combine heat and power (chp).ferris.april14.pdf - turi

Toxic Use Reduction Institute

April 14th, 2016

Mass Save® Utility and Energy Efficiency Program Sponsors

COMBINED HEAT & POWER (CHP)

Agenda • CHP Overview Review • Economics Example • Energy Solutions Center CHP Tool • CO2 Reduction Calculation • BCR • Incentives • Interconnection Tips

Presenter Information

Gerald (Jed) Ferris B.S.(Electrical Engineer), CEM, CEA Lead Project Manager CHP New England

Customer Execution nationalgrid

Gerald.ferris@nationalgrid.com

CHP Vs. SHP

Technology Comparison International Energy Agency, CHP benefits global investment

Technology Comparison International Energy Agency, CHP benefits global investment

CHP Economics

Blended Rate

CHP Economics

CHP Economics Simple ROI: 2.5 years.

Energy Solutions Center

Useful Website about all kinds of Technology Specific to CHP

www.understandingchp.com

CHP Calculating Tool Comparison

http://calculators.myescenter.com/chp/index.htm

Under development, fine tuning with industry professionals.

Technology Comparison

Technology Comparison

Excel Calculating Break Out

CHP is more attractive now

CHP Load Duration Curve

Carbon Dioxide Emissions Savings EPA’s recommended methodology for calculating fuels and CO2

emissions savings from CHP. Both Electric and Thermal Outputs of CHP system must be

accounted. CHP’s Thermal output displaces the fuel normally consumed for

on site thermal generation. Power output displaces the fuel consumed and emissions from grid electricity.

Fuel use of the emissions released from the CHP system are subtracted from the fuel use and emissions that would normally occur without the system.(Using SHP)

Heat rate and emissions factor of the displaced grid electricity. EPA’s Emissions and Generation Resource Integrated Database and ISO-NE annual emission reports are a good resource for these factors.

Carbon Dioxide Emissions Savings • Overall Energy Efficiency; CHP typically 60-80% SHP 45-55% • Installing CHP on site will generally increase the amount of fuel that is used at the site but

depending on where you draw your box there is a 32 percent decrease in the amount of fuel used.

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Carbon Dioxide Emissions Savings Source: EPA Fuel and Carbon Dioxide Emissions Savings Calculation Methodology for CHP Feb 2015

Technology Comparison

Benefit Cost Ratio(BCR) Break Out Generic Example

CHP Incentives

All Tiered Level Incentives require the below. All projects must bass BCR test. Incentives not to exceed 50% of project cost. TA Study may or may not be required (50/50 cost share). System Efficiency must be 60% or greater. <150KW systems get higher level incentive.

Tier I Up to $750 per Net Nameplate KW

CHP Incentives Tier II

Up to $950-$1000 per Net Nameplate KW Ashrae Level 1 Audit Required. ECM’s with 3 year or less payback must be implemented within 18 months of CHP incentive commitment.

Tier III Up to $1100-$1200 per Net Nameplate KW Ashrae Level 2 Audit Required. Total Site energy to be reduced by > 10% ECM’s with 3 year or less payback must be implemented within 3 years of CHP incentive commitment. Annual estimated efficiency must be > 65% New Construction does not qualify(See guidebook)

* Incentives are being reviewed between the PA’s for 2016.

Industrial Case Studies Heavy Industrial Manufacturing Facility 24 hr a day 7 days a week operation. Installed 5400 KW Steam Turbine Generator with Duct Burner Firing, Electrical Eff 25%,

Thermal 47% Total 72% of the input fuel is utilized. Facility able to island away from Grid Power. Difficulty getting Natural Gas fuel.

Existing: Electrical Consumption: 47,000,000 kwh/yr = $4.7 Million/yr Fuel Consumption: 284,000 MMBtu/yr; $2.82 Million Dollars #6 fuel oil

Future: Installation Cost: $13,500,000 $2500/KW Electricity Offset: 40,000,000 kwh at $4.0 Million/yr. Savings Fuel Increase: 195,000 MMBtu/yr; $2,300,000 Fuel Increase O&M Cost: $0.011*40,000,000 = $480,000/yr. Savings/yr $1.2 Million/yr.

Industrial Case Studies Hotel Boston Area 9 floor, 400 + guest rooms, health club, guest suits and meeting and

wedding spaces.

(3) 75KW Microturbines Installation Cost: $585,000 $2600/KW Electricity Offset: 1,300,000 kwh $0.12 = $156,000/yr Fuel Increase: 48,000 Therms, $52,000 O&M Cost: $19,000/yr. $1.4 cents Savings $85,000/yr

Industrial Case Studies Food Processing Plant BioGas Food Digester processing waste Fine tuning Kw demand, gas production and engine constraints.

Installed 1000 KW Engine Hot water and Steam Recovery Installation Cost: $5.3 Million $5300/KW Electricity Offset: 8 million kwh at $980,000/yr Fuel Increase: 67,000 therms free Bio gas $67,000 O&M Cost: $225,000/yr Savings per year: $688,000/yr

Distributed Generation/Interconnection Interconnection Process Pre-Application 3-10 BD’s Impact Study 55 BD’s

• Once this piece is complete an overall financial decision can be made about the project. • Utility construction could be substantial.

Direct Transfer Trip protection 3V0 Protection Verizon MPLS and POTS Execute an Interconnection Service Agreement Collect Payment Construction of Impact Study Witness Test all protection schemes.

Conclusions CHP Systems should be properly sized to maximize the BCR and

customer pay back scenarios. Spark spread is such that timing cannot be better for selling a CHP

project. CHP Engines cost less than $1000/KW. Incentives should not exceed 50% of total project costs. Follow CHP

guidelines. Contact Local Sales Utility Representative to find out Incentive levels

before selling a project. Submit a Distributed Generation(DG) application sooner than later.

This might mitigate costs and will reserves a spot in the queue ahead of future DG projects.

Questions/Contact

QUESTIONS?

Contact Info:

Gerald (Jed) Ferris CHP Program Manager New England

National Grid Gerald.ferris@nationalgrid.com

401 784-7364