heavy fuel (FO180) : 0.11 US $ / KWH
Fuel cost with Diesel-oil (MDO) : 0.21 US $ / KWH

March 2009:

Fuel consumption is about the same, burning fuel oil or diesel-oil.
The range is about 200 Gr / KWH
In march 2009, fuel cost is about:
Heavy fuel (FO180) : 250 US $ / T
Diesel-oil (MDO) :400 US $ / T
This means a fuel cost range of:

Fuel cost with Heavy fuel (FO180) : 0.05 US $ / KWH
Fuel cost with Diesel-oil (MDO) : 0.08 US $ / KWH

 

N°1 Conclusion:
Heavy fuel choice is an evidence

N°2 Conclusion:
The investment part in KWH final cost is marginal

N°3 Conclusion:
Per year fuel consumption is about:
With Heavy fuel (FO180) : 16 000 T / year
With Diesel-oil (MDO) : 16 000 T / year

Per year fuel cost is about:
With Heavy fuel (FO180) : 8.7 US $ million in 2008 and 4 US $ million in 2009
With Diesel-oil (MDO) : 16.6 US $ million in 2008 and 6.4 US $ million in 2009

Per year burning heavy fuel instead of diesel-oil create a profit of:
Profit = 7.9 US $ million / year in 2008 and 2.4 US $ million in 2009

A new 10 MW genset is paid in less than 2 years.(2008)

A new 10 MW genset is paid in less than 5 years.(2009)

Long term trend to be considered is evidently 2008 figures and not episodic 2009 figures.

3– Power distribution network.

The reason why heavy fuel is not the only fuel burnt for thermal electricity generation is the difficulty or impossibility of its transport to the power plant site.
Main problems are related to the high viscosity or high pour point of the heavy fuel, or both.
On the opposite crude oil transport is quite easier. Then, if the main power plant has to be located at some distance from the crude production area, the crude will be transported to the power plant site and the mini-refinery skid mounted units located close to power main genset, in order to avoid any heavy fuel transport. The main power plant genset will burn the entire heavy fuel production.
The diesel-oil production is easy to transport and will be splitted towards the various remote small power gensets of the power distribution grid.

4– Power generation improves exported crude oil value.

As suggested in the example the light distillate crude oil feed fraction is returned to the crude feed pipeline. The light distillate (raw gasoline) as well as the middle distillates fraction (diesel oil) are both the high value fractions of the crude oil: their value is higher than the crude barrel cost. On the opposite, the value of heavy fuel-oil (bottom of the barrel) is quite lower than barrel’s cost.
In other words, pumping back a high value fraction (raw gasoline) to the crude oil supply source is increasing its value.

5– Electricity generation fuel cost lower than crude oil barrel price.
Said another way: the power generation for the whole distribution network is achieved at a fuelling cost quite lower than diesel-oil cost, but even lower than fuelling with crude oil.

 

 

Power Generation on Oil Production Site (onshore or offshore).

Production of heavy fuel and motor diesel oil from local crude oil on crude oil production site is generating significant profit.

No more imported diesel-oil with associated transport cost, storage cost and shortage possibilities.
Heavy fuel oil available for the main power generation unit.
Diesel-oil preferred for the smaller remote external power gensets and industrial engines.

This is possible with small skid mounted crude oil refining units.
The associated small skid mounted mini refinery for a 10 MW genset (for the example hereunder) would be about 1000 BPD.

 

 

The oil mini-refinery facility has to be located with the main power genset.

The investment cost of skid mounted crude oil refining units is marginal compared to genset investment.
The operating cost of skid mounted crude oil refining units is marginal compared to genset operating.
The additionnal crew can be neglected.