Heat pump versus PNG boiler for a dairy hot-water load
A dairy plans to replace its PNG-fired hot-water boiler with an electric heat pump. The site needs 1,800 MWh of hot water a year at 70 °C. The existing boiler runs at 84% thermal efficiency on PNG with LHV 35.5 MJ/SCM priced at ₹45/SCM. The proposed heat pump takes heat from treated effluent at a stable 30 °C and has a guaranteed COP of 3.2 at 70 °C delivery, including source pumping. Electricity costs ₹7.50/kWh. Installed cost of the heat pump and its effluent heat exchanger is ₹1.8 crore. However, 30% of the annual hot-water demand is for clean-in-place at 85 °C, and the vendor's COP guarantee does not cover that condition; a second-law efficiency of 0.373 (derived from the guaranteed point) may be assumed when scaling the COP. The state grid emission factor is 0.71 kg CO2/kWh and PNG emits about 2.0 kg CO2 per SCM.
1. Compute the annual operating cost of the boiler and of the heat pump at 70 °C, the savings, and the simple payback.
Read the worked answer
Boiler. Useful heat 1,800 MWh/yr; fuel input = 1,800/0.84 = 2,142.9 MWh = 7,714 GJ. Gas volume = 7,714/0.0355 = 217,300 SCM/yr. Cost = 217,300 × 45 = ₹97.8 lakh/yr.
Heat pump. Electricity = 1,800/3.2 = 562.5 MWh/yr. Cost = 562,500 × 7.50 = ₹42.2 lakh/yr.
Savings = 97.8 − 42.2 = ₹55.6 lakh/yr. Payback = 180/55.6 = 3.2 years.
This is comfortably bankable and the running cost is barely sensitive to the exact COP: even at COP 2.6 the bill is ₹51.9 lakh and the payback is about 3.9 years. The real technical risk is not the 70 °C duty but the effluent source - flow, fouling and temperature stability through the year. The heat exchanger should be specified with a fouling allowance and the effluent flow should be measured before the order is placed.
2. Estimate the COP at 85 °C and recompute the economics with the 30/70 load split.
Read the worked answer
Carnot COP at the guaranteed point: T_H = 343 K, T_C = 303 K, lift 40 K → 343/40 = 8.58. Second-law efficiency = 3.2/8.58 = 0.373, consistent with the figure supplied.
At 85 °C delivery: T_H = 358 K, lift = 55 K → Carnot = 358/55 = 6.51; COP = 0.373 × 6.51 = 2.43.
Electricity: CIP load 0.30 × 1,800 = 540 MWh at COP 2.43 = 222.2 MWh; remaining 1,260 MWh at COP 3.2 = 393.8 MWh. Total = 616 MWh, cost = ₹46.2 lakh/yr.
Savings fall to 97.8 − 46.2 = ₹51.6 lakh/yr, payback = 180/51.6 = 3.5 years. Still clearly attractive.
Check the alternative of leaving the CIP load on gas: boiler cost for 540 MWh = 540/0.84/3.6 × 35.5 → 65,200 SCM = ₹29.3 lakh, versus ₹16.7 lakh by heat pump. The heat pump still wins at 85 °C, but on a thinner margin that could be erased if the delivered COP proves to be 2.0 rather than 2.43. Insist on a guaranteed COP at 85 °C and a performance test at that condition.
3. Assess the carbon case for the project and state what should be negotiated with the vendor.
Read the worked answer
Boiler emissions = 217,300 SCM × 2.0 = 435 t CO2/yr. Heat pump emissions = 562.5 MWh × 0.71 = 399 t CO2/yr at 70 °C operation, or 616 × 0.71 = 437 t with the 85 °C split.
So the carbon benefit is essentially nil on this grid - anywhere from a 36 t saving to a 2 t penalty. That is not a reason to reject the project, but it is a strong reason not to justify it on decarbonisation grounds, and it means any future carbon price does not rescue a weak case. The argument for the heat pump is cost and fuel-price risk, not CO2.
Negotiation points: (i) a guaranteed COP at both 70 °C and 85 °C, tested on site, with a liquidated-damages curve for shortfall; (ii) guaranteed effluent flow and inlet temperature, and the right to reject if the summer minimum is below about 25 °C; (iii) a shell-and-tube or wide-gap plate exchanger with a documented cleaning method and a spare bundle; (iv) retention of the existing boiler as a standby, since the heat pump's capacity at 85 °C will be roughly 25% lower than at 70 °C.