On-site energy generation for a decarbonized Irish manufacturing industry

Abstract

The objective of the thesis is to explore whether it is technically, economically and en-vironmentally feasible for an Irish manufacturing facility to become an energy prosumer, byproducing energy on-site, and decrease the environmental impact of its electric and thermalenergy demand as the energy sector is progressively decarbonized. A new model has been de-veloped and implemented in Matlab in this thesis. It allows to simulate the techno-economicand environmental feasibility of on-site energy generation for a manufacturing facility throughan integrated Variable Renewable Energy (VRE) system and a Combined Heat and Power(CHP) system. The model is built as a robust and flexible tool that can be used for any fa-cility worldwide by updating inputs such as geographical location, solar and wind availabilityand hourly energy demand. The implemented model allows also to evaluate the feasibility ofon-site energy generation in possible future scenarios by conducting a sensitivity analysis ofparameters that may change in the future, such as discount rate, commodities price and gridcarbon intensity.An existing Irish manufacturing facility has been used as a real case study to providerealistic data as input to the analysis, capturing real requirements and constraints that char-acterize this type of end-user. The first option investigated to decarbonize the electric loadof the facility is an on-site VRE system composed of solar PV and wind turbines. The mod-elled VRE system results technically viable but not economically feasible in isolation: its PayBack Time is too high (PBT >25 years) to be attractive for a manufacturing facility andit would remain unattractive even with substantial subsidies and a reduction in the capitalcost of VRE technologies. The second option investigated, both to economically support theon-site VRE system and to decarbonize the thermal energy load of the facility, is to add anon-site CHP system. The integrated system results to be both technically and economicallyfeasible with aPBTclose to 6 years. However, the environmental benefits of reducing carbonemissions by producing energy for self consumption on-site are limited in time: if the projectwas to be commissioned in 2020, the cumulative emissions savings would become negativein 2040 as the electric grid is progressively decarbonized, creating a potential misalignmentbetween decarbonizing policies and the manufacturing facility’s economic strategy. Anotherissue arises with the installation of the on-site system: the almost constant electric load ofthe manufacturing facility becomes more variable and difficult to predict due to the intermit-tency of renewable sources. Despite its inherent operating flexibility, the CHP system doesnot significantly reduce the occurrence of high fluctuations in the residual electric load thatthe grid has to cover.It is concluded that a techno-economic opportunity does exist for on-site energy cogener-ation in the Irish manufacturing industry, however the environmental benefits are limited intime. The effects on the electric grid of a switch from a predictable and constant load to amore variable one should be considered as the penetration of distributed generation increases