Branching Out With CHP
“Although it’s hard to quantify, people take you more seriously when you have your own onsite power.” –Kevin Stevenson, Vice President of engineering, FDS Manufacturing
Energy efficiency and solid economics have made combined heat and power (CHP) technology an attractive choice for distributed energy projects, but the number of installations in North America have yet to reflect the technology’s value and potential. Realistically, the same is true on a worldwide basis, and, according to the International Energy Agency, the increased use of CHP could reduce power sector investments by $795 billion (USD) over the next 20 years, while reducing transmission costs and retiring obsolete centralized energy plants. Although CHP isn’t growing fast enough yet, we can report on the progress of recent projects that demonstrate breakthrough applications, and furthermore, how they relate to the support of government agencies, the agriculture industry, energy trade associations, and of course, a wide variety of businesses that place a priority on energy efficiency.
Surviving Supply and Demand
While the Ontario Power Authority’s goal was to demonstrate efficiency and add reliability to its grid, the Department of Public Utilities (DPU) in Massachusetts was looking to a CHP project to save jobs and enable future growth at a company that’s done business in the state for 179 years, Fitchburg-based Simonds International, a provider of industrial cutting tools. In August 2011, Simonds cut the ribbon on a 1.6-MWh CHP plant consisting of three, 600-kWh systems from 2G-Cenergy, Orange Park, FL. The 2G avus series CHP modules are complete modular packages that are factory tested and don’t require civil construction or site engineering, and, according to Ken Myer, director of materials at Simonds, they’re quite a bit different from the first design for the factory and headquarters.
Four-Year Payback, 40% Savings
“We originally planned a 12-megawatt biomass plant, but the state of Massachusetts changed their view of biomass as green energy so we had to move the project to natural gas,” says Myer. “It’s a $5.5 million project, and we’re in a lease to own agreement with a payback of 4.5 years. We have a very high electrical usage profile, and it’s a major portion of our costs, at about $2 million a year.”
As of January 2012, the system was powering about 70% of the plant, due to the need for interconnection work to absorb spikes from large furnaces, but Myer expects the system to support the entire plant around March 2012. The DPU has approved a favorable contract between Simonds and Unitil, the local natural gas supplier, and Simonds estimates overall energy savings of 40%.
Help for CHP projects from local and state governments is the right approach, according to Anna Chittum, senior policy analyst at the American Council for an Energy Efficient Economy (ACEEE). Chittum co-authored a recently released study, “Challenges Facing Combined Heat and Power” and predicts that CHP won’t achieve mainstream status until policymakers and regulators are unified in an effort to encourage the technology.
But with all of its benefits in the areas of efficiency and economy, why haven’t we seen that unification? “If you really look at the business model of our large industrial utilities, you see that it does not in any way incentivize them to move forward and support CHP projects,” she says. “So there’s a fundamental disconnect between increased CHP deployment and the utilities continuing to run their businesses and provide some sort of fiduciary duty to their shareholders.”
Happily, there are some states demonstrating a proactive approach, such as the New York State Energy Research and Development Authority (NYSERDA).
“They made the case for CHP, and New York has some interesting programs that are really unique in the country,” says Chittum. “One of the challenges of getting facilities to invest in CHP is that they’re not comfortable with making these long-term investments. So New York has a fleet program that will work with an individual company that has a lot of different facilities that might be well suited for CHP, such as a grocery chain. They put in one demonstration system plus a 50% cost share and work very closely with the decision-makers until the point that they are comfortable enough to see that 30 of those throughout their facilities would enjoy economies of scale and they can leverage the benefits.”
The program has been very successful addressing the utility disconnect, according to Edward Kear, senior project manager, NYSERDA Industrial Research.
In a NYSERDA presentation, Kear reports that the partnership approach, “. . . enables sharing of project-specific information [not ‘anecdotal’]—which has led to improved standby tariffs, updated Standard Interconnection Requirements, prohibition of utilities’ use of ‘flex rates’ to kill CHP projects, and resolution of utilities’ mischaracterization of cost for access to natural gas pipeline; precedent-setting outcomes with utility-acceptance of techniques for electric interconnection; and use of private wires.”
A similar effort has been underway since 2001 in California, where the Self-Generation Incentive Program (SGIP), rewards businesses, building owners, industry, and homeowners for installing clean energy systems. New guidelines for the SGIP were approved in September 2011, and the financial incentives should prove tempting to California businesses and facilities that may have had reservations about making an investment in onsite energy production.
The new guidelines allow for systems powered by reciprocating internal combustion engines to qualify for a rebate of up to $500 per kilowatt, and when biogas is utilized, rebates jump to a maximum of $2,500 per kilowatt. The incentive is capped at 3 MW, and all systems must be new and in compliance with all applicable performance and safety standards. According to Kirk M. Fowkes, vice president of sales & business development, Elite Energy Systems, LLC, Carson City, NV, the updated program offers a great opportunity, and there’s never been a better time to take advantage of from the efficiency and sustainable benefits of CHP.
Elite uses a modular approach in the design and construction of their CHP units, as demonstrated by a 900-kW project recently completed for John Muir Medical Center, Concord, CA. The system is fueled by natural gas and utilizes 3, 250-kW Caterpillar 3412 engines and one 150-kW Caterpillar 3406 engine to produce electricity, plus heat for process water and to run an absorption cooler for seasonal cooling.
The project exceeds 80% in overall thermal efficiency. Moreover, it succeeds in defining the hospital’s efforts to reduce energy costs with a sustainable solution that significantly lowers its carbon footprint. Another benefit is in providing reliable power for patient care. The system features seismic isolation, and runs in parallel to the region’s utility grid. In the case of grid failure, it can run independently to maintain operations.
The SGIP benefits extend to microturbines as well, and FDS Manufacturing, Pomona, CA, received SGIP funds for a CHP project utilizing six, C65 microturbines from Capstone Turbine Corporation, Chatsworth, CA. The product line at FDS includes plastic packaging for food products, and the factory operates their microturbines in a trigeneration mode, with the thermal power used for drying plastic, while hot water is fed to an absorption chiller to make chilled water to cool the plastic.
Reliability and Savings
On the electrical side of the equation, the system is grid connected and typically supplies about 310–320 kW, or 20% of the plant’s 1.5–2 MW total power usage. “Having a reliable energy source is what started this project,” says Kevin Stevenson vice president of engineering at FDS. “In 2001, California had brownouts, and we realized that we needed to fend for ourselves. Now we’re still in parallel with the grid, but it’s nice to have the reliability, and with gas prices so low, we’re saving about $15,000 a month on energy.”
Stevenson wasn’t surprised by the savings, but the earnings aspect of onsite trigeneration wasn’t expected. It’s something he describes as an indirect marketing benefit.
“Our customers are very conscious of our carbon footprint, and we are competing with other companies that have solar power,” says Stevenson. “Although it’s hard to quantify, people take you more seriously when you have your own onsite power. And we can prove that we’re running 24 hours a day, rather than solar that’s only available during the day.”
It’s true that solar is a sunlight only proposition, but it’s one of the purest of renewables, and recent entries into the market that incorporate CHP designs are boosting solar’s value. For example, Cogenra Solar, Mountain View, CA, manufactures a distributed solar cogeneration system that combines PVC solar plus hot water collectors in a concentrated solar array. Optimal efficiency ratings run as high as 75%, according to CEO Dr. Gilad Almogy.
“In very good conditions, we have 15% electrical and 60% thermal efficiency,” explains Almogy. “Let’s say you have an apartment building that doesn’t have a lot of roof space so a single solar array would only produce a small fraction of your electricity needs, but with our solution, you may be able cover more than half your thermal needs. In limited space situations, the cogeneration is significantly better than just solar.”
Cogenra recently entered a contract to supply a solar cogeneration array at La Posada, a retirement community in Southern Arizona. The system will supply hot water and electricity for residents’ use, laundry facilities, and a fitness pavilion. The ground-mounted array is eligible for both solar electric and solar hot water performance-based incentives provided by Tucson Electric Power’s Renewable Energy Credit Purchase Program and other Arizona utilities.
Cogenra’s system has an advantage in Phoenix where the hot weather can typically exceed 100°F, because the heat extraction hardware cools the photovoltaic (PV) panels.
“Let’s say it’s hot in Phoenix, and the panels are easily 70 to 80 degrees Fahrenheit above the ambient temperature, so it’s essential to cool them,” says Almogy.
The heat isn’t quite so brutal in northern California’s wine country, but the solar cogeneration system at Sonoma Wine Company in Graton, CA, is working as planned, according to Natasha Granoff, Sonoma’s director of Business Development.
A Toast to CHP
“We commissioned it a little over a year ago in 2010, and it’s working well,” says Granoff. “When we look at the performance, it’s doing 90 to 95% of what we predicted, and we feel that’s very good. We expected it to reduce our natural gas use about 45%, and it’s been in that range, so our gas usage and cost has dropped similarly.”
The project uses 15 individual Cogenra SunBase modules, and Sonoma purchases heat and electricity at guaranteed energy rates from Cogenra under a 15-year heat and power purchase agreement, while Cogenra maintains ownership of the modules.
As seen previously with the experience of FDS Manufacturing, Granoff notes that onsite energy generation carries a significant marketing impact.
“As a side benefit, it’s a terrific marketing opportunity,” he says, “and it also helped to introduce the concept to the wine industry because we are hot water users. We featured it on our company’s website in the sustainability section, but we see more traction from media interviews, and there’s been a parade of industry and politicians and elected officials through here, and local water agencies and others that are interested in distributed energy.”
The US Department of Defense (DoD) has a longstanding interest in distributed energy, and Cogenra’s concept has attracted the attention of the DoD’s Environmental Security Technology Certification Program. Cogenra recently won an award to provide its technology for the Installation Energy Test Bed initiative for 2012. The $2 million contract requires the installation of hybrid solar solutions for two military sites. The Port Hueneme Naval Base in Ventura County, CA, will test a 242-kW rooftop array, and the Army Parks Reserve Forces Training Area in Dublin, CA, will test a 121-kW system.
Cogenra’s method for heating uses water, but Conserval Engineering, Inc., Buffalo, NY, offers a different approach to cogeneration by combining solar heated air with photovoltaics. The company’s SolarWall PV/Thermal product is an effective solution that takes advantage of a building’s sides, rather than a rooftop. It can be retrofitted, or as in the case of the John Molson School of Business (JMSB) at Concordia University in Montreal, QC, Canada, architects can design and integrate the system into a structure. The JMSB installation generates 24.5 kW of electricity and about 75 kW of thermal heating.
According to Conserval’s performance testing, the SolarWall PV/T design produces four times the amount of energy in the same space as standalone PV, yet it adds only about 25% in additional cost. Cooling the PV module also improves electrical output by up to 10%. Natural Resources Canada supplied the funding for the JMSB project, and it’s another example of the positive effect government agencies can have to promote CHP. However, many commercial enterprises are also helping to fund CHP projects, and it’s no surprise that some would be manufacturers of cogeneration hardware, such as Caterpillar Engines, one of the world’s largest engine manufacturers.
A prime example of Cat’s impact on CHP can be found 40 miles south of Windsor, Ontario, Canada in Leamington/Kingsville, on the Southern Ontario shores of Lake Erie, an area that’s often described as the greenhouse capital of Canada, and home to more than 1,800 acres of greenhouses, plus five major food processing plants. With so many consumers of heat and power, plus so many producers of organic waste, the owners of Pelee Hydroponics recognized the area as an ideal location for CHP, fueled with biogas from an anaerobic digestion plant. The idea blossomed into a partnership between Pelee, Alpenglow Energy and Gemini Power Corp, and the new group formed Seacliff Energy.
In 2009, Seacliff began construction on an anaerobic digestion facility using a two-stage biodigestion technology fueled by vegetable and animal waste from local farms and greenhouses. Cat Financial supplied the debt financing for the construction and operation phases, while Canadian Cat dealer, Toromont Cat Power Systems handled construction and engineering for the CHP unit. The plant is designed for two Cat G3520C 60-Hz 1.6-MW, high-efficiency, low-emission gas generator sets. The first phase is operational with just one generator, and the second phase is shovel-ready, awaiting a Feed-in-Tariff contract from Ontario Power Authority.
“We were looking to a green solution, and it’s been six years since we started,” says Dennis Dick, owner of Pelee. “Yet we made our first kilowatt on January 16, 2011, so it’s been a long process that began when we made a trip to Europe to investigate anaerobic digesters, and we were sold right away. We did plan that we would have a learning curve, and it turned out to be longer than we expected, but when we were beset with a challenge we just didn’t look to fix that challenge, we looked to create improvements or make a challenge work for us. So, it’s being passionate about the project.”
That kind of passion can provide almost as much fuel as a digester’s biogas, according to Joe van Schaick, market manager power generation systems at Toromont.
“The project surprised everyone in terms of the amount of time it took to get all the approvals from the Canadian government,” recalls van Schaick. “But I think one of the things that is a good aspect of this particular project is that it is co-located with a fairly large heat load from the greenhouse operation. A lot of the systems in the past have tried to maximize the amount of power generation from CHP, and that’s an incentive from the electricity power purchase agreement, but if at the end of the day you’re throwing away half the energy in the form of waste heat, then you’re not necessarily more efficient.”
In the case of Seacliff’s design, the match of power generation with the thermal load approaches 85 to 90% energy efficiency, and the system has a large thermal storage tank that allows them to “deliver heat to the greenhouse at peak times during the day, and they can run full bore to store the excess heat and savings for the night,” says van Schaick. “That’s been a very effective tool to match up their thermal demand with the electrical output and feed-in prices.”
At this point, the system supplies enough heat for Pelee’s greenhouse, but with the second phase Seacliff could supply two more neighboring greenhouses by piping hot water to their systems.
“Another opportunity is a school across the road from us, and it has been our dream to someday supply that public school as well with heat and cooling,” says Dick. “That’s in the future, but there are a lot of opportunities. We have a tomato processing factory right beside us with a need for process heat, and there are subdivisions planned down the road.”
Getting in Sync
The idea of supplying heat to a subdivision in some sort of district heating design is a proven method, but the advantages CHP in residential settings may well catch up with district heating, according to Joe Weinschreider, mechanical engineer at Energy Concepts Engineering (NRG Concepts), Rochester, NY.
“We just completed a 400-kilowatt cogeneration system at a 26- story residential building in downtown Manhattan with 288 apartments,” explains Weinschreider. “It’s basically a whole renovation of the electrical system with submetering for tenants and master metering for the utility. This is kind of unique because Con Edison doesn’t like synchronous generation paralleling with them, but the Tecogen 100-kilowatt InVerde units with their inverter system has been very successful with Con Edison.”
With the upgrade, the cogeneration plant now produces power for the entire building rather than just the core area common spaces. And not surprisingly, the power comes at a lower cost than the utilities can provide. The savings can go back to the tenants who are purchasing the power for a lower rate, or the landlord can say it’s going to sell it for the same rate as the utility would but use the savings for maintenance upgrades and other improvements.
Tecogen Inc., Waltham, MA, also supplied six InVerde 100-kW CHP cogeneration systems to an NRG project that provides grid independence for Phoenix Beverages, Brooklyn, NY. Initially, the plan was to run in parallel with the grid, but changing to an independent island (or microgrid) operation had many benefits.
“It’s simplified everything,” says Weinschreider. “We didn’t have to worry about any interaction with the utilities such as coordinating and paralleling, though, with this kind of plant, you have to take care of your internal load a little better and understand how your equipment operates. They have some pretty big motor and lighting loads that need to be managed from an electric generation standpoint.”
The decision to run independently paid off quickly when power outages plagued parts of the Northeast in November 2011.
Residential CHP is a growing market for another supplier of cogeneration systems, American DG Energy Inc., Waltham. In January 2012, the company announced an agreement to install 14 CHP systems at multiple residential buildings in New York, managed by RY Management. Under the terms of the 14-year agreement, American DG will supply a total of 1,050 kW of electricity, plus domestic hot water at prices below utility rates. American DG retains ownership of the equipment and is responsible for all service, maintenance, and repair.
The announcement comes on the heels of a November 2011 launch of an American DG project in the hospitality industry, which is another growing opportunity for CHP suppliers. The location is the Doral Arrowwood Hotel and Conference Center, Rye Brook, NY. The 375-kW system includes three 100-kW units, plus one 75-kW, to provide electricity, space heat, domestic hot water, and pool heat under the same ownership and maintenance terms as the RY Management agreement.
According to Barry Sanders, president, American DG, the 15-year agreement gets Doral a 10% discount on their energy, and that will contribute significant savings to their operating costs. Also, the business will see an advantage over their competition, because CHP is a very efficient technology and can be considered green, so they can genuinely say they are using clean energy. If power needs grow, the hotel can add units easily.
“It’s very simple to scale up at this installation,” explains Sanders. “We have three units on the hotel side and one unit on the conference side, so let’s say the conference side adds some amenities. Our smallest unit is 60 kW and the largest is 100 kW, and the modular design avoids the mistake of using one large unit because when they’re not modular and the load drops, you don’t have the ability to shut off an entire unit such as we can. That’s how boilers are designed now, whereas 30 to 50 years ago they were huge.”
Chillers are also benefiting from modular designs, and American DG offers a mechanically driven design, rather than using an electric motor.
“Most chillers are electric with ours the engine drives the chiller’s compressor,” says Sanders. “Then, we have the heat recovery off the engine, and it helps on the economics and makes it more efficient.”
Economics and efficiency seem to crop up consistently in these CHP projects, and it’s no surprise that American DG and the other manufactures that contributed to this article are seeing sales growth in a diverse number of markets. And if the industry continues to see federal programs, such as those from the DOD plus state programs such as NYSERDA, the overall picture for CHP looks more than promising for 2012 and beyond.
Author's Bio: Writer Ed Ritchie specializes in energy, transportation, and communication technologies.