The Importance of LPG Power Generation in Off

Editor's Note: This article is an updated version of a post originally published on TransTech Energy's website. Visit transtechenergy.com to read the original post.

Liquefied petroleum gas (LPG) is gaining awareness as an important fuel consideration for off-grid power generation — not only in the United States but also throughout Latin America and the Caribbean, with a growing success rate. While natural gas may be an obvious choice for homes and businesses close to natural gas pipelines, in remote areas, in island locations and in countries lacking established pipeline infrastructure, natural gas delivery can have costly obstacles.

For its efficient and safe transportation, natural gas must be cooled to extremely low temperatures of approximately -160 degrees Celsius (-260 degrees Fahrenheit), transforming it to a liquid state known as liquefied natural gas (LNG). LNG must be maintained at a constant temperature during transport and storage, requiring significant investment in purpose-built receiving terminals and on-site cryogenic storage and vaporization solutions.

Propane, on the other hand, is easily liquefied under modest pressure and can be efficiently transported as a liquid (LPG) via marine, truck or rail, using readily available storage tanks and equipment. In contrast to the significant infrastructure demands and lengthy cycles associated with the implementation of off-grid natural gas, the use of propane fuel can be quickly implemented at virtually any location and at lower cost, making it a favorable solution for power generation in both remote and off-grid locations.

Driven by the shale gas revolution and by associated natural gas market growth, propane has experienced record production in recent years, making it abundantly available and easily accessible in world markets.

The U.S. — a net propane importer prior to 2010 — is now leading the world as the largest exporter of propane, according to the U.S. Energy Information Administration (EIA). As reported by EIA, the U.S. exported more than 1,400 barrels of propane a day in 2020, an increase of 13% from 2019, making it the largest U.S. petroleum product export, with broad distribution to more than 50 destinations worldwide.

The U.S. supply makes propane particularly compelling in areas dependent on imported fuel, such as the Caribbean and Central America, where TransTech Energy has witnessed an uptick in LPG plant orders regionally, including its 28 MW LPG-fired power plant for Roatan Electric Company, built in partnership with a leading provider of power generation equipment.

TransTech has also been involved with other LPG power generation projects utilizing reciprocating engines and turbines; completing successful projects in the Bahamas (18 MW), the oil patch in Colorado (7 MW), and distilleries in Puerto Rico and USVI; and most recently supporting a major upgrade to the power generation capabilities on St. Thomas.

Abundant supply, relative low cost and ease of implementation have already established propane as a desirable solution for heating, cooking, agriculture and transportation throughout the world. These benefits combined with other advantages suggest propane will have an expanding role within the global power generation sector in the coming decades.

Due to its low carbon content, propane is a relatively clean burning fuel that presents no threat to soil, surface water or groundwater and is considered a "clean fuel" by the U.S. Department of Energy (DOE). As a replacement for conventional fuels, including coal and heavy fuel oils (HFO), propane can support significant reductions in greenhouse gas (GHG) emissions and, in fact, offers lower GHG emissions than many other energy options — without compromising performance. Propane also delivers a favorable energy density over other fuels, offering more than twice the energy of natural gas as measured in BTUs. On a per unit basis, propane delivers double the amount of heat offered by natural gas, which ultimately results in using less fuel (one cubic foot of propane = 2,516 BTUs, whereas one cubic foot of natural gas = 1,030 BTUs).

As policymakers around the world continue to focus on the importance of renewables — including renewable propane — and with coal and heavy fuel oil increasingly losing favor for both poor emissions and unfavorable economics, propane is uniquely positioned to both support more stringent emissions regulations and help pave the way toward cleaner alternative energy.

For existing remote and off-grid power suppliers, switching to natural gas requires the conversion of oil, diesel or coal-fired power generators to gas-fired units. With the current, relatively lower cost of natural gas, there is a strong case for fuel switching — using propane as an interim fuel — with returns recognized within favorable time frames.

Even more compelling is when new power plants are needed to satisfy growing electricity demand and the expense of fuel conversion can be avoided altogether.

In some cases, in areas where natural gas will be available in the future, governments are exploring LPG as a "bridge" fuel as an interim strategy until LNG infrastructure can be built over the longer term. Certain power generating engines are capable of combusting LPG and natural gas interchangeably, allowing users to begin benefitting from lower-cost, cleaner burning propane today and preparing them to leverage low-cost natural gas once it becomes available in the future.

LPG can also be used as a standby fuel source. Should there be an interruption in the natural gas supply, "peak shaving" strategies allow users to supplement natural gas consumption with propane to offset high prices during times of peak demand and/or to compensate for natural gas supply shortfalls.

Multi-fuel engines — which can burn a variety of fuels, including LPG, ethane, condensate, and naptha in addition to natural gas — also allow customers greater fuel flexibility, with the option to always choose the most affordable fuel supplies available or to choose fuels that may be more readily available than others depending on the circumstances.

For decentralized, distributed power generation models and combined heat and power (CHP) applications, clean-burning LPG is again an obvious choice, offering an economical and environmentally friendly alternative to conventional fuels and delivering a return on investment within highly desirable time frames. LPG is also gaining interest as a supplemental or back-up fuel to complement power generated from renewable energy sources and technologies — including solar and photovoltaics and wind power generation — which can be prone to interruption.

With abundant propane output expected to continue through 2040 and beyond, TransTech anticipates burgeoning growth of LPG power generation capacity in the coming decades. We continue to see significant increases in demand for LPG terminal storage and LPG gasification equipment to fuel power generation applications in the Latin American, Carribean and African markets.

With increases in critical power applications in the U.S. — such as data centers, bitcoin mining and hardening of government installation infrastructure — LPG and renewable LPG offer a reliable and economical fuel solution for these applications.

Mark Wenik oversees all business development, commercial and design functions of the terminal, power generation and cryogenic market for TransTech Energy. He is responsible for all midstream and downstream EPC solutions for storage and handling, distribution, import/export, power generation and standby solutions for NGL, LPG/propane, butane and LNG. As a 35-year veteran of the energy sector with extensive knowledge in storage facility design and construction, Wenik has been instrumental in driving the growth of TransTech's terminals and power generation end markets since joining the company in 2012. Prior to joining TransTech, Wenik held leadership roles in LPG equipment distribution and storage facility design and construction industries for more than 20 years. Wenik chairs the Bulk Plant and Terminal Subcommittee for NPGA's Technical, Standards and Safety Committee and is an active member of several regional propane associations, as well as oil and gas associations.