July-August 2008

Promising Combination

CHP has demonstrated its good sense, and more people should be considering its adoption.

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Photo: Roche

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It was Don Quixote who wanted to tilt at windmills. He thought those were giants that he could battle and defeat with his lance, and he imagined his victory against such impossible odds—it was one against 30 or 40—would solve problems that were, to him in his age, global in nature.

If there’s a giant menacing us today in North America, it is the rising of energy costs. If all parties involved in our battle do not cooperate, those brave knights who are fighting the giants will be, like Quixote, tilting against windmills. If history is any indication, those windmills have plenty of wind, too. I have heard and read many words of frustration by people who can see the merits and benefits of combined heat and power (CHP, or cogeneration), but have been unable to persuade others of the urgency of their cause. Success, however, may not be a mere dream. There are signs of progress and a growing number of people, companies, and communities who have been sharpening and balancing their lances.

Situated on the campus of a modern pharmaceutical company in Nutley, NJ, about 12 miles from the towering columns of Manhattan, NY, is an unpretentious building containing an icon of energy efficiency. The structure, about three stories in height, is one of the first cogeneration plants in New Jersey. Since the 1980s, it has substantially cut emissions and costs for Roche, the global pharmaceutical and diagnostic company.

The concept of cogeneration is relatively simple. Power comes from burning primarily natural gas in two large jet engines that turn a generator (creating electricity) and hot water (creating steam). Generating electricity and steam from the same fuel source at the same time saves money and reduces harmful emissions.

“Cogeneration saves 35% of the fuel that would otherwise be burned,” says John Parodi, director of energy management, corporate environmental and safety affairs for Roche, in North America. Nutley’s plant provides about two-thirds of the 127-acre-site’s electricity and more than half of the steam that heats and cools other buildings. The reduced emissions are comparable to removing 8,700 automobiles from the road each year. 

By 2004, the engines were getting old and outdated, so Roche installed state-of-the-art engines that burn cleaner and are easier to operate. If not for cogeneration, most of the power would be pulled from a regional electrical grid and the Nutley site’s boilers. The modernization of the cogeneration facility was one of the reasons Roche achieved its US Climate Leaders Goal in 2007, two years ahead of schedule. Launched in 2002, the Climate Leaders program is a voluntary partnership between the EPA and industry to develop long-term, comprehensive climate-change strategies.

“I’m very fortunate to be in a company that really wants to take the lead on environmental issues,” states Parodi. “At Roche, it’s not just talk. The company is prepared to resource projects that produce a reduction in greenhouse gas emissions.”

I received some excellent materials from R. Neal Elliott, industrial program director at the American Council for an Energy-Efficient Economy (ACEEE). Elliott was the lead author of a report that showed how a combination of energy efficiency and onsite renewable energy resources, coupled with expanded demand-response programs, could meet the growing electricity needs of the state of Texas.

“Energy efficiency is the most affordable energy resource in Texas,” advises Elliott. “While 18% efficiency savings may seem challenging, Texas is already finding energy efficiency resources at less than four cents per kilowatt-hour, compared to the expected cost of power from new plants of five to 10 cents.”

The ACEEE is an independent nonprofit organization, dedicated to advancing energy efficiency as a means of promoting both economic prosperity and environmental protection.

Who Should Consider CHP?
Julian Rich, president and chief executive officer of Penacook Place, an independent nursing and rehabilitation facility in Haverhill, MA, explains why his facility chose an onsite 75-kW cogeneration facility, from the Waltham, MA–based American DG Energy. “As a nonprofit organization with limited sources of revenue, we are open to all options for reducing operating costs,” he says. “I was already familiar with cogeneration. Once I learned the specifics, selecting American DG Energy’s onsite utility energy solution was one of the easiest executive decisions I’ve ever made; it was a no-brainer.”

The 75-kW cogeneration facility will be owned and operated by American DG Energy, and will produce clean energy in the form of electricity and space heating at Penacook Place and sell it to Penacook at a price lower than the local energy utility. The installation will also have a positive environmental impact.

“Evaluating cogeneration for your facility: A look at the potential energy-efficiency, economic, and environmental benefits,” by Joel Puncochar, product manager for lean-burn gas generator sets at Cummins Power Generation, is an article worth reading by anybody who considers CHP as a solution. “Advancing technology has made cogeneration systems suitable for a much wider range of applications than in the past, although the simultaneous need for electric power and heat or cooling is common to all cogeneration applications,” says Puncochar.

In the article, he also mentions that, “facility types that are good candidates for cogeneration today include: hospitals, hotels, manufacturing, government facilities, colleges and universities, greenhouses, commercial facilities, food processing plants, industrial/chemical plants, nursing homes, health clubs, and swimming pools.”

“Cogeneration systems that produce both electricity and heating/cooling from the same fuel can offer energy savings of up to 35% for a wide range of facilities, while at the same time contributing to building sustainability and protecting the environment,” adds Puncochar. “The potential for cost savings in energy expenditures is usually the motivating reason to consider cogeneration, but building sustainability and LEED [Leadership in Energy and Environmental Design] certification are becoming reasons on their own to investigate the potential benefits of cogeneration for your facility” (http://cumminspower.com/www/literature/technicalpapers/PT-7018-EvaluatingCogen-en.pdf).

Here’s an example of how a commercial facility in California saved energy costs with a CHP system. Before the system from Cummins was installed, the facility used more than 12 million kWh of energy per year, with a peak electrical demand of 2,656 kW. Its average cooling load was 500 tons, with a peak of 100 tons. The facility paid $0.1419 per kilowatt-hour of electricity and $0.55 per therm of natural gas. The owners decided to install an onsite CHP, or cogeneration, system to generate 80% of their electrical and thermal needs on an annual basis.

The prime mover for the system was a Cummins QSV91G lean-burn natural-gas engine generator, with selective catalytic reduction after treatment that produces 1,200 kW of electricity. Waste heat from the generator was sufficient to power a 250-ton absorption chiller. The generator set typically operates at 38.1% electrical efficiency and 48% thermal efficiency. That results in a net running cost of $0.0648 per kilowatt-hour and a net thermal output of 4,191,118 Btu per hour. The cost of the total-installed CHP system, after a state rebate, was $2,581,982. The projected annual electric savings are $1,280,123, with the generator operating costs (including its fuel and maintenance) at $631.79. That gives a net annual cash flow from a savings of $648,331. The payback period would be just under four years. After four years, then, the system will provide annual positive cash flow for the facility.

The EPA has some excellent pages about CHP. The Web site www.epa.gov/chp/project-development contains helpful information, especially for those facility owners who are considering CHP and are not sure where to start their investigations. A few of the questions posed by the EPA CHP Partnership are:

• Do you pay more than $0.07 per kilowatt-hour on average for electricity (including generation, transmission, and distribution)?

• Does your facility operate for more than 5,000 hours per year?

• Is your facility located in a deregulated electricity market?

• Do you have thermal loads throughout the year (including steam, hot water, chilled water, hot air, and so forth)?

The key ingredient of the CHP recipe is the prime mover. Three types are most popular, and each one has characteristics that may suit your, or your client’s, applications. CHP systems that have reciprocating engines as the bases seem to be the most popular, so far. There is a high level of availability and reliability—in the 90%–95% range—for cogeneration systems, but you may choose a system with a lean-burn gas engine generator, a gas turbine generator, or a fuel cell as the prime mover. With a fuel cell, the fuel is converted directly into electricity and heat without going through a traditional combustion process. The most common fuel is natural gas and the chief byproduct is water. Fuel cells are clean, reliable, and the most expensive system of CHP technologies available today—and, therefore, not well established yet. Fuel cells may, however, develop into the most practical for some applications.

Lean-burn engine generators (such as those from Cummins) offer emissions of less than 0.5 grams of nitrogen oxide per brake horsepower-hour. Even without exhaust aftertreatment, the engines are good for systems with extensive, high-hour use in most of the US. If you add the exhaust aftertreatment, these can be used anywhere here. There is generally speedy availability for these systems. Costs are about one-half of CHP systems based on gas turbines, and sizes range from 300 watts to 10 MW, or more, electrical output (with 1.5-million Btu to more than 45-million-Btu thermal output). The advances in natural-gas combustion technologies are what have propelled these cogenerations forward so well.

Systems that use microturbines or larger gas turbines as the bases, offer greater thermal output per Btu of input. The systems cost more per kilowatt of capacity and are lower in overall efficiency than reciprocating engine-based cogeneration, but availability is excellent and maintenance tends to be lower. Gas turbines have won acclaim where high-quality heat or high-pressure steam is a required output for industrial processing. Such systems are usually very large. Gas turbine systems range in size from 30 kW to hundreds of megawatts, with emissions similar to those of the lean-burn-gas engine generator system.

States That Lead the Way
The news from across our country, reported in the ACEEE’s Grapevine Online newsletter of December 2007, is encouraging. “More and more governors, state legislators, and state agencies across the nation are turning to energy efficiency as the ‘first fuel’ in the race for clean energy,” says Elliott and his colleagues. “In our recent travels, we’ve seen governors, new and old, talk about efficiency with passion and without notes, telling us this is a core concern, not a second-tier issue. Legislators are ramping up resource commitments, and utility commissions are pushing utilities harder than ever to increase efficiency investments.”

Some highlights of recent state action include:

• New York state’s Department of Public Service issued a preliminary plan to meet the governor’s target of reducing electricity usage in the state by 15% in 2015. (ACEEE provided technical assistance to the commission in developing and estimating impacts of recommended programs and policies.)

• North Carolina’s legislature passed a bill in late summer that creates a Renewable Portfolio Standard, in which up to 40% of resource requirements can be met through energy efficiency.

• The Illinois legislature enacted a bill last summer that creates an Energy Efficiency Resource Standard (EERS), requiring utilities to achieve energy savings reaching as high as 2% of electricity sales. Important details, including program cost limits, are to be worked out.

• Minnesota lawmakers passed the New Generation Energy Act this year, which includes an EERS target reaching 1.5% of electricity sales—roughly equivalent to current load growth rates. Utility programs, building codes, and other approaches can be used to meet the resource requirement.

• Iowa’s legislature appointed an Energy Efficiency Study Committee, which held hearings last fall that may lead to a major increase in utility efficiency programs, already among the most effective in the Midwest.

• Texas lawmakers acted this year to double the state’s EERS target, from 10% to 20% of load growth. A study was also commissioned to consider raising the target to as high as 50% of load growth.

• Virginia’s State Corporation Commission held a stakeholder process in the summer of 2007, gathering input for a report to the legislature on ways to meet the 10% utility energy savings target that was enacted as part of legislation passed in April.

• In Colorado, Xcel Energy responded to a number of legislative, regulatory, and gubernatorial initiatives with its Colorado Resource Plan. The plan will double the current capacity of its customer programs to 694 MW, while tripling the amount of annual energy sales reductions to approximately 2,350 gigawatt-hours, by 2020.

These states, spread widely across the diverse regions of the US, reflect a rapidly rising wave of efficiency policy commitments. ACEEE estimates that the EERS savings targets set in 15 states could reduce total national electricity sales by as much as 0.8% per year by 2015—more than half the current national Annual Energy Outlook forecast, which projects annual load growth rates at 1.5% per year. CHP will be an important aspect of these commitments and savings.

Useful Wastes
One of the best aspects of CHP is that it uses wastes that would otherwise have been…wasted. Schoolchildren can read all about the goods that are produced in our country, but they (and we) are seldom reminded of what may be our most voluminous product: waste. In CHP, waste gases can be used instead of lost. It’s as if all the exhaust fumes from our millions of vehicles were somehow converted into useful energy.

How is it done? At a Midwestern dairy, the owners wanted to use the manure generated by its large herd of dairy cattle to produce electric power. At the same time, the process would reduce the odor at the facility. Enter Enercon Engineering, a national leader in several engineering projects. Enercon designed and built an engine-driven cogeneration package that used the latest techniques in manure digester technology to produce biogas fuel. The system generates enough electric power to drive the entire dairy farm, while excess power is sold back to the local utility.

The heat from the General Electric’s Jenbacher JGS 316 generator (1,200 horsepower) is harnessed to heat the digester mix to 110˚F. That produces the biogas to fuel the power of the engine. The heat is taken from the engine’s jacket water and exhaust—its traditional waste. The slurry of the digester is odorless and sterile; it makes a good fertilizer. The dry, solid digester product is soft enough to give a good bedding material for the cattle.

Only scheduled maintenance shutdowns stop the cogeneration unit from working at all hours. Details of the Enercon CHP system show that the generator is 480 V (828 kW), while the engine is 16 cylinders, with biogas fuel of 400 Btu to 650 Btu per cubic foot. At this dairy farm installation, the enclosure for the system is weatherproof, with sound attenuated to 85 decibels at 1 meter. It has internal switchgear and controls.

To use methane gas created by solid waste, the city’s wastewater treatment plant in Sheboygan, WI, has 10 Capstone MicroTurbines. These use the gas to generate electricity and heat and have cut the plant’s electric and natural gas bills by some 40%. The microturbines also help earn renewable energy and emission credits. Savings are estimated at approximately $70,000 a year.

At a totally different kind of site—a high-rise building in New York City, NY—Enercon engineered a CHP system that can be described as a super-efficient, 1.6-MW installation. It provides the building with peak-shaving electric power, office heating for the winter, and air conditioning for the summer. The system has increased the building’s energy efficiency from a range in the 30% to 40% marks, to 60% and 65%. The system provides 60% of the building’s electricity and 65% of its heating and cooling. At this CHP installation, the unit’s engine exhaust and water jacket heat is harnessed into a single-heat exchanger that generates hot water for the winter perimeter heating and operates an absorption chiller for the air conditioning of the hot months. There are two 1,200 horsepower engines (each 820 kW) that are fueled by natural gas. The generator has 1.6 MW of total power, 480 V, 60 Hz. The enclosure has a single heat exchanger, a 289-ton hot-water absorber. From reading about these two similar, but different, installations, it seems clear that property owners could start by telling experts what they would like to achieve in energy efficiency and savings. The ability to do that and the necessary equipment seems to be readily available to us.

Across the country, in San Francisco, CA, there is a Capstone C60-ICHP located in the rooftop boiler room of a 20-story high-rise condominium. It’s in the prestigious Pacific Heights neighborhood. This system is a little different from most of Capstone’s installations. Usually they operate continuously at full load, but this one in San Francisco is set to load-follow all the time, at an average of just over 35 kWe. Capstone systems can load-follow in grid-parallel, while maintaining a no-export buffer of just a few kilowatts (or they can serve directly the entire fluctuating load in a standalone mode). There is an upgrade at this site to provide a sub-10-second fast transfer to standalone mode for when the grid does down; otherwise a four- to five-minute warm-down cycle and restart is required. Fast transfer is a standard feature of Capstone’s new C65 model with Capstone Dual-Mode Controller. It’s a quick, low-cost retrofit for existing installations of single units and arrays that have a Dual-Mode Controller.

At the Ritz Carlton hotel in the Nob Hill area of San Francisco, CHP is provided by a UTC PureComfort 240M, a system that combines four 60-kW Capstone MicroTurbines and a double-effect absorption chiller from Carrier Corp. (a sister company of UTC Power). This chiller collects the exhaust from the microturbine in a manifold and puts out 160 refrigeration tons of cooling at an ambient air temperature of 59˚F. There are other configurations for the PureComfort series, with five 60-kW or six 60-kW microturbines. The initiating purpose behind the decision of the Ritz Carlton to install a CHP system was to lower energy consumption at the hotel.

In Monroe County, NY, a new CHP system replaced a 75-year-old coal-burning plant that provided steam to more than one facility. That old facility required many upgrades to meet current regulations, so the authorities (the not-for-profit New Power Inc.) approached CHP experts Siemens Building Technology (SBT) for a good solution. SBT had already had success at some 20 installations in New York state, from large school districts to nursing homes.

Monroe County’s first CHP plant was at the Iola health facility campus. The new facility can generate 4 MW of electricity and up to 40,000 pounds of steam per hour. The plant incorporates three Caterpillar natural gas G3516B generator sets with two heat-recovery units. The second facility is slightly larger, using four Cat G3516Bs. It provides heat and, in the right season, cooling through a 400-ton absorption chiller. Caterpillar has been the manufacturer of choice for SBT cogeneration facilities. That manufacturer also has Solar Turbines in its family, for a different approach to CHP.

Postscript
CHP shows enormous promise for the comfort and economic well being of our nation. In those places where it has been installed, it has been an exciting success, with energy savings for the owners and peripheral benefits for everybody who enjoys the comforts. In some of the research I do there are sometimes undercurrents that are seldom carefully spoken or, more frequently, evaded by professionals involved. In this most promising matter of CHP, I have noticed unwillingness on the part of correspondents to name parties who seem to be placing obstacles in the way of success.

Despite the good efforts in several states, there have been reports of discontinuities in interconnection standards, utility disincentives, lack of awareness of CHP benefits, discriminatory tariff rates, a negative impact on utility profits, and misconceptions about safety issues. These negative impacts reveal a general lack of education among those who are not in what we may call the CHP or cogeneration community, and have been (and may continue to be) significant barriers to the national adoption of CHP.

Everybody involved in distributed energy should surely work to break down the crippling barriers, on behalf of potential users and in the interest of our national community, whether those barriers are built for political, commercial, or any other reason of special interest.