Intelligent Investment: a Level II CHP Feasibility Analysis

Louis Dreyfus Commodities owns and operates the largest fully integrated soybean processing and biodiesel plant in the United States. The facility, in Claypool, Indiana, produces 1 million tons of soybean meal for animal feed and has an annual production capacity of 88 million gallons of biodiesel. It averages 8,600 hours of annual operation with an average power demand of 8 MW. As part of an ongoing energy conservation campaign, Louis Dreyfus developed an energy profile, which is used to determine the primary sources of thermal energy consumption, electrical load, and natural gas usage at a facility. Louis Dreyfus hired Woodard & Curran to assess whether or not the facility would benefit from implementing a Combined Heat and Power (CHP) system and provide the necessary information to make a final investment decision.

The Claypool plant’s recent and planned expansions required a significant amount of steam—a demand that its existing natural gas boiler and a rental boiler could meet. However, Louis Dreyfus sought to install a new 135,000 lb/hr natural gas boiler to supply the plant’s minimum steam needs, in case its larger boiler was unavailable for any reason. The findings of a Level I (Phase 1) feasibility analysis, conducted by another firm, showed a reasonable payback with the installation of a 6 MW Solar Taurus 70 Combustion Turbine Generator and a duct-fired Heat Recovery Steam Generator combination system.

Woodard & Curran conducted a Level II CHP preliminary engineering design analysis (Phase 2) for the selected gas turbine based CHP system. This analysis replaced the assumptions used in the Level I Feasibility Analysis with verified data, confirmed the optimal CHP configuration and sizing, and defined the appropriate thermal applications and economic strategies. We provided a preliminary engineering design package (30%) in order to build a construction-grade capital cost estimate and economic model that recalculated the original return on investment/simple payback. The economic model included an examination of the plant’s recent operating history and utility operating costs compared to estimated future utility rates and charges, as well as potential savings from the installation of a CHP system through grants, rebates, and tax incentives.

The primary goals of the Level II analysis included: confirmation of facility integration of the CHP utility outputs; verification that the recommended CHP system will meet the operational and economic needs of Louis Dreyfus; and verification of available funding and incentive sources used in calculating the return on investment in order to make a sound final investment decision. In addition to the mechanical and electrical engineering analyses, Woodard & Curran determined site-civil and structural engineering requirements and various land and air permitting obligations.

After a detailed review of operating schedules, thermal loads, and electrical demands for the site, Woodard & Curran identified a number of steps and that would improve simple payback and determined that the implementation of an appropriately scaled CHP system would serve the facility well, improve steam-generating resiliency, produce favorable cost-benefits, and meet the objectives of the company’s energy conservation program. Given the estimated annual savings, Woodard & Curran calculated a simple payback of between 9.8 and 10.1 years without incentives and between 8.7 and 9.0 years with all potential incentives.

Louis Dreyfus Agricultural Industries, LLC

Claypool, IN


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