Thermoeconomics and Environomics

  • Thermoeconomic analysis and optimisation of power plants
  • Environmental cost internalisation
  • Carbon Exergy Tax

Thermoeconomics is a complex approach for assessing energy system performance in terms of both thermodynamic and economic capabilities. Thermoeconomics has been proposed and developed by several authors since several years by now.

TPG is involved in this theme since early 90s. Our interests and expertise deal with the following aspects:

  • Thermoeconomic analysis and optimisation of advanced energy systems (mixed air-steam cycles, fuel cell hybrid cycles, Integrated Gasifier Combined Cycles,…)

  • Plant layout and operational optimisation of cogenerative and trigenerative plants (hourly operational optimisation, depending on plant efficiencies and energy selling price scenario)

  • Environmental impact of power plants

One of the latest examples of (A) is the application of the thermoeconomic analysis to an innovative fuel decarbonisation and carbon dioxide separation plant. In this case, the fuel pre-treatment section is responsible for a considerable increase in plant complexity which affects overall efficiency, capital costs and cost of energy (COE). The basis for any economic evaluation is the estimation of the capital cost of the plant components. This was performed using the T.E.M.P. code (described in the “SKILLS” section of this website), which is provided with “cost/costing equations” that evaluate single component capital costs starting from the thermodynamic and physical performance specifications and requirements. As far as investment cost is concerned, the figure below shows, as an example, the percent capital cost allocation when a Siemens V64.3a turbine is integrated in such a fuel decarbonisation plant.

Capital cost allocation for Siemens v64.3a integrated in the fuel decarbonisation plant

The layout and operational optimisation of energy systems (B) requires a detailed approach also for the economic boundaries of the energy plant, such as fuel cost trend and electricity-heat prices. In this respect, the hourly fluctuations of the prices and the plant performance variations at part-loads must be included in the calculations. Moreover, usage degradation and O&M costs can greatly affect the technical and economic performance of the plants. Most of these aspects need to be addressed when a comprehensive thermoeocnomic analysis is concerned.

An example of operational optimisation of an existing cogenerative plant is presented in the figure below: the exploitation percentage of each component was decided after a thermoeconomic optimisation procedure aiming at maximising the instantaneous profit for the plant.

Component exploitation percentage

Environomics (C) concerns the environmental impact of the energy systems, from the thermoeconomic point of view.
Two main approaches are possible to deal with pollutant emissions and the global warming issue: the political approach and the economic approach. The former “forces”, the latter “suggests” and makes low-emission energy systems more competitive than conventional solutions.

The NOx emissions were studied in order to highlight a possible economic break-even point for different plant configurations between the low-cost but polluting combustors (without steam-water injection) and the innovative low-emission combustors (with and without steam-water injection), at various levels of taxation for the NOx emissions.
As far as the CO2 emissions are concerned, the TPG recently proposed an innovative approach called “Carbon Exergy Tax (CET)”. This allows the CO2 emission external cost to be evaluated on the basis of efficient utilisation of exergy resources. The idea is not to punish the energy production activity (CO2 emissions are not toxic and moreover they are inevitably emitted in large quantities during hydrocarbon combustion processes) but the inefficient use of fossil fuels.

The Carbon Exergy Tax should push the deregulated energy market towards the most efficient and advanced conversion technologies and towards renewable resources (they should not be taxed since they do not emit carbon dioxide); in addition, the CET is an effective regulation for making CO2 sequestration economically feasible.
A few sample results for some different plants are presented in the following figure that shows the equivalent Carbon Tax calculated with the objective and non-arbitrary method of the Carbon Exergy Tax.

CET values vs LHV efficiency, for different plants and fuels