Micro Power Generation
Natural Gas-Fired Reciprocating Engines
Natural-gas fired reciprocating engines are also used for on-site electric generation. These types of engines are also commonly known as combustion engines. They convert the energy ontained in fossil fuels into mechanical energy, which rotates a piston to generate electricity. Natural-gas fired reciprocating engines typically generate from less than 5 kW, up to 7 megawatts (MW), meaning they can be used as a small scale residential backup generator to a base load generator in industrial settings. These engines offer efficiencies from 25 to 45 percent, and can also be used in a CHP (Combined Heat & Power) system to increase energy efficiency.
Economics of Petrostar Micro Power Generation
The primary factor on micro power generation economics is the policy of a dollar saved is a dollar earned. In the production phase of Natural Gas the largest cost incurred by producers is from the wellhead to the market. Due to the nature of the commodity and the need for large scale infrastructure the majority of cost is categorized under processing, compression, handling and gathering fees charged by other industry competition to allow access through their infrastructure to sales points.
Industry averages range in the $1.25 per MCF to $2.50 per MCF for incurred overhead costs to turn raw natural gas into a commercially viable commodity at a designated point of sale. Through the utilization of micro generation we are able to drastically cut our cost and dependency on other industry partners and incurred tariffs. Through self utilization our operation costs range from $0.75 to $1.00 per MCF. The largest variable we face is associated royalties to mineral owners based on the percentage of the forecasted sales. This cost is a variable for both the self utilization and conventional sale of P&NG.
Each site, based on the quality and the quantity of natural gas will vary slightly of economic valuation. Other contributing factor to take into account is the existing power grid and local consumption of base load power. Utilizing a site specific model of a proposed location in Herronton, Alberta (located 45 minutes South East of the city of Calgary) Petrostar has identified the potential of a yearly average of $2.53 netback per Mcf of natural gas consumed. The figures calculated utilized the Alberta Treasury Branches natural gas forecasting model for 2012 and historical power pool pricing from 2011. The average cost to produce the feedstock was $0.93 per Mcf.