January-February 2011

Harnessing Heat

Rebates, incentives, and increasingly energy-efficient technologies are driving the trend toward co- and tri-generation in small- to medium-sized applications.

By Carol Brzozowski


With Combined Heat and Power (CHP) systems reaching operating efficiencies ranging from 55–75%, compared to conventional fossil-fuel based power plants (which tend to hover in the 30% efficiency range), it makes sense that Universities, like Fairfield University (Fairfield, CT), have begun to incorporate CHP and Combined Cooling, Heat, and Power (CCHP) into their overall energy infrastructure. And those efforts to increase efficiency, while decreasing greenhouse gases (GHGs) and carbon footprints have not gone unnoticed. Fairfield was one of three universities—the other two are the University of Missouri-Columbia and the University of California San Diego (UCSD)—recently recognized by the US Environmental Protection Agency (EPA) with the designation of 2010 Energy Star. The EPA Energy Star CHP Award was bestowed upon the three universities in acknowledgement of their success in generating power and thermal energy while saving energy, lowering greenhouse gas emissions, and decreasing air pollution. The EPA’s CHP Partnership is a voluntary effort that encourages the use of CHP to reduce the environmental impact of power generation. It involves energy users, the CHP industry, state and local governments, and other energy stakeholders to facilitate the development of new projects and to promote energy, environmental, and economic benefits.

CCHP at Fairfield University
Mounting concerns over rising costs and a congested utility grid led Fairfield University to join a host of institutes of higher learning that are producing their own onsite heat and power through cogeneration—CHP—and trigeneration—CCHP.

“The state of Connecticut started to promote small power plants in southwestern Connecticut to take some of the strain off of the grid and the local utility company and in doing so, they were offering rebates,” says Bill Romatzick, manager of Energy Controls and Plant Systems for Fairfield University.

“We got in on the ground floor and qualified for a $500-per-kilowatt rebate if we installed the plant,” he reports.

At Fairfield University, the infrastructure was already in place to set the stage for cogeneration. The university operates a high-temperature hot water plant, has its own distribution system, and owns all of the transformers and switchgear. Fairfield University officials initially considered a diesel-powered reciprocating system. But its partner, United Technologies Carrier, suggested a Mercury 50 turbine, built by Solar Turbines, a subsidiary of Caterpillar. It is fueled by clean-burning natural gas.

“We don’t have to have scrubbers on our stacks,” says Romatzick. “Our emissions are about 2.3 NO_x [nitrous oxides].”

Carrier does hourly analyses on how to best use all of the electricity and heat generating from cogeneration systems.

“When we looked at it in detail and looked at the future expansion of plans for the university, the turbine we selected had the best overall return on investment [ROI] for the client,” says Gregory Hester, P.E., and Leadership in Energy & Environmental Design (LEED) AP director for project development engineering for Carrier. 

Carrier had done a host of projects for Fairfield before the cogeneration installation, including a central boiler plant, a chiller plant, replacing underground piping, water projects, and lighting.

“It was typical energy services type of work,” says Hester. “We got to the point after setting up their campus in such a way that cogeneration would make sense for the university.”

In December 2007, the university began operating a CHP system that generates nearly 95% of the power needed by the 200-acre campus and produces up to 66% of the school’s high-temperature hot water heating and cooling supply. Designed for efficiency, the CHP captures waste heat and recycles it, while also lowering emissions of sulfur dioxide, carbon dioxide (CO₂), and NO_x. The rejected heat byproduct is captured to heat and cool campus structures.

The university has saved $2.2 million annually through the recovery and utilization of otherwise wasted heat from the 4.6-MW solar turbine. At an operating efficiency of approximately 55%, the CHP system requires approximately 22% less fuel than typical onsite thermal generation and purchased electricity. As such, the CHP system effectively reduces CO₂ emissions by an estimated 7,400 tons annually. The system was designed to have the capability to generate almost the entire electrical load of the Fairfield University campus, reducing strain on the region’s power grid. The goal was for the plant to reduce the university’s overall carbon footprint by more than 10,000 metric tons per year. 

To accommodate the CHP system, the university constructed a 3,000 square-foot addition to its Central Utility Facility. That facility had been producing heat and cooling since 1960, but relied on outside sources for electricity. Romatzick says it took about a year to iron out all the bugs in the interconnection of the campus system with the turbine system.

“We don’t generate enough power to handle all of our needs year-round,” he says. “We run parallel with the utility company. We’re not allowed to sell excess that we could produce in the wintertime. Our heaviest loads are in the summertime, so we very often are importing a megawatt while we are at full capacity with the turbine.”

Romatzick adds that if the street power does go down for some reason, the turbine will trip itself out to protect itself. “We’re able to load shed the campus, get the turbine back on within an hour, and we can power the campus.”

That’s essential to keep the students fed and safe, he acknowledges. “We might have to cut back on the air conditioning in a few buildings, but the turbine is powering all of the heating and electrical needs in the wintertime when it’s critical.”

Fairfield’s $9.5 million CHP project was funded in part by a $2.3 million grant from Connecticut’s Capital Grant for Customer-Side Distributed Generation Resources program, which awards grants to corporations and schools working to provide some or all of their power via generators in an effort to minimize power grid strain. The purpose of grant program is to create more energy independence in Connecticut and reduce the impact of Federally Mandated Congestion Charges on state ratepayers. Grant sizes are related to how much power generation is produced.

“In southwestern Connecticut where Fairfield is located, there were a lot of issues with the local utility grid,” says Hester. “The cost of electricity was very high. Connecticut also had some very lucrative incentives and rebates for cogeneration, which definitely helped. They received a check as part of our project that offset the capital costs and they are also receiving income from their renewable energy credits they’re selling as part of the project.”

UCSD Hits 95%
Meanwhile, on the West Coast, UCSD attracted the EPA’s attention for a system it set up in 2001 that now meets 95% of the campus’ thermal needs. Those needs are immense. The campus comprises 1,200 acres and 11 gross million square feet, utilized by more than 50,000 faculty, staff, and students. To meet their electrical and thermal needs, the university began operating a natural gas fired CHP system. The system is based on two Solar Turbines combustion turbines at its core and otherwise wasted heat recovered for use.

The CHP system generates nearly 30 MW of electricity and produces 140 MMBtu/hr of steam. The EPA was particularly impressed with its low NO_x emissions. The system has a 66% operating efficiency and requires 26% less fuel than typical onsite thermal generation and purchased electricity. Based on this comparison, the CHP system effectively reduces CO₂ emissions by an estimated 82,500 tons per year.

The UCSD had an existing CHP plant that provides chilled water and high temperature water for campus heating and cooling needs.

Photo: Fairfield University Congressman Jim Himes is given a tour of Fairfield University’s eco-friendly, energy-producing CHP plant by Manager of Fairfield University’s Energy Controls & Plant Systems William Romatzick and University president Rev. Jeffrey P. von Arx, S. J.

 

“The plant has always been a thermal plant using natural gas lines and boilers to make the steam to use in centrifugal chilling, and then heat exchange for high-temperature hot water,” says John Dilliott, manager of Energy and Utilities for the university. 

 

Photo: Capstone Turbine Corp. This cogen system generates 780 kW of clean and secure electricity—35% of the building’s day-to-day electricity needs and up to 80% of heating needs.

“We were always importing electricity from the grid and burning natural gas in boilers, so we were always a good host for cogeneration, until the utility got out of the commodity electricity business in California in the late 1990s,” he reflects. “That opened up the door for us to go into cogeneration. We then proceeded with getting the financing for the project because when we ran the numbers, the thermodynamic efficiency of cogeneration always proved itself out in the bill.”

It was apparent that with $100 million savings to the campus over a 30-year period using natural gas that it would be an economical move, Dilliott says. In 1999, the campus got the funding and started to build the project. The system was manufactured by Solar Turbines. Rentech provided the heat recovery steam generators, which makes steam from the waste heat. Emerachem provided a pollution control system that reduces the NO_x and results in a greenhouse gas reduction of 82,000 pounds a year.

The system is part of an overall energy plan at the university.

“Almost 60% of the square footage is laboratory-based, which is very energy-intensive,” says Dilliott. “It’s meant for safety, not energy efficiency, because there are chemicals and other things that need protection. So we have a big challenge on our hands.”

Dilliott contends that the campus also has an obligation to provide solutions, not just provide the warning to the world that there’s a problem. Once the University of California demonstrates it can be done, “anyone can do it,” he says.  

The campus currently has a program of $73 million to retrofit all of its oldest buildings for optimal energy efficiency.

“We think we can get it to AB 32 goals, which is getting to 1990 levels by 2020,” says Dilliott. “A short-term goal is to meet as fast as we can meet AB 32 goals and show we can do it economically. All of these investments we’re making have paybacks to them. That’s why our financing department allows us to make the investment.

“So we base it off of cogeneration and energy efficiency, and we layer in these other renewable energy projects,” he adds.

There have been no drawbacks to the approach, continues Dilliott. “It’s very positive. Once you get into power generation as a campus, you need different skill sets from your employees. We’re lucky we have the Navy next door to us, so we have some very talented plant operators.”

UCSD was the first campus to operate its own plant rather than having a third-party owned and operated system.

That’s always been a form of pride at the university, says Dilliott. “The cogeneration plant has been beneficial because after it was put in, it infused a lot of new technology into a 1960s plant, helping to bring that plant into the new age.”

The benefits are both financial and practical.

“If you lose the grid, you can provide reliable energy service to your campus needs,” points out Dilliott. “We’ve seen it in these past few wildfires where we’re able to separate ourselves from the grid that was having problems. One of the benefits you get from a system like this is you have a second source of power and the ability to maintain operations even though the grid is not there.”

At MU, CHP Equals Tradition and Efficiency
In mid-America, one of the oldest CHP systems in operation is on the campus of the University of Missouri (MU) in Columbia, MO. The campus has been using CHP technologies to provide thermal energy and electricity to its campus buildings for nearly 120 years.

MU built its plant in its current location in 1923. The current plant has undergone several expansions over the last 87 years to meet the growing academic, research, and outreach missions, says Gregg Coffin, superintendent of the MU Power Plant. 

“The most recent expansion was completed in 2002, which includes two dual-fuel gas turbine generators equipped with heat recovery steam generators,” says Coffin. “Steam from this plant is sent through the plant’s existing cogeneration steam turbine generators before being sent to campus.”

The MU CHP plant uses two types of technologies, including boilers with cogeneration steam turbine generators and gas turbine generators with heat recovery steam generators. The system has an aggregate capacity to fully satisfy campus energy needs.

“These two technologies are integrated together to provide MU reliable and cost-effective energy,” notes Coffin.

The equipment network produces up to 66 MW of electricity and more than 1.1 million pounds of steam per hour to supply a daily population of more than 40,000 people in 13 million square feet of campus facilities, including three hospitals, a research reactor, and numerous research facilities.

Heat from the turbines that would otherwise be wasted is recovered to reduce fuel consumption, air emissions, and energy costs as part of the university’s energy management and conservation program.

The system has a 76% operating efficiency, requiring 38% less fuel than typical onsite thermal generation and purchased electricity.

Based on this comparison, the CHP system effectively reduces CO₂ emissions by an estimated 107,000 tons per year.

 

Photo: Fairfield University Fairfield University’s CHP plant has generated almost the entire electrical load for the 200-acre campus. It has reduced strain on the region’s power grid and has reduced the University’s overall carbon footprint.

“This approach is used to provide the MU campus with highly reliable and efficient utilities,” says Coffin. “The associated higher efficiencies of CHP provides MU with lower energy costs, compared to separate heat and power, and also lower emissions because less fuel is consumed.”

In addition to reliability and cost-effective energy service, other benefits include fuel flexibility and lower emissions than separate heat and power technologies, Coffin points out. “Another benefit is the campus CHP plant operation provides an educational and research resource to MU’s students and faculty,” he says.

MU currently has a project underway to replace a coal-fired boiler with a biomass boiler.

“There are some challenges with this project as there would be with any project,” says Coffin. “This new boiler is expected to replace up to 25% of MU’s coal use with biomass from various sources in the region. Our current challenge is to integrate this new biomass boiler into our existing CHP and to develop the biomass fuel supplies. To meet that challenge, we are working with campus researchers and area suppliers to help us meet biomass demand once the biomass boiler is online in 2012.”

He says the various CHP projects have been selected for providing the campus with the lowest life cycle cost for supplying needed thermal and electrical energy. Each day, the MU campus uses 567,000 kWh of electricity, 3.8 million pounds of steam, 2.2 million gallons of water, and 89,800 ton-hours of chilled water.  

Future Forecasting: CHP Today and Tomorrow
Whether a system is owned and operated in-house or outsourced to an energy services company, CHP is a growing business, notes Barry Sanders, president and CEO of American DG Energy.

“Ten years ago, it was very much a niche technology,” he says, acknowledging that it wasn’t well understood.

“People say CHP has been here for a while and it really hasn’t grown dramatically so there must be a problem with it,” says Sanders. “As this changes, people begin to realize that although renewables are terrific, the economics are just a ways away.

“CHP gives you great economics today. CHP is all about efficiency. From the EPA to the Sierra Club to the United States Department of Energy (DOE) and various states and utilities, efficiency has gone to the front of everyone’s mind and CHP is on everyone’s plate from that perspective.”

American DG Energy owns and operates the onsite utility models to sell the energy back to the customer at a discount so the customer pays only for the electricity and the heat or hot water off the equipment.

“We price it as a costless discount off of their avoided cost,” says Sanders. “Whatever they pay for energy for their boilers, that’s how we price our hot water, and whatever they pay for electricity from the utility, that’s the core price.”

American DG Energy follows the spark spread, which Sanders describes as the difference between the cost of fuel and the cost of electricity. “The wider the spark spread, the wider the difference between the price of natural gas and electricity, the better the economics are. The tighter they are, the economics aren’t as good,” he says.

There may not be many CHP systems in a territory like Tennessee, because the price of electricity and hydro is relatively low, versus a place like New York City, NY, where American DG Energy is active because the spark spread is robust, says Sanders. The best spark spread in the US is the Northeast, from Washington D.C. north,” he says.

Sanders points out that the key to being efficient is to use the heat of CHP as well as the power. “If you’re just using the power, it’s no better than other technologies,” he says. “If you’re using that heat, we believe it’s as efficient as any other technology out there.”

Sanders also notes that opportunities for CHP are expanding in Europe. “I think a big difference between the states and Europe is while CHP has great environmental credentials, there aren’t great economics in the United States and there actually is in Europe.”

If the US ever develops an environmental economy that’s tangible in real dollars, CHP could be as much of a player here as it is in Europe, Sanders says.

“We believe in order to be sustainable, things have to be affordable,” says Cameron Carey, president of Sustainable Energy Solutions. “We also believe in a new generation of energy management that helps us focuses on distributed generation.”

Sustainable Energy Solutions, an energy services firm focusing on the small facility sector markets the advantages of cogeneration and trigeneration by pointing out that the use of an electrical generator equipped with high-efficiency heat recovery equipment offers facility operators the advantage of being able to supply base load power at or below prevailing cost as compared to municipal distribution systems.

Substantial additional savings are obtained from the ability of the heat recovery equipment to supply waste thermal energy to other house loads. An increasingly common application is the use of direct-fired chilling equipment that utilizes waste heat to drive air conditioning or process chilling equipment, according to Sustainable Energy Solutions.

In addition to generating electricity as lower net kilowatt-hour cost, cogeneration and trigeneration systems also offer the ability to reduce electrical demand charges up to 100% of the rated capacity of the generator, the company points out. Additionally, the systems’ use offsets the purchase of fuel in the form of oil, natural gas, or propane, based upon the output of the generator’s recovered waste heat stream. Energy savings to the facility owner are generally calculated as the net of all capital and maintenance costs and represent true “bottom line” savings.

The basis of that is studying how much energy is being used, what remains, and employ it to the greatest effect, notes Carey. To do so, his company first takes a “relatively granular look at what sort of energy use the dollars are paying for,” he says.

That includes examining such factors as lighting, motors, pumps, heating, fans, computers, and servers. After those factors are identified and measured, the company then examines the efficiency of that which is using the electricity or thermal energy.

“Say you’re in a hospital looking at an MRI machine that has a bad power factor,” says Carey. “It’s got some harmonics; it’s got some new peaks every once in a while because it gets turned on three or four different times a day. We can correct the power factor, smooth out the peaks, do some peak shaving, and deal with the harmonics which are being passed down from someone else through our MRI machine, which is causing us damage and some expenses, and screen those out and save some money at the same time.”

The imbalance of the three-phase electrical system also is a source of inefficiency, Carey adds. “We know that [a] 1% imbalance equals a couple thousand bucks a year in lost expense money in paying for more electricity than we really need to,” he says.

Through a root cause analysis, Sustainable Energy Solutions can identify those factors on a particular panel that are coming on at particular times, how much current or kilowatt hours they’re using, and which ones are inefficient or being left on too long. The power factor problems are identified and corrected, “and then you pull in the cash,” notes Carey.

Heat also is a source of inefficiency, though not as complicated as other factors, he says. “It’s either on or off, or it’s a number of degrees. You can turn down the heat if you don’t need it. There’s no sense in keeping a hot water tank full of 180-degree water if you can meet the legal requirements of 105. It’s mostly a question of optimizing your operation’s production so you’re not using a lot of hot water all the same time.”

Then there’s the human factor: adding conservation to efficiency saves more money, Carey points out. “Once you find out the sales department is leaving all of their computers on and the heat is on, the windows are open, and they never close the door, you’ve identified the source that isn’t following the corporate program on commonsense things to do everyday to conserve energy and greenhouse gas. Now you’re able to plug that little leak in energy.”

In addition to identifying those factors, there also is an analytical factor, Carey says. “That’s where you do the drill-downs and the root cause analysis and find the 32 air conditioners that are on the roof were all bought years ago. Now they need something that will improve their efficiency and get you away from a penalty charge from your utility for creating a huge bad power factor,” he says.

Carey says cogeneration and trigeneration are his company’s favored and best sources of savings, followed by solar power and wind (his company partners with another to provide solutions in the latter category). He states that his company advocates distributed generation primarily because of national security reasons.

“It’s a much more secure way of having the nation’s energy deployed,” says Carey, adding that if a utility is compromised, “it’s a disaster,” but it’s much more difficult to compromise “a thousand distributed generators.”

Similarly, a major event, such as a hurricane, can knock out a grid, but distributed generation is capable of coming up as a backup supply.

“Another reason why we believe in it is that we believe the heat used by cogeneration and trigeneration is to be used as a free source of fuel,” says Carey. “Once you’re making electricity for yourself, you’re running an engine, and you can capture that heat because it’s onsite, not 100 miles away at a big coal plant.”

Captured heat can be used to run a facility’s kitchen, used for domestic hot water, heat swimming pools or hot water tanks. It can be used in an absorption chiller to make ice for a hockey rink or run air conditioning, Carey says.

“That free fuel, called waste heat, is now being put to productive use so you don’t have to buy natural gas or electricity to make those chilling operations chill or heating operations heat,” he adds.

Sustainable Energy Solutions deals with the rapidly growing smaller facility market. The challenge has been addressing a resistance in that market that exists because of lack of education.

“No one knew anything about energy because it was a regulated monopoly,” says Carey. “You got the bill, threw it in the out basket, and hoped that accounts payable would deal with it. Nobody was ever forced to learn about the responsibilities associated with energy nor learn how to manage energy.”

As the industry became deregulated, choices opened up.

“Brokers jumped into the marketplace and began to offer electricity and natural gas at slightly lower prices,” points out Carey. “That’s why we deal with people who can do that using a futures commodity exchange. It’s more efficient and saves thousands of dollars. We slowly began to drift into the idea that there’s something to manage here.”

Today’s software tools that enable a root cause analysis, graphs, and dashboards enable facility managers to see what’s going on and make better decisions, Carey acknowledges. The absence of that has been a stumbling block moving forward, he says. “All of the end-users are smart, but they are very cautious. They don’t want to get stung with something they don’t fully understand. There’s a lot of learning and foot-dragging, and then the learning has to go all the way up to the board of directors to get approved—another half-million dollar capital expenditure in order to do these things.”

Confidence builds through the input of the facility managers, technical staff, financial staff, and vendors.

“Once senior management gets to understand conceptually what it’s all about, and they get a sense of confidence that this is going to work out OK and their careers are not going to get ruined, they want to go ahead,” says Carey.

Carey says he’ll offer to buy the system for the end-user and sell the electricity and heat at lower numbers until the equipment is paid off about seven years down the road. “They think about it and tell me they’ll arrange their own financing to get the full savings. The end-users, once they really understand it, like the money,” he says.

Another benefit end-users favor is the greenhouse gas reduction.

“There’s no question that what you’re saving is heat from natural gas, and there’s a lot of carbon credits associated with this in the voluntary Regional Greenhouse Gas Initiative. That’s another cash benefit if your state happens to be in one of the regions,” says Carey. “When the end user realizes there’s money involved, they somehow find the money.”

Aegis Energy Services is a vertically integrated cogeneration company that manufactures cogeneration equipment. The company engineers, installs, and services the systems and, in many cases, owns and operates them, selling energy to the end-user at a discount. Aegis’ typical clients are in the 500-kW market sector in the northeastern US, such as apartment buildings, condominiums, hotels, assisted living facilities, nursing homes, schools, colleges, and health clubs.

“People like that need a continuous thermal and electrical supply,” says Lee Vardakas, the company’s general manager. 

Vardakas points out that there is an advantage to his company providing sole-source accountability for the end product. “Over the years, we’ve seen projects where there has been a different equipment vendor, another engineer who designed the system, another contractor who installed the system, someone else who services it, and sometimes the customer does not get what they anticipated,” he says.

Aegis has been able to overcome some of the challenges others in the industry have encountered over the years, says Vardakas.

Steve Gillette, vice president of business development for Capstone Turbine, points out that CHP and CCHP “have multiple benefits that accrue to both the end user and society in general. “CHP and CCHP systems are more efficient at producing electric and thermal output, because only one fuel source is used to get two results,” he says. “The average US power plant is only 33% efficient according to US Environmental Protection Agency and Department of Energy data. A typical hot water heater or boiler is about 80% efficient.”

In contrast, the Capstone C65 microturbine with an integral heat recovery unit can achieve a total of 80% net thermal and electrical efficiency, compared to about 57% by using traditional separate electrical and thermal processes to get the same output, says Gillette.

“That efficiency provides multiple benefits,” he says. “First, it can reduce the end user’s utility costs compared with purchasing electricity and purchasing fuel for an onsite hot water heater or boiler. 

“Second, the higher efficiency means less fuel used for the same output. This conserves limited natural resources and is often a government priority where fuels must be imported. 

“Third, since less fuel is used, there is less greenhouse gas generated. This can be especially important where the electric grid includes a high mix of coal-fired power plants, such as in the US.”

Capstone Turbine designs, manufactures, and sells microturbines—small gas turbines with an integral electrical generator in ratings from 30 kW to 1,000 kW.

“The microturbine exhaust is extremely clean and provides an ideal heat source for creating a CHP or CCHP solution,” says Gillette.

“Capstone offers integral heat exchangers on some of its models so that they become a complete CHP system,” he adds. “However, we rely on our distribution partners to install such systems to create a complete CHP solution, and also rely on our partners to provide absorption chillers or other thermally activated cooling technologies when a CCHP solution is required.”

A CHP or CCHP system can also be configured to generate electricity even when the utility grid is not present, providing critical power supply security for businesses.

 “The only drawbacks are that a company must invest in capital to get the savings benefits and must also have the space to install this new equipment,” says Gillette. “These two requirements are often in competition with other business needs for cash and facility space, although creative solutions can often overcome these drawbacks.”

Case in point: one of Capstone’s distributors in New York City noted the value of rental space in high-rise office buildings and offers to pay rent for un-used outdoor mezzanine space where the distributor then installs onsite CHP and CCHP equipment and sells power back to the building occupants.

Sanders says in his company’s experience, CHP systems are either oversized or some aren’t even activated because “the economics don’t work”.

“A company makes more money selling an 800-kilowatt system versus selling a 400-kilowatt system,” he adds. “Now the customer needs good engineering or good discipline by a customer or more knowledge. They can get a system that’s oversized, and that oversizing has hurt the economics of the system.

“I also think customers sometimes get a little overly motivated by some of the incentives out there,” continues Sanders. “We think the incentives are terrific and great for the industry, however, they are misapplied to oversize the core technology—the installation cost will ultimately be low, but your variable cost won’t change.”

Vardakas agrees system oversizing has been a problem.

“We’ve been doing this for 25 years and have seen many players that have come and gone in this industry,” he says. “People were sizing based on the electrical load and not looking at the thermal side of the picture. And truly combining power means the thermal needs to match the electrical load.”

Most of Aegis’ plants are base-loaded to ensure thermal and electrical energy are being used on a continuous basis as opposed to sizing it based off the electrical load.

There is still some resistance in the marketplace, Vardakas notes. “Many clients, when they look at moving ahead with a CHP project very often are hesitant about putting up the money and the effort because they are not 100% confident in the results,” he says.

“Whether it’s a school, apartment building, or a hotel, they don’t see themselves as being able to run the plant,” he continues. “So they get intimidated by them, and that deters them from making a decision to move ahead with the project. An apartment building doesn’t have to be in the power generation business. They can’t be, they don’t have the staff to be, so we’ve eliminated the risk for them.”

The key to a successful CHP and CCHP installation is properly matching system size to the thermal loads, says Gillette.

“The requirements for hot water for domestic or process heating, or chilled water for air-conditioning or industrial processes, must be well understood so that a CHP and CCHP system can be sized properly,” he states. “Purchasing fuel for even the most efficient electrical power generation equipment cannot usually compete with just purchasing that same electricity from a utility grid.”

The benefit of combining the electrical and thermal outputs is needed to make the system economical, adds Gillette.

“If the onsite thermal demand is not there, then the financial benefit is not there either, and the capital investment is not getting repaid,” he says.

Capstone Turbine provides a software program to its distributors to help size its equipment as well as estimate payback or ROI. The program first estimates the performance of a given microturbine CHP or CCHP solution using site-specific inputs. It then calculates a financial return using inputs for the costs of fuel and electricity and assumed operating hours.

“The output from this program includes expected changes in utility bills, which can then be compared with current bills as a validation that the savings are feasible,” says Gillette. “Of course, the program cannot replace the need for a thorough walk-through by trained professionals to estimate the cost and difficulty of any installation.

“While the microturbine and CHP and CCHP equipment itself is relatively standardized, site conditions have a dramatic impact on how much a complete turnkey solution will cost,” he continues.   

Carey says there is a financial debate regarding oversizing systems.

“The optimum heat and electrical requirements for a particular facility are not level; they go up and down,” he points out. “People who put in cogeneration try to understand the peak requirements for heat and electricity. Then they plan for one or the other, or the average of the two in terms of the sizing of their machinery. What they tend to do in order to be safe and get away from the criticism is to take too little.

“They’ll take the base load of the electricity—say one-third of the electricity, and say that comes even with the trough of the wave you see in the graph,” he continues. “It goes up and down—there’s a high point, there’s a valley. The bottom of the valley is where they draw the line. Their machine will be at capacity at the bottom of the valley and they’ll take whatever heat they can get.”

Someone who examines it from a financial perspective may believe the facility is not taking enough because the heat factor saves money and can be used for electricity or put back into the grid.

“Therefore, they plan for the heat variability and take as much as forces that machine to work 100% of the time,” says Carey. “Suppose you have it only produce half the time. Now you find that it’s not really economical. If it stops running and producing heat and electricity 10% of the time, is it justified? How about 20% of the time—is it justified? What you want to do is to take as much of that incremental benefit as you can to optimize it.”

Gillette says he sees CHP and CCHP as a long-term opportunity that will continue to grow and provide multiple benefits to end users and to the society beyond that.

“Many studies have been done by the DOE and other government organizations to estimate the size of the CHP and CCHP opportunity,” he says. “Electricity use in the US is roughly split into one-third industrial, one-third commercial, and one-third residential.

“Large industrial CHP systems have already penetrated the market well, since the cost savings can be substantial where there is a high thermal process requirement,” adds Gillette. “However, small industrial, commercial, and residential CHP and CCHP solutions have only scratched the surface.”

Hester sees more products coming onto the market in the smaller scale range.

“We do projects from 50 kilowatts to 25 megawatts; the lion’s share of work we do is probably two megawatts and above,” he says. “I see more microgrid-style cogeneration systems being palatable. But the technology hasn’t caught up yet. There are a few manufacturers out there that make prime movers in that smaller range. There is still a lot of work to be done there.”

Author's bio: Carol Brzozowski writes on the topics of technology and industry

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