Points of view | Insights

The ORC systems: a mature and reliable technology for the energy and economic efficiency

Focus on applications for gas and diesel power plants.

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According to the International Energy Agency, energy efficiency represents the main lever for reducing current CO2 emissions, with 44% of the total potential

This study focuses on one of these energy efficiency solutions: Organic Rankine Cycle (ORC) machines. Installed on thermal power plants or production plants, they are powered by “free” energy – the waste heat from processes – and produce competitive and low-carbon electricity. This study focuses on one of these energy efficiency solutions: Organic Rankine Cycle (ORC) machines.

Installed on thermal power plants or production plants, they are powered by “free” energy – the waste heat from processes – and produce competitive and low-carbon electricity
The study outlines the potential of this technology for diesel and gas engine power plants, both in economic and environmental terms, as well as the means available to operators to finance what can be considered a significant investment.

ORC technology makes it possible to recover waste heat from motor power plants, an application that is insufficiently exploited

ORC technology is now mature: the first developments date back to the 19th century and thousands of machines have been installed worldwide to date. In order to generate mechanical or electrical energy, an ORC cycle operates between a hot source (the heat to be recovered) over a temperature range of between 120°C and 350°C and a cold source (cooling with ambient air or water). The greater the temperature difference between the hot and cold sources, the better the efficiency of the installation. ORC technology is now mature: the first developments date back to the 19th century and thousands of machines have been installed worldwide to date. In order to generate mechanical or electrical energy, an ORC cycle operates between a hot source (the heat to be recovered) over a temperature range of between 120°C and 350°C and a cold source (cooling with ambient air or water). The greater the temperature difference between the hot and cold sources, the better the efficiency of the installation.
Medium to large ORC machines are the most promising technology for using heat with a temperature above 150°C. This allows for example to improve the energy efficiency of industrial combustion turbines, internal combustion engines and industrial processes.

Diesel power plants, which emit a lot of CO2, are often indispensable for the production of electricity

BASe-load POWER PLANT

Base-load production plants are located in areas that are not interconnected to the major continental electricity grids (islands far from the coast, for example), or in areas with industries that consume a lot of electricity (e.g., mines), or in areas where electricity consumption is growing very rapidly (Africa, South America, Southeast Asia, but also the United States; these plants can be set and produce in a short time).

Peak power plants

Peak power plants are used to supplement intermittent electricity production (solar, wind) or production that cannot be modulated. This ensures a certain reliability of supply, thanks in particular to a very short start-up time (full load reached in a few minutes).

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Engine power plants still emit a lot of CO2 and will be difficult to replace in the medium term

the installed capacity of power plants, i.e. the equivalent of 25 medium-power nuclear reactors (900 MW), distributed over several thousand power plants with capacities ranging from a few hundred kW to over 500 MW

Tons

of CO2 emissions per year, equivalent to the total emissions of Portugal in 2019

The worldwide fleet of engine power plants that are candidates for the installation of ORC can be estimated at about 130 units for a total installed capacity of 9 GW

fioul lourd vs. gaz naturel

The installation of ORC on thermal power plants reduces COemissions

Considering the direct and indirect emissions over their entire life cycle (construction, extraction, fuel supply, etc.), oil and gas-fired power plants are particularly high emitters of CO2 and pollutants.  By using the waste heat from these power plants through the installation of ORCs, it is possible to generate additional electricity, in other words to reduce the amount of fuel needed to produce the same amount of electricity. This increase in energy efficiency reduces CO2 and pollutant emissions for each kWh produced.
The installation of an ORC on a power plant requires a significant investment, but provides fuel savings and annual carbon allowances allowing a payback time ranging from 3 to 8 years depending on the configuration. The reduction of CO2 emissions is then established between 5% and 9% thanks to the installation of an ORC.

The transition to less polluting fuels and the increase in the price of carbon allowances will make ORC solutions more attractive

the impact of switching to VLSF oil fuel on the return on investment time

the impact of switching to biofuel on the return on investment time

the impact of increasing the price of the carbon allowance to 100 € / t on the payback time 

the impact of increasing the price of the carbon allowance to 300 € / t on the payback time

The ESCO third-party financed model for the installation and operation of ORC machines is an attractive solution for operators and investors

ESCOs (Energy Services COmpany) are energy service companies that offer customers the ability to finance their energy efficiency work and achievements in a variety of applications with contracts tailored to each situation.
ESCOs offer operators an efficient, flexible and cost-effective method of improving energy performance, supported by energy specialists and responsible third-party financing. For each energy efficiency solution installation, the ESCO initiates a Project Company.
With the installation of an ORC on a power plant, ESCO and the Project Company repay the investors through the sale of electricity to the operator at an attractive price of about €80-90/MWhe, which is less than half the cost of producing the electricity by the plant itself. The energy savings made by the operator allow him to ensure at lower cost the self-consumption of electricity from the plant.
In France, ESCOs and project companies can obtain significant subsidies making the investment even more attractive. In the case of French non-interconnected areas, the electricity market as a regulated utility implies an adaptation of energy efficiency financing. Energy efficiency solutions in non-interconnected areas represent an additional lever for reducing the cost borne by the consumer and/or the taxpayer. Supporting the installation of ORCs in motorized power plants would be a strong signal for reducing the carbon footprint while maintaining a competitive production cost.

Comparison of production costs in the low or non interconnected zones

PER MWh

ORC (controllable)

PER MWh

Wind energy (intermittent)

PER MWh

Solar (intermittent)

The deployment by public authorities of a green industrial revival would be an opportunity to accelerate the installation of ORCs for energy efficiency

The 2015 Energy Transition Law for Green Growth generated public incentives that promoted investment in wind and solar energy. Similar mechanisms could be deployed to encourage industrial investment in energy efficiency. Public subsidies and grants via calls for projects – such as ADEME’s IndusEE – are to be encouraged to support the attractiveness of the energy efficiency market. The support of an energy efficiency industrial sector would be greatly enhanced through long-term order commitments. Some technologies are currently the subject of recognized French know-how and have significant development potential – including for export. They deserve to be supported. By stepping up their collaboration with the national network of innovative SMEs, the major French energy players will obviously have a key role to play in the development of this sector.
Moreover, as they consume little concrete or rare earths, ORC technologies seem to contribute to both energy efficiency and the reindustrialization of the country.

Contributors to the study

Pagamon is a strategy and transformation consulting firm founded in 2013. We support major players in the industry, services and life sciences sectors in their search for balance. Helping them structure their strategic vision, transform their operational and/or digital model, and drive change. To support profitable, sustainable and responsible growth. As a committed player, Pagamon leads the Observatory of the Balanced Organization™, articulated around a “think tank” and an annual survey. In order to provide an innovative, sometimes offbeat, perspective on the strategic support of transformations to support the growth of companies.