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4.1. SR 10-06-1997L. lty of River ITEM 4.1. Memorandum TO: MAYOR AND CITY COUNCIL FROM: DATE: STEPHEN ROHLF, BUILDING AND ZONING ADMINISTRATOR OCTOBER 6, 1997 ~-:>/~ SUBJECT: REQUEST BY UPA FOR MICRO- TURBINE AT WASTE WATER TREATMENT PLANT In cooperation with Energy City, United Power Association (UPA) is requesting permission to install a micro-turbine on the digester at the Elk River Waste Water Treatment Plant. The mirco-turbine will generate electricity from excess methane gas at the plant. Currently, in the winter months, most of the methane produced is used to heat the digester, but in warmer months there is an excess that is currently being flaired (burned to dispose of it). The generator is not large at 24 kilowatts. However, it will use energy that is currently being wasted and the micro-turbine will make an interesting Energy City demonstration. During the testing phase of this proposed project, approximately the first six months, UPA will give the electricity produced to the city to help run the treatment plant. After that the city may purchase the electricity at a very low cost. UPA hopes to install the micro-turbine in the spring or fall of 1998. To help pay for the micro-turbine, UPA has applied for a grant through the "Great Lakes Regional Biomass Energy Program". If the Elk River program is not successful at securing a grant, UPA will look for alternative ways to fund the micro-turbine. Steven Shurts of UPA has been in contact with Darrell Mack and Bryan Adams regarding this project and there are no objections from staff. Steve will be at Monday night's meeting to address any further questions you may have. 13065 Orono Parkway · EO. Box 490 · Elk River, MN 55330 · TDD & Phone: (612)441-7420 · Fax: (612) 441-7425 United Power Association P.O, Box 800 · Elk River, MN 55330-0800 · (612) 441-3121 September 4, 1997 Mr. Patrick Klaers City Administrator City of Elk River 13065 Orono Parkway P.O. Box 490 Elk River, MN 55330 Dear Mr. Klaers: In June of this year, United Power Association (UPA) submitted a proposal to the Steering Council of the Great Lakes Regional Biomass Energy Program (GLRBEP) requesting partial funding for a biomass-to-energy project in our service territory. The proposal was to install a very small combustion turbine, or microturbine, and operate it on methane gas from a wastewater treatment plant or agricultural processing facility. In mid-August, the GLRBEP advised that UPA was selected to provide a full proposal, which is due September 15, 1997. After further evaluation of potential sites, we concluded the best site is right in our backyard. The Elk River wastewater treatment plant has digesters which produce methane gas. With approval from Mr. Darrell Mack, this gas was recently sampled and analyzed by a local testing laboratory and was found to be suitable for combustion in the microturbine. This tiny power plant would produce 24 kW of power, while consuming approximately 10 cubic feet per minute of methane gas. This appears to be a very small portion of the total methane generated at the treatment plant. The plan is fairly simple. UPA would install the microturbine near the flare system at the treatment plant, and would include methane piping, electrical connections and all other equipment needed to complete the power plant. Information from the manufacturer currently planning on participating in this project is enclosed so you will have a better idea of how the plant might appear. In preliminary discussions, Mr. Mack has been very positive about participating in this project. We are now requesting a more formal show of support and participation by the City of Elk River. In addition to providing all the labor, materials and equipment to install and operate the microturbine, UPA will provide the City of Elk River treatment plant with the electrical energy generated by the power plant for the initial six month to one year test period. In exchange, the Mr. Patrick Klaers September 4, 1997 City will provide the site and methane gas to UPA at no charge and will allow UPA to connect the power plant to the treatment plant motor control center. If after the test period, the microturbine proves to be an economical source of power and UPA believes it can continue to provide economical power for the foreseeable future, the City and UPA will discuss the future disposition of the plant. It could possibly stay at the site indefinitely, generating electricity as long as methane is available. If not, UPA would remove the plant and return the wastewater treatment plant to its original state. Our request of the City of Elk River is to provide UPA with a letter of interest, stating the City will provide the site and gas to UPA for the demonstration of the microturbine on methane gas. This would not be a contractual obligation. It is simply a statement that the City is interested in participating in this project, contingent upon the City and UPA agreeing to certain terms and conditions at a later date. We believe the City and UPA will both benefit from participation in this project. It enhances the "Elk River: Energy City" image and goals and helps UPA gain valuable information on this technology. In addition, it is our intent to present our findings at a national conference, giving "Energy City" further recognition. Your letter of interest would greatly enhance our chances of receiving the grant. Therefore, if possible, we would appreciate receiving the letter by September 12. You likely have many questions. Please feel free to contact me at 241-2300 and I will gladly discuss this in greater detail. Sincerely, UNTED POWER ASSOCIATION Stephen J. Shurts, P.E. Manager, Generation Development SJS\kflcityofer Enclosure c: Stephen Rohlf, City of Elk River INDUSTRIAL MANAGEMENT & TECHNOLOGY APRIL 1, 1996 FORTUlX Microturbines may be the electric company's best way to make more juice in a de- regulated era. Some could turn up on a street near you. OLLOW THE LINES on a map of a region's electric power grid to the big dots where they converge. There, like spiders in their webs, sit giant central generating plants, those archetypal industrial landmarks whose smokestacks and cooling towers are visible from afar. Advancing technology and deregulation may soon alter that landscape, however, and add an overlay of new little dots to the map. They'll represent pint-size power plants that will supply extra juice when and where it's needed. One of the hottest contenders to pump new power into the system is the PHOTOGRAPH BY DAVID STRICK INDUSTRIAL MANAGEMENT & TECHNOLOGY microturbinc, a miniaturized, cheaply pro- duced cousin of the turbine-powered electric generators tucked into the tails of thousands of airliners worldwide. In urban areas, where microturbines are a much better bet for fill- in power than other nonconventional sources likc solar cells and windmills (see boxes), the littlc machines could help hold down the elec- tric bills of consumers and businesses alike. Says Daniel Rastler of the Electric Power Re- search Institute, a utility-supported entity in Palo Alto: "Utilities that see a market for standby power could be buyers and distribu- tors of tens of thousands of these units." A microturbine takes up less space than your office desk. It can make electricity from a variety of fuels--natural gas, kerosene, die- sel oil, even gasoline. If designers get things right, the little dynamos will require almost no upkeep. Your power company might in- stall bevies of them at regional substations, or even ()ne or two right up your street, if you're in an outlying neighborhood. Don't worry: The turbines run so quietly that they'll be hardly more intrusive than the big transform- ers already commonplace in residential areas. Distant computers will switch the turbines on and off as needed, and you won't even notice. Despite its puny size, the microturbine has a couple of big-lcaguc supportcrs: Capstone Turbine Corp., a Tarzana, California, startup financcd by the Sevin-Rosen and Canaan Part- ners venture capital funds, and the aerospace division of AlliedSignal in Torrance, Califor- nia, which has long experience in turning out those airplane generators. Already testing pro- totypes, developers expect the microturbine to play a host of roles besides supplementing the electric company's output. In highly polluted areas, it might be a more acceptable and af- fordable alternative to batteries as a power plant for cars. Microturbines could also re- place diesel generator sets, those widely used, growling pallets of portable kilowatts. They could supply emergency power to hospitals, for example, or keep lights burning at isolated logging camps. Mounted on trucks, microturbines could supply juice for welding equipment, say, or churn out electricity at filmmaking locations, upstaging diesel gener- ators that need elaborate acoustical muffling in such situations. Although the microtur- bine's capital cost would be higher than a die- scl's, at least in the immediate future, it has attracted the attention of the power industry RI.~POI*,TI.:R ASS()('IATI': Mt'lanic Warm'r Your power because of diesel's many drawbacks. "The diesel generating set is noisy and polluting and needs a lot of maintenance," says Edan Prabhu, man- ager of technology trans- fer at Southern Califor- nia Edison, the electric utility unit of Edison In- ternational, which is eval- uating microturbines as a power source. Deregulation, which electric companies are just beginning to taste, could send them on a microturbine shopping spree. Says Oliver Yu, director of energy and utility systems at SR| Interna- tional, a Menlo Park, California, research and consulting firm: "This is a revolutionary time for utilities. When they operated as re- gional monopolies earning a fixed return on their investments, it used to make sense to have central power stations." That time is long past, says Yu. Even before deregulation threatened, power companies had become re- luctant to spend billions on big, new generat- ing plants and the long, high-voltage trans- mission lines radiating from them. Instead, they'd started squeezing more kilowatt-hours out of their existing investments. company might install bevies of microturbines in outlying neigh- borhoods. But don't worry; they're quiet and unobtrusive. OW, as federal and state au- thorities get ready to open electricity markets to competi- tion, the utilities have an added impetus to serve cus- tomers at the lowest possible cost. In the first stage of deregulation, likely to occur first in such states as California and New Hampshire, industrial users will be able to choose among power suppliers; homeown- ers may have that option in the future. In this new climate, microturbines can in theory both hurt and help the utilities. Fiercely inde- pendent customers may be tempted to install them as do-it-yourself power plants in their backyards. But the power companies, by set- ting up microturbines of their own, could re- lieve customers of this chore and thereby keep their allegiance. Weighing in at a mere 165 pounds and re- sembling a beer keg wrapped in a silvery space blanket, Capstone's microturbine could be seen running in a test cell recently. The machine, no noisier than a vacuum cleaner when you stand beside it, is simplicity itself. Just one mov- ing part, a spinning shaft whose 96,000-rpm speed lights up on a red LED display, serves si- multaneously as com- pressor, turbine, and electric-generator rotor. Air bearings support the shaft, eliminating the need for a lubrication system. The goal of the engine's designers is operation on demand for months on end without maintenance. Customers, including several electric utili- ties, expect to gain experience with 35 of these generators in field trials beginning in early summer. Capstone is tooling up a pro- duction line scheduled to begin operating later this year. Capstone's turbine generates 24 kilowatts, enough to run the central air conditioner of a big house. The output is puny compared with that of the big gas turbines, typically turning out 160,000 kilowatts, that utilities have been installing in recent years at central power plants, not to mention the giant coal- powered units in the 500,000-kilowatt league that power companies have quit building in many areas because they sop up too much capital. (It's been years since they built new nuclear units, which are even bigger.) Paul Craig, Capstone's vice president of engineer- ing, says the 24-kilowatt size was picked with an eye to a second and potentially gigantic market: low-polluting automobiles. A microturbine of this size would be pow- erful enough to propel an electric car. Though it packs the equivalent of only 32 horsepower, a "hybrid" power train that couples the turbine-generator with a battery or flywheel energy-storage device could draw on them for extra oomph when passing or climbing hills. Hybrid cars would be more fuel efficient than conventional models; air-pollution levels would be low enough that California author- ities might classify them as "zero emission" vehicles under proposed future standards. And unlike cars powered solely by batteries, which must stop for recharging after running a few hours, hybrid cars could travel hundreds of miles on a tank of fuel. Detroit's Big Three, aided by federal dol- lars, are seriously pursuing hybrid-car re- SUN POWER WARMS UP THOUGH THE BASE is small, solar electricity is getting bigger. U.S. silicon photovoltaic cell pro- ducers, which command more than a third of the world market, rang up a 35.5% in- crease in shipments last year, to a record $148 million. Wholesale factory prices for the solar modules, more than half of which were exported, ranged from $3.90 to $4.35 per watt of capacity, according to the trade newsletter PhotoVoltaic News. While that can't compete with conventional power costing as little as 50 cents per watt of ca- pacity, demand continues to grow where sun power has long made sense: at remote water-pumping stations, roadside tele- phone call boxes, and isolated locations in the Third World. Some power companies are experi- menting with erecting arrays of solar cells to relieve peak-hour demands where up- grading transmission capacity is expen- sive, such as suburban neighborhoods served by buried cables. The hottest part of the day, when people want air condi- tioning, coincides with the hours when so- lar cells put out the most juice. But while the cost of photovoltaic installations keeps falling, these projects can't yet pay their own way. One utility has jumped into a solar business that can stand on its own. Idaho Power in Boise has developed a line of 200- to 800-watt solar systems that it in- stalls, owns, and maintains at remote sites such as ranchers' houses and water pumps supplying cattle troughs. The residential setups consist of a solar power array, DC to AC inverter, storage battery, and small backup generator fueled by propane. Idaho Power owns this photovoltaic unit--with a battery for cloudy days-- which it set up at the home of Wendell and Leola Jones near Boise. Most of the systems re- place small, noisy diesel generator sets that re- quire frequent mainte- nance. So far 30 of the systems, for which Idaho Power charges a flat fee of $20 to $150 a month depending on their size, are in place; 70 more are scheduled for installa- tion by the end of the year. Idaho Power's biggest solar job involved replac- ing most of the diesel 9 power at an Air Force ra- ~ dar site 41 miles from the ~ nearest power lines. In 5 the past, Air Force crews relied entirely on diesel fuel that had to be hauled over difficult roads to reach the facility, which now can be kept open during winter months when snow and ice block access roads. In a new joint venture, the utility aims to export stand-alone renewable en- ergy systems to developing countries. Other promising solar ideas are gestat- ing in corporate labs. Cummins Engine of Columbus, Indiana, has been working since 1988 on seven- and 25-kilowatt sys- tems that use solar heat reflected from circular mirrors to run a version of the Stirling engine, whose pistons move when the gas surrounding them is heated. The engine in turn drives an alternator that makes the electricity. Though Cummins is a leading maker of diesel engines, its goal is to match or undercut the "life cycle" cost of diesel-electric power when solar energy's low maintenance and free "fuel" are figured in. search, and so are a number of foreign auto- makers. Though the hybrid car might be less expensive than a battery car, it would still be too pricey, at least initially, to supplant very many of the world's millions of piston- powered gasoline engines. Ultimately, the market for low-polluting cars will be con- trolled by the EPA's mandates on exhaust emissions and fuel-economy standards, which are subject to the whims of politics. "Without mandates, the automotive market won't go anywhere," says Charles Weinstein, director of advanced technology at AlliedSignal. No political mandates are required to open the microturbine's other big market --electric power for stationary uses. The challenges are all technical. Small turbine generators called auxiliary power units, which have been used in airliners for years, wear out fairly quickly. And because they are produced in small volumes, require complex gearing arrangements, and perform other tasks besides supplying electricity, their price--about $1,000 per kilowatt of capac- ity-is too high for them to qualify for a role in today's earthbound electricity wars. Not to worry. The microturbine engineers at AlliedSignal and Capstone hope to squash costs not only through simplified design but also by borrowing production techniques INDUSTRIAL MANAGEMENT TECHNOLOGY that have made turbochargers cheap and reliable enough for widespread use in auto- mobiles. Turbochargcrs, which squeeze more air into a car's engine to provide added kick when the driver mashes the accelerator, have strong similarities to microturbines. Capstone began life as NoMac Energy Systems, founded in 1988 by AlliedSignal alumni Jim Noe and Robin Mackay. For- merly the director of industrial market devel- opment at AlliedSignal's Garrett Corp. divi- sion, Mackay envisioned a small, high-speed turbogenerator that was uncomplicated, cheap--and not on the market anywhere. THE WINDMILL'S NARROW NICHE erating capacity are operating in the U.S., most of it in California. Several hundred thousand kilowatts of new capacity are planned in several states, but construction could be slowed down or halted by the worsening economics. People in the wind business have several ways to cope. One, says DeMeo, is to "in- ternationalize.'' In Europe and India, for example, electricity prices are similar to America's, but governments subsidize wind energy more generously. Other hopes are to serve customers in parts of the U.S. where cutthroat pricing by utilities can't reach--at off-grid sites in the middle of nowhere--or to squeeze more energy from the breezes. That's an ever- green challenge for inventors like aeronau- tical engineer Alfred Weisbrich of Eneco in West Simsbury, Connecticut. ~ Weisbrich has patented a system ~ that looks like a stack of automobile ~ wheels without tires. These toroidal shrouds, or augmenters, channel and accelerate the flow of wind into pairs of turbine generators tucked into their concave sides. Wind tun- nel tests and computer simulations conducted at Rensselaer Polytech- nic Institute in Troy, New York, and the Technical University of Graz, Austria, have shown that Weis- brich's design, called TARP (easier to say than toroidal accelerator ro- tor platform), can send wind rush- ing through the generators as much as 50% to 80% faster than in con- ventional windmills. New York State's Energy Research and De- velopment Authority has been partly funding the project. A MERE 18 MONTHS ago, wind power looked like a source of elec- tricity that could survive where sufficient breezes blow. But even efficiency gains of the past few years can't offset the combined effects of today's low fossil fuel prices, the reduction of government subsi- dies, and new competition in the power in- dustry. On the spot market, where utilities shop for cheap juice, competition has forced prices as low as 2 cents per kilowatt- hour; the most efficient wind farms operate at about 4 cents per kilowatt-hour. "This restructuring has hit very quickly over the past year," says Edgar DeMeo of the util- ity-supported Electric Power Research In- stitute. "It's a tough time for anybody to be in the wind business." About 1.7 million kilowatts of wind gen- To wring more electric power from the wind, inventor Weisbrich funnels it through turbines tucked between wheellike structures. NoMac subsisted for several years on re- search contracts from such organizations as NASA, Ford Motor, and the Southwest Re- search Institute of San Antonio, until a tech- nical paper that Mackay authored caught the attention of a team of veteran researchers at Hughes Aircraft. The engineers liked the idea of developing little turbogenerators that might ultimately power low-pollution vehicles. With the back- ing of venture capitalists, they left Hughes and bought NoMac in 1993. The firm changed its name to Capstone last year, when Fletcher Challenge Ltd., a New Zealand venture capi- tal firm, signed on as a major investor. It didn't take long for CEO James Wens- iey, 61, who at Hughes had designed satellites and spacecraft that soft-landed on the moon and dived into the atmospheres of Venus and Jupiter, to decide that rocket science wasn't going to be enough for thc project. "We re- alized that we needed some developmental gas-turbine smarts that we just didn't have." That's when he brought in Paul Craig as en- gineering VP, who in Wensley's words "took the original concept and really made it work." Craig, 57, had been director of turbo- machinery programs at Sundstrand Corp., a maker of aircraft generators, and engineer- ing VP at AlliedSignal's Garrett automotive unit, where hc led the successful commer- cialization of car turbochargcrs. HE KNOW-HOW that has been gained in producing these tur- bochargers cheaply--they sell for around $100--may hold the key to launching microturbines into the big time. Both &vices have at their heart bladed wheels mounted on a shaft spinning blindingly fast. Says Craig, whose office trophies include some of the winning small turbines he's worked on over the years: "To be affordable, you have to keep your cyc on how turbochargers were designed for cars, with sophisticated shapes made from commodity materials using dem- onstrated manufacturing processes. That's why the project intrigued me." Part of thc trick at Capstone is to cast compressor and turbine wheels, curved blades and all, in a single piece from alumi- num and nickel-alloy steel instead of ma- chining their complex shapes. Another is de- signing the recupcrator, which increases fuel efficiency by using exhaust heat to warm in- INDUSTRIAL MANAGEMENT & TECHNOLOGY coming air, st) it can be made from inexpen- sive parts formed from thin steel sheets and welded together by robots. Craig is par- ticularly proud of the low-cost air bearing de- sign Capstone has patented. It suspends the shaft on a wedge of high-pressure air com- pressed during the first few revolutions at startup. Air bearings have been used in AlliedSignal's airborne air-conditioning units for decades and have a proven record. Getting rid of the pumps, filters, and other paraphernalia used in oil-lubricated bearings is well worth it, Craig says: "They account for the majority of breakdowns in aircraft sys- tems that use them." How low does the microturbine's produc- tion cost need to go'? Wensley says it starts to make sense in some utility operations at a capital cost of $500 per kilowatt, somewhat higher than that of the bigger gas turbines in widespread use. That works out to $12,000 for a 24-kilowatt machine. If the micro- turbine were produced for hybrid cars in vol- umes of more than 100,000 a year, Wensley says, the price would drop to less than $2,000. Long before it reached this figure, the elec- tric companies' interest might become down- right ardent. "Little turbogenerators have got our attention," says a manager at a major U.S. utility, who for competitive reasons asks for anonymity. "Hundreds of thousands of them could be sold to utilities, particularly if manufacturing efficiency can get the in- stalled price down to around $6,000." At some point, of course, you or I could af- ford to buy a microturbine. Are they the per- fect revenge weapon for homeowners and businesses that have always hated the local power company? Maybe, but it seems un- likely that homeowners, aside from extreme mavericks or those with bucolic hunting lodges, would want to make their own juice. Chances are, they would prefer the conven- ience and reliability of power delivered by the electric company. Still, utilities are aghast at the prospect of losing customers out "at the end of the grid," where existing transmis- sion lines are often burdened to their limit and demand continues to grow. Adding more towers, transformers, and overhead wires to serve new customers is hugely expensive. In a metropolitan region a new 220-kilovolt transmission line can cost several hundred thousand dollars per mile, not counting the cost of permits to run it over people's prop- erty. That assumes that the utility gets its way Are' micro- over neighbors who hate and even fear high-ten- sion lines, even though there's no proof that they cause cancer. The power companies have another reason to lose sleep. Under dereg- ulation, competitors could try to cherry-pick customers at the edge of the grid by setting up a few pint-size turbines near them in a vacant lot. To beat interlopers to the punch, many utilities are basing their strategy on what they call "dis- tributed generation"--installing small power plants close to users and hooking the equip- ment to the grid by short, low-voltage lines of the type that already run along many streets. That would assuage another worry: losing business customers who might be intrigued by do-it-yourself power even if homeowners aren't. "Rising rates can make self-genera- tion look attractive to a large user," reflects George Preston, a vice president at the Elec- tric Power Research Institute. "A smart util- ity is going to figure out how to keep that customer." Not surprisingly, AlliedSignal's Weinstein thinks that utility-installed micro- turbines might be just the answer. HESE LITTLE generators might also help utilities over- come a perennial challenge: meeting peak demand with minimal investment. Peak de- mand typically occurs on a hot afternoon when perspiring millions switch on their air conditioners. Even when transmis- sion capacity imposes no constraints, the electric company hates to fire up a large gas- turbine generator at such times, only to run it inefficiently for a few hours at part-throttle. Instead, it could let microturbines at local substations and at customers' factories kick in temporarily to supply the extra power. If efficient manufacturing succeeds in driving the microturbine's production cost downward and the little machines prove re- liable--two big ifs, of course--utilities could be placing substantial orders within a few years. Prabhu at Southern California Edison is optimistic. "The long-term dependability of microturbines still needs to be proven in turbines the perfect revenge weapon for homeowners and businesses that have always hated the local power company? field tests," he says, "but I think this should be achievable." Once that's done, mi- croturbine makers will be able to trumpet their other advantage: fuel flexibility. Most micro- turbines are likely to use natural gas, but if fuel prices dictate, their for- giving nature lets them run happily on liquid fuels following a simple change of fuel injectors, which takes less than an hour. Turbines are also inherently cleaner- burning than piston engines. Catalytic com- bustors, which both Capstone and Allied- Signal can build into their machines, further cut pollution. These devices combine fuel and air in a flameless reaction at tempera- tures too low for the formation of smog- spawning oxides of nitrogen. One company, Catalytica Combustion Sys- tems of Mountain View, California, is already adding catalytic combustors to mobile, bigger-than-micro-size turbogenerators. They offer another preview of how microtur- bines could be used. AGC Project Develop- ment of Tulsa has built a rolling cogeneration unit that consists of two Kawasaki gas- turbine industrial generators mounted on a 60-foot semitrailer. The generators churn out 1,500 kilowatts each and already meet some of Los Angeles' strict emission standards, with further improvements expected. AGC will sell the equipment outright, or operate and maintain it as a contract supplier of elec- tricity to a commercial user. The developing world could turn out to be another hot market for microturbines. Several of AGC's systems are supplying plants in Mexico, and a number of experts think that the simplicity and fuel flexibility of microturbines will win them many cus- tomers in remote places where the spider- webs of power grids may never be strung. Muses Prabhu at Southern California Edi- son: "One day all those villages in the Phi- lippines with diesel generators could have little turbines." Fletcher Challenge has joined the Capstone venture primarily be- cause it's impressed by the microturbine's potential as a primary power source in cap- ital-poor countries. [] Reprinted through the courtesy of the Editors of FORTUNE ©1996 Time Inc. Capstone Turbine Corporation The Capstone 30 kW Turbogenerator is a compact, lightweight and multidueled electric power source for use in many stationary and vehicular applications. The 165-pound unit is vibration-flee, extremely quiet and runs at low-emission levels. The Turbogenerator is fully integrated with and powered by a small gas turbine engine that turns at 96,000 rpm. The result is a highly-reliable, low maintenance power source. SPECIFICATIONS: Ambient Conditions 59°F (15°C) @ Sea Level 95°F (35°C) @ Sea Level ' Output Power*, 30 kW @ 1600 Hz 24 kW @ 1600 Hz Natural Gas 3.77 therm/hr 3~36 therm/hr Fuel Flow Gasoline 3.1 gal/hr (11.7 l/hr) 2.8 gal/hr (10.6 i/hr) //2 Diesel 2.6 gal/hr (9.8 i/hr) 2.3 gal/hr (8,7 I/hr) Exhaust Gas Temperature , . 500°F (260°C) 525°F (274°C) i Exhaust Mass Flow 36.0 lbs/rain (16,4 kg/rain) 34.2 lbs/rain (15.5 kg/rain) *50 Hz, 60 Hz. 400 Hz and direct current available. Target Emissions* (Natural Gas): NOx CO NMOG 9 ppmv (corrected to 15% 02) 9 ppmv (corrected to 15% 02) 9 ppmv (corrected to 15% 02) Target Noise Level 60 dba @ 1Om Dimensions: Turbogenerator Generator Set Weight: Generator Set Generator Set w/Enclosure 38" I x 18" dia (97cm x 46cm dia) 49" I x 23" w x 43.5" h (125cm I x 59cm w x 111cm h) 165 lb (75 kg) 400 lb (181.5 kg), estimated *Emissions based on conventional natural gas combustor Ultra4ow emission levels are possible with liquid fueled catalytic combustor options. APPLICATIONS Distributed Generation: Expanding incremental generating capacity for electric utilities without constructing new transmission or distribution lines. General Power: Remote facilities, construction sites, oil fields, marine applications, portable power, developing countries and other locations where utilities not readily available. Lighting: Supermarkets, stores, office buildings, hospitals, factories and other buildings with large lighting loads. In each case the Turbogenerator can be block-loaded. Cogeneration: Buildings or processors needing electricity and heat where the Turbogcnerator exhaust can be used for heating, absorption cooling, dehumidification, baking or drying. Air Conditioning: Electric air conditioners and heat pumps. Hybrid Electric Vehicles: Electric vehicles that need greater range, uphill power and added capability to run heating or air conditioning features. Ccq~.~tom' CEO Pad Craig with thc Capsto~c 30 h\V Tt~rbogcncrc~tor Capstone Turbine Corporation FLOW DIAGRAM The rccuperator uses tur.bine exhaust heat to preheat burner inlet air. This reduces Jncl consumption by half EXHAUST INTAKE · · · · · · · · · · COMPRESSOR -- ~TURBINE MAINTENANCE & RELIABILITY The Capstone Turbogenerator has no scheduled maintenance. Reliability is achieved through simplicity. · Air bearings completely eliminate the need for oil or other lubricants · Air cooling system eliminates water, antifreeze or water pumps "No belts or engine-driven accessories "The rotor assembly, which includes the compressor, turbine, generator magnet and shaft, is the only moving part 6025 YOLANDA AVENUE TARZANA CALIFORNIA 91356 TELEPHONE 818.774.9600 FACSIMILE 818.774.0228 LOS ANGELES BUSINESS JOURNAL WEEK OF OCTOBER 28 - NOVEMBER 3, 1996 Generating power without much fuss Capstone touts turbine as perfect source of energy BENJAMIN MARK COLE - Senior Reporter If best-laid plans don't go astray, tiny turbine power plants produced by Capstone Turbine Corp. soon will be humming away in the nation's office buildings and factories. And after that, maybe they'll be in the world's motor vehicles - a production target market of 50 million units a year and rising. For jaded observers of the high-tech ven- ture capital scene, the plans of Tarzana- based Capstone Turbines' may at first blush seem to be wishful fantasy. But Capstone has induced big-name financiers to cough up tens of millions of dollars, including Paul Allen, co-founder of Seattle-based Microsoft Corp., and Ben Rosen, chairman and founder of Compaq Computer Corp. Capstone turbines are small (165 pounds, and about the size of a beer keg), but can deliver enough electricity to air- condition a 7-Eleven on a hot day. They require no scheduled maintenance and run on clean-burning natural gas or other fuels. That's all well and good in theory. But the challenge is to put theory into practice - to mass produce the machines using readily available materials and to sell them at an affordable price. Enter Paul Craig, the affable, 57-year- old president and chief executive, who was brought to the company two years ago for his past wizardry in converting wild ideas into commercial production. It was Craig who delivered break- throughs in the production of automobile turbochargers for his former employer, AlliedSignal's Garrett automotive division in Torrance. "My background is in manufacturing high-speed turbochargers (for automobiles) in volumes of 1 million to 2 million a year," says Craig. "I intend to ramp up production here." The trick in making this new technology commercial, Craig explains, is to use off- the-shelf manufacturing techniques. "We are designing for high-volume pro- Efficient fuel: Capstone CEO Paul Craig looks to make turbine power ubiquitous. duction, using commodity (non-exotic) materials, and manufacturing processes that have been proven," he said. Capstone currently has just 70 employ- ees, mostly engineers, ensconced in a makeshift 23,000-square-foot plant in Tarzana. The company was founded in 1988 by former Allied Signal executives, and for several years survived with the help of research grants from motor giant Ford Motor Co. and the federal government. By 1994, Capstone managers and finan- cial backers felt they had a good idea, but needed production smarts to bring it to market - resulting in the hiring of Craig. So far, not a single turbine has been placed into commercial use, although 24 have been put into various sites for testing. Two turbines whir and whine outside Capstone's headquarters, helping power the plant. Capstone's short-run goals are to install the relatively low-priced turbines into office buildings, grocery stores and facto- ties. And there is much to suggest that it will find a market. Right now, big power companies are grappling with the challenge of deregula- tion and competition at a time of relatively slow growth in electric demands. Plans for huge power plants have been shelved because of high costs, but new cus- tomers still need power. Existing plants, and transmission lines, are in some areas slowly becoming overwhelmed. "It's not a time to commit to huge pro- jects,'' says Jim Reilly, manager of research and technology applications for Southern California Edison, a unit of Rosemead- based Edison International Inc., which has purchased five Capstone turbines for testing. "But we can install hundreds of these little guys (turbines) for not much capital expense." Cheap - that's one of Capstone Turbine' s advantages. The 2,200-megawatt San Onofre nuclear power plant, for example, cost Southern California Edison $4.3 billion to build, almost $2,000 per watt. And 2,400 workers toil to keep it run- Capstone Turbine Corp. Headquarters: Tarzana Founded: 1988 Top Executive: President and CEO Paul Craig Major Investors: Vulcan Ventures (Paul Allen group), Canaan Partners, Rho Management Inc., Sevin Rosen Funds, Fletcher Challenge Ltd. Employees: 70. Telephone: (818) 774-9600. ning. In the industry, it is considered an economic dinosaur. In contrast, a Capstone turbine will retail at $12,000, and while it produces only 24 kilowatts, that's only about $500 per installed watt. And they can be connected for greater output. In the cutthroat energy markets of the future, utilities are wondering if the turbine is friend or foe. The prospect of huge addi- tional sales also has gas companies intrigued. Electric utility customers might become gas customers, generating their own electricity. Southern California Gas Co., a unit of Los Angeles-based Pacific Enterprises Inc., has purchased turbines, and is studying if they could be put widely into place, according to a company spokesman. In Third World nations, Craig points out, the tiny turbine stacks up well. It is small enough so that it could be easily shipped to remote villages - where reliability is key - thus voiding the need for expensive stringing of powerlines. "Globally, there might be a market for hundreds of thousands of these turbines," ventured Dan Rastler, a researcher with the Electric Power Research Institute in Palo Alto, an industry research and think tank. Nationally, Reilly of SCE guessed that perhaps 10,000 to 15,000 micro turbines could be installed within five years, if the lit- fie engines work as advertised. So maybe there is a real-world demand for Craig, his intrepid investors and their mr- bines. But can Capstone produce in volume, and not hit bottlenecks? What about price and reliability? A network of Southern California ven- dors are ready for the task of greatly increased production, claimed Craig. "We believe the market is for thousands of units, and that is what we have to produce to bring prices down. The supply base is in position to allow us to grow to 100,000 units a year," he states. Craig's easy banter sometimes sounds too easy - but he is the man who brought automobile turbochargers to market by the millions for AlliedSignal. In fact, AlliedSignal could mm out to be Capstone's biggest competitor in the micro- turbine market. The firm is building a tur- bine about twice as large as Capstone's, also with mass production in mind. Nevertheless, Capstone Turbine officials How the Capstone turbogenerator works Intake air (1) is drawn through the generator by the compressor (2) which incre&~es the pressure of the air, and forces it into the recuperator(3). Here, exhaust heat is used toprehsat the air before it enters the combustion chamber (4) where the heated air is mixed with fuel and burned. The mixture is then expanded through the turbine ~5), which drives the compressor and generator. Since the generator is mounted on the same shaft as the turbine. it rotates at the same speed and produces up to 24 kW ot mectric power. The combusted air is then exhausted through lbo recuperator (6) before being discharged at (7). Generator Exhaust outlet Recuperator Combustion chamber cooling fins Preheats air entering combustor and Burns multiple fuels. lessens amount of fuel needed. Air bearing Eliminates lubrication Generater Compressor One-piece rotor assembly Turbine Rocupnrator housing Source: Capstone'Turbine Turbine power: Capstone says its machine believe they can compete with the larger firm. Capstone has attracted a cadre of venture capitalists, including Seattle-based Paul Allen Group, to pour perhaps $20 million to date into the enterprise, although no one will say exactly how much. Other backers include New Zealand- based Fletcher Challenge Ltd., Rowayton, Conn.-based Canaan Partners and Dallas- based Sevin Rosen Funds. "We think there is a market for the tur- bine, and that the turbine offers low-cost, reliable and clean power," said Vern Raburn, chief executive of the Paul Allen Group. "The utility market is a huge market...we think the rewards justify the risk." And providing competition to the electric company is just a first step. As a longer term goal, Capstone hopes to use turbines, in con- nection with flywheels, to power motor vehicles. A flywheel is a kinetic energy storage device, sometimes called a mechanical bat- tery. The idea is to spin a wheel up very fast, and then draw energy out of it. Capstone has teamed up with Rosen Motors Inc. in Woodland Hills, formed by Compaq chief- tain Ben Rosen, and his brother Harold, a can produce power cheaply. longtime Hughes engineer of note. The' have poured $10 million into flywhee, design. The gameplan is to perfect a flywheel - made partially of space-age plastic compos- ites - that would spin in a vacuum chamber at 54,000 RPM,To date, the Rosens haven't made it work, but they feel they are closing in, according to insider accounts. In a motor vehicle, the flywheel would supplement the turbine, when power was needed on hills, or for acceleration. The whole result, on paper, is efficient, and clean-burning. When braking, the turbine-powered vehi- cles would put power back into, or re- charge, the flywheel. The turbine-flywheel combination, on paper, easily beats batteries, which are very heavy, and of limited range.The Rosens have stated that their car will emit almost no emissions and have plenty of pep. Craig, when he allows himself to muse, sees a bright future for the Capstone turbine- flywheel motor vehicles, which could even become mobile powerplants. "Oh, I see the day when you might drive to your remote cabin near Big Bear, and then plug the car in when you get there, to pre vide electricity during your stay," he says. Reprinted by permission of the Los Angeles Business Journal