Deployment of microturbine energy technology has been slow to develop, but analysts predict growth on the horizon as more businesses use the small units to power their facilities and reduce their carbon emissions.
The microturbine market has always been specialized, with units designed for use in situations where limited space is a consideration and the production of power must be on a smaller footprint. The promise of the technology was touted in several studies released in the early 2000s as part of the expansion of distributed generation options, including fuel cells and reciprocating engines, along with traditional boilers and diesel generators. A number of industries were expected to embrace microturbines, usually classified as turbines operating in a 25-kW to 500-kW range, with some reports estimating market values as high as $8 billion by 2010.
Deployment has not matched those expectations, with current market values in the millions rather than billions, although more rapid growth is expected as industries look to curb carbon emissions, and with the increased adoption of combined heat and power (CHP) and combined cooling and heating power (CCHP) technology. MarketsandMarkets, a research firm headquartered in India with a U.S. base in Seattle, Washington, said the microturbine market would have a compound annual growth rate of 11.5% between 2016 and 2021, and be valued at about $250 million at that time, which it said would be nearly double the value from 2015.
“We see a double-digit growth in the microturbine market, especially in the CHP segment,” said Satyam Singh, a senior analyst in the Energy & Power group for MarketsandMarkets, in an email interview with POWER. “This growth will be driven by demand from the North American region. The distributed power generation industry, oil and gas industry, along with the IT and telecommunication sector are expected to drive the market in North America.”
Adam Forni, a San Francisco-based senior research analyst with Navigant Research, a business management consulting and research company, also forecasts “steady growth” in microturbine deployment; he said his “ballpark is about a $150 million market right now.” Forni told POWER in a phone interview: “I think there are many who predicted faster growth than what has occurred. There are a number of reasons microturbines have struggled. A lot of it is the upfront capital cost, because it’s higher. Microturbines play in a space dominated by reciprocating gensets, and there are sales and incumbent supply chain aspects that can’t be ignored.”
A study by Barney L. Capehart of the College of Engineering at the University of Florida, updated in December 2016, said microturbine capital costs, including hardware, software, associated manuals, and initial training range from $700 to $1,100 per kW. Adding heat recovery to the system increases the cost by $75 to $350 per kW, according to Capehart, who said installation costs can vary widely depending on location, but “generally add 30% to 50% to the total installed cost.”
Forni, while noting those costs, said “Microturbines have many advantages, such as simpler maintenance, lower lifetime cost of ownership, and the quality of its heat is better, more stable and consistent, and producing higher temperatures than [reciprocating engines].” Those advantages, along with increased deployment for CHP and CCHP, are a reason for optimism. Forni also cited the technology’s flexible fuel advantage.
“There’s a lot of interest in multi-fuels for generation, and microturbines are better than [reciprocating engines] in that area,” he said. Microturbines can operate on natural gas, LPG/propane, biogas, associated gas, and liquid fuels such as diesel, kerosene, and aviation fuel. They also can burn waste gases when used in resource recovery applications; these gases otherwise would be flared or released into the atmosphere.
“The market for microturbines is expected to keep increasing as packaged CHP systems become more prominent and more commercial facilities with energy loads conductive to the microturbine outputs get more familiar with the technology,” Anne Hampson, a principal with ICF leading the CHP group in the Distributed Energy Resources practice, told POWER via email. ICF is a Fairfax, Virginia-based business-consulting firm. “There are currently 394 microturbines [Figure 1] operating in CHP mode in the U.S., generating 107 MW of electricity,” Hampson said.
Industrial applications account for the majority of microturbine installations worldwide, with most in North America, followed by Europe and Asia. Several businesses that were not the earliest adopters—hotels, college campuses, breweries, auto manufacturers, landfills, and even the cannabis industry, among others—today are finding microturbines are a good solution as part of their energy strategy. The technology also works well in retrofits to existing energy systems.
Exploring New Markets
Capstone Turbine Corp., based in Chatsworth, California, is a leader in microturbine technology. The company has units installed at locations in the North Pole, South Pole, and in Siberia, and over the past year announced deals for projects in China, Australia, Mexico, the Netherlands, Kazakhstan, and other far-flung destinations.
Capstone has deployed microturbines in CHP applications for years, with turbine exhaust sent into a boiler or heat recovery steam generator in a cogeneration approach. The company also has turnkey microturbine packages with integrated heat recovery modules (HRMs), used to generate steam. The company has one of its 1-MW, five-turbine C1000S systems with HRMs in a New York food processing plant, and because the system offsets use of existing gas-fired boilers to improve the facility’s energy efficiency, it is eligible for support from the state’s Clean Energy Fund.
Another Capstone installation is at Consorzio Nazionale Dettaglianti (CONAD), a food distribution cooperative in Italy (Figure 2), where a Capstone C800 microturbine was commissioned in summer 2015. It can generate 800 kWe to power food storage and distribution activities while a custom heat recovery module harnesses thermal energy from the exhaust to heat water and provide space heating for the warehouse and adjacent offices. A 365-kW exhaust-fired ammonia absorption chiller produces chilled water used to refrigerate the warehouse and air condition the adjacent offices.
The company also helped the Pennsylvania State Employees Credit Union (PSECU) install a tri-generation system in 2013 (Figure 3), cutting carbon emissions and providing backup power to the PSECU. Viking Yacht Co. in New Gretna, New Jersey, uses a Capstone CCHP system that provides the facility with 40% of its power, including all its space heating and chilled water. The system, commissioned in December 2012, includes six Capstone C65 ICHP Grid Connect Microturbines, with 390 kW of capacity, and has reduced the location’s energy costs by 25%, according to the company.
Residential and business uses continue to be explored. Dutch company MTT has entered the market with its EnerTwin system, a micro CHP, combining a boiler and power plant in a single product. The company began developing the EnerTwin about four years ago. The microturbine in the device can deliver 3 kW of electricity and 15 kW of thermal power for heating and hot water. The system has a magnet-based microturbine using turbocharger components such as those in the automobile industry, according to MTT. The company says it can be a standalone power generation system or configured as part of a larger system using one or more boilers.
MTT says EnerTwin’s flexibility makes it suitable for small CHP applications, such as in a residential setting or a small business, or in the oil and gas industry in metering stations along pipelines or gas decompression stations. The company also says the unit was designed to be about 40% cheaper than competing units. Willy Ahout, a former officer in the Royal Netherlands Navy and MTT’s CEO, has called the EnerTwin the “iPad of turbines, or even the iPhone.”
Jim Kesseli, president of Brayton Energy LLC, a research and development company for sustainable energy in Hampton, New Hampshire, told POWER in phone and email interviews, “Microturbine sales traditionally have been underwhelming since their introduction.” Kesseli said Brayton sponsors ICRTec, a company that developed a small turbine engine that is considered an alternative to traditional diesel power. ICRTec’s technology is low emission and fuel flexible.
“We are delivering two of our advanced microturbines, with ceramic hot section, to NRG and Microsoft,” he said. The ceramic hot section is an upgrade program designed to improve energy output, thermal efficiency, and component life. It can be used in a range of applications, from power to transportation, industrial, off-road, and marine.
Kesseli said the oil and gas industry continues to be a good customer for microturbines, for use in field operations, and CHP uses, like dorms and hotels, are still good applications, “but costs remain prohibitive in most cases,” he said.
Forni agreed that the oil and gas industry is “already established” as a market for microturbines. “They’re built like tanks, which is important out there in the oilfield. They can take a wide range of fuel inputs, and there are just massive amounts of natural gas that is flared off. There are growing initiatives to forcibly put that natural gas to use, and microturbines are a viable operator for that, with their ability to take wellhead gas directly and pipe it into the microturbine.”
Cars, Cannabis, and Renewable Energy
Some automobile manufacturers are touting the technology. Hybrid Kinetic Group (HKG) debuted its luxury H600 model at the Geneva Motor Show earlier this year. The H600 has a microturbine generator “that can recharge the car’s super battery on demand,” according to HKG. The company says the vehicle is multifuel compatible, able to run on gasoline, diesel, ethanol, natural gas, propane, biofuels, and more. HKG says the engine has lower emissions than traditional internal combustion engine hybrids, and even pure electric vehicles.
In August, Ariel—a British car company known for its exotic designs—announced its HIPERCAR (High Performance Carbon Reduction), a 1,180-hp electric vehicle with an onboard microturbine to extend its range. Simon Saunders, the company’s founder, told automobile website Jalopnik: “This is the first true electric supercar that will cross continents, drive to town and lap a race track.”
Microturbine deployment also has found a friend in the cannabis industry, an energy-intensive business, which is growing as more states legalize recreational and medical marijuana.
Brian James, founder and president of Infinite Energy Systems, a subsidiary of MBS Engineering of San Ramon, California, told mg, a cannabis industry magazine, “We believe the cannabis industry is an inherently green industry that will come to embrace natural gas,” and by extension microturbines.
“Our microturbines, which are compact and designed to produce large amounts of energy on a smaller scale, are the next-generation energy solution,” James said. “While the microturbine application is new to the cannabis industry, we believe our expertise in this field will add tremendous value to this fledgling industry. One of the biggest obstacles for a grow [operation] is ensuring there is adequate power.”
Said Navigant’s Forni: “Grow industries are interesting, and it’s worth noting that related to CCHP installations, grow operations are certainly one of those where there’s an opportunity. I would also apply that to data centers.”
Past, Present, and Future
Hennepin County, Minnesota, in 2005 installed a natural gas-powered, 60-kW Capstone microturbine (Figure 4) in conjunction with Xcel Energy at the County Home School, a residential correctional treatment center in Minnetonka, Minnesota. Electricity from the microturbine powers the school’s campus. Exhaust from the heat exchanger heats water, which is used to heat residential cottages and the facility’s kitchen, and moves throughout the campus for hot water needs in a closed-loop system.
Megan Huang, project engineer for the Engineering and Energy Management Division of Hennepin County Property Services, told POWER via email the system encountered “numerous maintenance issues,” and was turned off for about eight years. The county still hoped to use the system and along with Vergent Power Solutions (VPS), a local technical support service, completed an assessment. Repairs were made and the microturbine now has operated successfully for the past year. While the county has not installed microturbines in any other buildings, Huang said the County Home School unit has proven to be a “good fit,” and said “payback for the repairs and protection plan [with VPS] was less than five years.”
While older systems continue in service, a mechanism that would support future growth in the microturbine market is S. 1409 (the Senate version of H.R. 1090), the Technologies for Energy Jobs and Security Act of 2017, which is awaiting congressional action. The bill would extend and modify tax credits for investments (ITCs) in energy-efficient property, including microturbines.
Jen Derstine, Director of Strategy, Policy and Distributor Development at Capstone, told POWER via email that there could be an impact on microturbine sales in the U.S. if the current 10% tax credit went away. “However, other CHP and gas-fired distributed energy technology providers … will face the same financial hurdle, and the loss of the ITC entirely levels the playing field with fuel cell technologies,” which had received a 30% ITC under current legislation, she said.
“[The tax credit] helps drive project deployment, but the amount [of savings from the legislation] is small enough that separate drivers are needed to really push a project through,” said Navigant’s Forni. “I don’t see some sort of magical breakthrough [to ramp up deployment], but there are viable use cases in a variety of scenarios, including as energy systems become more distributed, and as we see more microgrids and virtual power plants.”■
—Darrell Proctor is a POWER associate editor.